ARDA Working Hard to Mitigate the Effect of Agency Cutbacks on Timeshare
By Jason Gamel, ARDA State Affairs
November 6, 2012
Timeshare is highly regulated in most states, and is feeling the brunt of recent state agency staff cutbacks. Timeshares usually have to file new projects as well as renew their existing developments every year in order to continue to sell units and vacation packages within that state. For states with many timeshare registrations, this can mean a lot of paperwork. With less government employees fielding this paperwork, backups can occur. In most cases it is against the law for timeshares to sell their product without receiving these reviews and approvals. These backups can be detrimental to the developer, industry, and the economy of tourism. While some states have crafted their own ways to address this issue already, ARDA is stepping in to help do what they can for other states that could be facing this problem now or in the near future.
A handful of states have solved this problem by deregulating. When a state deregulates, it no longer requires the same strict policies of registration, review, and renewals. For example, in 2010, Michigan ruled that timeshare resorts were no longer required to register in the state. This freed up the burden on both timeshare resorts and the state government who had to process each registration.
Arizona also realized it had a problem with managing the filing buildup due to the regulatory requirements. Thus, with ARDA’s help, Arizona legislature passed legislation that included “deemed approved” language, ruling that renewal filings not manually reviewed within 15 days would be automatically accepted in the system. If the state agency finds an error after the filing was accepted, they are authorized to have the developer fix the error.
Nevada retained all current regulation requirements even after experiencing severe cutbacks in staff and budget. Being a popular destination for timeshare sales, and with new projects being completed in Las Vegas, the build-up of un-reviewed timeshare filings began to severely affect the industry. There are initial filings, amendments, and renewals that have been yet to be reviewed dating from six months to two years.
ARDA and its members have been eagerly working with the Nevada Real Estate Division (NRED) and Department of Business and Industry, as well as the Governor and the State Attorney General’s offices, to solve this regulatory dilemma. ARDA plans on working with NRED to introduce legislation that would simplify regulatory procedures and restructure NRED’s budget, allowing for an adequate number of reviewers at all times so that filings will not be delayed in the future.
ARDA is aware of several states that will be experience turnover, staff and budget cutbacks, and trained reviewer retirement. While ARDA has always supported reasonable regulation, the coming years may prove challenging. ARDA is looking into ways to best address these challenges and recreate the balance of good business and consumer protection through sufficient regulation.