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other suites was similar to its function with respect to its own
rooms.
We believe the record in this case, although sparse,
establishes that B'Mae's was acting as petitioner's agent when it
undertook the various activities incident to renting out the
timeshares. Petitioner's uncontroverted testimony was that
B'Mae's undertook the advertising, guest registration,
housekeeping, and inventory replenishment in exchange for a fee
equal to 40 percent of the proceeds of any rentals. Documents in
evidence substantiate this fee arrangement.
Respondent argues that B'Mae's was a competitor of
petitioners with respect to rentals at the resort. It is true
that B'Mae's rented its own units as well as the timeshares of
petitioners and units of other owners. However, B'Mae's could
retain 40 percent of rent receipts on any rental of petitioners'
timeshares, and B'Mae's had none of the risks of ownership. This
was the standard arrangement that B'Mae's had offered to other
owners. We think B'Mae's proposed and accepted a 40-percent fee
because it was advantageous to B'Mae's, despite the fact that
B'Mae's was also renting its own units. B'Mae's initially made
money on the sale of suites to petitioners and the other owners,
and the only way B'Mae's could continue to make money on the
suites was to be paid for managing the rentals. Thus, B'Mae's
had significant incentive to rent the timeshares. In addition,
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