Allan's letter pt 3
P. S. One time share owners recent comment:. "The majority certainly know about the special assessment and care about that. They also likely have zero idea about the brouhaha here and even if they knew wouldn't react. The only area that really gets owners attention is when it hits their wallet. Most know little to nothing about the workings of the Board/Management and aren't going to lift a finger to figure it out. That's just the way it is in timeshare - a fact all too well known by developers and used to their maximum advantage in most cases."
Some 20 questionable actions by MVCI and disturbing questions that they have not satisfactorily addressed -- are listed below. For pursuing these issues, my tenure as Board President was terminated.
This is in summary of my fall from MVCI grace's and if anyone wants more details and backup, please contact me at
C20854@aol.com or call me at 301-299-2118.
1. After Owners questions, my discovery that the Owners did not receive revenue from the rental space in the lobby for past years. Once this was disclosed, MVCI issued the Association a check for over $100,000 in lost revenue from the De Palm tours and Red Sail desks. My seeking interest during this period irritated MVCI, but only after many months of asking did they pay an additional amount to the Owners for lost interest "as a good will gesture".
2. My continued questioning as to why Owners did not receive any revenue for 9 years from the Hertz desk in our lobby. (Their contract provided two vehicles for use by the resort staff and no cash). National was paying over $5,000 per month at the Surf Club for a desk plus vehicles. After going out to bid, now the Owners receive two vehicles as well as over $7,000 per month for one desk for auto rental. I questioned why under the original contract with Hertz we did not receive any cash, I asked to see the Marriott Hotel rental contract and see what cash payments the Hotel was receiving from Hertz for the last nine years, for comparison. This request was refused. I questioned whether this contract was i n the best interest of the Owners?
3. My continued request for recovery of lost revenue from the 2-4 Marriott Sales desks in the Lobby for the last 9 years. We had received zero dollars and while Marriott's lawyers contend that they have a right to get this space free, our legal counsel see's this differently. Marriott now is paying $500 per month or $6000 per year for this space. I contend that 2-4 desks for Sales is worth hundreds of thousands of dollars on the Island. We may have lost over $1 million dollars in revenue. Only a third party can decide. While the Aruba Ocean Club units have been sold out for years, and they are selling the Surf Club, MVCI contends that they have sold hundreds of re-sales from these desks which helps Owners. To a far greater extent it profits MVCI, as it also provided millions of dollars to MVCI with their 40% commission. I ask, is $500 a month with no payment for the past nine years a fair rent for 4 desks when the least amount we currently receive is $2,000 per month per desk?
4. After Owner complaints and my continued inquiries about the condition of the Building and roof. After seeing for myself the flooding that occurred in the lobby, 2nd floor area, as well as the rear patio two years ago at 4 a.m., I was impressed by the staff's response and thanked them for all the hard work, but was shocked when they stated that "this happens every time we have a good rain". I had been told by many Owners that our Building leaked very badly, but was constantly reassured by MVCI management that this only "happens when a Felix-type event happens" referring to the 100+ year storm. Marriott Sales staff now disclose that they have used buckets for years by their desks to catch the water and our front desk staff have stated that they had leaks since the building opened. This was all reconfirmed only after the Board hired their own consultant to review water intrusion as well as structural issues with our Building. Our consultant is a well respected expert as well as an Owners. MVCI spent thousands of dollars and hired their own consultant to follow our Consultants around. The capacity of roof drains as well as underground storage tanks for run off were in question. While I was still an elected Board member (but removed from the Presidency), the new Officers refused to share any reports on the Building condition with me only with MVCI.
According to our GM it has cost Owners over $70,000 dollars to hire our own consultants, yet their initial and final reports have not been shared to this day. I witnessed thousands of dollars of unnecessary consultant time because MVCI did not give our consultants correct building blueprints or requested material in a timely manner. I was told that all requests had to go thru Marriott legal before dissemination.
Two examples: The wall behind the front desk, when cut into by our consultants, shows that the sheet rock and studs go into the ground and no water barrier was ever installed. No wonder it leaked and had mold issues since the building was opened (according to staff). When our consultants showed me the front atrium windows that we had replaced jus t a few years ago, anyone could have observed that they were poorly installed and not maintained. Upon our arrival MVCI had removed all the sheet rock on the interior walls on floors 2-6 because of the leaks. Mold remediation was underway. We had Stephen Rudner of Robert Darvas Associates, a structural engineer, as part of Connie Morbach's Santi-Air team who poured over blue prints of the building and raised questions. Additional items questioned were the roof drainage as well as the underground storage capacity and the lack of mechanical fastening of the new roof as required by the Mfg. Yet the new Board has refused to ask our structural consultant to follow up and are using Marriott's consultants’ reports only.
AOC Owners should insist that our own consultants present their final comments on MVCI's responses and the work being done. My continued questioning about the lack of adequate oversight did not make MVCI happy, yet we the Owners are paying for all these repairs.
5. After the concerns noted in #4, I requested our Board attorney to draft a list=2 0of issues we had with MVCI and stated that unless they are responded to immediately, then it will be turned over to our legal counsel for action. It was only after the passage of this Board resolution on January 14, 2008 that MVCI had the roof looked at and produced a report stating that it must be replaced immediately because it was holding water which weight it had not be designed for and could risk total failure. It was also at that time that MVCI disclosed that the roof had been on the building for at least 5 years prior to any sales and never disclosed to Owners. Since other issues were still pending from the January 14, resolution and the threat of legal action was the only thing that seemed to work with MVCI. I also had our attorney prepare a similar motion for possible consideration at our November 2008 meeting. This confidential memo was wrongfully obtained by MVCI to their displeasure.
6. My sharing the discovery of information with Owners gathered by one of our Owners from Aruba's Historical Records about our building that stated: "...Before construction was completed, they ran out of money, the Italian contractors had left without notice and the unfinished buildings were left empty for years, like modern time ruins. The government was even considering blowing up the skeletons when hotel magnate Marriott took care of them." -
www.historiadiaruba.aw/index.php?option=com_content&task=view&id=24&Itemid=39&lang=en I have been accused of sharing too much information with Owners. By contrast, this Board passed a secrecy resolution threatening any Board member providing information of being sued personally. I believe that Owners are entitled to information, we all own the AOC together.
7. After hearing from other Vacation Club Boards and our Owners that the Management fee structure is unreasonable - Several years ago our board voted to request a change in management fee structure from a 10% of all funds collected to a flat rate with an inflation factor. This is allowed in our B y-Laws, but only if Management agrees. They did not, but assured us that they would be presenting a new method within a year. Nothing to date. What this means is that Management receives 10 cents on every dollar we collect. If the government adds a $1.00 tax, we must pay Management an additional 10 cents per our contract. On our assessment of $14 million dollars for our ten year refurbishment Marriott is entitled to $1.4 under the current contract. Our reserves were so poorly funded that MVCI, the “experts,” should have known that we were severely under funded. Every year MVCI would recommend a reserve figure and the Board every year supported it 100%. As some Owners have pointed out, if the reserve funding had been increased from day one - MVCI would have had to pay millions of dollars on the unsold villas. Since we contracted with MVCI to do our 10 year refurbishment, and as I have been informed that they have waived management fees on refurbishments at other Vacation Clubs, they have waived it for us. It is appreciated.
8. My non support of the Maintenance bill increase - I did not vote for the huge increase in this year’s maintenance fee, because I did not believe that it had been reviewed adequately. When asked, MVCI said they could cut hundreds of dollars off the fee, but we might “lose some services.” The Board voted for the increases without further inquiring about alternatives.
9. Owner concerns and my questioning whether MVCI's $2 million dollar concessions is adequate? This positive gesture is appreciated, but what percentage of the whole amount does $2 million represent? Even this concession only occurred because of the outcry from hundreds of our Owners. Remember, this consists of the $1.4 million fee waiver as noted in item #7 above, the waiver of rental income from rooms taken out of inventory during the refurbishment and the 48% cost of the new roof because of the lack of disclosure that the roof sat open for 5 years prior to any MVCI sales to Owners.
10. Owner concerns and my continued request of legal clarification on the contradictions over who has final authority over the question of integrating the Ocean Club facilities with the Surf Club. MVCI contends that under their agreements they have final say.& nbsp; But on behalf of the AOC Owners, on a developers-controlled Board, in 2001, prior to the construction of the Surf Club. I know what the Board was told and I know what we agreed to and did not agree to. I co-signed an agreement and blueprints allowing all Ocean Club Owners free use for life of the Lazy River in exchange for MVCI on behalf of the Surf Club being allowed to open the wall between the two properties for egress, removal of a propane building, use of the Ocean Club lobby for Surf Club check in until the Surf Club lobby is opened etc. Ocean club's pool, beach, palapas, or tennis courts were never to be used by Surf Club owners. Why this agreement is “not enforceable” is still in question and although the AOC Board has stated not to integrate, we still share Tennis Courts and MVCI staff have continued to state their long term desire to have an integrated resort. The Owners voted and passed a motion at the 2002 Annual meeting that no integration can occur unles s voted on by the Owners. Will this be enforced?
11. After Owners request for timely information I created an Owner Web site -
www.arubaoceanclub.com. After many years of requesting MVCI to create a web site for Owners’ news, to no avail, I created one and it was recognized as one of the most professional and best Owner sites that many at Marriott had seen. It was only my posting of correspondence to Owners without MVCI's final approval that led to a decision to move everything thru MVCI, which this Board has done. They have never stated that anything I have written to Owners was untrue, rather that “Owners do not have to know that much.” They even stopped sharing owners’ letters to the Board with all Board members.
12. My concern about past By Law amendment regarding the date for the Annual Meeting - MVCI's and the current Board's legal staff discovered that a 1980's Aruba Law that requires all timeshares to have an annual meeting within 6 months of the end of the fiscal year to provide its Owners will full financial information; the Board moved this year’s meeting forward to comply. Yet, In 2000 under a developers-controlled Board, a By-Law change was proposed by Marriott's legal department and passed by the Owners/Developer to be recorded with the Aruba government to move our Annual meeting to October to save the Owners expenses and allow for all the financial information to be available. When I pointed this out, MVCI's legal department - although acknowledged from the minutes that this did occur - said that they have no record of recording this By-Law change. Did the MVCI legal team not know that the 2000 By Law change was in violation of Aruba law and that we have been operating illegally for the past 9 years? This year we did have the annual meeting on May 15. Some owners feel that one of their motives was to remove me from office - 6 months early. I feel that this is a useful law which insures that Time Share Owners get full financial information with 6 months of the end of the year. But in any event, I feel that the Board is still in violation of Aruba law since they did not provide Owners with a complete accounting nor did they acknowledge or amend the past By-Law change.
13. After request from Owners about Annual audits - Per our By-Laws, the Board must receive annual independent financial Audits. When I asked why this was not done and whether this might be considered mismanagement, MVCI produced audits in 2007 for years 1999-2006 , stating that because of legal confusion on island tax issues the audits were never completed and shared with the Board. Before I left the Presidency, we set up a finance committee and I hope that they are given the ability to review our complete financial's and insure adequate audits. Who will follow up on this, if Owners have limited contact with the Board?
