On December 12, Florida State Representative Eric Eisnaugle filed House Bill 1001, which would substantially change the regulation of the secondary market for Florida timeshares. This bill follows up on, and appears consistent with, an announcement by Florida Attorney General Pam Bondi that we covered in a post from last October.
While the bill has just been introduced, we thought the following elements of House Bill 1001 were worth noting:
- Compared to the existing Florida law, for-sale-by-owner advertising companies (referred to as “resale advertisers” in the bill) would have to comply with substantially greater obligations than those applicable to licensed real estate brokers.
- The bill does not create any regulatory obligation aimed specifically at transfer companies.
- Violations of the law could result in civil penalties of up to $15,000 per violation.
We also noted that House Bill 1001 introduces this curious requirement – to the extent that a resale advertiser would “state or imply, directly or indirectly, that its resale advertising services are successful in identifying buyers or renters,” it would also have to provides the consumer with the “ratio or percentage of the timeshare interests advertised for sale that have resulted in a sale, or advertised for rental that have resulted in a rental, for each of the previous 2 calendar years.”
This obligation would become practically mandatory, assuming that the resale advertiser is actually trying to sell its services. However, the logic behind the requirement contains at least two fatal flaws:
- It appears to assume that timeshares are fungible, such that the success of any particular resale effort isn’t dependent upon the asking price or the attributes of the timeshare (brand, location, season, etc.).
- It isn’t at all clear how an advertising company, which by definition can’t engage in activities requiring a real estate license, would be able to accurately track its success ratio without running afoul of Florida’s brokerage laws.