|By Hubble Smith, Las Vegas Review-Journal|
Knight Ridder/Tribune Business News
May 7, 2004 - The time share industry has cleaned up its unsavory reputation by embracing state and federal regulation while battling lawmakers who view the market as an easy tax target, industry executives believe.
The industry has an opportunity to change regulations and still protect consumers, said Stephanie Madsen, senior vice president of public affairs for the American Resort Developers Association.
"On the regulatory side, states are looking to save money," Madsen said this week during the general session of the association's annual convention at Mandalay Bay. "They want to save money, they want to save time and they want to save staff."
Nevada is among about a dozen states in which the association's legislative advocacy group, the Resort Owners Coalition, is quite active, she said.
Legislative or regulatory changes achieved by the group in Nevada in 2001 include clarifying the nature of management company regulation and requiring reserve studies for time share associations every five years.
Two years earlier, the American Resort Developers Association worked on a Nevada law requiring registration and licensing of persons listing, advertising or soliciting the sale of 12 or more previously sold time shares.
Also, time share resale brokers who charge or collect an advance fee are required to place 80 percent of the money into a trust account and to return the money within 10 days of expiration of the listing.
Robert Webb, a lawyer from Orlando, Fla., who is chairman of the American Resort Developers Association's legislative council, said the time share association is engaged in tax battles everywhere and is heavily involved in discussions with the Federal Trade Commission and Federal Communications Commission over "do not call" and "do not e-mail" laws.
Webb was on the forefront in shaping time share legislation in Florida in the 1970s that "saved the industry," he said.
Lawmakers there put serious requirements on time share developers regarding advertising and financial disclosures.
"These fundamental requirements made developers be better capitalized and made them more careful about their projects," Webb said. "We're focused on making the time share industry better for developers and for consumers."
By bringing legitimacy to the business, the time share market has exploded in recent years, generating expenditures of $44.4 billion in 2002, said Scott Berman, a partner with PricewaterhouseCoopers, which released a study Monday on the economic effect of the time share industry.
In addition to revenue from sales and maintenance fees, the industry accounted for $16.5 billion in payroll and $6.5 billion in taxation, he said.
With 56 resorts and about 5,000 units, Nevada's time share industry brought in $1.4 billion with $480 million in payroll and related income and $197 million in tax revenue, the study showed.
"This is a study that will turn heads in the industry and beyond," Berman said. "A study like this is purely a facilitator to discussions with elected officials."
Wayne Thorburn, administrator for the Texas Real Estate Commission and a panelist on an afternoon educational seminar, said the perception among regulators is that marketing time shares is a high-pressure sales operation.
"Take the initiative to invite regulators to come and visit your property," he advised.
"Only when I went to the Silver Leaf property in my state did I get insight. I went on a tour of the Fairfield Grand Desert here in Las Vegas. It gives me a better understanding and a better appreciation of the time share industry, how the point system works. Unless you believe that every time share is the same and once you've seen one, you've seen them all, think about that."
Michael Garvin, attorney with the Illinois Office of Banks and Real Estate, said the most frequent complaint he gets involves resale activities -- people being contacted by telephone from out of state, paying a fee by credit card and having no services provided.
"That's certainly an area that needs attention," he said.
The American Resort Developers Association convention, which alternates between Las Vegas and Orlando, had record preregistration of 3,600 and was expected to draw about 4,000 with walkup registration, said Howard Nusbaum, president of the association. There were 193 exhibitors, including 73 first-time exhibitors.
"There's more media here than ever," he said. "The research we have is being carried in newspapers across the country. There's interest in the industry."
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(c) 2004, Las Vegas Review-Journal. Distributed by Knight Ridder/Tribune Business News.