Special Assessment Fee @ Pollard Brook

[AJS]

I have been going through the "Public Offering" document and "By Laws of Pollard Brook", which I received in 1998.

Some statements, which appear as if they are not being followed (maybe they have been modified by the board). I will follow each with it's related question. Finley are you willing to include these with your own questions. You seem to have someone who is answering your questions, where I have not begun a conversation with anyone at Pollard Brook yet. I wanted to get my facts straight first.

1.
Public Offering - (d) Purchasers of timershare intervals will pay to the association to e collected by the manager an annual maintenance fee as provided by the projected budget. Except in extraoridinary circumstances, the annual maintenance feel shall be the only charge the purchaser must pay in addition to the purchase price and closing costs associated there with.
Question:
What were the exraordinary circumstances?

2.
By Laws of Pollard Brook - Part II Board of Directors
(vii) May purchase such equipment and other personal property as is necessary to properly accomplish the purposes of the Association, except that board should have no power to expend in excess of $4,000 in any one (1) year for the acquisition of personal property or for capital improvements w/o majority vote of members present and voting at a duly held meeting of the members association.
Questions:
How much are they spending in one year? Where are the meeting minutes from the approval of this?
Can we see the operating budget for this year and the last two?
Note: The last operating budget I received was the year I purchased my unit.

3.
By Laws of Pollard Brook - Part IV Meetings
Section 1
(c) The president, with in (30) days of said meeting shall cause a copy of the minutes there of, including the budget adopted thereof to be mailed to each member.
I received the special assesement in mail, but have never received a copy in the mail of the operating budget.
Questions:
Can we receive (in mail) the future annual meeting minutes and operating budgets for each year going forward?
Note: The annual meeting according to the 1998 By Laws is held:
"... on the Saturday in November immediately preceding Thanksgiving Day at 1PM in the Conference Center in the Village af Loon Mountain in Lincoln, NH, or at such other time, which shall not be more then twenty (20) days before or after said date, or at such other place as the board shall direct. ..."

4.
By Laws of Pollard Brook - Part VI Accounting -
5. Special Assessments
(a) Each owner is liable for those expenses directly related to his period of occupancy of a condominium unit assigned to him, which shall be billed to him as a special assessment.
(b) Expenses billable as special assessments include, but are not limited to,, the cost of repairing damamge done to" ... "during a use period other then ordinary wear and tear.

Comment: The items our $419. bill are supposed to cover do not seem to fit this discription, with the exception of the phrase "are not limited to".
Question: Based on the definition of Special Assessment within the "By Laws" is it possible that the bill has been miss labeled?

5.
By Laws of Pollard Brook - Part VI Accounting -
4. Maintenace Fees
(a) Each member including the partner is w/ respect to any unit owned by it, whether or not it is completed and ready for use or occupancy, shall be assessed prior to the beginning of each fiscal year.

If the answer to question 4 is yes, then -
This bill would seem to be have missed the due date for the maintenance fee.
Will this be addressed at the next annual meeting?
Where and exactly when will the next annual meeting be held?
Why are some units exempt from paying as seems to be the case?
When all units are billed will our share of the burden be lowered?

Regards

It seems to me that the Board cannot levy a special assessment for in excess of $4000 with a vote of the members.
This is not mislabeled. Your maintenance fee was due in January. This is a special assessment.

 

[Bwolf]

You need to read the laws of the state where the timeshare is located to learn your rights as an owner. Every state I am aware of has provisions in its non-profit corporation law, under which HOA's are organized, that establish a right of members to 1) inspect and copy the list of members, and 2) examine and copy many corporate records, including finanical records.

You need to research this for your state, and write a demand letter to the corporate officers demanding to inspect and copy these records. In your letter describe all categories of records just as they are set out in the statute. If management starts stonewalling, you will know there is something there they do not want you to see. With a list of members, you can start making contacts to set up a Concerned Owners group to try to bring about reform.

I was hoping that the Consumer Fraud office might be able to point us to the relevant laws as you describe, Carolinian, but I may be reading too much into the role and function of said office. Maybe I'll undertake this research.

 

[AJS]

I think the key questions that need answers are:
1) What is the total dollar amount expected to be raised by the special assessment?
2) How many interval owners are delinquent? What is the amount of delinquency for 2009, for 2008 and previous years? When will foreclosure action begin so that this money can be recovered?
3) Are all interval owners, both weeks and points, being assessed the special assessment? Are any interval owners excepted from the assessment and what is that number of owners?
4) How much is the Developer delinquent in 2009 maintenance fees on how many intervals? How much for 2008 and previous years?
5) Is the Developer being assessed the same amounts on each interval owned for this special assessment? How many intervals? When is the Developer paying the special assessment?
6) What section in what document permits the Board of Advisors to implement special assessments? What document permits the Board of Advisors to assess some owners and not others.
7) With the Developer not paying annual maintenance fees, and possibly not paying the special assessment, what actions are being taken by the Board of Advisors to protect owners from default by the Developer on either or both the unpaid maintenance fee amount or the unpaid special assessment.
8) Where and when is the mext Board of Advisors meeting?

Perhaps anyone in contact with PB personnel could ask these question and fill in the answers as we find out. I think answers to these questions might give us the ammunition we need with the AG of NH.

I also think we should get a good representation of owners to attend the next Board of Advisors meeting.

Does anyone have other facts that we need to obtain? How do we get these answers??

 

[Carolinian]

Does anyone have other facts that we need to obtain? How do we get these answers??

Look at the non-profit corporation laws of NH for the method by which members can examine and copy the financial records, and membership list, of the HOA. Send a demand letter to the appropriate corporate officer(s) of the HOA by registered mail making a demand to see those records, specifically reciting everything that statute allows you to see and copy.

In most states there is a state agency, in addition to the Consumer Protection Division of the state AG (whose duties are more general), which specifically oversees timeshares, including HOA's and developers. In North Carolina, it is the Real Estate Commission, as it is in many states, but I do not know about NH. A call to the Real Estate Commission there could probably answer the question of whether it is them or someone else. Whoever it is, they need to be brought into the process. Copy your demand letter for corporate records to them. Also, direct all your other complaints to them, as well as the AG.

Trying to make homeowners cover for a deadbeat developer is just outrageous, and their use of a conflict of interest controlled HOA board to do it makes it even worse.

 

[Finley]

Meeting Minutes & Meeting Schedule

In my e-mail dialogue with Joel Bourassa I requested these and he responded in the affirmative that they were being sent. I'll keep you posted. I will also post these pointed questions to him and indicate they are the composition of several member's. I'm happy to share what I get from him / PB as I get it.

In regards to Eric's statements regarding non-profit HOAs, I am not sure if that would be addressed in the NH State RSA's if referenced but this supported the fee structure I referenced in my letter so there may well be more to support other aspects too:

http://www.gencourt.state.nh.us/rsa/html/XXXI/356-B/356-B-mrg.htm

TRADE AND COMMERCE
CHAPTER 356-B
CONDOMINIUM ACT

 

[ecwinch]

It seems to me that the Board cannot levy a special assessment for in excess of $4000 with a vote of the members.
This is not mislabeled. Your maintenance fee was due in January. This is a special assessment.

I do not think it prohibits a special assessment in excess of $4000 for operational expenses.

It clearly states that a vote is required for assessments over $4000 pertaining to "acquisition of personal property or for capital improvements". It is silent on special assessments for other reasons - like a shortfall in revenues.

 

[Carolinian]

Where you need to look for the right to inspect and copy records is not in the Condominium Act, it is in the non-profit corporation act. This right exists for all members of any type of non-profit corporation, not just timeshares.

Looking up laws applicable to timeshare can be a pain because they are usually in several places. One is the Uniform Condominium Act, which most if not all states have. For timeshares organized before that act was adopted, many but not all aspects of the older condominium law, which in North Carolina is the Unit Ownership Act, still apply. Then there are usually some timeshare related provisions in the real estate sales laws and these often go beyond just real timeshare sales. And importantly, since HOA's are organized as non-profit corporations, there is the non-profit corporation laws.

In my e-mail dialogue with Joel Bourassa I requested these and he responded in the affirmative that they were being sent. I'll keep you posted. I will also post these pointed questions to him and indicate they are the composition of several member's. I'm happy to share what I get from him / PB as I get it.

In regards to Eric's statements regarding non-profit HOAs, I am not sure if that would be addressed in the NH State RSA's if referenced but this supported the fee structure I referenced in my letter so there may well be more to support other aspects too:

http://www.gencourt.state.nh.us/rsa/html/XXXI/356-B/356-B-mrg.htm

TRADE AND COMMERCE
CHAPTER 356-B
CONDOMINIUM ACT

 

[Carolinian]

I do not think it prohibits a special assessment in excess of $4000 for operational expenses.

It clearly states that a vote is required for assessments over $4000 pertaining to "acquisition of personal property or for capital improvements". It is silent on special assessments for other reasons - like a shortfall in revenues.

Special assessments should NOT be for operational expenses. If that is the excuse for a special assessment, it indicates gross mismanagement, and it indicates a crying need for a change in management. Putting the developers m/f responsibility on the back of the individual owners is just appalling. THis is one developer who needs to be shown the door and the sooner the better.

 

[ecwinch]

Special assessments should NOT be for operational expenses. If that is the excuse for a special assessment, it indicates gross mismanagement, and it indicates a crying need for a change in management. Putting the developers m/f responsibility on the back of the individual owners is just appalling. THis is one developer who needs to be shown the door and the sooner the better.

Put yourself in the shoes of a BoD member that steps into a situation like this - where there is a real shortfall in revenues vs expenses. How would you solve that problem?

Here is one option:

I would first probably do a detailed analysis of your expenses. That would find some savings that you could implement without decreasing services. But that likely only realize a small reduction in expenses. Then you would need to either do a special assessment, borrow money, or reduce services. Each option has certain challenges. I can see how a special assessment would be a viable option. I would not like doing it, but I can see how I would vote to have one done.

You are making the assumption that they have not already done this or something similar. We do not know that.

 

[Carolinian]

Having served for seven years on an HOA BoD, I can tell you that if the problem is on the income side, as it is in this case, we would look first at how to pry the money out of the deadbeat(s) and if not foreclose on their weeks so we could try to get them into the hands of someone who would pay. Fortunately, the resort where I served on the board had already kicked out the developer, taken ownership of its remaining developer weeks, and wholesaled them to a reseller which had sold them on to new owners some years before I was first elected to the board, so I have never had to deal with a deadbeat developer. Of course, before the homeowners dealt with the developer, they first had to take control of the HOA board away from it, followed by taking away resort management.

The first step is get control of the HOA. The second is to figure out the pressure points on the developer. It is the developer which should either be cutting its other expenses or borrowing money to pay what it owes, not using its conflict of interest control of the HOA BoD to foist their debts onto other members. What is needed is a homeowner controlled board that will be tough enough to hammer the deadbeat developer until it either pays up or relinquishes its weeks.

How is it fair that individual owners should have to pay a SA to cover the butt of a deadbeat developer?

Put yourself in the shoes of a BoD member that steps into a situation like this - where there is a real shortfall in revenues vs expenses. How would you solve that problem?

Here is one option:

I would first probably do a detailed analysis of your expenses. That would find some savings that you could implement without decreasing services. But that likely only realize a small reduction in expenses. Then you would need to either do a special assessment, borrow money, or reduce services. Each option has certain challenges. I can see how a special assessment would be a viable option. I would not like doing it, but I can see how I would vote to have one done.

You are making the assumption that they have not already done this or something similar. We do not know that.

 

[ecwinch]

Having served for seven years on an HOA BoD, I can tell you that if the problem is on the income side, as it is in this case, we would look first at how to pry the money out of the deadbeat(s) and if not foreclose on their weeks so we could try to get them into the hands of someone who would pay. Fortunately, the resort where I served on the board had already kicked out the developer, taken ownership of its remaining developer weeks, and wholesaled them to a reseller which had sold them on to new owners some years before I was first elected to the board, so I have never had to deal with a deadbeat developer. Of course, before the homeowners dealt with the developer, they first had to take control of the HOA board away from it, followed by taking away resort management.

The first step is get control of the HOA. The second is to figure out the pressure points on the developer. It is the developer which should either be cutting its other expenses or borrowing money to pay what it owes, not using its conflict of interest control of the HOA BoD to foist their debts onto other members. What is needed is a homeowner controlled board that will be tough enough to hammer the deadbeat developer until it either pays up or relinquishes its weeks.

How is it fair that individual owners should have to pay a SA to cover the butt of a deadbeat developer?

All very valid points, and a solid long-term strategy.

But in the real world, resorts have bills to pay. The process you articulate might take more time then they have.

How would an owner or exchanger respond if they showed up at the resort, and there was minimal staff due to payroll not being met. Or services were slashed to a minimum due to cash-flow problems.

Even a independent BoD will have to find a way to bridge the revenue shortfall.

I would not make the special assessment the key issue. I would make the assumption that the resort has cash-flow issues, and needs the revenue to make it through the year.

First, I would focus on it not being applied to everyone equally. And then on what actions are being taken to foreclose on those who are not paying m/f. To get there I would fully understand the developers contractual obligation to pay the m/f.

Some resorts have developer contracts that allows the developer to either pay m/f on held inventory OR make up any shortfall in the operational budget. If this situation is due to the latter, and the assessment is due to the developer's inability to make up that shortfall, then a different strategy would need to be used. A breach of contract suit to terminate the developers rights, rather then foreclosing.

 

[dreamWeaver]

It seems to me that the Board cannot levy a special assessment for in excess of $4000 with a vote of the members.
This is not mislabeled. Your maintenance fee was due in January. This is a special assessment.

Our maintenance fee was due in October and has been paid. This past year the due date for the maintenance fee was moved from January to October. Maybe they were experiencing a short fall then?
Are you a PB owner and was your m/f due in October?
I was expressing a belief that they called it a special assessment, because that is the type of fee they can charge anytime. The definition of special assessment in the By Laws of Pollard Brook sounded like the SA was for unexpected (non wear and tear) damages to an owners unit during their use interval.
I plan to pay the fee. I don't want to see PB go under, because that will impact my interest as well as the developers. It will benefit us as owners if the condition of the units is maintained and we can retain membership to an exchange program.
Am I angry about the special assessment? Yes.
But I don't think we have enough information yet.
I think Eric has made some very good suggestions.

 

[AJS]

All very valid points, and a solid long-term strategy.

But in the real world, resorts have bills to pay. The process you articulate might take more time then they have.

How would an owner or exchanger respond if they showed up at the resort, and there was minimal staff due to payroll not being met. Or services were slashed to a minimum due to cash-flow problems.

Even a independent BoD will have to find a way to bridge the revenue shortfall.

I would not make the special assessment the key issue. I would make the assumption that the resort has cash-flow issues, and needs the revenue to make it through the year.

First, I would focus on it not being applied to everyone equally. And then on what actions are being taken to foreclose on those who are not paying m/f. To get there I would fully understand the developers contractual obligation to pay the m/f.

Some resorts have developer contracts that allows the developer to either pay m/f on held inventory OR make up any shortfall in the operational budget. If this situation is due to the latter, and the assessment is due to the developer's inability to make up that shortfall, then a different strategy would need to be used. A breach of contract suit to terminate the developers rights, rather then foreclosing.

Re foreclosing on the owners that have not paid the maintenance fee, the assessment letter days "the developer at some time in the future would begin foreclosure proceedings, and a portion of the funds recovered would be used to cover unpaid maintenance fees" Why would the developer foreclose? He has no financial interest. Its the unit owners association who has the financial interest and the legal ability to foreclose. It should be foreclosing, selling the units, paying the dekinquent fees with the proceeds, and using any excess to fund the reserve. The developer has NO, repeat NO interest in seeing units on the market when he still has over 1000 to sell. He has no legal right to initiate foreclosure proceedings. The developer, as the management company, might do so at the request of the owners association, but has no right to monies recovered.

 

[AJS]

It's clear that PB has a cash flow problem. It's important to distinguish between cash needed to run the resort and cash needed by the Developer to expand, buy land, etc.

When we paid our 2009 maintenance fee, we recieved a budget for 2009. I don't have one handy. How much was shown on it as income from maintenance fees?? I assume it was around $3M. Can anyone tell me what that amount was?

If PB is short of cash because owners did not pay their maintenance, that amount of cash has to come from some place. It's appropriate to do a special assessment to cover it. However, when this money is recovered, either paid or units foreclosed and sold, it should reduce our future maintenance fee because it is additional to a budgeted years income.

PB apparently is also short the maintenance fees owed by the Developer. Again, this is needed cashflow to operate, and has to come from someplace. The Developer doesn't have it and can't get his normal financing, so where does it come from? Special assessment. However, this is a debt to be recovered through collection or foreclosure of units, just as the delinquent owner above. The problem with this, however, is that the Developer has a 3-2control of the Board's decisions. So he can vote to essentially make us his "lender" vs. getting the money from the bank (which apparently won't renew his line) at no interest. So, it's really a loan to the Developer that we are paying. It is a debt that, when repaid in the future, is extra cashflow for those years, and should reduces the normal $500+/_ maintenance fee appropriately. I would worry about non payment, brush it under the rug, and we never see a maintenance fee reduction. Write it off as uncollectable.

We need to know the $ amount of these two cash shortages. Let's estimate it at $500,000. Thats less than $100 per owner getting hit with the special assessment. So, where is the rest of the money going? I'm estimating the special assessment will raise $3M. That leaves $2.5M. It's certainly gross mismanagement and lousy budgeting if $1.2 M is needed for improvements to PB properties, above the money already included for same in 2009, 2008, etc budgets. But it's possible. So, again, special assessment. Not really the Developer's responsibility, but the Board of Advisors and the management company who should have been on top of it,

Still leaves $1.3M unaccounted for. Is the Developer getting any of this for other projects and using us as as a "lender" ( at no interest) because he can't get financing from a bank? This would be fraud and deception. With a 3-2 control of the Board, he would be making a very favorable loan to himself, and not revealing to us the true purpose of the special assessment. We also would have no collateral and possibly no recovery. One would hope that the independant accounting firm would see through this little sceme if it happened.

It's really important the we see a true breakdown of how the $3M will be spent, that it is all spent on PB needs, that it reduces our future maintenance fees appropriately, and that all $3M is recovered either as debts collected or accounted for if extraordinary PB improvements. None of it should be usable by the Developer for other projects for which he needs a source of financing.

 

[ecwinch]

Re foreclosing on the owners that have not paid the maintenance fee, the assessment letter days "the developer at some time in the future would begin foreclosure proceedings, and a portion of the funds recovered would be used to cover unpaid maintenance fees" Why would the developer foreclose? He has no financial interest. Its the unit owners association who has the financial interest and the legal ability to foreclose. It should be foreclosing, selling the units, paying the dekinquent fees with the proceeds, and using any excess to fund the reserve. The developer has NO, repeat NO interest in seeing units on the market when he still has over 1000 to sell. He has no legal right to initiate foreclosure proceedings. The developer, as the management company, might do so at the request of the owners association, but has no right to monies recovered.

To me this sounds like the developer has financed the purchase of those units, and is attempting to foreclose on the units. So those owners are probably behind on both m/f and loan payments. Typically the developer would be forced to foreclosed, and then bring the units current on their m/f.

That is completely separate from what I think is the real reason for the assessment - that the developer is not able to pay their m/f. As you mention in your subsequent post, you should not be in effect lending the developer money to meet his contractual obligations.

If they cannot meet their obligations, then the BoD should be looking to terminate the developer contract.

 

[Finley]

Previous Maintenance Fees

2009 - $3,887,318 income / expenses
Revenue:
Assessment Income Operating 2,908,823
Assessment Income Reserves 434,024
Rental Income 145,688
Interest/Reinstate/Bad Debt Recov 50,807
Telephone Income 2,730
Houskeeping Income 36,612
Internet Income 7,905
Miscellaneous Income 300,730

Expenses:
Wage & Benefits 1,688,740
Operating Expense 839,239
Admin & General 631,313
Reserves 390,621
Bad Debt 334,285
Depreciation 3,120

Amount set aside in the "reserves" $390,621 amount set aside for Bad Debt Expense $334,285 (is this to write off the amount or fees associated to collect).

Clearly a concern is that the types of improvement that they state need done, are not unexpected or sudden things. So I think the beig question is why were they not "saving" for this from the reserves. Of my $499.00 maintenance fee, $411 is for "operating expenses of which the vast majority of that is the salaries/benefits. Only $70 bucks goes into the reserves with $18.00 for property taxes. (Of note, the manager is paid per his contract a percentage of the total of the maintenance fees.)

2008's fees are similar with $3,868,910 and I can go back as far as 1994 as I have all my records. Nothing jumps out and they are standard balance sheets (of course). They have changed their billing timeframes, twice that I noted. Neither of which is the billing period stated our owners documents.

None of the cover letters or statements ever indicate there is a problem. That in and of itself, is a problem. If this was a bad debt issue, it has been coming on for a while as the economy hit the skids. Still the big issue, why were we not kept apprised and then suddenly hit with the fee and no real explanations.

So is there lack of planning and forsight in many areas yes, but again you can't fire the developer who is also the owner and there in lies a huge problem for all of us. If folks want to save $40 any pay the thing now, or set up the payment plans etc. so be it. And well understood, but this is not something that should go away regardless. I don't believe for one minute PB will go under. Dennis & Billy have far too much invested in Lincoln, NH for that to happen. But I am now concerned that this will happen again.

We do need to demand more specific information about the function of the various Boards (HoA & BoD) and its members as well as the finances of the overall resort and how it gets tied to the others. I think the reality of getting this as honest information is questionable at best however.

 

[AJS]

2009 - $3,887,318 income / expenses
Revenue:
Assessment Income Operating 2,908,823
Assessment Income Reserves 434,024
Rental Income 145,688
Interest/Reinstate/Bad Debt Recov 50,807
Telephone Income 2,730
Houskeeping Income 36,612
Internet Income 7,905
Miscellaneous Income 300,730

Expenses:
Wage & Benefits 1,688,740
Operating Expense 839,239
Admin & General 631,313
Reserves 390,621
Bad Debt 334,285
Depreciation 3,120A

Amount set aside in the "reserves" $390,621 amount set aside for Bad Debt Expense $334,285 (is this to write off the amount or fees associated to collect).

Clearly a concern is that the types of improvement that they state need done, are not unexpected or sudden things. So I think the beig question is why were they not "saving" for this from the reserves. Of my $499.00 maintenance fee, $411 is for "operating expenses of which the vast majority of that is the salaries/benefits. Only $70 bucks goes into the reserves with $18.00 for property taxes. (Of note, the manager is paid per his contract a percentage of the total of the maintenance fees.)

2008's fees are similar with $3,868,910 and I can go back as far as 1994 as I have all my records. Nothing jumps out and they are standard balance sheets (of course). They have changed their billing timeframes, twice that I noted. Neither of which is the billing period stated our owners documents.

None of the cover letters or statements ever indicate there is a problem. That in and of itself, is a problem. If this was a bad debt issue, it has been coming on for a while as the economy hit the skids. Still the big issue, why were we not kept apprised and then suddenly hit with the fee and no real explanations.

So is there lack of planning and forsight in many areas yes, but again you can't fire the developer who is also the owner and there in lies a huge problem for all of us. If folks want to save $40 any pay the thing now, or set up the payment plans etc. so be it. And well understood, but this is not something that should go away regardless. I don't believe for one minute PB will go under. Dennis & Billy have far too much invested in Lincoln, NH for that to happen. But I am now concerned that this will happen again.

We do need to demand more specific information about the function of the various Boards (HoA & BoD) and its members as well as the finances of the overall resort and how it gets tied to the others. I think the reality of getting this as honest information is questionable at best however.

Thanks for the 2009 budget info.

I assume the $334K is 2009 maintenance fees that are assessed but not collected. Interesting that bad debt recovery is only $50K. That would mean that over 500 interval owners are delinquent in paying. That, however, could include the Developer.

What were the bad debt expense and income numbers for 2008, 2007, 2006? Have they gone up dramatically?

At this point, all of PB is developed I think. It's in maintenance mode. The Developer has 1200 intervals to sell. He is like any other owner. He pays a maintenance fee on his units, collects the profit from units that are sold, maybe finances some sales to new owners.

The maintenance fee income is spent per the budget, which is approved by the Unit Owners Association Board of Advisors and spent by the management company that the Board of Advisors contracts (which is the Developer's company). But the Developer really has no financial interest that is different than what we as owners have. I think the Board of Advisors could fire the current mamagement company and run the resort with a different company. Won't happen though because of the Board makeup.

What's really mysterious is the sudden need to do $1.2M in improvements. You are correct in that these should be year to year improvements approved by the Board of Advisors and budgeted year to year. What has happened to be so urgent six months after the last budget approval that now $1.2 M is needed ( above the budget)?

As I said in my earlier post, we need the Board of Advisors to, in detail, give the owners information about owner delinquencies, developer delinquencies, 2009 budget shortfall because of delinquencies, details of the "sudden" improvements needed above the budget, and a complete breakout of how much money the special assessment raises and where it will be used. I find it very "fishy" that the Developer controls the Board and can vote to speciall assess the owners, making us his "lender" to raise enough money to pay his maintenance dues.

 

[Bwolf]

This discussion seems to have veered from the intended purpose of banding together to get to the truth of the situation, so I'm not going to respond to several of the posts above that may be misdirected. Waste of time and effort.

I have sent Timesharing Today an email asking if the publisher is aware of this problem, if we might get it in the magazine, and what the cost would be for TST to send one of its "bulletin" emails to its membership so we might reach more Pollard Brook owners.

Finley: I think you and I should continue our email communications and expand the list to include those PB owners who ask to join it.

My plan is to pay the assessment while I get the 10% reduction while continuing to pursue the truth -- The truth is out there -- for all you X-files fans. It may take years to get this sorted out.

 

[Bwolf]

AJS: Pollard Brook is not yet complete. I believe Sabbaday Lodge is still to be built. Approved, but put on hold.

 

[ecwinch]

2009 - $3,887,318 income / expenses
Revenue:
Assessment Income Operating 2,908,823
Assessment Income Reserves 434,024
Rental Income 145,688
Interest/Reinstate/Bad Debt Recov 50,807
Telephone Income 2,730
Houskeeping Income 36,612
Internet Income 7,905
Miscellaneous Income 300,730

Expenses:
Wage & Benefits 1,688,740
Operating Expense 839,239
Admin & General 631,313
Reserves 390,621
Bad Debt 334,285
Depreciation 3,120

Amount set aside in the "reserves" $390,621 amount set aside for Bad Debt Expense $334,285 (is this to write off the amount or fees associated to collect).

Clearly a concern is that the types of improvement that they state need done, are not unexpected or sudden things. So I think the beig question is why were they not "saving" for this from the reserves. Of my $499.00 maintenance fee, $411 is for "operating expenses of which the vast majority of that is the salaries/benefits. Only $70 bucks goes into the reserves with $18.00 for property taxes. (Of note, the manager is paid per his contract a percentage of the total of the maintenance fees.)

2008's fees are similar with $3,868,910 and I can go back as far as 1994 as I have all my records. Nothing jumps out and they are standard balance sheets (of course). They have changed their billing timeframes, twice that I noted. Neither of which is the billing period stated our owners documents.

None of the cover letters or statements ever indicate there is a problem. That in and of itself, is a problem. If this was a bad debt issue, it has been coming on for a while as the economy hit the skids. Still the big issue, why were we not kept apprised and then suddenly hit with the fee and no real explanations.

So is there lack of planning and forsight in many areas yes, but again you can't fire the developer who is also the owner and there in lies a huge problem for all of us. If folks want to save $40 any pay the thing now, or set up the payment plans etc. so be it. And well understood, but this is not something that should go away regardless. I don't believe for one minute PB will go under. Dennis & Billy have far too much invested in Lincoln, NH for that to happen. But I am now concerned that this will happen again.

We do need to demand more specific information about the function of the various Boards (HoA & BoD) and its members as well as the finances of the overall resort and how it gets tied to the others. I think the reality of getting this as honest information is questionable at best however.

You might dig into the misc income a little bit further. That number looks large in relation to the overall income. Depreciation also looks small for a real estate project.

Based on the review of the governing documents, have you identified the provisions that apply to the developers obligation to pay m/f on their inventory?

 

[ecwinch]

In my e-mail dialogue with Joel Bourassa I requested these and he responded in the affirmative that they were being sent. I'll keep you posted. I will also post these pointed questions to him and indicate they are the composition of several member's. I'm happy to share what I get from him / PB as I get it.

In regards to Eric's statements regarding non-profit HOAs, I am not sure if that would be addressed in the NH State RSA's if referenced but this supported the fee structure I referenced in my letter so there may well be more to support other aspects too:

http://www.gencourt.state.nh.us/rsa/html/XXXI/356-B/356-B-mrg.htm

TRADE AND COMMERCE
CHAPTER 356-B
CONDOMINIUM ACT

Unfortunately, unlike most states, NH does not have specific statutes that apply to time-share projects. So the Condominium Act is the area of NH that will apply to the situation here. Here at the links to the portion of the statute on Google that is book marked and searchable:

http://law.justia.com/newhampshire/codes/nhtoc-xxxi/nhtoc-xxxi-356-b.html

And here are the provisions that apply to the disclosures when selling land in NH:

http://www.gencourt.state.nh.us/rsa/html/XXXI/356-A/356-A-mrg.htm

 

[MAM1]

This assessment was a shock! If you find out anything, would appreciate learning what out options are. Has the AG suggested anything to date?

 

[Bwolf]

Not yet, MAM1.

 

[Carolinian]

There should also be substantial late fees from the developer. Do not forget those. Also what is the policy for other owners on interest on unpaid m/f? That interest rate should also be applied to the developer, and may be higher than what a bank would charge him. If the directors do not handle all of this in a commercially reasonable manner as they would with any other owner, they may have some personal liability.

To get the full financial story, someone is going to need to send a demand letter to inspect and copy the records and then make a trip to the resort to do so.

It's clear that PB has a cash flow problem. It's important to distinguish between cash needed to run the resort and cash needed by the Developer to expand, buy land, etc.

When we paid our 2009 maintenance fee, we recieved a budget for 2009. I don't have one handy. How much was shown on it as income from maintenance fees?? I assume it was around $3M. Can anyone tell me what that amount was?

If PB is short of cash because owners did not pay their maintenance, that amount of cash has to come from some place. It's appropriate to do a special assessment to cover it. However, when this money is recovered, either paid or units foreclosed and sold, it should reduce our future maintenance fee because it is additional to a budgeted years income.

PB apparently is also short the maintenance fees owed by the Developer. Again, this is needed cashflow to operate, and has to come from someplace. The Developer doesn't have it and can't get his normal financing, so where does it come from? Special assessment. However, this is a debt to be recovered through collection or foreclosure of units, just as the delinquent owner above. The problem with this, however, is that the Developer has a 3-2control of the Board's decisions. So he can vote to essentially make us his "lender" vs. getting the money from the bank (which apparently won't renew his line) at no interest. So, it's really a loan to the Developer that we are paying. It is a debt that, when repaid in the future, is extra cashflow for those years, and should reduces the normal $500+/_ maintenance fee appropriately. I would worry about non payment, brush it under the rug, and we never see a maintenance fee reduction. Write it off as uncollectable.

We need to know the $ amount of these two cash shortages. Let's estimate it at $500,000. Thats less than $100 per owner getting hit with the special assessment. So, where is the rest of the money going? I'm estimating the special assessment will raise $3M. That leaves $2.5M. It's certainly gross mismanagement and lousy budgeting if $1.2 M is needed for improvements to PB properties, above the money already included for same in 2009, 2008, etc budgets. But it's possible. So, again, special assessment. Not really the Developer's responsibility, but the Board of Advisors and the management company who should have been on top of it,

Still leaves $1.3M unaccounted for. Is the Developer getting any of this for other projects and using us as as a "lender" ( at no interest) because he can't get financing from a bank? This would be fraud and deception. With a 3-2 control of the Board, he would be making a very favorable loan to himself, and not revealing to us the true purpose of the special assessment. We also would have no collateral and possibly no recovery. One would hope that the independant accounting firm would see through this little sceme if it happened.

It's really important the we see a true breakdown of how the $3M will be spent, that it is all spent on PB needs, that it reduces our future maintenance fees appropriately, and that all $3M is recovered either as debts collected or accounted for if extraordinary PB improvements. None of it should be usable by the Developer for other projects for which he needs a source of financing.

 

[Carolinian]

You also need to look up the non-profit corporation laws which govern many of the operations of the HOA. That is where you find the mechanism to get the financial records and membership list.

Unfortunately, unlike most states, NH does not have specific statutes that apply to time-share projects. So the Condominium Act is the area of NH that will apply to the situation here. Here at the links to the portion of the statute on Google that is book marked and searchable:

http://law.justia.com/newhampshire/codes/nhtoc-xxxi/nhtoc-xxxi-356-b.html

And here are the provisions that apply to the disclosures when selling land in NH:

http://www.gencourt.state.nh.us/rsa/html/XXXI/356-A/356-A-mrg.htm