# After the dust has settled ( I think)



## Nickfromct (Feb 10, 2010)

Before all the $&#@ hit the fan with Starwood/II, I was considering purchasing a cheap SDO resale week for exchanging into other Starwood properties. Once the Starwood/II thing raised its ugly head, I backed off and was waiting for the situation to clarify itself. I haven't religously  keep up with everything here, but wanted to get opinions on whether I should start looking agin or if I'm crazy to even consider buying into Starwood. I see their is still alot of angst over the increases in MF's as well as the issue with exchanging with II. What has been the experience with exchanging under the new regime with SDO units? 

Thanks in advance for your time.


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## DeniseM (Feb 10, 2010)

Nick - We found out that true fixed weeks are not under the new exchanging rules, so a very prime fixed week at another resort might be a better trader.  

By ture fixed weeks, I mean a  week that cannot be used any other time, period.  A fixed-floating week does not qualify.


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## Nickfromct (Feb 10, 2010)

So a fixed platinum week would be primo for exchangability since you retain your trading power.  Have your soured on SDO? Which other Starwood properties would you consider?


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## DeniseM (Feb 10, 2010)

I own at SDO, but I wouldn't go out and buy another one.  Note that SDO doesn't have any fixed weeks.  
SVR has true fixed weeks, but I am not familiar with all of them.  I own a fixed Falls week - dedicated 2 bdm., and I've used it to trade into WPORV twice.

Ideally, I'd own a true fixed one bdm., or true fixed 2 bdm. lock-off for trading these days.  But I am not sure which resorts have those options.

Sheraton Vistana Resort - Falls (dedicated 2 bdm.) - MF $714.50
Sheraton Desert Oasis (2 bdm. lock-off) - MF $889.08


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## Laura7811 (Feb 10, 2010)

I'm still getting decent enough trades with my small bedroom SDO. Exchanged with old rules 2010 week into princeville for September, and new rules 2011 week to a 2 bedroom lagunamar for next February.

We are able to travel anytime of year so that helps.


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## Nickfromct (Feb 10, 2010)

Laura7811 said:


> I'm still getting decent enough trades with my small bedroom SDO. Exchanged with old rules 2010 week into princeville for September, and new rules 2011 week to a 2 bedroom lagunamar for next February.
> 
> We are able to travel anytime of year so that helps.



Laura: 

What type of unit/season do you have?


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## Nickfromct (Feb 10, 2010)

DeniseM said:


> I own at SDO, but I wouldn't go out and buy another one.  Note that SDO doesn't have any fixed weeks.
> SVR has true fixed weeks, but I am not familiar with all of them.  I own a fixed Falls week - dedicated 2 bdm., and I've used it to trade into WPORV twice.
> 
> Ideally, I'd own a true fixed one bdm., or true fixed 2 bdm. lock-off for trading these days.  But I am not sure which resorts have those options.
> ...



Denise: 

Thanks for you candor. I value your opinion very much.


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## DanCali (Feb 10, 2010)

Nickfromct said:


> Before all the $&#@ hit the fan with Starwood/II, I was considering purchasing a cheap SDO resale week for exchanging into other Starwood properties. Once the Starwood/II thing raised its ugly head, I backed off and was waiting for the situation to clarify itself. I haven't religously  keep up with everything here, but wanted to get opinions on whether I should start looking agin or if I'm crazy to even consider buying into Starwood. I see their is still alot of angst over the increases in MF's as well as the issue with exchanging with II. What has been the experience with exchanging under the new regime with SDO units?
> 
> Thanks in advance for your time.



I don't own there but from what I've read people are still getting decent trades even with the 1-52 weeks. However, keep in mind that Starwood controls what weeks go into II and usually keep the "best" (high demand) weeks for internal trading. You are not likely to get a prime summer Hawaii week if it's not deposited no matter what your trading power is. As Laura7811 points out, if you can travel anytime of the year it definitely helps.


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## DeniseM (Feb 10, 2010)

The main advantage to buying a fixed week (as I see it) is that you don't lose the "request first" option - which is huge.

So for example, my fixed week is the week before or after Easter 65% of the time.  If I use it to put in a "request-first" and don't get the exchange I can still:

1)  Use my fixed Easter week myself
2)  Rent it (and have a popular week for a rental)

Another big advantage to the fixed weeks is that you can deposit them 24 mos. in advance - instead of just 12.


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## SCMom (Feb 14, 2010)

*SDO New Rules trades*

I also had done all the research for SDO right before everything changed.  I, however, had already purchased, and was closing escrow the week the new rules came out.  For a few days, I wondered if I was really in trouble.  I bought the SDO two bedroom on E-bay from Vin Inc. for $1,475.  At the time, it was a good price.  It is not a true platinum, but a 1-52 float.  It is listed as Gold Plus on II now.

I have made four trades since August using my 2009 and 2010 weeks.  I did not do deposit first.  My intention in buying SDO was to trade and to hopefully be able to trade the each side for a 2 bedroom.  We have four boys ages 2-8, so we have to have a 2 bedroom.  However, we homeschool, so we can travel at will.

Here are my trades:

1) In August I traded a 1 bedroom for a 2 bedroom at Hyatt Sedona Pinon Pointe in Sedona the first week in November.
2) In August I also traded a 1 bedroom for a 2 bedroom at Hyatt High Sierra Lodge in January (beautiful ski week!)
3) In November is traded a 1 bedroom for a 2 bedroom at Westin Princeville in January and was able to send some extended family.
4) In January I traded a 1 bedroom for a 2 bedroom at WKOVR-N the last week in August 2010.  

We have already traveled to both Hyatts -- they were beautiful and wonderful trades.  I had hoped when I bought SDO that I would be able to exchange into Princeville and Maui and I already have done both.  I know that many people show reduced trade value, but I believe that I have been able to see everything I've checked from the Sightings Board with just one side of my 2 bedroom.  

I also realize that my trades are not necessarily for the highest seasons, but they have all been for good times to be where we were going.  Sedona was gorgeous in November, the skiing was great in Tahoe, and Hawaii is nice year round!

I hope this helps.  I understand why many people are so frustrated with Starwood, but our little SDO purchase has worked well for my family.

Blessings,

Emily


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## Ken555 (Feb 14, 2010)

SCMom said:


> 1) In August I traded a 1 bedroom for a 2 bedroom at Hyatt Sedona Pinon Pointe in Sedona the first week in November.
> 2) In August I also traded a 1 bedroom for a 2 bedroom at Hyatt High Sierra Lodge in January (beautiful ski week!)
> 3) In November is traded a 1 bedroom for a 2 bedroom at Westin Princeville in January and was able to send some extended family.
> 4) In January I traded a 1 bedroom for a 2 bedroom at WKOVR-N the last week in August 2010.




Great trades! Your 2-bed SDO has already paid for itself.


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## DanCali (Feb 14, 2010)

SCMom said:


> However, we homeschool, so we can travel at will.



This (and access to the TUG sightings board) is the key to this type of ownership and these types of trades.


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## K2Quick (Feb 16, 2010)

I've come full-circle on this.  I was one of the last on here to close on a 1-52 2 bed SDO before the trading rules changed.  I was upset as most owners of SDO were to hear of the changes.  Up until recently, I was exploring the option of trying to sell my interest.  However, based on sightings posted by others with "new rules" deposits, this thing still accomplishes exactly what I need it to for a fraction of the cost of alternatives (the alternatives I was considering were Marriott or Worldmark).

What I want:
1.  The ability to lock-off and get two trades.
2.  The ability to trade to either Maui or Kauai *wood properties in the Jan-Apr timeframe and get a preference period on the trading window.
3.  Ability to trade to either Marriott's Newport Coast Villas or Four Seasons Aviara outside of summer.

Even with the modified trading methodology, I'm still able to accomplish all of the above fairly easily it appears.


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## jerseygirl (Feb 16, 2010)

I thinik you're exactly right -- for now.  

But, can we trust that long-term?  I don't trust any company that removes basic, long-held, ownership rights (e.g., the right to book any available week in one's float season and do what you want wih it -- including use it, rent it, exchange it).  Or a company that strong-arms II into removing it's biggest competitive advantage (request first).

We're now in a position where Starwood completely controls our trading rights .... which would be fine if we were in SVN (as that is part of the membership agreement).  But, it's unprecedented (except for maybe Wastegate -- and we certainly don't want to be in their company!) for a non-club ownership.  And, if we let them get away with this, what will they try next?

Has it occurred to anyone that the trading is good now so as to reduce the complaints ... sweep the changes under the rug, per se?  I belonged to a club that had excellent points-based trading power with II.  As soon as the club stopped depositing prime weeks, the trading power dropped considerably.  Luckily, I was able to get out (bought for $199, sold for $1 ... had 8 or 9 wonderful trades in the interim).  But, things are changing -- will we be able to get out of our Starwood properties for $1?  I sure hope so, but my confidence level is waning.


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## gmarine (Feb 16, 2010)

I think some people have lost sight of the real issue with Starwood and why owners should be concerned. 
The point isnt that you cant still get good exchanges. You can. Many owners are reporting that they arent as good as in the past, but never the less still good. However, that isnt the point.
The point is, Starwood is trying to control owners usage of their deeded weeks. Non-SVN owners have the right to make a reservation and assign that usage to anyone they wish. Starwood has no right to tell an owner what they can or cant do with a reservation.  Starwood has received many,many complaints about this and refuses to supply any documentation that they have a right to do this. This is because it does not exist.

This is where owners should be concerned. If Starwood can just disregard ownership rights on this issue, who knows what they will do next.

Starwood is counting on the fact that most owners are passive, lazy and/or too disinterested to care about what happens as long as they are given a trade to pacify them. If you are a Starwood owner and this fits you, then you are what they are counting on. 

I dont have much money invested in Starwood and I could just walk away and take the easy way out. But that is what Starwood is counting on. I've never let any big company push me around and I refuse to let it start now.


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## DanCali (Feb 16, 2010)

gmarine said:


> The point is, Starwood is trying to control owners usage of their deeded weeks. Non-SVN owners have the right to make a reservation and assign that usage to anyone they wish. Starwood has no right to tell an owner what they can or cant do with a reservation.



This sounds like a compelling argument but if this is such a clear cut issue ("they have no legal right to do it but are doing it anyway") what is stopping a lawsuit? Maybe this even qualifies to be a class action. If a law firm was convinced it was clear cut they would have undertaken this already on a contingency basis - lawyers are the first to get paid for their time in a class action lawsuit...

The fact that Starwood is actually doing this makes me think their lawyers advised them that this territory is gray enough that they are probably safe from a legal perspective.


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## DeniseM (Feb 16, 2010)

DanCali said:


> This sounds like a compelling argument but if this is such a clear cut issue ("they have no legal right to do it but are doing it anyway") what is stopping a lawsuit?



There is nothing stopping a lawsuit - I expect that there will be one.


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## DanCali (Feb 16, 2010)

DeniseM said:


> There is nothing stopping a lawsuit - I expect that there will be one.



And I suspect you have inside information on this issue


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## gmarine (Feb 16, 2010)

DanCali said:


> This sounds like a compelling argument but if this is such a clear cut issue ("they have no legal right to do it but are doing it anyway") what is stopping a lawsuit? Maybe this even qualifies to be a class action. If a law firm was convinced it was clear cut they would have undertaken this already on a contingency basis - lawyers are the first to get paid for their time in a class action lawsuit...
> 
> The fact that Starwood is actually doing this makes me think their lawyers advised them that this territory is gray enough that they are probably safe from a legal perspective.



Unfortunately companies take illegal action all the time. They may make a decision to do so based on a risk versus reward scenario. For example, does the chance that some owners/customers will actually file a lawsuit outweigh the money they make/save by attempting to get away with the action.

To answer your question, nothing is stopping the lawsuit. Without getting into specifics about it here, the process has begun.


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## rickandcindy23 (Feb 16, 2010)

K2Quick said:


> Even with the modified trading methodology, I'm still able to accomplish all of the above fairly easily it appears.



Maybe for now, but as Jerseygirl pointed out so well, trading power will drop when Starwood deposits lesser weeks.  I am not surprised II and Starwood are doing this slowly.

This will make your day:  I talked to an II guide a week ago, and she said, "You will only get the Westins with your Sheratons when Marriott owners have taken their fill, as Marriott owners have priority over Sheraton owners over everything in the system."  

I asked if this was something new to come, something that has been discussed at II?  Are you saying there will be no internal preference in the future, because Starwood includes Westin and Sheratons, and we keep being told there is a preference.  She seemed resolute.  If there are rumors like that circulating in II, I find that very interesting.  

Could be she didn't know what she was talking about.  :rofl:


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## jerseygirl (Feb 16, 2010)

DanCali said:


> And I suspect you have inside information on this issue




Oh ... I suspect she does too!  It's not wise to layout all your cards on a public board.  :ignore:


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## Stefa (Feb 16, 2010)

rickandcindy23 said:


> I talked to an II guide a week ago, and she said, "You will only get the Westins with your Sheratons when Marriott owners have taken their fill, as Marriott owners have priority over Sheraton owners over everything in the system."
> 
> Could be she didn't know what she was talking about.  :rofl:



II has also made changes that have reduced the trade value of many Marriotts.  They give out many fewer ACs and there is a thread on the Marriott forum discussing how Newport Coast summer weeks have been "blacked out" so that exchangers cannot even request them.  

I'm of the opinion that SDO will still continue to be a respectable trader.  I wouldn't buy SDO if I was hoping to trade into a lot of high demand weeks.   

Any time you buy a timeshare only to trade you are taking on the risk that it will not pan out.   DVC dumped II for RCI, so anyone who bought an II trader for the sole purpose of trading into DVC was stuck out in the cold.


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## ocdb8r (Feb 16, 2010)

DanCali said:


> This sounds like a compelling argument but if this is such a clear cut issue ("they have no legal right to do it but are doing it anyway") what is stopping a lawsuit? Maybe this even qualifies to be a class action. If a law firm was convinced it was clear cut they would have undertaken this already on a contingency basis - lawyers are the first to get paid for their time in a class action lawsuit...
> 
> The fact that Starwood is actually doing this makes me think their lawyers advised them that this territory is gray enough that they are probably safe from a legal perspective.



As has been mentioned before in other threads, it's not necessarily a gray area, but rather how you look at the problem.  

It can be framed such that Starwood is not controlling what you can and cannot do with your week...rather, II is saying that it will only accept a deposit initiated/determined by Starwood.  THAT is completely within the right of II as an exchange company.  They do not HAVE to accept your reseerved week...they have latitude to make exchange policies as they see fit.  Why would they do this?  Obviously keeping SVO as a client is most important....individual exchangers come and go.

Framed as above (which I guarantee is how SVO would frame it in court), the only possible legal principle I can think of to sue SVO on would be tortious interference of contract.  Theoretically we entered into our contracts with II with the expectation we could deposti our reserved weeks.  SVO's subsequent pressure on II has interfered with that expectation.  However, the damages if proven would likely be no more than the reaminaing value of our II membership fees...

I think a more productive lawsuit would look at how SVO reserves weeks for rental income they keep.  This is the REAL reason for the change.  They don't want to compete with us exchangers in nabbing good weeks for deposit that they could nab for padding their own pockets with rental income.  I have been too lazy to look at all the documents, but it sure seems like there may be something fishy giong on with the way SVO gets to reserve and rent out weeks for it's own use.


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## gmarine (Feb 16, 2010)

ocdb8r said:


> As has been mentioned before in other threads, it's not necessarily a gray area, but rather how you look at the problem.
> 
> It can be framed such that Starwood is not controlling what you can and cannot do with your week...rather, II is saying that it will only accept a deposit initiated/determined by Starwood.  THAT is completely within the right of II as an exchange company.  They do not HAVE to accept your reseerved week...they have latitude to make exchange policies as they see fit.  Why would they do this?  Obviously keeping SVO as a client is most important....individual exchangers come and go.
> 
> ...



Starwood is also refusing to allow owners to deposit reservations to RCI as well and claims they have the right to control owner deposits/reservations because they are the management company. I have this in writing.

I have spoken at length with II management as well. II will accept any Starwood week I give them as long as Starwood will confirm usage. This is where the problem lies. Starwood wont confirm my usage as available if I want to give it to II or RCI. Whats next?  Only owners can occupy peak season weeks and/or high season weeks cant be assigned to others? Or high season weeks can only be assigned to others if you pay Starwood a fee? 

Starwood is counting on owners to be the usual passive, misinformed people that the timeshare community generally are.


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## rickandcindy23 (Feb 16, 2010)

What bothers me most, and maybe others will agree, is Starwood has a very profitable rental program, basically through their hotel rental site.  They offer condos to the general public via rental, yet the HOA's don't get any money for those rentals.  

I would like to know why Starwood is allowed to rent inventory at any resort they choose, and then not pay back the HOA, so the owners don't have to pay for owners who aren't paying fees.  

So Starwood rents the inventory not receiving fees from deadbeat owner, and they stick us with paying for those weeks through our fees.  Where does that rental income go?  That is my question.


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## DavidnRobin (Feb 16, 2010)

and mine as well - how much reimbursment is the HOA getting for SVN/II exchanges, rentals, and SPG usage? Follow the money... and in order to do that... transparency (forced via legal action, most likely)


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## jerseygirl (Feb 16, 2010)

rickandcindy23 said:


> What bothers me most, and maybe others will agree, is Starwood has a very profitable rental program, basically through their hotel rental site.  They offer condos to the general public via rental, yet the HOA's don't get any money for those rentals.
> 
> I would like to know why Starwood is allowed to rent inventory at any resort they choose, and then not pay back the HOA, so the owners don't have to pay for owners who aren't paying fees.
> 
> So Starwood rents the inventory not receiving fees from deadbeat owner, and they stick us with paying for those weeks through our fees.  Where does that rental income go?  That is my question.





DavidnRobin said:


> and mine as well - how much reimbursment is the HOA getting for SVN/II exchanges, rentals, and SPG usage? Follow the money... and in order to do that... transparency (forced via legal action, most likely)



It's not as simple as it sounds.  The "rental rules" are different for SVN units, non-SVN units and are subject to different state regulations.  Some of us are attempting to get to the bottom of it, but as of now, I'm not aware that there is any concrete proof that Starwood is doing anything illegal.  Should we find evidence to the contrary, the fun will begin!  

If anyone has information pertinent to this issue (through discussions with HOA board members, attending HOA meetings, disclosure documents, etc.), please send me a PM.  We can use all the help we can get.  David is right ... we have to follow the money.  And, help doesn't need to be proof -- anecdotal evidence for attorneys to investigate can be very beneficial.

Quote by Jerseygirl's dd:  "Starwood is sure going to be happy when you go back to work."


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## jarta (Feb 17, 2010)

rickandcindy,   ...   "I would like to know why Starwood is allowed to rent inventory at any resort they choose, and then not pay back the HOA ..."

A week ago Sunday, the same claim was made.

I had asked that someone post the language where such an arrangement was set forth.  The last response was from LisaRex who was leafing through her owner's documents to find the language.  She never posted anything.

I'm not saying such an agreement doesn't exist.  I'd just like to have the language posted to see if it is being interpreted the right way.  Also, since it is such an important complaint about Starwood, perhaps it could be posted in one of the stickys so that everyone could be directed to the exact language.

If you have access to any such language allowing Starwood to keep all of the rental proceeds and give none to the HOA, could you please post it?   TIA.   ...   eom


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## jerseygirl (Feb 17, 2010)

Jarta -- Don't you have documents with your developer purchasers?

It's late ... and I'm not going to do a thorough search, but here are a few snippets from documents I have:

_The managing entity shall have the right to forecast anticipated reservation and use of the accommodations of the timeshare plan and is authorized to reasonably reserve, deposit, or rent the accommodations for the purpose of facilitating the use or future of the accommodations or other benefits made available through the timeshare plan._

Note:  We know they can rent weeks to purchase SPs for SP conversions, but the above clause seems a little more broad than that.  What the heck does "for the purpose of facilitating the use or future of the accommodations" mean????

_Pursuant to the SVN Affiliation Agreement for the Club, Club Operator has assigned to SVN Operator any and all rights to rent unreserved Vacation Periods (in accordance with the reservation priorities of the Club Documents and the SVN Documents)._

This makes it legal, but is it ethical?

_Pursuant to the SVN Affiliation Agreement for the Club, Club Operator has assigned to SVN Operator any and all rights to rent unreserved Vacation Periods (in accordance with the reservation priorities of the Club Documents and the SVN Documents). In accordance with the Resort Documents, the Club Documents, and the SVN Documents, SVN Operator must make available to Association that portion of such unreserved Vacation Periods verified by Association as being reasonably necessary to perform additional maintenance of the Units. The total net rental proceeds, if any, shall be allocated 50% each to SVN Operator and Association until Association receives an amount of rental equal to 2.5% percent of Association’s annual budget for each fiscal year. SVN Operator shall be entitled to receive the total net rental proceeds received by SVN Operator from the rental of unreserved Vacation Periods at the Resort during the SVN Priority Period (defined in the SVN Documents) to the extent such total net rental proceeds exceed 2.5% of Association’s annual budget. Association’s share of the net rental proceeds, up to 2.5% of Association’s annual budget, will be delivered by SVN Operator to Association and must be applied against common expenses of the Resort each year. As used in this paragraph, “net rental proceeds” means the gross rental proceeds generated from the rental of the unreserved Vacation Periods, less housekeeping fees, travel agent, and other rental commissions and fees, and any other expenses incurred by SVN Operator or its affiliates in connection with the rental of the unreserved Vacation Period._

I could keep going and going ... these three snippets are from the first 20 pages of 357, but, again, I think you have the same or similar documents so I'll let you pitch in on the homework.


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## ocdb8r (Feb 17, 2010)

Well, I think Jarta is right...we really should be making sure we try to identify the exact language and rights.

As for the above, I don't see anything wrong with the first couple of snippits....to me it just makes clear that Starwood has authorization for the rental function, which I think we want (the amount of latitude they should have may be up for debate).  

The final snippet provides the real issues we should be talking about.  Looks like rental income is split 50/50 until it hits 2.5% of total operating budget for the resort.  At that point it appears Starwood pockets the rest.  In a good year that may be plenty fair, but if usage is low and/or defaults are high it would seem there would be MORE weeks to rent, while at the same time a greater justification for the HOA getting more than 2.5% (to cover the loss from defaults).


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## jarta (Feb 17, 2010)

"The managing entity shall have the right to forecast anticipated reservation and use of the accommodations of the timeshare plan and is authorized to reasonably reserve, deposit, or rent the accommodations for the purpose of facilitating the use or future of the accommodations or other benefits made available through the timeshare plan."

This gives the managing entity, now Starwood, the right to forecast future anticipated reservations and the discretion to *reasonably* decide to keep the unit in the reservation pool, to make a deposit to II or to rent the unit if it has no reservation.  The club manager should not have to call a board meeting every time it has a unit that is unreserved to obtain authority to deposit it in II or to rent it out.  That's what the language above means and why it exists.  

It does *not* say that, if the unit is rented, Starwood would keep all the rental income and the HOA would get nothing.

"Pursuant to the SVN Affiliation Agreement for the Club, Club Operator has assigned to SVN Operator any and all rights to rent unreserved Vacation Periods (in accordance with the reservation priorities of the Club Documents and the SVN Documents)."

This language is merely a declaration that the right to decide which units will be rented exists in the Club Documents (see above; the owner document you have quoted above) and the SVN affiliation agreement (the management contract between the club and Starwood).  And, the use of "any and all" means that Starwood has the exclusive contract to rent the unreserved units.

Again, it does *not* say that if the unit is rented, Starwood gets to keep all the money and the HOA gets nothing.   ...   eom


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## jarta (Feb 17, 2010)

"Pursuant to the SVN Affiliation Agreement for the Club, Club Operator has assigned to SVN Operator any and all rights to rent unreserved Vacation Periods (in accordance with the reservation priorities of the Club Documents and the SVN Documents). In accordance with the Resort Documents, the Club Documents, and the SVN Documents, SVN Operator must make available to Association that portion of such unreserved Vacation Periods verified by Association as being reasonably necessary to perform additional maintenance of the Units. The total net rental proceeds, if any, shall be allocated 50% each to SVN Operator and Association until Association receives an amount of rental equal to 2.5% percent of Association’s annual budget for each fiscal year. SVN Operator shall be entitled to receive the total net rental proceeds received by SVN Operator from the rental of unreserved Vacation Periods at the Resort during the SVN Priority Period (defined in the SVN Documents) to the extent such total net rental proceeds exceed 2.5% of Association’s annual budget. Association’s share of the net rental proceeds, up to 2.5% of Association’s annual budget, will be delivered by SVN Operator to Association and must be applied against common expenses of the Resort each year. As used in this paragraph, “net rental proceeds” means the gross rental proceeds generated from the rental of the unreserved Vacation Periods, less housekeeping fees, travel agent, and other rental commissions and fees, and any other expenses incurred by SVN Operator or its affiliates in connection with the rental of the unreserved Vacation Period."

The split is 50/50 of the *net* rental.

The deductions from the gross rental are housekeeping fees (charged by the resort and going to HOA), travel agent (steering fees paid from the rental to a "finder," the travel agent), any other expenses (unspecified) and expenses of the SVN operator (unspecified, but Starwood's not the resort's).

This caps the rental income received by the HOA at 2.5% of the entire budget of the association.  Only when the 2.5% cap is reached, Starwood has the right to keep the rest of the net rental income.

So, the things you have to know are:

1.  The budget amount - to calculate the cap.

2.  The normal vacancy rate of the resort - to see if the 2.5% is a reasonable cap.

3.  The "other expenses" - I assume they are the expenses normally paid by HOA that are reimbursed since Starwood expenses are found in 4; and

4.  The SVN operator (Starwood) expenses.

Please note that this is not a 90 day give away.  Please also note that the HOA gets its housekeeping expenses taken off the top, IMO its "other expenses" taken off the top and also gets, from the 50/50, split of the net up to 2.5% of its budget from the rental program in addition to the MF fees.

Also, please note that in many States net rentals of delinquent properties would go to pay off the delinquency.  So, these types of rentals of unused rental would probably generate more revenue for the HOA than renting delilnquent units.

Reasonable?  Is the cap a fair number?  That depends on the circumstances.   ...   eom


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## jerseygirl (Feb 17, 2010)

jarta;866839

Again said:
			
		

> not[/B] say that if the unit is rented, Starwood gets to keep all the money and the HOA gets nothing.   ...   eom



No, but that's covered in the 3rd paragraph, isn't it?

And, again, this isn't the full story .... it's dependent on whether or not a unit is SVN/non-SVN and the statutes of the particular state involved.  Not to mention that I only skimmed ~5% of the disclosure documents for one phase of one resort.  It's much more complicated than it needs to be.  

From my research this far, I have drawn one conclusion:  The terms are in no way designed to favor the owners.

I don't think there's an owner alive who doesn't approve of Starwood making a reasonable profit in this business.  But, what's reasonable?  What's fair?


Edited to add:  Written before I read jarta's above post (only after seeing the first).


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## Pit (Feb 17, 2010)

jarta said:


> If you have access to any such language allowing Starwood to keep all of the rental proceeds and give none to the HOA, could you please post it?   TIA.



From the SDO CCRs:



> Any Interval Weeks not timely reserved as herein provided, and not needed by the Association for maintenance, repair or related puposes, shall be available for use by the Declarant as it determines in its sole discretion, including but not limited to rental for the account of Declarant with no obligation of payment to the Association ...


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## DavidnRobin (Feb 17, 2010)

There is a lot to cover from above - but from my POV...
The standard rental is covered from the aspect of what the Owner/HOA will get back - and not the direct issue because these are from Owners that have paid their MFs.

MY ISSUE is for those Owners that are deliquent in MFs and their VOIs are used by SVO (by renting, SVN/II exchanges, or used in the SPG program)  - HOW are these VOIs reimbursed to the HOA?

As long as each the MFs for each VOI used is reimbursed to the HOA - I have no big issue since that is what I signed up for.  It is the non-payment ones that I would like to see transparency on (as well as the overall reimbursement processes)


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## ocdb8r (Feb 17, 2010)

DavidnRobin said:


> There is a lot to cover from above - but from my POV...
> The standard rental is covered from the aspect of what the Owner/HOA will get back - and not the direct issue because these are from Owners that have paid their MFs.
> 
> MY ISSUE is for those Owners that are deliquent in MFs and their VOIs are used by SVO (by renting, SVN/II exchanges, or used in the SPG program)  - HOW are these VOIs reimbursed to the HOA?
> ...



But VOI's are not split out this way...especially in a floating system.  There is no way to say week X rented by Starwood was a deault week, while week Y was for non-use/SVN trade/etc.


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## DavidnRobin (Feb 17, 2010)

Perhaps I was not clear - it comes down to if MFs were not paid (and this does not matter based on the VOI type) - and this VOI ends up in SVO's hands to use as they please. Then how is the HOA reimbursed for that usage?

If the MFs are paid - and SVO ends up with the VOI (e.g. Owner converted to SPs) then it is less of an issue (other than the usage and wear/tear may be unfairly balanced towards Owners in the HOA).


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## James1975NY (Feb 17, 2010)

rickandcindy23 said:


> What bothers me most, and maybe others will agree, is Starwood has a very profitable rental program, basically through their hotel rental site.  They offer condos to the general public via rental, yet the HOA's don't get any money for those rentals.
> 
> I would like to know why Starwood is allowed to rent inventory at any resort they choose, and then not pay back the HOA, so the owners don't have to pay for owners who aren't paying fees.
> 
> So Starwood rents the inventory not receiving fees from deadbeat owner, and they stick us with paying for those weeks through our fees.  Where does that rental income go?  That is my question.



There are different types of rental pools:
1.) Owners have elected to use the internal rental option. This is between SVO and the owner. Owner nets X amount of dollars, SVO gets X amount of dollars.
2.) Owners elect to convert their ownership into SPG points. SVO rents the a week to recover costs associated to issuing of SPG points to the owner.
3.) 60-day inventory. SVO can place inventory into a rental pool that has not been reserved 60-days out. Not sure if this is across the board or within certain HOA's or for SVN inventory.
4.) Delinquint owners.

This is not an illustration of priority for rental. Just outlining why you may see inventory on Starwood websites for rental.

The HOA's do collect on the delinquint rentals and SVO also gets their commission.


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## ocdb8r (Feb 17, 2010)

DavidnRobin said:


> Perhaps I was not clear - it comes down to if MFs were not paid (and this does not matter based on the VOI type) - and this VOI ends up in SVO's hands to use as they please. Then how is the HOA reimbursed for that usage?
> 
> If the MFs are paid - and SVO ends up with the VOI (e.g. Owner converted to SPs) then it is less of an issue (other than the usage and wear/tear may be unfairly balanced towards Owners in the HOA).



Again, I don't understand how you would identify a VOI Starwood has rented as being one that specifically came from a default on maint. payments vs. one they are entitled to from other sources(SVN/non-use/etc.)?  

Say you have 100 VOI's - 10 weeks are in default on maint. fees, 20 weeks are just unused, and 70 weeks are SVN trade outs.  Starwood puts 100 weeks up for rent and 75 rent out.  Why wouldn't you expect them to just say they rented out their 70 SVN weeks and 5 unused weeks?  Not saying this is ethical, but with a floating system you can't identify a specific defaulted VOI as being "the" one which was defaulted.  

Therefore Starwood has written the rules to apply to the rental pool as a whole.  I don't think this is necessarily unfair (and is probably the most practical thing to do), however limiting rental receipts to a max of 2.5% of overall HOA budget may be too restrictive in periods where maint. fee defaults are high.


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## ocdb8r (Feb 17, 2010)

James1975NY said:


> There are different types of rental pools:
> 1.) Owners have elected to use the internal rental option. This is between SVO and the owner. Owner nets X amount of dollars, SVO gets X amount of dollars.
> 2.) Owners elect to convert their ownership into SPG points. SVO rents the a week to recover costs associated to issuing of SPG points to the owner.
> 3.) 60-day inventory. SVO can place inventory into a rental pool that has not been reserved 60-days out. Not sure if this is across the board or within certain HOA's or for SVN inventory.
> ...



Related to my above post...if a renter goes to Starwood.com and rents week 32, how is it determined to which of the above pools you have identified that rental goes to?  What prevents it operating like my above example where Starwood applies the rentals to the categories which benefit them most first.  Given the price of rentals I can't see there being enough to make it to cover delinquent owners if that's the LAST pool that gets reimbursed.


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## DanCali (Feb 17, 2010)

James1975NY said:


> There are different types of rental pools:
> 1.) Owners have elected to use the internal rental option. This is between SVO and the owner. Owner nets X amount of dollars, SVO gets X amount of dollars.
> 2.) Owners elect to convert their ownership into SPG points. SVO rents the a week to recover costs associated to issuing of SPG points to the owner.
> 3.) 60-day inventory. SVO can place inventory into a rental pool that has not been reserved 60-days out. Not sure if this is across the board or within certain HOA's or for SVN inventory.
> ...



It looks like (1) - (2) have to go through SVO... (1) is because the owners elects to rent via Starwood and (2) because an owners gets SPG points

In regards to (3) I don't really see why any open inventory needs to be rented out at all. In theory, (and assume a stand alone resort with no exchanges allowed) an entire resort may be comprised of owners who just pay MFs and never occupy units or exchange. It's their choice... as long as MFs are paid it doesn't hurt anyone and the units can stay unoccupied (HOA even saves on housekeeping labor which is paid and goes unused). Now if the HOA is made better off because those units are rented out by Starwood, maybe it's worth it. But an arrangement like the one Pit describes in post #34 from the SDO CCR&Rs (in response to jarta's request) is outlandish!

In regards to (4) I don't see why an HOA needs to rent through Starwood - other than that it is forced upon them. As pointed out in other places, the HOA may be able to do better on its own by offering those weeks to other owners etc... For example, at HRA they could offer (fixed) delinquent weeks for rental via Atlantis Family Fun for a much lower commission than Starwood. Does a Board even have a choice? If they do, then what can we say about fiduciary duty? And if Starwood does the rentals, then of course there  needs to be a proper paper trail as to where the money goes...


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## jarta (Feb 17, 2010)

"From the SDO CCRs:
Quote:
Any Interval Weeks not timely reserved as herein provided, and not needed by the Association for maintenance, repair or related puposes, shall be available for use by the Declarant as it determines in its sole discretion, including but not limited to rental for the account of Declarant with no obligation of payment to the Association ... "

That's SDO.  jerseygirl did not post where her language #3 is from.  So, maybe it varies from resort to resort and from development time to development time.

I assume the Declarant at SDO is the developer.  Was the developer Starwood?  Or, was the Declarant/developer of SDO Sheraton or even some company before Sheraton who saddled the resort with that language?  It was formed as "Scottsdale Pinnacle Condominium," wasn't it?

On 3/22/05 dbmMayer posted on TUG:

"Starwood didn't build this property - they bought it, so some of the deeds are recorded under the original name. Doubt if there is any way to change this.
------------------
Denise"

If Starwood didn't insert the provision into the CCRs, why blame Starwood for its existence?

...   eom


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## Pit (Feb 17, 2010)

Scottsdale Pinnacle was the original SDO developer. 

Fredm posted on the other thread that his Mission Hills docs have the same verbiage. I'm not sure who the original Mission Hills developer was that saddled the resort with that language.


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## jarta (Feb 17, 2010)

Well, if the original developer isn't Starwood, why is Starwood responsible for the language in the CCRs?

I thought it was posted as an example of Starwood overreaching.   ...   eom


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## rickandcindy23 (Feb 17, 2010)

Starwood cannot pick and choose which of the CCR's they will follow and not follow.  We are supposed to be able to deposit any week into II, yet they took that away. 

Scottsdale Pinnacle was originally Embassy, I think.  Maybe someone will correct me.


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## James1975NY (Feb 17, 2010)

Pit said:


> Scottsdale Pinnacle was the original SDO developer.
> 
> Fredm posted on the other thread that his Mission Hills docs have the same verbiage. I'm not sure who the original Mission Hills developer was that saddled the resort with that language.



SDO was previously branded as an EVR property - Embassy Vacation Resort. Interesting that the verbiage is the same but not surprising.


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## jarta (Feb 17, 2010)

"We are supposed to be able to deposit any week into II, yet they took that away."

So, sue Starwood.  If your interpretation of the unique CCRs at SDO hold up, you will be doing all the owners of SDO a terrific service.  If not, you will still have tried.  The new procedure has been in place for nearly 9 months and nobody's sued.   ...   eom


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## Pit (Feb 17, 2010)

jarta said:


> Well, if the original developer isn't Starwood, why is Starwood responsible for the language in the CCRs?
> 
> I thought it was posted as an example of Starwood overreaching.   ...   eom



You asked, "If you have access to any such language allowing Starwood to keep all of the rental proceeds and give none to the HOA, could you please post it?" 

It was posted in response to your request. Of course, this language doesn't require Starwood to rent units and keep the money. It only enables them to do so. The decision to do so rests with Starwood.

Why don't you look up the relevant language in your own documents and post it here for comparison?


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## jarta (Feb 17, 2010)

Because I am at Lagunamar and all my documents are at home.  I am enjoying immensely my TS trip.


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## jerseygirl (Feb 17, 2010)

my three snippets came from a WSJ Hillside Svn document.  As i stated earlier [may be on another thread - I'm on my phone so hard to type and follow>, the rules vary by state and location. CCRs are amended - especially when SVN is overlaid.


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## jarta (Feb 17, 2010)

CCNs are only amended by the requisite vote of the owner/members of the association.  Starwood cannot unilaterally change them when it enters into a management contract when it comes to a resort.


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## Pit (Feb 17, 2010)

jarta said:


> Because I am at Lagunamar and all my documents are at home.  I am enjoying immensely my TS trip.



In that case, you should be at the pool bar, instead of posting on TUG. Consider it a homework assignment.


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## jarta (Feb 17, 2010)

I think we all should be sticking to issues.


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## jerseygirl (Feb 17, 2010)

jerseygirl said:


> my three snippets came from a WSJ Hillside Svn document.  As i stated earlier [may be on another thread - I'm on my phone so hard to type and follow>, the rules vary by state and location. CCRs are amended - especially when SVN is overlaid.



meant to say varies by SVN vs non SVN and state/Location. Sorry. We give them LOTS of leeway when we sign SVN agreements. Hence my recent posts <as Ive been researching this> that SVN is not so great when you peel back the layers. We would all be way better off under a marriott system <With a PFL feature of course>.  If marriott is about to move to a more Starwood like system you can bet your last dollar its not for the owners benefit!!


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## DanCali (Feb 17, 2010)

jarta said:


> A week ago Sunday, the same claim was made.
> 
> I had asked that someone post the language where such an arrangement was set forth.  The last response was from LisaRex who was leafing through her owner's documents to find the language.  She never posted anything.
> 
> ...




jarta - Here is another one that probably affects you directly - this one from WKV:

12.3 The developer has the right to reserve any Use Period that, for any reason, is not reserved as of 60 days before the check in day...

12.4 The Developer may use its Vacation Periods for any purpose, no matter what else the Vacation Plan Documents provide. This includes, among other things, use for rentals, sales and other commercial purposes permitted by law... *If the Developer rents these Use Periods, it alone is entitled to keep the rent...*

And in case I misinerpret or omitted something feel free to correct me from the Lagunamar pool...  Here is the link to the doc.


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## DavidnRobin (Feb 17, 2010)

ocdb8r said:


> Again, I don't understand how you would identify a VOI Starwood has rented as being one that specifically came from a default on maint. payments vs. one they are entitled to from other sources(SVN/non-use/etc.)?
> 
> Say you have 100 VOI's - 10 weeks are in default on maint. fees, 20 weeks are just unused, and 70 weeks are SVN trade outs.  Starwood puts 100 weeks up for rent and 75 rent out.  Why wouldn't you expect them to just say they rented out their 70 SVN weeks and 5 unused weeks?  Not saying this is ethical, but with a floating system you can't identify a specific defaulted VOI as being "the" one which was defaulted.
> 
> Therefore Starwood has written the rules to apply to the rental pool as a whole.  I don't think this is necessarily unfair (and is probably the most practical thing to do), however limiting rental receipts to a max of 2.5% of overall HOA budget may be too restrictive in periods where maint. fee defaults are high.




I attempted to be clear - but obviously failed - it is clear to me...

Step 1) Did a Owner become deliquent on their MFs? If not - Owner paid their MFs and it went to the HOA as normal. If they were delinquent, then...
Step 2) SVO takes control of the VOI (per CCRs) and can use it how they see fit (I assume via resort rentals, SVN/II exchanges, SPG program).
Step 3) if is SVO using the VOI - does the HOA get reimbursed by SVO and by how much, and if so where is the transparency of this reimbursment?

Does SVO let them sit empty? {I doubt it in most cases}
Follow the money...

If it can not be easily answered in a few sentences - then I simply ask for transparency. And that as OWNERS in the HOA - we should be entitled to the answer and transparency.

This is separate from the SVO/Owner rental agreement...

btw - in the discussion of the contents of the CCRs - it is important to differentiate between SVO Owned VOIs and those that are defaulted - there has been no where in the CCRs that I have where this is clear...  I did not create this problem - only looking for a simple answer. 

 As well... I never got a chance to vote (that I am aware of since it was never specifically stated in any proxy) in regards to the creation of the BV section of WSJ.  Did WKORV Owners vote on teh formation of WKORVN?  I think not...


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## ocdb8r (Feb 17, 2010)

From the WKV document DanCali linked to...I paraphrased or summarized some things and just put in parenthesis...

11.4 ….Any Use Periods that are unreserved due to an Owner’s delinquency that are not rented by the Association, may be reserved and rented by the Developer or Plan Operator, pursuant to Charpters Twelve and Thirteen.
12.3 (Basically says Developer may reserve any units not reserved within 60 days as well as units delinquent which the association has not elected to rent out)
12.4 The Developer may use its Vacation Periods for any purpose, no matter what else the Vacation Plan Documents provide. This includes, among other things, use for rentals, sales and other commercial purposes permitted by law... If the Developer rents these Use Periods, it alone is entitled to keep the rent...
12.5 The developer ALSO gets an extra week anytime there is a 53rd use week….
12.6 The developer has the right to rent Use Periods reserved by the Developer in its capacity as an Owner of a Vacation Ownership Interest, pursuant to Section 12.4 above, is unrestricted.  (same thing for VOI’s it may rent under 12.5)


SO, what sticks out to me is that 1) the developer or club operator gets to rent and keep the proceeds for any week it rents, 2) either of these two entities may rent delinquent VOI's if the association doesn't (and then keep the proceeds).

Begs the question...what the _____ is the Association (BOD) doing to try to rent these weeks to get some income for the Association!?!??!  It looks like NOTHING!  

I especially love if you read all of section 11.4.  If the Association rents the week, it can deduct costs of running the week and the apply whatever is left against the delinquent account...however, if the Association doesn't rent the week, the Developer or Club operator can rent the week and KEEP all proceeds.  Classic.


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## James1975NY (Feb 17, 2010)

ocdb8r said:


> I think a more productive lawsuit would look at how SVO reserves weeks for rental income they keep.  This is the REAL reason for the change.  They don't want to compete with us exchangers in nabbing good weeks for deposit that they could nab for padding their own pockets with rental income.  I have been too lazy to look at all the documents, but it sure seems like there may be something fishy giong on with the way SVO gets to reserve and rent out weeks for it's own use.



I can see the interest on SVO's behalf with having "controls" over how the inventory is being manipulated whether it be for (in no particular oder):

a.) SPG 
b.) II 
c.) Owner Use
d.) SVN
e.) Rental etc....

....what I think is consistently being exajurated here is SVO's intention and what the negative impact really is with regards to their management of the inventory.

Remember, SVO is audited once a year on how inventory is managed and if they are deemed to be outside the lines, they will be charged stiff penalties which I understand are not recoverable through the owner base.

The common thread with Tuggers on these boards is either a.) maintenance fees or b.) the change in exchange rules with II. Whether or not any will believe, I do understand and appreciate the "meat" of the concern. I have always been a pro-ponent of being able to deposit a week at your home resort, same season if you are able to reserve it.

Is SVO in the business for the money? Well, last I knew they were a publicly traded - _for_ profit company (Yes). 

Do I think the maintenance fees are comparatively high? Yup. 

I also believe that there will be a better balance in the future and would rest assured knowing that there is real substance behind the increases - much of which is beyond their control. There is also a lot of benefit in the changes made to the exchange rules with II (another popular statement here) that may not be accepted by the small population of owners represented here on TUG but are real improvements for the majority.


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## ocdb8r (Feb 17, 2010)

James1975NY said:


> I can see the interest on SVO's behalf with having "controls" over how the inventory is being manipulated whether it be for (in no particular oder):
> 
> a.) SPG
> b.) II
> ...



I accept the there is likely some exaggeration as to how SVO manipulates inventory, HOWEVER, as you can see from the WKV example I outline in post 57 above, the "lines" are drawn QUITE liberally in favor of SVO.  Even operating within those lines gives pause for concern.

Out of curiosity, WHO audits their inventory management?


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## James1975NY (Feb 17, 2010)

ocdb8r said:


> I accept the there is likely some exaggeration as to how SVO manipulates inventory, HOWEVER, as you can see from the WKV example I outline in post 57 above, the "lines" are drawn QUITE liberally in favor of SVO.  Even operating within those lines gives pause for concern.
> 
> Out of curiosity, WHO audits their inventory management?



I believe they are audited by a third party company of SVO's choice.

JUST KIDDING!!!  - I had to.  

They are ultimately audited by the state who may or may not use a third party company. Similar to how companies were sourced for Sarbanes Oxley (sp?) compliance.


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## DeniseM (Feb 17, 2010)

And who would owners contact for a copy of the audit?


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## James1975NY (Feb 17, 2010)

ocdb8r said:


> SO, what sticks out to me is that 1) the developer or club operator gets to rent and keep the proceeds for any week it rents, 2) either of these two entities may rent delinquent VOI's if the association doesn't (and then keep the proceeds).



1.) Between SPG conversion, 60-day inventory and owner rental particiption - yes. 

2.) Not sure I understand the statment or question.



ocdb8r said:


> Begs the question...what the _____ is the Association (BOD) doing to try to rent these weeks to get some income for the Association!?!??!  It looks like NOTHING!



When an owner goes delinquint, their account is locked out by request of the HOA and ultimately a week can be assigned for rental. The challenge here is that the billings are all done in January, owners that do not pay go into lock-out status I would say in February if not paid. If the owner did not have a week already reserved, the HOA is going to have a hard time finding a reasonably high demand week to come close to recovering the costs. Does this make sense or am I rambling?


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## James1975NY (Feb 17, 2010)

DeniseM said:


> And who would owners contact for a copy of the audit?



Not sure that it is available to the public. If it were, I have NO idea where one would obtain it.


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## ocdb8r (Feb 17, 2010)

James1975NY said:


> 2.) Not sure I understand the statment or question.



The statement is that the docs give the Developer/Club Operator the right to rent delinquent VOI's with out any reimbursement to the Association.



James1975NY said:


> When an owner goes delinquint, their account is locked out by request of the HOA and ultimately a week can be assigned for rental. The challenge here is that the billings are all done in January, owners that do not pay go into lock-out status I would say in February if not paid. If the owner did not have a week already reserved, the HOA is going to have a hard time finding a reasonably high demand week to come close to recovering the costs. Does this make sense or am I rambling?



So, are you saying there is even any attempt...or just implicating the Association shouldn't bother trying to do anything because it would be difficult?  Seems to me SVO thought there might be value to those weeks, why else build in their right to them into the docs?

Also, this assumes owners are only delinquent for one year.  If delinquent for longer there would be plenty of advance notice to reserve "prime" weeks.

Finally, why couldn't the BOD exercise VOI reservation rights as soon as they were delinquent (or within a reasonable time after delinquency).  Say April 1st, 2010 if fees haven't been paid, they start reserving 2011 weeks to rent toward their delinquent account.  If/when the owner pays off their account, the inventory is released and the owner is free to reserve their week.


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## DanCali (Feb 17, 2010)

ocdb8r said:


> I especially love if you read all of section 11.4.  If the Association rents the week, it can deduct costs of running the week and the apply whatever is left against the delinquent account...however, if the Association doesn't rent the week, the Developer or Club operator can rent the week and KEEP all proceeds.  Classic.



These sounds like key statements...

11.4 deals with renting delinquent weeks. It does specify here that "whatever is left" goes against the delinquent acount. Renting those weeks is the HOA's responsibility and I don't think we can necessarily say they are not doing it. 

But you are right that the last sentence is weird and sounds like it says that if the association doesn't rent delinquent weeks, the Developer can benefit from that. 

The two key statements in 11.4 are:

 "The Association shall not be required to solicit rentals for every or any delinquent owner's reserved use period..."  and (if they do rent, they need to try to obtain a compettiv rate and revenue is split after commissions, housekeeping fees etc...)

"Any use periods that are unreserved due to an Owner's delinquency that are not rented by the Association may be reserved and rented by the Developer or Plan Operator pursuant to Chapters 12 and 13....

and I requote 12.4

12.4 The Developer may use its Vacation Periods for any purpose, no matter what else the Vacation Plan Documents provide. This includes, among other things, use for rentals, sales and other commercial purposes permitted by law... If the Developer rents these Use Periods, it alone is entitled to keep the rent...


So not only can they reserve vacant units at 60 days out and keep 100% of the rental (too bad for the owners who had to cancel a reservation and can only reserve at 60 days out...) - but the HOA doesn't have to solicit rentals for delinquent accounts (maybe they are, maybe not) and if they don't Starwood can rent delinquent units and keep 100% of the rental...


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## DanCali (Feb 17, 2010)

A different point is that timing is also of the essence at a resort where Platinum season basically ends at week 21... This is more particular to the desert resorts.


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## jerseygirl (Feb 17, 2010)

I attended a recent board meeting for a SVO resort where most of the weeks are fixed. I suggested that we consider changing the due date to make maintenance fees due 90-days prior to the usage date so as to allow for a timely owner rental program.  (This was after it was confirmed that January owners who had not paid were definitely being allowed to use their units).  I was told that it would be very difficult to do.  I responded that a lot of things are difficult ... doing nothing doesn't seem to be working ... we need to think out of the box and come up with a plan that will work.

This particular resort had not yet processed one foreclosure (that's apparently difficult as well).  

I was also told:

-- Units for delinquent owners are eventually rented
-- A delinquent owner can show up on his/her usage date (e.g., June 30th) with a check in hand and he/she will be permitted to occupy.

Is it just me or do those two statements contradict one another (unless eventually means 2011, 2012, etc.)?

It was also stated that they were blind-sighted (my words ... but that's essentially what was being said) by the delinquecies.  Perhaps we should all pitch in and buy the executives subscriptions to the Wall St Journal because they apparently hadn't heard about the worst recession since WWII / Great Depression (depending on which economist you trust).

There was one owner board member who appeared to be truly on the side of the owners -- was voting "no" to budgets, challenging everything, etc.  There was a second owner who spoke as if he shared our general concerns, but unfortunately his voting pattern left me uncertain.

Suffice it to say I was flabbergasted by the whole situation.  I own a rinky dink, "location location location," no-name resort in Florida that is so much better run.  Starwood should be ashamed of themselves -- it's up to us, the owners, to get answers to questions such as the above and hold them accountable.


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## jarta (Feb 17, 2010)

DanCali,   ...   "Here is the link to the doc."

The link doesn't work now.

But, take a look at section 12.6.  It says that the Developer gets to keep all the rental income from units it owns (section 12.4) and week 53 units (section 12.5).

The specification of those situations having Starwood keep all the rent and the lack of such a statement about the rentals of 60 day reservations (section 12.3) leads me to believe that Starwood would not keep all the money in that situation.

But, can I say it *for sure*?  No I can't.

The legal principal involved is:

http://legal-dictionary.thefreedictionary.com/Expressio+unius+est+exclusio+alterius

11.4 only applies to rentals of delinquent units.    ...   eom


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## nodge (Feb 17, 2010)

jerseygirl said:


> I attended a recent board meeting for a SVO resort where most of the weeks are fixed. [...] I was flabbergasted by the whole situation.  [...] Starwood should be ashamed of themselves.



I think I found this footage from that board meeting.

-nodge


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## DanCali (Feb 17, 2010)

jarta said:


> DanCali,   ...   "Here is the link to the doc."
> 
> The link doesn't work now.
> 
> ...



You're right - looks like the Maricopa County server is down for the night.

I didn't download the doc so I'll have to take a look tomorrow... but I understand what you are trying to say. 

And it doesn't bother you that it's that vague and they might be getting all that rental income? As far as I recall, you do own here...


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## jarta (Feb 18, 2010)

DanCali,   ...   What bothers me is that some people are saying Starwood definitely gets all of the rental income based on something that you refer to as vague (but is not so under the legal principle).  It appears to me that those declarations are spurred on by suspicion and mind-set, not facts.

I'd accept some proof that all of the rental income (not just rental income from units Starwood still owns and week 53 which it retains rights to under the Declaration) goes to Starwood.  I cannot say it doesn't occur.  But, I have seen no proof posted.

If all of the rental money for 60 day reservations is going to Starwood, the WKV HOA should be making noises to have Starwood assign the 60 day reservations to the association, as section 12.3 provides can be done.

Re-read the WKV Declaration.  I also saw nothing in it that would give anyone (HOA or Starwood) the right to reserve and rent out any WKV week prior to the 60 day window.  It seems like this is deemed necessary to protect the right to internally trade into WKV for the "Club" (SVN) members during the 8-2 month before arrival internal SVN trading period.  But, that's another issue.  It's not how or whether the 60 day rental proceeds are split.    ...   eom


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## jerseygirl (Feb 18, 2010)

If you guys are looking at CCRs without SVN disclosure overlay, you're not dealing with the full information by a longshot.


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## DanCali (Feb 18, 2010)

That document linked to above was the SVN disclosure. I'll posted links to both once their server is back up...


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## DanCali (Feb 18, 2010)

*WKV Docs*

Here are the CC&Rs: http://156.42.40.50/UnOfficialDocs/pdf/20020790609.pdf

Accompanying SVN Doc: http://156.42.40.50/UnOfficialDocs/pdf/20020790610.pdf

Not sure why the link from before stopped working but in case these stop working, the docs are accessoble the Maricopa County ecorder website:

http://recorder.maricopa.gov/recdocdata/

using document numbers: 2002 0790609 (CC&Rs) and 2002 0790610 (SVO Docs)

just search for these docs and the unofficial document can be downloaded for free by clicking the link embedded in the "number of pages"


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## DanCali (Feb 18, 2010)

jarta said:


> I also saw nothing in it that would give anyone (HOA or Starwood) the right to reserve and rent out any WKV week prior to the 60 day window.



This is in 5.2.d

"The reservation rules may create one or more reservation periods during which the developer and/or the club operator may reserve any Use Period in a Club Unit that nobody else reserved and that no other person has exclusive rights to reserve _(I read this as anything but fixed weeks or the first 60 days in the home resort reservation period -i.e. 12-10 months window - discussed in 5.2.a.i)_. This means that owners and other club members may have to compete with the developer and/or club operator for a reservation."


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## rickandcindy23 (Feb 18, 2010)

VRI would do a far better job of managing than Starwood. 

If an owner is delinquent, that owner is denied the use of the week, pure and simple.  You cannot show up with check in-hand because that unit may be gone; VRI has a strong rental program and can recover all or most of a maintenance fee for the HOA.  This is motive alone for an owner to pay on time.  They have a really effective collection process as well.  I vote for VRI to manage SDO and SBP!

What makes a board owner so pro-deadbeat, anyway?  I am so disgusted with the deadbeats at Twin Rivers, I want to show up at their homes and collect personally.  We had a LAWYER way too long, which was how the former board and management company did things.  Now we have at least 15% delinquencies and a slew of judgments against many of the owners.  We have to pay a lot of cash to foreclose on the weeks, which the resort doesn't have.  It's absurd.


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## ocdb8r (Feb 18, 2010)

DanCali said:


> This is in 5.2.d
> 
> "The reservation rules may create one or more reservation periods during which the developer and/or the club operator may reserve any Use Period in a Club Unit that nobody else reserved and that no other person has exclusive rights to reserve _(I read this as anything but fixed weeks or the first 60 days in the home resort reservation period -i.e. 12-10 months window - discussed in 5.2.a.i)_. This means that owners and other club members may have to compete with the developer and/or club operator for a reservation."



First
I don't necessarily have a problem with SVO/SVN having the same reservation rights as we do for VOI's they own or VOI's they gain control of via Starpoint trades or owner rental program.  However, I want to know EXACTLY how SVO/SVN goes about reserving their weeks?  Do they have to sit and wait until reservations open, call the number, and possibly wait in the que as weeks are assigned?  If they are able to just login to their reservations system and star snapping up prime weeks, then they have exercised superior reservation rights in my opinion.

James1975NY, can you give us some more details about the reservations audit you referred to?  Who mandates it?  What do they check for?  Nowhere in the docs is there mention of an audit so I am just wondering where it comes from and if it applies universally to all the resorts or only those in jurisdiction with this mandate.

I'm also curious about this given not all the resorts were initially developed by Starwood and thus they have different reservations obligations/restrictions for some resorts.

Second
I do think SOMEONE needs to get some answers as to how delinquent VOI's are dealt with.  It is clear that SVO/SVN can gain access to these and reserve/rent/use them as they please based on the docs.  However, the Association also has the right to rent them out under the docs.  What we don't know is WHO is doing WHAT.  Is the Association attempting to do anything with these weeks or are they throwing their hands up in the air b/c it is too difficult?  Is SVO/SVN snapping them up under their rights, or are they also just letting them slide into non-use?  


I am not a WKV owner, rather I own at SBP.  I am slammed the next week but after that I will attempt to dig up my SBP docs to see how they compare to these.  I am not a member of SVN though so I may not have the SVN overlays for SBP.


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## DanCali (Feb 18, 2010)

I accidentally omitted the last statement in 5.d, but the whole paragraph says the following:

"The reservation rules may create one or more reservation periods during which the developer and/or the club operator may reserve any Use Period in a Club Unit that nobody else reserved and that no other person has exclusive rights to reserve. This means that owners and other club members may have to compete with the developer and/or club operator for a reservation. The Reservation period may not start more than 60 days before the check-in day of a use period. If may overlap with other home resorts of club reservation periods."

So this still looks like a 60 day restriction, as jarta pointed out.

Either way, I don't think this refers to units owned by the developer, but rather reservations Starwood can rent out. If they are owner by Starwood I agree they should have the same rules as owners, although they probably reserve without calling in and getting "no availability".


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## jarta (Feb 18, 2010)

DanCali,   ...   Sure, 5.2(d) ties into the overall Plan description.  And it ties into 12.3. where the right is reserved by the developer.

Both relate to the 60 day period.  Starwood needs to reserve the week to make deposits in II and to be able to break the week into less than 1 week periods.  Thus, during that last 60 day use period, owners and Club members (SVN) could be competing with Starwood for the week.  

However, neither 5.2(d) or 12.3 say anything about rental proceeds if Starwood rents the week it reserves.  For 12.4 (still owned by Starwood) and 12.5 (week 53) Starwood gets to keep all the rental money despite any other agreement to the contrary.  Why is 12.3 not included in the "Starwood keeps it all?"


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## DanCali (Feb 18, 2010)

jarta said:


> DanCali,   ...   "Here is the link to the doc."
> 
> The link doesn't work now.
> 
> ...



jarta,

I understand what you are saying with respect to Chapter 12, but when I read chapter 13 (Club Operator Rights) it still reads to me like they keep all the rent from 60 day reservations...

13.1.a Reservation Rights: (says they can reserve anything they want, for any reason, within 60 days, in addition to units they own)

13.1.b Use Rights: (says they can use their Vacatin Periods for any legal purpose and regarless of what the Vacation Plan Documents say. If they rent the Use Periods they alone get to keep the rent).

I don't even see the ambiguity anymore when reading these two paragraphs... If they make a reservation within 60 days they have that Use Period, which they can then rent and keep 100% on the revenue.


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## Troopers (Feb 18, 2010)

Dan and Jarta,

Can you give me the dummies version when you sort this out?

Thanks.


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## James1975NY (Feb 18, 2010)

ocdb8r said:


> First
> James1975NY, can you give us some more details about the reservations audit you referred to?  Who mandates it?  What do they check for?  Nowhere in the docs is there mention of an audit so I am just wondering where it comes from and if it applies universally to all the resorts or only those in jurisdiction with this mandate.



I understand that it is mandated by the state. I was never involved with the audit only aware of it.

My understanding as to the purpose of the audit was to ensure that SVO was managing the inventory in a way that promotes owner usage and supported the "club" where applicable.


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## James1975NY (Feb 18, 2010)

*Managing Inventory*

The rules that are being dissected here are in place to allow SVO the manage the complexities of the club. Are there opportunities within these rules to make money - yes; however, the main purpose in the flexibility of those rules is to allow them to manage effectively.


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## DavidnRobin (Feb 18, 2010)

jarta said:


> DanCali,   ...   What bothers me is that some people are saying Starwood definitely gets all of the rental income based on something that you refer to as vague (but is not so under the legal principle).  It appears to me that those declarations are spurred on by suspicion and mind-set, not facts.



All I have been requesting is transparency to know what is happening to these deliquent VOIs in regards to HOA reimbursment - since it is not transparent (even with people combing thru the CCRs) - of course there is concern on what happens to this money since the Owners have the burden.

It seems if I read correctly - SVO gets usage and the HOA gets the burden - sweet set-up.  If this is the case - I believe from my simpleton POV - that this borders on something that can be used in legal action.  Perhaps or perhaps not... bottom-line is it is not transparent - and it should be.

Another related issue is that we are hearing that while these deliquences (right now) are not that high of percentage - and therefore responsible for only a small increment in the MFs - THEN what is the cause of the escalating MFs year-after-year (e.g. WKORV/N, WPORV, WSJ - I can only speak for these)???

There is an accumulation of many things - but and average of >10% per year for 5 years (WKORV, WSJ) - is certainly more than Cost-of-Living, Inflation, energy costs, taxes, staffing costs, etc...

So... my point is - in SVO/SPG usage of these VOIs via rentals, exchanges, SPG program - is the HOA (therefore us) being fairly compensated for this usage? From a pragmatic POV - if not, then is this the cause of the escalating MFs? And if so - is it defendable by SVO?

food for thought...


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## jarta (Feb 18, 2010)

DanCali,   ...   I believe 13.1(b) again ties back to 12.4 and 12.5.

Thus the "may use its Vacation Periods" and the "these Use Periods" refers to the Starwood owned (12.4) and week 53 (12.5) Vacation Periods.  A Vacation Period  is defined as 7 days.  A Split Vacation Period is less than 7 day period.  Both come under the definition of Use Period.

The last sentence of 13.1(b) is merely 12.6 restated for the SVN Club Operator (Starwood) as opposed to the Developer (Starwood).  12.6 and 13.1(b) are mirror images.

You construe a document so that all the sections make sense and together make a unified whole.  You do not look at merely one clause or phrase or sentence.

Dan, I am not saying *for sure* that you are wrong and I am right.  I'm just saying that from a legal construction position, IMO I have construed the document correctly.

The best indicator of rental revenue to the HOA is a rental income category in the yearly financials or, barring that, a comparision of total assessments budgeted to the total amount of revenue for the year.  I think I will ask WKV for a copy of the latest financial report when I am back home next week.  As an owner there, I am legally entitled to get a copy if I offer to pay.  I could put it in .pdf format and it could be included as or in a TUG sticky.   ...   eom


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## nodge (Feb 18, 2010)

*WKV and SDO 2010 Operating Budgets*

It sounds like everyone could use some good old fashioned data to help sort things out.  

Fortunately, I’ve got a big ol’ bag of crap I’ve been collecting just in case I ever end up on “Let’s Make A Deal.”  Anyone else remember that show?  It was awesome.  Monty Hall would say “I’ll give $100 to anyone who has a tennis ball with them.”  And someone in the audience, who is usually dressed up like a clown, fishes one out of their big ol’ bag of crap to become the next contestant, while the others in the audience look forlorn because they had thought Monty would have focused on kitchenware or personal items instead of sporting goods so they’d been lugging a complete set of silverware, an old beer can, and support hose around with them all day.  Pure genius, but I digress.  So, fishing around in my big ol’ bag of crap  . . . . . we’re in luck!

Here are the 2010 Operating Budgets for the Westin Kierland Villas (a/k/a “Scottsdale Sonoran Villas”) and the Sheraton Desert Oasis (a/k/a “Scottsdale Pinnacle”).  Each budget includes a line item for rental revenue which offsets the total expenses.  It’s so much fun looking at tables of numbers, I’ll let everyone find these items before offering any comments on them. (I’ve placed a little hint where you should look in case anyone is having trouble).

Westin Kierland Villas 2010 Operating Budget






Sheraton Desert Oasis 2010 Operating Budget





From my reading of this data, SDO owners are expected to get $188,263 in rental revenue to offset expenses, and WKV owner’s (who also own at a larger and nicer resort that usually charges higher nightly rates than SDO) are expected to get a whopping $42,795 in rental revenue.  In other words, the owner of a 2 bedroom lock-off at WKV saves $5.52 a year in maintenance fees by SVO renting the units to third parties.  I don't know about you, but I'd gladly pay $6 more a year if SVO kept its grubby mitts off that inventory.

What is even more remarkable is that the WKV owners’ association appears to be making more money from that $20 “biennial service fee” charged to bi-annual owners than it makes from renting units.

Zonk!

-nodge


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## DanCali (Feb 18, 2010)

jarta said:


> Dan, I am not saying *for sure* that you are wrong and I am right.  I'm just saying that from a legal construction position, IMO I have construed the document correctly.



I am not a lawyer, so I can only read it from the perspective of someone with a couple of other graduate degrees. To me, it is ambiguous at best. I would think that these types of issues, especailly with a lot of money involved, need to be unequivocal as to where the money goes.

As I said earlier, I actually don't even see a reason to fill vacant units. As long as asessments are paid, it doesn't hurt owners if the units stay empty. The budget is still balanced and, if anything, the HOA can save on actual vs. budgeted housekeeping and other maintenance costs. Renting them out at sixty days (or, inventory management, as james1975ny called it) just creates excess wear and tear. And especially if Starwood collects all that revenue, there is no reason for this to happen - other than that it was imposed on owners who don't know better when they created the resort)




jarta said:


> The best indicator of rental revenue to the HOA is a rental income category in the yearly financials or, barring that, a comparision of total assessments budgeted to the total amount of revenue for the year.  I think I will ask WKV for a copy of the latest financial report when I am back home next week.  As an owner there, I am legally entitled to get a copy if I offer to pay.  I could put it in .pdf format and it could be included as or in a TUG sticky.   ...   eom



It would be great if you share with us what you find. The big issue is that rental income you may see may be from delinquent owners (which the HOA does get) rather than the 60 day window rentals. How do you distinguish between those?


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## jarta (Feb 18, 2010)

nodge,   ...   Thank you for posting the WKV & SDO 2010 budgets.  But, only the SDO budget appears?

If Starwood kept a more significant block of units at WKV than Sheraton did at SDO, and Starwood can rent them in advance of the 60 day restriction and keep all the rent from those units, why is a low amount of rental income for the WKV HOA from the rather last minute 60 day units so surprising?

What DanCali posted is an interpretation that would result in no rental income at all for the WKV association from 60 day rentals.


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## DanCali (Feb 18, 2010)

jarta said:


> nodge,   ...   Thank you for posting the WKV & SDO 2010 budgets.  But, only the SDO budget appears?
> 
> If Starwood kept a more significant block of units at WKV than Sheraton did at SDO, and Starwood can rent them in advance of the 60 day restriction and keep all the rent from those units, why is a low amount of rental income for the WKV HOA from the rather last minute 60 day units so surprising?
> 
> What DanCali posted is an interpretation that would result in no rental income at all for the WKV association from 60 day rentals.



I can see both budgets but basically the numbers nodge mentions are what is listed as rental income. Given the lack of rental income at WKV it does look like the inerpretation that Starwood keeps all that rental income is more likely.

Arguably, since the housekeeping for these units is paid for in Mfs, then I'm not even sure if Starwood reimburses HOA for housekeeping on these stays, not to mention that you can have multiple stays in a single week and excess wear and tear. The docs do say they keep all the rental income.


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## DeniseM (Feb 18, 2010)

I can see both of them too, but the names are not what we usually recognize them by.


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## jarta (Feb 18, 2010)

DeniseM,  ...   The names of the resorts used for marketing purposes are not the legal names of the associations.

nodge has posted the right information. They are the right places.   ...   eom


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## DeniseM (Feb 18, 2010)

jarta said:


> DeniseM,  ...   The names of the resorts used for marketing purposes are not the legal names of the associations.
> 
> nodge has posted the right information. They are the right places.   ...   eom



Correct - I was responding to your post about only seeing the SDO budget.


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## jarta (Feb 18, 2010)

DanCali,   ...   If Starwood keeps all the rental income, wouldn't the rental income be $0?

If the rental is of a delinquent week, wouldn't any net rent over the delinquent MF and late fees be the property of the delinquent owner?   ...   eom


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## James1975NY (Feb 18, 2010)

ocdb8r said:


> Second
> I do think SOMEONE needs to get some answers as to how delinquent VOI's are dealt with.  It is clear that SVO/SVN can gain access to these and reserve/rent/use them as they please based on the docs.  However, the Association also has the right to rent them out under the docs.  What we don't know is WHO is doing WHAT.  Is the Association attempting to do anything with these weeks or are they throwing their hands up in the air b/c it is too difficult?  Is SVO/SVN snapping them up under their rights, or are they also just letting them slide into non-use?



Delinquint owner's weeks can and will be rented by the HOA to recover the costs. Not 100% sure how the monies are disbursed but I am sure SVO gets a cut for the marketing of the unit(s).

Not all owner's weeks are rentable. Lets say dues are to be paid by 01/01. The owner does not pay, they go into lock-out in about February. By February of the current use year, much of the inventory is going to be consumed that is "rentable" or with any demand.

With that, lets say a week is assigned to the owner and placed in the lock-out rental pool. It is likely that the week is going to be off-peak time (assuming float owner) and everyone here knows that the best way to get a cheap week during off peak times is to get a getaway for about $350 dollars or so. It would be kind of tough for an HOA to recover via rental if they are up against those cheap weeks elsewhere.


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## nodge (Feb 18, 2010)

jarta said:


> DanCali,   ...   If Starwood keeps all the rental income, wouldn't the rental income be $0?
> 
> If the rental is of a delinquent week, wouldn't any net rent over the delinquent MF and late fees be the property of the delinquent owner?   ...   eom



I was fishing around in my big ol' bag and found an old can of "Cheez Whiz" and a glossy flier titled "annual summary and 2010 forecast" from "Scott Caldwell General Manager" of "THE Westin Kierland Villas"  (How come SVO is pushing the "THE" thing so much lately?).

It says, and I quote:

"Club Rental Revenue"

"*Associations which are part of the Starwood Vacation Network(sm) program receive a share of the rental for weeks not reserved by Owners.*  The budget is based on projected occupancy and inventory levels.  Due to lower market demands, the revenue in the 2010 budget is projected to be $22.87 less per average ownership week compared to the 2009 budget." (emphasis added).

Sooooo, in light of this data, I think one could reasonably interpret that THE recorded docs give SVO THE right to keep every cent of rental income within THE defined parameters, but a separate, and probably not recorded, SVN program document gives some (and I'm guessing a very, very small sum at that) back to THE HOA.  That some/sum is expected to amount to THE $42,795 in THE 2010 budget.

-nodge
my web site 
(What is that strange looking box thing she wins?  They scare me.  Good thing we don't have 'em at THE Westin timeshares).


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## DeniseM (Feb 18, 2010)

> Fixing the quotes - AGAIN!



Jim - Just so you know - to hand edit your quotes using html, you need to put this at the end of the quote - *[/ quote]*  (take out the extra space!)


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## jarta (Feb 18, 2010)

nodge,   ...   If the 2010 estimated rental revenue income is $22.87 *less per unit* than 2009 and the range of income per unit for 2010 is $5.52 (2-br) to $2.13 (deluxe 1-br) with the average being about $3.68 per unit, wouldn't the 2010 budget estimate for rental revenue have been slashed to about 12.5% what it was for 2009?

If you multiply the 2010 budget figure of $43K by 8, the 2009 budget figure would have been about $344K, wouldn't it?

Even if the "unit" is a 2-br unit and the $5.52 is $22.87 less for 2010, the average for 2009 would have been $28.39 per unit - about 5 times $43K - or about $215K.

Maybe the WKV board was just being conservative about rental income for 2010 based on the economy?  It's their job to be conservative in estimating revenue and liberal in estimating expenses in the budget.  Otherwise, the resort could suffer a cash deficit for the year.

I'm still going to ask for a copy of the latest annual financials for WKV when I get back home.   ...   eom


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## James1975NY (Feb 18, 2010)

DeniseM said:


> Jim - Just so you know - to hand edit your quotes using html, you need to put this at the end of the quote - *[/ quote]*  (take out the extra space!)



Thanks Denise! Sorry for the trouble!!!


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## DeniseM (Feb 18, 2010)

No trouble at all, I just wanted to make sure you know how to do it.  

It's actually VBulletin Code and here is link to a list of the more common tags if anyone is interested in jazzing up their posts.


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## nodge (Feb 18, 2010)

jarta said:


> Maybe the WKV board was just being conservative about rental income for 2010 based on the economy?



Possibly. 

I guess that as with most things, it comes down to faith and trust.  With no one at SVO saying squat about anything to any of us these days and us uncovering a bunch of screw you clauses it buried deep within piles of recorded legal documents, it's not really doing itself any favors in either of those departments now is it?

-nodge


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## jarta (Feb 18, 2010)

It seems that information posted that shows rental income was sent out to all WKV owners.  It doesn't seem that Starwood is sending out "squat."

It seems the Starwood "screw you" clauses are being misinterpreted.  They may not be "screw you" at all.

It seems that the 2010 WKV budget for rental income is based on the economy and used to be much higher for 2009.

And, what happens when Marriott or Hilton or Hyatt rents a timeshare?  Does all the net rent go to the HOAs?


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## jerseygirl (Feb 18, 2010)

I am at least equally interested in an audit of the rentals that occur under this clause:

_SVN Operator has the right, but not the obligation, to reserve a number of Floating Vacation Periods from time to time at any time thirty (30) days after the beginning of the Home Resort Fixed Priority Period, and any unreserved Vacation Period after the Home Resort Fixed Priority Period, for the purpose of depositing the reserved Vacation Periods with an External Exchange Program on behalf of SVN Members based on SVN Operator's
determination, in its sole discretion, of anticipated SVN Member demand to access an External Exchange Program or the Starwood Preferred Guest Program._

I'm not so concerned about the units they use for bulk banking, but let's rewrite this paragraph as it concerns SPG conversions only:

_SVN Operator has the right, but not the obligation, to reserve a number of Floating Vacation Periods from time to time at any time thirty (30) days after the beginning of the Home Resort Fixed Priority Period, and any unreserved Vacation Period after the Home Resort Fixed Priority Period, based on SVN Operator's determination, in its sole discretion, of anticipated SVN Member demand to the Starwood Preferred Guest Program._

Boy did we give away the store on that one.  Since Starwood permits SPG conversions very late in the usage year, there's nothing of any value left for them to rent and therefore I feel fairly certain they're taking full advantage of their headstart on the inventory.  In fact, I think it may explain the following, among other things:

-- Why I've never been able to "float" my fixed week ownerships at the 10-month mark (the "2-month headstart owners get over non-owner SVN exchangers).  And, I've spoken to many other owners who have had the same experience.  Everyone I've ever spoken to about the 8-10 month "float period" at HRA and WSJ says it's a joke.  If anyone on here has had a successful "owner float exchange," please feel free to tell me I'm wrong.

-- The availability of full-priced "SPG.com" 4th of July rentals at WKORV.  

Although I signed the contract, I think it's very one-sided in Starwood's favor.  What if they over-estimate the number of conversions?  Who decides where the rentail income goes?

This is just another one of the "peel back the layers" items I've mentioned in previous posts.  The issue is not necessarily reduced rental revenue at the resort (although it does come into play if they over-estimate).  Giving Starwood a head start on prime inventory for the purpose of rental income to fund SPG conversions means less inventory available to the SVN-membership as a whole.  

Is there a better way?  Maybe not, given the way the club was set up.  But, it certainly indicates the liberal SPG conversion process (4 and 5 star elite members can convert up to Oct 1 of the current usage year) may be a very nice perk for 4 and 5 star members, but it hurts everyone else.

Before I get jumped, I agree that 4 and 5 star members deserve extra perks.  Heck, I get lots of them through my Hyatt and Continental statuses --- I even get an occassional cool upgrade as a lowly SPG gold member.  And, I enjoy them as much as the next person.  But, when I get upgraded, it's because a better room/first class seat was otherwise sitting empty.  Nothing was taken from other customers/owners 11 months in advance.  (Hope that analogy makes sense -- it's the best I can come up with.)

Was this a stupid move (allowing 4 and 5 star members to convert after all possible rental opportunities to recoup the costs of the conversion are gone) .... or a carefully calculated move to allow Starwood to maximize it's profit on SPG conversions:

An oceanview studio for July 3 - 10 commands $6019
An oceanview one-BR for July 3-10 command $10347

Let's just say SVO has to pay 3.5 cents/SP like everyone else.  They collect $16K+ on a conversion that costs them less than $3000 to fund.  Pretty good deal ... for them.  Not so good for SVN members hoping to trade in that week.

Disclaimer -- This is a "what-if" scenario based on what the documents permit.  I do not have any proof this is occuring.  I just think we should be demanding full financial audits to determine just exactly where the money is going.  As David has said .... follow the money .... follow the money.  I'll add one more .... read your documents .... read your documents.


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## DanCali (Feb 18, 2010)

jarta said:


> DanCali,   ...   If Starwood keeps all the rental income, wouldn't the rental income be $0?
> 
> If the rental is of a delinquent week, wouldn't any net rent over the delinquent MF and late fees be the property of the delinquent owner?   ...   eom



jarta - Yes and yes...

On the other hand - what type of revenue sharing agreement is there? Why is it not spelled black on white?

Here are some extremely conservative assumptions on rental income:

5% vacancy rate at 60 days (given the bad economy argument this is probably more)
starwood rents only 20% of these (hotel occupancy rates can't be this low even in a recession)

So that's 1% of available villas get rented under the 60 day rule - or about 4 one BR units per night. 

Assume an average rental rate of $200 per night per 1BR ($350 platinum season, $150 summer - sample rates from spg.com)

And I'll assume only 300 days per year in case I was overly aggressive somewhere above.

so under these conservative assumptions you have 4 units * $200 * 300 days so thats $240K per year. And if they rent 40 units per night, just add a zero... So how in the world does the HOA end up with only $40K? Unless you really think I was overly aggressive with my assumptions...

And then there is the issue raised by jerseygirl which I don't even know what to say of...

It's good to have someone defend Starwood from what may be unjust attacks. But I can't believe that all this doesn't seem fishy to you at all...


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## jerseygirl (Feb 18, 2010)

DanCali said:


> And then there is the issue raised by jerseygirl which I don't even know what to say of...



Say something ... anything ... please!   

This is at least the second (if not the third or fourth) time I've brought it up and NO ONE else seems concerned.  I feel like I'm over-compilcating it or something.  Every single SVN member (even the 4 and 5 star elites) has a stake in this one.  Possibly even the non-SVN members if inventory is not being properly segregated as some suspect.  

Where's the outrage?!

Again, I'm not suggesting anything illegal is being done.  But, if we're not demanding audits ... then we're all nuts!


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## DeniseM (Feb 18, 2010)

OK - I'm on it!  (Thinking...)  

*jerseygirl - I got your back!*


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## jarta (Feb 18, 2010)

jerseygirl,   ...   "But, if we're not demanding audits ... then we're all nuts!"

Then I guess I'm the only sane one on TUG.  As I said earlier today, my request for the latest WKV annual financial report is going in as soon as I get back home.

Everyone else is just wringing their hands, misinterpreting documents and making wild guesses.

I'll pdf the latest WKV annual financial report (might be 2009) when I get it and post the pdf copy.  Stay tuned.

In the meantime, it would be nice to see what Marriott and Hilton and Hyatt do with the rental income.  If it's relatively the same for everyone, it may be industry standard procedure and not a cause of the higher assessments at Starwood resorts.   ...   eom


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## jerseygirl (Feb 18, 2010)

jarta said:


> Everyone else is just wringing their hands, misinterpreting documents and making wild guesses.



You might want to consider the fact that "everyone else" is not sharing what they're doing with you.  Heck, some of us even have official conference calls!      You're a little late to the party -- seem to be only recently coming around to the possibility that everything might not be rosy at SVO.



jarta said:


> I'll pdf the latest WKV annual financial report (might be 2009) when I get it and post the pdf copy.  Stay tuned.



That will be helpful, thanks.  Of course, a standard financial report will probably not answer the inventory assignment questions at the root of these questions, but it's a start.  We need to know how much rental income was attributable to the HOA and to SVO on a resort-specific basis -- and how those figures were derived.  Good luck getting that -- I truly mean that (no sarcasm whatsoever).  I guess I'm just a little skeptical that a financial report will reveal the answers to the underlying questions (but, it's been about 30 years since I majored in Accounting --- and I'm just thinking of my own VERY LARGE company.  We have all the financial reports you could ever want ... audited by the very best ... but unless you know the questions to ask, the answers are buried in the details not present in the reports themselves). 



jarta said:


> In the meantime, it would be nice to see what Marriott and Hilton and Hyatt do with the rental income.  If it's relatively the same for everyone, it may be industry standard procedure and not a cause of the higher assessments at Starwood resorts.   ...   eom



I'm done doing homework for others, but I think the reason no one is really concerned with what Marriott, Hilton and Hyatt are doing is because they don't have the same problems with out-of-control escalating maintenance fees.  It's a matter of trust .... I didn't worry about Starwood's handling of the finances until the "recent unpleasantness."  But, that's just me.  As long as the following continues, I won't waste my time checking into things:

-- My Hyatt and Hilton maintenance fees only increase by amounts in line with the CPI

-- I recieve solicitations to run for the BOD, then full bios and position statements for those who choose to do so -- all of which is received on a timely basis.

-- Fully transparent information about resort finances .... quarterly newsletters keeping me abreast of resort conditions, changes, etc. (not monthly advertisements sent under the cover of newsletters!).  Gasp -- ours are even resort-specific.

-- Contact information for board members.

-- I could go on, but I think I've made my point.


----------



## LisaH (Feb 18, 2010)

jarta said:


> In the meantime, it would be nice to see what Marriott and Hilton and Hyatt do with the rental income.  If it's relatively the same for everyone, it may be industry standard procedure and not a cause of the higher assessments at Starwood resorts.



As far as I know, Marriott has a very straight forward approach with timeshare rental: Marriott only takes a certain number of the units and they pay the owners upfront. They may make a lot of money (the difference between what they get from renters and what they pay to the owners) in renting but it's not at owner's expense.


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## l2trade (Feb 19, 2010)

jerseygirl said:


> Say something ... anything ... please!
> 
> This is at least the second (if not the third or fourth) time I've brought it up and NO ONE else seems concerned.  I feel like I'm over-compilcating it or something.  Every single SVN member (even the 4 and 5 star elites) has a stake in this one.  Possibly even the non-SVN members if inventory is not being properly segregated as some suspect.
> 
> ...



Yes.  As a non-SVN owner, I am very outraged about this.  I believe Starwood has no justifiable right to preemptively select inventory for anticipated SPG conversions on behalf of SVN owners from a shared inventory pool belonging to all owners.  This practice never existed during the creation of the deeds or CC&Rs which everyone agreed to.  Since I am not eligible to join SVN, I never agreed to accept the SVN rules.

The audit we will ultimately need to do must go far deeper than the summaries we have now.  We need all the detailed chronological line item transactions to prove whether or not the inventory management system is executed in the best interests of all owners according to the founding documents and the law.  I suspect it is not.


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## jarta (Feb 19, 2010)

l2trade,   ...   This is a serious question.

What are you talking about?

"I believe Starwood has no justifiable right to preemptively select inventory for anticipated SPG conversions on behalf of SVN owners from a shared inventory pool belonging to all owners."

What "anticipated SPG conversions?"  SPG is short for Starwood Preferred Guest, a Starwood HOTEL term.

If you are against all internal trading systems, just say so.  But, you cannot run any internal trading system without someone setting up a system of reserving unreserved weeks for other owners trading into the resorts.   ...   eom


----------



## DeniseM (Feb 19, 2010)

SPG conversion = converting your week to Starpoints (hotel points)


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## Pit (Feb 19, 2010)

jarta ... read post #102


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## jerseygirl (Feb 19, 2010)

Pit said:


> jarta ... read post #102



Probably won't help.  :ignore:


----------



## jarta (Feb 19, 2010)

Does someone have someone else's back?  See post 105.    ...   eom


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## Fredm (Feb 19, 2010)

jarta said:


> you cannot run any internal trading system without someone setting up a system of reserving unreserved weeks for other owners trading into the resorts.



Sure you can. 
If an owner does not :
 1. convert to points, or,
 2. request a trade (internal or external).

then, the inventory should remain available to the owner for a reservation request until the 60 day window.

As Starwood selects the offsetting inventory with item 2, they retain the discretion to dispose of it as they see fit. But, an allocation system is not required to accommodate internal exchanges. The inventory has either been released by an owner, or it has not.

Of course, this flies in the face of the owner reservation preference period. Therein lies the real problem with the internal exchange mechanism as it currently operates.

A resort owner should not be relegated to second class status because they did not make a reservation 8 months in advance. 

The exchange concept is not, nor should be, complicated. Inventory for an exchange should be made available when the home resort owner decides they wish to go elsewhere. All the rest is designed to raid the system for the benefit of the operator.

The reason Marriott owners are generally happy is because Marriott has, thus far, adhered to this simple principle.


----------



## jarta (Feb 19, 2010)

"-- The availability of full-priced "SPG.com" 4th of July rentals at WKORV."

Starwood can rent out the units it owns any way it wants to.  There are Starwood owned units at WKORV.  If it uses them for SPG rentals, it is not "premptively" taking them from any "owners pool."  If that's what it is doing, it is merely renting units it owns and keeping the rent - just like any other owner at WKORV could do.   ...   eom


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## jarta (Feb 19, 2010)

Fredm,   "If an owner does not :
1. convert to points, or,
2. request a trade (internal or external).

then, the inventory should remain available to the owner for a reservation request until the 60 day window."

That's exactly what the SVN documents posted for WKV provide.  See posts #79-85.

However, for its own units, Starwood can rent those units whenever and to whomever it wishes.  And, apparently, that's what it does.  So, rentals appear before the 60 day period.

People who post here in amazement that they can't trade in because the resort is full - yet Starwood is offering SPG rentals - just don't get it.  They are Starwood owned units that Starwood has reserved at 12 months.  Then Starwood rents them out - just like any other owner could do with the unit he/she has reserved.   ...   eom


----------



## Fredm (Feb 19, 2010)

jarta said:


> Fredm,   "If an owner does not :
> 1. convert to points, or,
> 2. request a trade (internal or external).
> 
> ...



Agreed. Starwood can dispose of its units as they see fit.
Again, the real problem is the owner reservation preference period. 
The wheels fly off the milk wagon at that point.


----------



## jarta (Feb 19, 2010)

Fredm,   ...   When Starwood lists its own units for rent to SPG members and others at full price, it is merely doing what TUG members do (like mariawolf renting her week 51 and week 52 at Harborside through Atlantis Family Fun or anyone else renting out their St. John week).

Both the TUG members who rent out their units and Starwood keep the full net rental.  They give nothing back to the associations except the annual MF.

It's actually quite simple to understand and, IMO, only fair.  I don't understand the implication that Starwood is "stealing" someone else's week when it rents out its own units.   ...   eom


----------



## jarta (Feb 19, 2010)

"The wheels fly off the milk wagon at that point."

The reservation preference period for all who want to go to their home resort (12 months-8 months) is exactly the same whether someone is SVN or not-SVN.

At any point after 12 months out (and even before for fixed weeks - I think - I am not an II expert), any owner can deposit their owned week into II.

What do you mean by the "wheels flying off the milk wagon" when the home preference period ends?  All that happens is the internal trading period begins to run so there is more competition for the remaining available weeks.  That's bad?  How so?   ...   eom


----------



## Fredm (Feb 19, 2010)

jarta said:


> Fredm,   ...   When Starwood lists its own units for rent to SPG members and others at full price, it is merely doing what TUG members do (like mariawolf renting her week 51 and week 52 at Harborside through Atlantis Family Fun or anyone else renting out their St. John week).
> 
> Both the TUG members who rent out their units and Starwood keep the full net rental.  They give nothing back to the associations except the annual MF.
> 
> It's actually quite simple to understand and, IMO, only fair.  I don't understand the implication that Starwood is "stealing" someone else's week when it rents out its own units.   ...   eom



My comments went to your statement :"you cannot run any internal trading system without someone setting up a system of reserving unreserved weeks for other owners trading into the resorts".

Yes, they can. They choose not to. 
I do not dispute that they have the legal right to operate the exchange as they do. However, the mechanism provides Starwood the ability to skim, steal, appropriate, allocate, or what ever verb you wish to apply, inventory for their use.
 In the process, home resort owners are shortchanged.

Granted, all operators cherry pick inventory when the owner converts to hotel points.  The operator then "owns" the converted inventory. Fair enough. But, Starwood stands alone in appropriating inventory at its sole discretion when an exchange request is made.
Hence, what may be available at the 60 day window is wrung out.
Starwood has maximized its take. 

At the bottom of it is a system not unlike what RCI has been doing by "anticipating" demand, and renting the prime inventory for its own benefit.


----------



## jarta (Feb 19, 2010)

Fred,   ...   "However, the mechanism provides Starwood the ability to skim, steal, appropriate, allocate, or what ever verb you wish to apply, inventory for their use."

I agree the ability is there.  It's a pretty serious allegation you make, though.  And, it implies the complicity of the HOA board. 

Do you have any proof that inventory is not deposited fairly within the assigned season when the II trade request is made?  I haven't seen anyone post on TUG saying they deposited their Platinum week and Starwood deposited an out-of-season Gold or Silver week.

And, even more importantly, do you have any proof that Starwood is appropriating the II deposited inventory for Starwood's own use - as opposed to leaving it in the resort pool (until 60 days out) so that any owner at the resort can reserve it?   ...   eom


----------



## Fredm (Feb 19, 2010)

jarta said:


> "The wheels fly off the milk wagon at that point."
> 
> *The reservation preference period for all who want to go to their home resort (12 months-8 months) is exactly the same whether someone is SVN or not-SVN.
> *
> ...



As mentioned, the home resort owner loses primary reservation rights. In so doing, control over the reservation calendar has been subverted. Starwood has the "right" to do it, but owners are increasingly becoming aware of its implications. 
This is the singular source of all the skepticism. Rentals or otherwise.

If Starwood actually permitted an owner to control the week deposited for exchange, there would not be an issue. There are 52 weeks to be accounted for. But, when Starwood selects the weeks surrendered, the weeks it "anticipates" internal demand for,  AND cherry picks the weeks it wishes to compensate for point conversions,  it should not surprise anyone that Starwood has appropriated prime inventory for its purposes.

Again, I do not believe this is being accomplished illegally. It is how the system is constructed, per the Documents.

Does this tangentially weaken the exchange process, and result in lower rental revenues to the HOA? I think so.


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## Fredm (Feb 19, 2010)

jarta said:


> Fred,   ...   "However, the mechanism provides Starwood the ability to skim, steal, appropriate, allocate, or what ever verb you wish to apply, inventory for their use."
> 
> I agree the ability is there.  It's a pretty serious allegation you make, though.  And, it implies the complicity of the HOA board.
> 
> ...



Jarta,

It is not a serious allegation. 
It is the way the system is constructed. That's all.

I have not ever stated, or implied, that Starwood is depositing out of season weeks. Simply that it has preassigned seasonal values to exchange requests. 
I have, from the very beginning, said that Starwood is within its rights to do so. But, it enables them to control which weeks it actually surrenders. There is NO QUESTION that this practice weakens the deposit clout of the best weeks in a given season. Why?
Because the best weeks do not get deposited. If they did, there would be no reason whatsoever to implement such a system.
Again, Starwood has the right to do it. I simply recognize the motive.

Where seasonality is not involved, as with Hawaii, you can bet the ranch that an ocean front unit will not be deposited. It will be retained, irrespective of the date. Again, who benefits?

It is the system. There is no reason to implement a system such as this unless it is for the benefit of the operator. It is far simpler,  completely transparent, requiring less admin overhead, etc., to allow owners to control the inventory. The mechanism is designed to permit Starwood to milk the deal. That's not a serious accusation. 

 Starwood understands it.
 I.I. understands it. 
 I understand it.
 Most who know how the machinery operates understand it. 
 They just don't like it.


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## l2trade (Feb 19, 2010)

jarta said:


> Does someone have someone else's back?  See post 105.    ...   eom



No, I just needed to sleep last night.  I can't help it if other folks easily understand and agree with each other's posts.  I just read your question when I woke up this morning.  I respect everyone is entitled to their own opinion.  Please respect mine.  In your post #110, I feel you are twisting and misrepresenting my opinions again.  IMHO, others pointed out the obvious by answering for me.  

To be clear, again:
1. I NEVER took issue with Starwood making a reservation for a deeded week Starwood actually OWNS.

2. I NEVER took issue with Starwood making a reservation AFTER an owner called and converted their weeks to points.

3. I ABSOLUTELY take issue with Starwood grabbing the best weeks for ANTICIPATED point conversions, far in advance, on BEHALF of what they think an owner MIGHT DECIDE to do.

4. I ABSOLUTELY take issue with Starwood grabbing reservations from ALL owner inventory, to support a program NOT available to ALL owners.  And, by grabbing reservations, I mean that Starwood does NOT OWN the week and the SVN member has not yet called or taken any explicit action to relinquish said week.

5. No.  I am NOT AGAINST all internal trading systems.


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## saluki (Feb 19, 2010)

jerseygirl said:


> You might want to consider the fact that "everyone else" is not sharing what they're doing with you.  Heck, some of us even have official conference calls!      You're a little late to the party -- seem to be only recently coming around to the possibility that everything might not be rosy at SVO.



Jerseygirl-

Major thanks to you & the others for your insights & effort on this. I'm glad you're on OUR side!


----------



## jarta (Feb 19, 2010)

Fredm,   ...   I guess you have no proof.

You are saying, in a roundabout way, exactly what l2trade was saying.  You do not like Starwood's internal trading system.  You prefer that II be the only alternative to in season home resort use opportunities and that actual reserved weeks, not weeks comparable to owned weeks, be deposited for II external trades.

That's OK.  We just disagree as to the internal Starwood system.  I like the internal trading system.  Many more Starwood owners use it (Staroptions) than use II - despite the fact that II gives the opportunity for 2 for 1 trades.

Also, for II trading the deposit of weeks comparable to owned weeks, rather than reserved weeks is gone.  Either sue based upon supposed "rights" you have as an owner or accept the fact that 2 for 1 trades are still reasonably probable.  But, don't make allegations without proof that Starwood is stealing deposited weeks for its own use prior to the 60 day period.

To each his own.   ...   eom


----------



## jerseygirl (Feb 19, 2010)

saluki said:


> Jerseygirl-
> 
> Major thanks to you & the others for your insights & effort on this. I'm glad you're on OUR side!



You're very welcome Saluki -- and, believe me, it's not just me.  There are several others who wish to remain anonymous who are actively working for a fairer system.  We are on the side of ALL owners -- SVN, non-SVN, elite, non-elite.  We simply don't like being taken advantage of at every turn and are doing what we can to force more transparency and ultimately a fairer system for ALL.  If every owner took the time to really understand the implications of the SVN system, as designed, they would almost assuredly come to understand that we would ALL be far better off with a system like Marriott's.

As I stated on another post recently, if the rumored upcoming Marriott system has been designed to be like Starwood's, Marriott owners need to think LONG and HARD about the implications.  The changes will, on the surface, appear to benefit those with high value weeks.  But, when the layers are peeled back, there will only be one real winner -- and it won't be the Marriott owners.

As I've also stated -- anyone with soft copies of resort-specific documents can help .................. please send a PM so we can make arrangements to collect as many as possible.


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## Fredm (Feb 19, 2010)

jarta said:


> Fredm,   ...   I guess you have no proof.
> 
> You are saying, in a roundabout way, exactly what l2trade was saying.  You do not like Starwood's internal trading system.  You prefer that II be the only alternative to in season home resort use opportunities and that actual reserved weeks, not weeks comparable to owned weeks, be deposited for II external trades.
> 
> ...



Jarta, with all due respect, you do not understand.
So, I will leave it at that.


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## jerseygirl (Feb 19, 2010)

jarta said:


> But, don't make allegations without proof that Starwood is stealing deposited weeks for its own use prior to the 60 day period.



Quit putting words in other people's mouths.  Not one single person on this thread has suggested that Starwood is stealing weeks.  For an attorney, I'm frankly flabbergasted that you don't appear to understand the implications of this permitted activity (which negates the term "stealing," as we've all acknowledged):

_SVN Operator has the right, but not the obligation, to reserve a number of Floating Vacation Periods from time to time at any time thirty (30) days after the beginning of the Home Resort Fixed Priority Period, and any unreserved Vacation Period after the Home Resort Fixed Priority Period, for the purpose of depositing the reserved Vacation Periods with an External Exchange Program on behalf of SVN Members based on SVN Operator's determination, in its sole discretion, of anticipated SVN Member demand to access an External Exchange Program or the Starwood Preferred Guest Program._

Especially as amended to remove the bulk banking side of things:

_SVN Operator has the right, but not the obligation, to reserve a number of Floating Vacation Periods from time to time at any time thirty (30) days after the beginning of the Home Resort Fixed Priority Period, and any unreserved Vacation Period after the Home Resort Fixed Priority Period, based on SVN Operator's determination, in its sole discretion, of anticipated SVN Member demand to the Starwood Preferred Guest Program._

As it relates to the 4th of July rentals at WKORV, we ALL absolutely understand that Starwood might own the weeks.  Hence the disclaimers such as this one:

_Disclaimer -- This is a "what-if" scenario based on what the documents permit. I do not have any proof this is occuring. I just think we should be demanding full financial audits to determine just exactly where the money is going. As David has said .... follow the money .... follow the money. I'll add one more .... read your documents .... read your documents_

What we're saying .... and I have to suspect that you truly understand this but for some unknown reason choose to twist it ... is that the system has been legally setup so that Starwood has the greatest advantages.  It's that simple.


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## DanCali (Feb 19, 2010)

jerseygirl said:


> As I've also stated -- anyone with soft copies of resort-specific documents can help .................. please send a PM so we can make arrangements to collect as many as possible.



I assume you downloaded the WKV ones ? 

Thanks on my behalf too!


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## Fredm (Feb 19, 2010)

jerseygirl said:


> If every owner took the time to really understand the implications of the SVN system, as designed, they would almost assuredly come to understand that we would ALL be far better off with a system like Marriott's.
> 
> As I stated on another post recently, if the rumored upcoming Marriott system has been designed to be like Starwood's, Marriott owners need to think LONG and HARD about the implications.  The changes will, on the surface, appear to benefit those with high value weeks.  But, when the layers are peeled back, there will only be one real winner -- and it won't be the Marriott owners.



Marriott would truly be crazy to implement a system like Starwood's.
Yes, there are rumors of some kind of a point based system. 
I would not be surprised if something point-based happens. 
If it does, it will be because it benefits Marriott. Not to improve a system that is already widely considered the best for its owners.
It will not be to fix what is not broken.


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## jarta (Feb 19, 2010)

Fredm   ...   "There is no reason to implement a system such as this unless it is for the benefit of the operator."

We disagree.  There is benefit to every other owner from the recently implemented Starwood/II system.

What was happening was that owners at Starwood resorts were reserving prime weeks in a season merely to deposit them in II for a 2 for 1 trade.  Those owners were not using the weeks.  They were not even, for the most part, renting them out.

Now, the prime weeks in a season are being returned to the pool of weeks that all owners at the resort are able to reserve, use and enjoy.

Any resort should be primarily for the use of the owners, IMO.  They should have priority over and the the fullest use of the prime weeks in a season.  II traders should not.  

Just my opinion.  And, I realize it's not very popular here among mostly II traders.   ...   eom


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## levatino (Feb 19, 2010)

I would suggest, that counter to the name of this thread, the dust has not settled.

yucky!


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## DanCali (Feb 19, 2010)

jarta said:


> What was happening was that owners at Starwood resorts were reserving prime weeks in a season merely to deposit them in II for a 2 for 1 trade.  Those owners were not using the weeks.  They were not even, for the most part, renting them out.



Isn't exchanging part of timesharing? And isn't this what trading is all about? Maximize your trade value...? And with Starwood II priority those prime weeks were getting picked up by other Starwood owners using II. Since II is made available to all owners, I don't think anyone was getting shortchanged by this. It was, if anything, a process that was much more transparent and easy to follow - an SVO owners deposits a good week and another SVO owners gets it... Now we can only speculate on what is getting deposited, reserved by Starwood for its own rentals, and kept for SVN trades.



jarta said:


> Now, the prime weeks in a season are being returned to the pool of weeks that all owners at the resort are able to reserve, use and enjoy.



Yes, Starwood can now deposit dog weeks into II. Who says other owners are now getting the prime weeks? In fact, they are not getting them if Starwood reserves those prime weeks to rent based on anticipated StarPoint conversions... No way to know unless we see the books... shouldn't we be entitled to see what's going on at our home resorts?


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## jerseygirl (Feb 19, 2010)

jarta said:


> Fredm   ...   "There is no reason to implement a system such as this unless it is for the benefit of the operator."
> 
> We disagree.  There is benefit to every other owner from the recently implemented Starwood/II system.
> 
> ...



Wow -- this is pulling one teeny tiny part of an argument that's been hashed and re-hashed and ignoring the much bigger picture.  Amazing!


----------



## jerseygirl (Feb 19, 2010)

DanCali said:


> I assume you downloaded the WKV ones ?
> 
> Thanks on my behalf too!



Dan -- You're very welcome!  Unfortunately, I was traveling and didn't pull them at the time.  I don't need you to repost the links -- but can you just tell me what thread they're in (if you remember) so I can go back and add them to the inventory?  I think we have the original CCRs ... but might be missing the SVN disclosure agreement associated with WKV and SDO.


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## Pit (Feb 19, 2010)

jarta said:


> Now, the prime weeks in a season are being returned to the pool of weeks that all owners at the resort are able to reserve, use and enjoy.



This is laughable. The prime weeks were already in the pool of weeks that all owners can reserve, use, and enjoy. 




jarta said:


> Any resort should be primarily for the use of the owners, IMO.  They should have priority over and the the fullest use of the prime weeks in a season.  II traders should not.



When owners, who pay the bills, choose to trade, rent, or occupy their week(s), they are using their ownership.  Owner A has no priority over owner B, irrespective of how they use their ownership. Nor should SVN exchangers have priority over owners A or B.


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## jarta (Feb 19, 2010)

DanCali,   ...   1.   You should be able to get infomation from Starwood and the HOA about what is going on.  I am getting the latest WKV annual financial.  It's a starting place.

2.   "Starwood can now deposit dog weeks into II."  I don't consider other weeks in the same use season as "dog weeks."  And, it seems those "dog weeks" are still pulling 2 for 1 II trades.

3.   "And with Starwood II priority those prime weeks were getting picked up by other Starwood owners using II."  Very big assumption, but possibly true.

4.   "Who says other owners are now getting the prime weeks? In fact, they are not getting them *if* Starwood reserves those prime weeks to rent based on anticipated StarPoint conversions"  Owners have the ability to compete for reservations on equal terms with those using Staroptions.  Under the Starwood Plan you posted, nobody uses Starpoints to rent anything except Starwood's owned units.  If you have proof of otherwise, please post it.  Starwood can rent what's left over at 60 days and the money is split with the HOA.  See nodge's budget post.

5.   Trading (internal or external) is part of timesharing.  I just don't think trading should be used to deprive owners of opportunities to vacation at their home resort in prime weeks of a season.  Starwood's internal system gives home resort owners a preference for 4 months.  II's system which allowed reserving a prime week at 12 months out and handing the reserved prime week off to another II trader ( essentially, in return for a 2 for 1 trade) didn't give the home resort owners any preference - period.

So, the dust hasn't settled.  Still being able to get 2 for 1 trades does not stop the attacks on Starwood for "stealing" weeks "for its own use" prior to the 60 day rental period.   ...   eom


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## l2trade (Feb 19, 2010)

levatino said:


> I would suggest, that counter to the name of this thread, the dust has not settled.
> 
> yucky!



So true!  :hysterical: 

Doesn't it feel like we are debating with Starwood's defense attorney?  Same old tired excuses and distortions.


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## Fredm (Feb 19, 2010)

jerseygirl said:


> Wow -- this is pulling one teeny tiny part of an argument that's been hashed and re-hashed and ignoring the much bigger picture.  Amazing!



Jarta gets it.  He chooses to deflect it as a point of argument. 
Practiced lawyers do that. 

The question is why.


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## jerseygirl (Feb 19, 2010)

Fredm said:


> Jarta gets it.  He chooses to deflect it as a point of argument.
> Practiced lawyers do that.
> 
> The question is why.



You know, I think you're right (and I'm embarrassed that I haven't realized it before).  I've seen the same technique several times.  Failure to respond to my post #13 in this thread is just one example:

http://tugbbs.com/forums/showthread.php?t=114953&highlight=conde+starwood


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## jarta (Feb 19, 2010)

Are we all sticking to issues today and not making it personal?  Please refute what I am saying.  You all know I am an attorney in Chicago with no connections whatsoever to Starwood.   ...   eom


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## DanCali (Feb 19, 2010)

jerseygirl said:


> Dan -- You're very welcome!  Unfortunately, I was traveling and didn't pull them at the time.  I don't need you to repost the links -- but can you just tell me what thread they're in (if you remember) so I can go back and add them to the inventory?  I think we have the original CCRs ... but might be missing the SVN disclosure agreement associated with WKV and SDO.



It was somewhere in this thread - around page 3 but here is the info again:

CC&Rs

SVN Doc

If the links stop working you can use the Maricopa County recorder website:

http://recorder.maricopa.gov/recdocdata/

using document numbers: 2002 0790609 (CC&Rs) and 2002 0790610 (SVO Docs)

just search for these docs and the unofficial document can be downloaded for free by clicking the link embedded in the "number of pages"


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## Fredm (Feb 19, 2010)

jarta said:


> Are we all sticking to issues today and not making it personal?  Please refute what I am saying.  You all know I am an attorney in Chicago with no connections whatsoever to Starwood.   ...   eom



We have refuted what you have been saying.
We also give you more credit than to believe you do not get it.
Nothing can be more personal that you thinking us stupid.

Take it elsewhere.


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## jerseygirl (Feb 19, 2010)

jarta said:


> Are we all sticking to issues today and not making it personal?  Please refute what I am saying.  You all know I am an attorney in Chicago with no connections whatsoever to Starwood.   ...   eom



We're trying to stick to big picture issues, but attempts keep being made to throw the attention on tiny little side issues or change the direction of the discussion.

I am sincerely apologetic if you think it's personal.  I have one goal and one goal only -- and that is to help all Starwood owners understand the nuances of the program and draw their own conclusions as to whether its been set up to benefit owners as a whole. When incomplete, incorrect, or inconsequential information is posted in what appears to be an effort to detract from the main discussion, I feel its appropriate to try to get it back on track.  I truly have no desire to make it personal or attack any one particular poster -- just the information being posted.


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## DanCali (Feb 19, 2010)

jarta said:


> Starwood can rent what's left over at 60 days and the money is split with the HOA.  See nodge's budget post.



I have seen nodge's budget post. I've also seen it's $40K/year. I've also posted a post (#103) with VERY conservative assumptions showing how a paltry 4 rooms per night rent for about 6 times more than that on an annualized basis... (assuming $200 per night and 300 days per year). In fact $40K is 0.55 1BR units per night rented out at $200/night for 365 days a year...

But I guess as long as the rental income is not zero, you are technically right - the money is "split" with the HOA - even if the split is 99% in favor of Starwood... 

(and before you ask how I know this... I don't. I have no idea what the split is because it is conveniently omitted from the recorded documents. But would be happy if you enlighten all of us with numbers). 

If $40K in rentals makes you happy as a WKV owner, even though that's literally less than 1 unit per day rented out, then you are probably in the minority.

By the way - I 'm a new WKV owner too now so at least we do have one thing in common in this thread.


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## jerseygirl (Feb 19, 2010)

DanCali said:


> It was somewhere in this thread - around page 3 but here is the info again:
> 
> CC&Rs
> 
> ...



Thanks Dan!  They are now part of the official library of SVO-related documents!


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## l2trade (Feb 19, 2010)

jarta said:


> Are we all sticking to issues today and not making it personal?  Please refute what I am saying.  You all know I am an attorney in Chicago with no connections whatsoever to Starwood.   ...   eom



I'll refute:    You just stated you have 'no connections whatsoever to Starwood'.  Yet, you brag all the time about being Starwood 5* Elite.  Hmm...   

Honestly, I know that's not what you meant by saying 'no connections whatsoever'.  I'm smart enough to understand what you meant in your quote above.  I assume that you are smart fellow too.  Please take that as a personal compliment.  Yet, IMHO, this is an example of the kind of taking other people's posts out of context, distorting and changing the subject that I feel you sometimes do.  It occurs often enough that I am beginning to honestly wonder whether your connections extend beyond the 5* Elite.  Do you have some other undisclosed bias or motive?  I'm all for respecting true differences of opinion and honest debate.  Let's go there.  Let's work together to move the discussion and debate forward.


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## DavidnRobin (Feb 19, 2010)

As The Starwood Board Turns...
{I do not envy DeniseM...}

Sorry - this thread is hard to track (congrats... if that was intentional) - my response(s) is not II directed since I did not buy with the intent of using II (unless an emergency) - but more power to you in creating a fair usage system.  My issue has been about overall transparency by SVO on the reasons for escalating MFs...

Getting back to some aspects in this thread regarding the usage of SVO of deliquent Owner's VOIs...

I sent a question into SVO (to ask SVO...) - and they actually responded as follows (my usual underlying sarcasm from my question edited...):

_How does the HOA at a particular resort get reimbursed for VOIs that were taken over by SVO due to deliquent Owners not paying their maintenance fees?_

*If an owner’s Annual Fees are 120 days past due, the owner’s access to the account is denied. Starwood Vacation Ownership will attempt to rent the owner’s week in efforts to recoup the Annual Fees. If the Annual Fees continue to be past due, the account can be sent to foreclosure.* {standard yada,yada, yada... deleted}

OK - fine - I did not really expect a different response, but interesting - because this allows a potential money trail to be followed - they explain that this is attempted to be rented in some manner and from the posts above it may appear as a line item on some MF statements - such as WKV.  Does II usage falls under SVO usage during this period? If used via II - how then is the HOA reimbursed?


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## DeniseM (Feb 19, 2010)

DavidnRobin said:


> Does II usage falls under SVO usage during this period? If used via II - how then is the HOA reimbursed?



Are you asking if Starwood can deposit these weeks in II?  Per James1975NYC - II doesn't reimburse Starwood anything for deposits.


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## Transit (Feb 19, 2010)

My SBP unit requires maint. be paid before trading. SDO does not.I'm not sure about SVV because I've never competed a trade outside of SVN with it. I think in all fairness maint. fees should be required paid in full before a trade can be made.


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## DeniseM (Feb 19, 2010)

Transit said:


> My SBP unit requires maint. be paid before trading. SDO does not.I'm not sure about SVV because I've never competed a trade outside of SVN with it. I think in all fairness maint. fees should be required paid in full before a trade can be made.



With the number of non-paying owners, it seems like this is the only way to guarantee that the MF gets paid before the unit is used.

BTW - I exchanged my 2010 SVR week before I paid the MF - not sure if SVV is the same or not.


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## DavidnRobin (Feb 19, 2010)

DeniseM said:


> Are you asking if Starwood can deposit these weeks in II?  Per James1975NYC - II doesn't reimburse Starwood anything for deposits.



I am trying to figure out a few things (that may involve II or not...)

In following the money theme...

1) What happens to the VOI reimbursment for deliqunent MFs?
2) For those SVO-owned VOIs is the HOA getting fair reimbusment?
3) Is the HOA getting adequately reimbursed for the expenses incurred for villas used by SVO via SVN/II exchanges and/or rented?

More importantly - trying to gain understanding via transparency of why many SVO resorts MFs have double over a 4 year time-frame?  is because of the process set-up by SVO that leaves the burden to the HOA?  And if so, then what is wrong with the process (and how can it be fixed) in order for the Owners not to take on an unfair burden?

simple - right?  lol

it come down to transparency... (which I keep railing on about) of which is very hard to achieve it seems without taking (or threatening) legal action - or getting a Tugger on an HOA that can explain it to us clearly and concisely (hopefully).


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## DavidnRobin (Feb 19, 2010)

DeniseM said:


> With the number of non-paying owners, it seems like this is the only way to guarantee that the MF gets paid before the unit is used.
> 
> BTW - I exchanged my 2010 SVR week before I paid the MF - not sure if SVV is the same or not.



I think the actual numbers of non-paying Owners (in 2009) wasn't that large (%-wise) - so this does not account (to me) for the reasons for the escalating MFs year after year.  The Cost-of-Living increases, energy, staff-costs, and inflation have not had >50% increase in 4 years - yet our MFs have (at some resorts) - why???


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## DeniseM (Feb 19, 2010)

Hopefully, we will be asking j4sharks these questions in the near future!


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## jarta (Feb 19, 2010)

l2trade,   ...   "I'll refute: You just stated you have 'no connections whatsoever to Starwood'. Yet, you brag all the time about being Starwood 5* Elite. Hmm... "

That's ridiculous!  I really do not appreciate the personal attacks.  Are you really calling me a liar?  If anyone wants to debate issues, OK.  If all you want to do is engage in personal attacks, it's a violation of TUG's TOU.

5 Star Elites have an even greater interest in lower assessments.  They have a greater interest in making Starwood toe the line on the agreements for the property they have invested their mony in.  But, being 5 Star Elite does not mean that suppositions and misinterpretations cannot be refuted here.   ...   eom


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## l2trade (Feb 19, 2010)

jarta said:


> l2trade,   ...   "I'll refute: You just stated you have 'no connections whatsoever to Starwood'. Yet, you brag all the time about being Starwood 5* Elite. Hmm... "
> 
> That's ridiculous!  I really do not appreciate the personal attacks.  Are you really calling me a liar?  If anyone wants to debate issues, OK.  If all you want to do is engage in personal attacks, it's a violation of TUG's TOU.
> 
> 5 Star Elites have an even greater interest in lower assessments.  They have a greater interest in making Starwood toe the line on the agreements for the property they have invested their mony in.  But, being 5 Star Elite does not mean that suppositions and misinterpretations cannot be refuted here.   ...   eom



You just proved my point.  You just misquoted me again.
I never called you a liar.  I actually complimented your intelligence.  Anyone can go back and read my ENTIRE post.


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## jerseygirl (Feb 19, 2010)

DavidnRobin said:


> I am trying to figure out a few things (that may involve II or not...)
> 
> In following the money theme...
> 
> 1) What happens to the VOI reimbursment for deliqunent MFs?



If an owner is delinquent, a "lockout" letter must be issued and then the unit CAN be rented.  However, there does not appear to be an organized, efficient rental program that would ensure the HOA is getting its money first (which they would be entitled to, less Starwood's commission, if they handled it in a uniform manner).  The situation is more complicated when the resort is comprised mainly of floating weeks.  I've posed detailed questions on this very subject to two different HOA members (two different resorts).  Their answers were so vague that I was led to believe that, at this point, there is no real plan/procedure in place.  They're leaving it up to Starwood to handle, which is scary, since Starwood can rent any unreserved weeks at the 60-day mark.  I have no confidence whatsoever that Starwood is actively helping the HOAs deal with the delinquency issue.

I'm probably over complicating things -- but, where floating weeks are concerned, the HOA needs to "make reservations" as soon as they're legally able to do so for delinquent accounts, and then have an organized approach to a rental program.  Relying on Starwood to handle it is probably not in the best interests of the owners (for reasons discussed earlier in this thread).   




DavidnRobin said:


> 2) For those SVO-owned VOIs is the HOA getting fair reimbusment?



Wouldn't SVO have to pay the same maintenance fee everyone else has to pay for their owned units?  If yes, they can do whatever they want with them and the HOA is not out any money.




DavidnRobin said:


> 3) Is the HOA getting adequately reimbursed for the expenses incurred for villas used by SVO via SVN/II exchanges and/or rented?



When a unit is exchanged (either through SVN or II), the owner SHOULD have already paid his/her maintenance fee -- the VOI is just being used by someone else.  The HOA is not entitled to further funds. 

Am I misunderstanding your question here?

Re the rental issue -- that's what most of this thread is about and it's very complicated.  Rentals can come from:

A)  Owner rental program (if the resort has one) -- in this scenario, the owner pays his/her maintenance fee, gives to Starwood to rent.  Starwood attempts to rent, keeps a hefty commission, and sends any "overage" to the owner.  The owner may receive $0, more than the maintenance fee, or less than the maintenance fee.  But, regardless of the outcome, the HOA is not owed any funds.

B)  SVO-owned units -- As long as SVO has paid its maintenance fees, HOA not owed any funds..  Starwood can rent its own units all they want ... the only cause for concern here is if they have a headstart on the best inventory.

C)  SVO reserved weeks for anticipated SPG conversions -- as long as owner has paid his/her maintenance fees, HOA not owed any money.  Having said that, the clause that permits Starwood to reserve weeks at the 11-month mark for _anticipated SPG conversions_ is not really in the owners' best interests.  There is nothing (that we can find) stopping Starwood from grabbing the very best weeks --- weeks owners would love to have, weeks SVN exchangers would love to have and weeks the HOA would love to have for renting delinquent owners' weeks.  There also does not appear to be any public disclosure with regard to this process.  If they overanticipate the demand for SPG conversions -- and therefore "over-rent" weeks, how do they balance back ... are they even required to do so?  Would the HOA be owed money .... we don't really know at this point.

D)  Weeks owned by delinquent owners (see #1 above).

Others are free to dispute this -- but it represents my best answers based on my research thus far.


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## jerseygirl (Feb 19, 2010)

Ooops   .  I forgot what's possibly the VERY biggest source of rentals:

E)  At most resorts (we don't have all the documents yet), Starwood is permitted to rent any un-reserved weeks at the 60-day mark.  

.... If there is no organized rental program for delinquencies, there will be more inventory available for rent at the 60-day mark.

.... If "Request First" is no longer permitted by II, there will be more inventory available for rent at the 60-day mark.

The timesharing system as a whole works as well as it does because of the high number of owners who lose interest, never use their weeks, etc.  It's this phenomenon that allows for:

-- Great Getaways (and, yes, some are from developer inventory but MUCH of the inventory comes from unused weeks)

-- RCI Rentals

-- II's AC's (Bonus Weeks)

-- Trade-ups

-- Etc.

This "creation of excess weeks" is probably the real reason why most resorts are sold as floating weeks these days.  In the case of fixed weeks, a manager/developer can't touch a week unless, of course, the system is set up -- like Starwood's -- to force owners to confirm usage by XXX date.  Most fixed week resorts don't have that clause -- it's pretty unique to Starwood and other club systems.

In the case of SVO, Starwood gains the benefit (rental income potential) for all the unused weeks --- it's a sweet deal!

 .... peel back the layers, read your documents .....


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## DavidnRobin (Feb 19, 2010)

wow - thanks - it is clear that you have been attempting to understand this.

I echo your concerns.
I am a pragmatic person - if it looks like a duck, walks like a duck and quacks like a duck - then good chance it is a duck...
(and when evaluating ducks - I do not care why the chicken crosses the road...  <- an intended jab)

how does this relate?

MFs have increased by >50% over 4 years at WKORV and WSJ (and others?)
- as stated - cummulative overall costs have not in any realm of the imagination (at least mine)- therefore, what is behind the increases? (thus the need for transparency)

The deliquent VOIs make up very little of these increases on a relative basis - and is a recent event really (2009 to ????) - so that does not explain the total increases.

Of course SVO-owned villas are up to SVO to handle - and I can only assume that they pay MFs like we do (?).

But I keep coming back to the 'duck' - what are the cummulative things that have caused these MFs to run out of control?  I can look at the HOA summaries - and see the revenues and costs - and bottom-line that goes to the annual MF, but it still does answer (to me) the ~$1200 jump in 4 years (~$1800 to ~$3000) for my WKORV Dlx villa - or WSJ going from ~$1400 to $2000 for my 2Bd TH - with these resorts 'sold-out' - especially when LIFE has not had a similiar cost increase. 

While at WSJ - I have seen a number of times Hotel people occupying Villas (unique to WSJ since it shares a Hotel and SVO) that received these upgrades upon check-in.  It could be very telling to follow this money.  WSJ Hillside is fixed weeks/fixed villas.

At WKORV - there are Owners, SVN exchangers, II exchangers, SPG users, and SVO renters (others?) - is this money being fairly reimbursed to the HOAs? Because to me that is where the best potential for skimming money comes from that and perhaps (some or all) is not making it back to the HOA

Transparency...


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## jerseygirl (Feb 19, 2010)

David -- First of all, let me say I agree with everything you have to say about the duck!  And, although there are so many issues we could attack, my priorities are the following:

1)  Transparency and fair maintenance fees
2)  Fair inventory management

Are they related?  Definitely.  But, we have to try to understand each one separately before we can tie them together.

I have a couple of comments below:



DavidnRobin said:


> While at WSJ - I have seen a number of times Hotel people occupying Villas (unique to WSJ since it shares a Hotel and SVO) that received these upgrades upon check-in.  It could be very telling to follow this money.  WSJ Hillside is fixed weeks/fixed villas.



Although the resort is sold-out, there are always VOIs "in transition" as Starwood sells Hillside owners on upgrades.  Once the owner "upgrades" to something else (e.g., the float weeks at Bay Vista appeal to them, a combination of several resorts to gain elite status, etc.), the Hillside villas are under Starwood's control until the deeds can be transferred and the units resold.  I'm told this process takes 4-5 months.  Therefore, Starwood can use those units in its temporary control to upgrade hotel guests and for rentals.  If it's "intra-year," chances are the original owner already paid the maintenance fees and the HOA would not be owed a second maintenance fee.  If the unit is in Starwood's control at maintenance fee time,Starwood will have to pay it, but will collect it back from the new owner once its resold.  Again, the HOA would not be out any money.



DavidnRobin said:


> At WKORV - there are Owners, SVN exchangers, II exchangers, SPG users, and SVO renters (others?) - is this money being fairly reimbursed to the HOAs? Because to me that is where the best potential for skimming money comes from that and perhaps (some or all) is not making it back to the HOA
> 
> Transparency...




Owners pay their maintenance fees
SVN and II exchangers are using an owner's unit and that owner paid his/her maintenance fee -- no money owed
SPG users are renters -- they're just using SPG points as their currency.  So we need to throw them in the same category of renters (whether they rented from SPG.com, Expedia, Orbitz, etc.).  Their money (or some sort of compensation for accepting SPG points in lieu of cash) should be going to the HOA if the inventory came from the HOA (e.g., delinquent units -- but, again, there doesn't appear to be an organized rental program for delinquencies so this is doubtful and needs to be addressed).  If the inventory came from Starwood owned units, it belongs to Starwood (but, again, we need to be concerned with any unfair headstart they may have on the prime inventory).  If the inventory came from Starwood in the form of anticipated SPG conversions, the money belongs to Starwood -- but I've already outlined the concerns here .... priority access to prime inventory, the possibility that they're over-anticipating the number of SPG conversions, etc.  Lots of room for potential skimming here.
If the rental inventory is unreserved owner inventory in the last 60 days, it belongs to Starwood.
Mixed in with all of this is the "nodge clause" that has to do with the HOA being entitled to a share of rental revenue up to 2.5% of the operating budget ... I haven't wrapped my arms around this one yet but it's on my list for further exploration!

Bottom line -- our HOAs have a RESPONSIBILITY to get their collective arms around this process and ensure it is collecting its fair share of any rental revenue.  Does anyone really believe that Starwood has sat them down, explained the nuances, and suggested how the HOA could ensure it's maximizing rental revenue (at the expense of Starwood)?  I suspect not.

I think it's just as likely that the out-of-control maintenance fee increases are also due to reckless spending.  We need line-by-line expense statements to try to identify this.

I hate for this to come to litigation, but I really don't see any other way at this point.  There are just far too many smoking guns .... and we'll be chasing our tails forever until Starwood is forced to give up the goods (transparency).


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## jerseygirl (Feb 19, 2010)

When I used the term "skimming" above, I'm not suggesting that Starwood is doing anything illegal.  I think they set the system up in such a way that all this activity is legal.  But, that doesn't mean it can't be changed by a majority vote of owners.  We need to strive for transparency ... understanding .... and then possible changes designed to ensure that both sides (owners and Starwood) are getting a fair deal.  As written/practiced, it doesn't appear that we have an even playing field.


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## jw0 (Feb 19, 2010)

nodge said:


> It sounds like everyone could use some good old fashioned data to help sort things out.



Getting back to nodge's post with the budgets for SDO and WKV (#86)...

Thanks for posting this.  It's interesting, especially comparing it to the budgets for HRA and SBP (where I own).  (if I knew how to post them, I'd do it, too).

I similarly don't understand the "Club rental revenue" line item.  I suspect that it does NOT reflect the revenue from renting delinquent units - it's way too small.

The one line item I find interesting is "Uncollectible accounts".  At HRA, there are two items about $390K for the Common expenses, and $914K for the Phase II resort.  But at SBP, this number is $2.2 MILLION!  I believe this is where Starwood is basically writing off the entire amount of the unpaid MFs.  It's interesting that it's similarly high at SDO (~900K?).  I can't see it for WKV - am I missing it?

-John.


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## jarta (Feb 19, 2010)

jw0   ...   "I suspect that it does NOT reflect the revenue from renting delinquent units - it's way too small."

When delinquent units are rented, Florida and most other state statutes require that - after the costs of renting are deducted from the rent - the balance is applied to the account of the delinquent owner.  If it covers more than the delinquent MF and late fees, the account of the delinquent will show a credit in that amount.  If the net rent does not cover the delinquency the account of the delinquent still shows a shortfall.

The HOA gets the expenses of renting and the delinquency.  And, that's all it gets.  Getting more than the MF and any late fees would give the association an unpermitted windfall at the expense of the owner.   ...   eom


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## jarta (Feb 19, 2010)

Here's a link to the Florida statute.

http://law.onecle.com/florida/real-and-personal-property/721.13.html

721.13(6)(f)1:

"(f)1.  Provided that the managing entity has properly and timely given notice to a delinquent purchaser pursuant to paragraph (b) and to any affiliated exchange program pursuant to paragraph (c), the managing entity may give further notice to the delinquent purchaser that *it may rent the delinquent purchaser's timeshare period*, or any use rights appurtenant thereto, *and will apply the proceeds of such rental*, net of any rental commissions, cleaning charges, travel agent commissions, or any other commercially reasonable charges reasonably and usually incurred by the managing entity in securing rentals, *to the delinquent purchaser's account*."   ...   eom


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## Fredm (Feb 20, 2010)

*Marketing Blocks*



jw0 said:


> I similarly don't understand the "Club rental revenue" line item.  I suspect that it does NOT reflect the revenue from renting delinquent units - it's way too small.
> 
> -John.



I don't know if it applies to "Club Rental Revenue", but another source of rental revenue is the internal allocated cost applied to reserving blocks of units for marketing purposes.

For example, Marriott would charge its Marketing dept. a cost of $35/night (years ago, probably higher today) to reserve owner villas for timeshare tours.  It was 'rent". Not charged to marketing if the occupied villa was owned by Marriott. 

Starwood likely has something similar. Delinquent owner units may be rented to Marketing at an internally allocated cost which would  cover its internal  break even occupancy cost. 
Similarly, excess owner inventory at sold out resorts. 
Any remainder may be deposited with I.I. 

Of course, in these cases there would be no excess funds available to the HOA.

I emphasize that I do not know how this is handled at Starwood. Just another potential source and disposition of funds and inventory.


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