Royal Resorts RTU ending & cash back

Started by kekouri, March 09, 2005, 01:54:06

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Hi Tony!
  I was checking out on the resales, and note most seem to give back cash when the RTU period is finished.

  One Royal Mayan 2 bed 2 bath L/O  (I think week 19) was selling for about $6500 US and says residual in (I forgot how many years) will be about $5250.

  Does that mean at the end of the RTU (was it 13 yrs), the 'owner' will get back $5250, or a % of that amount?


Hi Ken. The owner would be guaranteed the residual amount plus even more should the sale price be high enough. Here is the exact wording from the Royal Mayan membership paperwork :  

"The company declares that following expiration of the Trust in January in the year 2014, the club will be sold (in an orderly fashion, at public or private sale) for the best price obtainable and any sales proceeds remaining after first deducting taxes, commissions and other appropriate charges and expenses, will be distributed in accordance with the priorities set forth below:
    First: Club members of record on the date of termination of the trust shall be paid their residual rights as specified [elsewhere in paperwork]
    Second: The company shall be paid an amount equal to the total amount paid out under priority First, above.
    Third: One half of any remaining net sales proceeds shall be paid pro rata among the persons receiving funds under priority First above and the other one half shall be paid to the Company."

The residual amount is almost always the original developer sales price of the unit. The other Cancun Royals have similar language with slighly different wording, some more favorable and one which pays all owners an equal residual amount.
 Club International (de Cancun) has it's RTU ending in 2007 with substantially the same residual payout plan (though some of the units there do not have residual rights). I am perhaps one the most cynical Royal owners, but I believe that the Royals will make good on the residual payment at Club International. I also expect an announcement of a new Royal resort to be built south of Cancun around the end of this year along with a special offer/incentive for Club International owners to buy there.


I already reported the new resort being built south of Cancun, but it appears that the residual payment for Club International will not be met at 100%. The Royals have contacted owners and asked them to fill out a survey as to whether they would prefer a payback at just under 50% or a RTU extension for 30 years at a developer price less a discount and the full residual amount. It will be interesting to see how this plays out, but it would appear that the Royals reputation will be suffering a blow if the full residual is not met.

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