Critics question realtor Wayne Stroman's timeshare resale business

In addition to the up-front fee, Stroman also charges a ten percent commission or $950, whichever is greater, on timeshare resales. By comparison, Thomas charges ten percent or $750, though he says the fee is negotiable, and Yeary says his Timeshare Store charges owners of Disney properties ten percent, but charges customers selling timeshares at other locations a minimum of $1,500 and no commission.

Hughes in his opinion justified the use of up-front fees, writing that they "are no more intrinsically unfair than high commissions," and that both systems are "designed in the hope that it covers both their costs and a profit." He further wrote that if customers shy away from companies charging up-front fees, they "will shift to high-commission brokers."

It didn't take Rick Shepherd long to decide there was no point in suing Stroman.

"I've tried to figure out what damages I can hit them for," he says, "but $500? It's not worth the hassle."

Other former Stroman customers feel the same way, realizing a lawyer will cost more than what they're trying to recover. The point is not lost on attorneys, either.

"Effectively, the way to pursue something like this is either through class action or a public enforcement action," says Houston-based consumer attorney Rich Tomlinson.

Realistically, though, Tomlinson says he doesn't see a lot of hope for consumers. A class action in Texas is a long shot, he says, because the way state law is written makes it difficult to certify a class. That means, he says, that public enforcement agencies such as the Attorney General or the Texas Real Estate Commission need to step up.

"The consumer is getting screwed left and right," says Tomlinson. "The AG has limited resources...and with only a handful of attorneys, they can't come anywhere close to meeting the demand for their services."

Attorney General spokesman Tom Kelly says the AG "pursues cases based on patterns, trends, egregious behavior toward the consumer and massive fraud," and is interested in hearing from anyone who has a complaint against Stroman.

As for the Texas Real Estate Commission, the body charged with enforcing real estate regulations, Della Lindquist of the Commission's enforcement division says her office has received complaints about Stroman and in response, issued in August 2006 a letter to the company providing three suggestions on how to "further avoid these customer misunderstandings." TREC has not taken any disciplinary action against Stroman in the past ten years, according to the commission's Web site.

The letter lists three changes that "must take place in order to bring the operation into compliance." Among them, salespeople must fully comply with the state license act, which requires that real estate licensees advise the timeshare owner as to their professional opinion of the property's market value before the up-front fee is collected.

Unlike Shepherd's complaint, TREC has fielded concerns from consumers who say they were misled by Stroman salespeople because they did not offer their expertise on how to appropriately price their timeshare. One customer, for example, says a salesman essentially let him pick a price — $1,000 more than what he originally paid — and did not mention the well-known industry reality of depreciation. Ultimately, the owner had to reduce the timeshare price to make it salable and eventually received a refund.

The letter says that "If TREC receives a complaint alleging that a Stroman agent misrepresented the value of a timeshare, the agent and Stroman will be expected to explain the basis for the advice the seller received."

Sharon Crall of Loveland, Ohio, listed her timeshare in Puerto Vallarta, Mexico, with Stroman four months after TREC wrote its letter to Stroman, according to BBB records.

"They made it sound like I could get a lot of money for my timeshare," says Crall. "They told me I could get more than I paid for it and made no mention of any depreciation."

Stroman charged the up-front fee on Crall's credit card immediately, instead of waiting until she signed the contract, as stipulated by ARDA for its members. However, one day after agreeing over the phone to list with Stroman, Crall read the BBB report on the company and decided she did not want to hire them. She says it took her two months to get a refund.

The lack of disciplinary action is "sort of expected with TREC," says Tomlinson. "I mean, it's asking for a lot to ask anybody to regulate their own profession very well."

It appears that Stroman Realty has found a safe haven in Texas to operate. It is protected by a ruling from a sympathetic federal judge as well as a compassionate real estate commission that makes helpful suggestions instead of sanctioning a company with a documented history of consumer complaints.

Again, Parsons says this may be a case of Stroman's company breaching ethical rules rather than breaking the law.

"It's gray, kind of like the fog as the Titanic rolled along," Parsons says. "The iceberg is sitting in front of you, and there's no rule that you can't travel through the fog, but I think the lifeguard should be asking questions here because the poor passengers are sitting waiting to be sunk, and they've been sunk several times before."