I have been reviewing the POS documents filed with the Orange County Comptroller, and Florida law on real property versus personal property and applicable timeshare laws. Exactly what DVD is doing is not totally clear, but there may be an issue as to whether what it has created is a legal "timeshare estate" under Florida Statute §721.05(34), which the POS claims it is.
A.
The Cabins Use Plan
Section 721.05(34), which provides the definition of a timeshare estate, is designed to apply to real property timeshares and provides:
“Timeshare estate” means a right to occupy a timeshare unit, coupled with a freehold estate or an estate for years with a future interest in a timeshare property or a specified portion thereof, or coupled with an ownership interest in a condominium unit pursuant to s.
718.103, an ownership interest in a cooperative unit pursuant to s.
719.103, or a direct or indirect beneficial interest in a trust that complies in all respects with s.
721.08(2)(c)4. or s.
721.53(1)(e), provided that the trust does not contain any personal property timeshare interests. A timeshare estate is a parcel of real property under the laws of this state."
Timeshare estate is one of three ways timeshare properties can become a timeshare. There is also a definition for a personal property timeshare interest and for a timeshare license, which applies if what you have is neither a timeshare estate or a personal property timeshare interest. All the prior DVC Resorts were created as real property condominium timeshare estates.
The Cabins Use Plan is created under the trust portion of the timeshare estate definition. Section 721.08(2)(c)4, relates to a single resort (DVC home resort) timeshare, and 721.053(1)(e) for the multisite plan, which statute applies because, under the DVC Resort Agreement, a multisite timeshare exists and members can reserve non-owned resorts at 7-months out using the DVC Reservation Component of the reservation system. Both those statutes set out what a developer must set-up to have a valid trust before allowing timeshares to be sold and used, and both contain the same essential terms. Two key terms are the following:
1. The trustee (the person or company) must be "independent" of the developer (here DVD) and the manager (here DVCM).
2. The "accommodations" or all use rights therein must be transferred to the trust and such transfer must be accepted by the trustee.
"Accommodations" are the timeshare units that are intended to be used for overnight stays. The definition of the term includes items that can be real property and some personal property. "Cabin" is one of the terms that has been included in the definition from early on in the history of the timeshare statutes when only only real property could become a timeshare; personal property was not added until 1991.
The named independent trustee is First American Trust FSB (which happens to also be Marriot's trustee for its timeshare plans). It was added to the program via documents filed at the end of December. Before then, the documents indicated that Palmetto Trust Association, a corporation formed as a trust, may be the trustee, but such would have violated the statute because it is completely controlled by DVD. The "Palmetto Trust" is now controlled by First American as trustee. The Palmetto Trust Association, though still legally a trust, is now the association of the timeshare plan and not the designated independent trustee. The Association is the beneficiary of the trust. It holds the Cabins Use Plan. Actual control of that has been transferred to DVCM.
Purchasers will be purchasing an interest in the Cabins Use Plan, which plan is the designated DVC Resort, and become members of the association by doing so. DVD has transferred to the trust a 50-year land lease it got from the Walt Disney Parks and Resorts Co. That lease includes the land but not the cabins on the land. Under the Cabins Use Plan, purchasers will receive points for making reservations, which a points are attached to the land lease, and will be members covered by the DVC Membership Agreement and DVC Resort Agreement, which control all the resort reservations of the cabins, 11-months out under the membership agreement for home resort, and seven for other resorts under the DVC Reservation Component controlled by BVTC. Basically, the main thing purchasers will be purchasing in the Cabin Use Plan is points to make reservations. Purchasers are supposed to receive a deed showing they have a real property beneficial interest in the trust via the use plan held by the association, which relates to the land lease.
B.
Personal Property Issue
DVD still owns the cabins, which have not yet been transferred to the trustee. There appears to be an issue as to whether that transfer can be done. As noted in the timeshare estate definition, the trust cannot have person property timeshare interests. The issue appears to be whether the cabins are in fact "mobile homes" as that term is defined under Florida law. There is actually a Florida Constitutional provision, Fl Const. §VI(1), which provides that mobile homes are to be subject only to licensing (personal property) taxes and not ad valorem (real property) taxes, although the legislature gets to define what a mobile home actually is.
The statutes set out the rules to determine whether a mobile home is real property or personal property if it is permanently attached to land (and permanently means hooked up to water, gas, and electric lines where they are). First, it has to, in fact, be a "mobile home" in that it has a chassis with wheels to which tires are, or can be, attached. A modular or manufactured home that is created and transported to a site without a chassis for wheels, is, when attached to land, deemed to be real property. If it has that chassis, it always remains personal property unless both the owner of the mobile home and the owner of the land are the same person or entity, in which case it becomes real property. See, e.g., See, e.g., Fl. Stat. §§320.01(2)(a), 320.015(1), 193.075(1). And the owner is required to purchase an RP sticker that designates the mobile home as real property. The land ownership required for mobile homes on the land to be deemed real property is a fee interest; having a long term lease in the land is not enough.
Zappo v. Gilreath, 790 So.2d 651 (2001).
Since neither DVD nor the trustee have a fee interest in the land, but only a long-term lease, the cabins would likely be personal property if they are actually mobile homes, i.e., the fact they are called "cabins" does not make them real property cabins under the definition of accommodation. And DVD's failure, and inability, to transfer the cabins to the trust could mean there is not a valid timeshare estate.
So are the cabins mobile homes? The fact that DVD has gone through so many complicated steps to somehow create a timeshare estate without actually transferring the cabins to the trust, indicates they could be personal property mobile homes. If they were real property modular homes, DVD could have made them condominiums. The prior cabins that were on the site were mobile homes. There is also a peculiar definition in the Declarations filed of "Resort Property," which is property controlled by the association (and thus DVCM), is mentioned in many places, and is part of the Cabins Use Plan. Resort Property is defined as:
"[T]he lands , leaseholds, easements, and personal property that are subjected to this Declaration from time to time as part of the Resort Property, whether contiguous, including those improvements or portions of improvements that are specifically identified in the survey materials in Exhibit “A” and in any survey materials attached as part of any amendment to this Declaration adding a phase to the Resort Property in accordance with Article 19, and all appurtenant easements and rights intended for use in connection with the Resort Property."
Note how the first line of the definition does not say "and real or personal property" but only "personal property" and then says that includes the "improvements specifically identified in the survey materials in Exhibit 'A'" to the declarations, which has maps of the land with cabins added as the improvements to the land, which are called "Vacation Homes."
