Denver partner David Waller authored “Key Landmarks/Decisions in the Stroman Case,” published in the November/December issue of Developments, the magazine of the American Resort Development Association.
In the article, Waller traces the history of legal matters related to Texas-based Stroman Realty, which bills itself as the “‘world’s largest resort timeshare resale broker and the acknowledged leader in the timeshare resales marketplace.’” Over the course of 20 years, “Stroman has fought real estate regulators from several states who allege that Stroman has engaged in unlicensed timeshare resale activities and improperly collected advance fees,” Waller explained. Those states have included California, Florida, Texas, Arizona and Illinois.
Most recently, a Florida trial court issued an order confirming the position of Florida regulators that “Stroman would have to hold a Florida broker license to list and sell Florida timeshares. Further, it prohibits Stroman from charging an advance fee for the listing of Florida timeshares,” Waller noted. But in contrast to the regulators’ assertions, “Stroman does not need a Florida license to assist Florida residents in the sale of timeshare interests located in another state. And Stroman is not prohibited from charging an advance fee with respect to that activity.”
Waller anticipates that “a federal court with proper jurisdiction will eventually be presented with the question of whether an obligation to comply with multiple real estate licensing statutes violates the Commerce Clause,” and that “the result will likely turn on whether the court finds the applicable laws to be so duplicative that they ‘unnecessarily and unreasonably’ create cumulative administrative cost and risk of inconsistent regulation without producing meaningful consumer protection.”
His conclusion: “The impact of that decision could be far-reaching, providing the basis for challenging other state-by-state licensure and permit requirements, including those under interstate land sale and timeshare registration laws.”