I think it is difficult to expect or even present the idea that in addition to the construction cost the developer absorb MF costs, especially with all the construction bankruptcies that have occurred as of late. However, if there are unoccupied units that are resort managed for rental purposes, or if the developer maintains promotion units for marketing then they should absolutely be paying the MF for those units. And, if it is upkeep we are talking about then I see no reason why the MF would be different than that of an owner. I do agree that making it much more difficult for MF to increase would raise the value and price of timeshares. I have parents coming to stay in Williamsburg in August, I was going to book a one bedroom with RCI points..which calculating exchange fee and points for a one bedroom comes out to $685, not bad...pretty cheap for a week stay...but hold on just one second. Going to the resorts website I am able to book a room for nearly $120 less...same room, same amenities...for LESS!!. Now my question is who paying the MF's on these rooms that are resort leased for the week? Are they absorbed by the actual owners? I don't know, but I am guessing yes. If you look at many of these balance sheets, the Timeshares are registered as non-profits (the developer is for-profit obviously)...but there is some very creative accounting going on to show a deficit each and every year...or barely breaking even. I also question if some of the owner/board members have the executive and business background to identify these types of creative accounting scenarios.
The bottom line is that the "bottom line" is not always the true BOTTOM LINE, and the board needs to be able to call out the corporate hooligans when they see them. In this era of corporate fraud and manipulation owners need to be more diligent about who is running their time share and how their proxy votes are used. You look at resorts like Winner's Circle in Solana, Tree Tops in Gaitlinburg, and a number of other independents and what you see is that they have managed to keep MF reasonable, build value for their owners, reasonably update their properties, and for the most part keep their foreclosure rates very low and occupancy rates fairly high.