# Cabo Azul: Hurricane Odile Damage & Special Assessment for MGV Owners Only



## rojocrandall (Dec 31, 2014)

During a DRI conversion meeting yesterday (I am a MGV hold-out), I was told by the DRI representative to expect a significant 
special assessment (approx. $20K based on my ownership of one week every other year, & a much higher amount for those with 
more points) in early 2015 to cover the post-hurricane repairs at Cabo Azul, because I am still part of the dwindling MGV owner population.
The same DRI rep mentioned that there is insurance coverage for Cabo Azul, but that the repairs will go way over the insurance
coverage amount, hence the need for a special assessment.

Granted, I realize that this was meant to scare me into buying into DRI to avoid the special assessment, but I wonder if there is 
any truth to his comments about _MGV owners bearing a greater financial responsibility for damage/repairs in regards to the nine
resorts in the MGV collection.
_
Is this possible?

(please have some mercy on me, this is my first post)


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## Passepartout (Dec 31, 2014)

If the 'representative' was a sales person whose form of income is commissions, and his lips were moving, I'd suspect he was at most lying through them, or at least spewing the corporate line.

As to an SA, that's surely one thing all owners need to be aware of and conscious of the possibility of inadequate insurance coverage. Underinsurance and liability DO happen. You should be in contact with the HOA covered by YOUR ownership.

We're a pretty gentle bunch here. No worries.

Jim


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## tschwa2 (Dec 31, 2014)

There is a kernel of truth.  You will pay more when a SA hits and you are primarily or solely deeded at that location.  Trust point owners are sheltered somewhat in the fact that the SA is spread out over more owners. The numbers he was mentioning seem way to high though.  You own an EOY single week interest and it is already in a collection of several resorts of which only one is having a SA.


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## Bill4728 (Dec 31, 2014)

The funny part of this is that DRI salespeople have been telling MGV owners for the past year or two that DRI is moving the deeds around for MGV and Cabo Azul to significantly decrease the percentage of MGV ownership at Cabo Azul.  They been telling people that with the decrease,  people with MGV points will not be able to use their MGV pts to get into Cabo anymore.  BUT now that a SA is needed, <BAMM > MGV pt owners are the main owners of Cabo Azul again. 

Nice touch DRI ;(


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## rojocrandall (Jan 5, 2015)

Here is a link with a picture and comments from someone who was onsite when the hurricane hit. From what I have read the damage is not as bad the DRI rep led me to believe. 
http://iconosquare.com/viewer.php#/detail/811901061519459692_275377128


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## rj80 (Jan 10, 2015)

Did you, MGV members, see an increase in maintenance fees? Did you get socked with a special assessment for Cabo Azul?


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## rojocrandall (Jan 11, 2015)

rj80 said:


> Did you, MGV members, see an increase in maintenance fees? Did you get socked with a special assessment for Cabo Azul?


Not yet - to both questions. 
However, I was told by a DRI rep that a large SA was coming in early January 2015.


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## Bill4728 (Jan 23, 2015)

rojocrandall said:


> During a DRI conversion meeting yesterday (I am a MGV hold-out), I was told by the DRI representative to expect a significant  special assessment (approx. $20K based on my ownership of one week every other year, & a much higher amount for those with
> more points) in early 2015 to cover the post-hurricane repairs at Cabo Azul, because I am still part of the dwindling MGV owner population.
> The same DRI rep mentioned that there is insurance coverage for Cabo Azul, but that the repairs will go way over the insurance coverage amount, hence the need for a special assessment.


WOW  $20 K  special assessment  That will never fly  Everyone will just walk away.  As of dec 2013  there was already almost 9 million in bad debt that DRI was trying to collect from MGV owners. 



> Granted, I realize that this was meant to scare me into buying into DRI to avoid the special assessment, but I wonder if there is
> any truth to his comments about _MGV owners bearing a greater financial responsibility for damage/repairs in regards to the nine
> resorts in the MGV collection._


ALL  repairs to the resort must be divided among the owners of the resort

there are three pools of owners
1   MGV point owners
2. DRI point owners
3 DRI corporate ownership

how much each group owns is known but the info isn't easily available to people like me and you. 

Also note if you buy into DRI, unless they are willing to takeover your MGV ownership, *you'll still own MGV*.   You'll have just had them grandfather your MGV ownership into a "DRI" approved MGV ownership and therefore the points would be consider in "The Club"


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## Bill4728 (Feb 22, 2015)

From Tugger Jbercu


> The following information is from the February 18, 2015 Q4 2014 DRII Results - Earnings Call Transcript.
> http://seekingalpha.com/article/2929...all-transcript
> 
> 
> ...



Thanks to Jake for this info

Bill


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## rojocrandall (Feb 22, 2015)

So it sounds like the hurricane impact had a silver lining and that a special assessment is very unlikely...


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## johnrsrq (Feb 22, 2015)

rojocrandall said:


> So it sounds like the hurricane impact had a silver lining and that a special assessment is very unlikely...



I read that quite differently. The share of uninsured losses, if any, will be divided among the interval owners(PGM, DRI Converts, DRI). DRI still get management fees as expected and, they get to build out more inventory for DRI purposes. Might help those in the club with potentially more inventory.

My take is if insurance doesn't fully cover losses (wondering about loss of use), then expect a Special Assessment.  We shall see.


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## T_R_Oglodyte (Feb 23, 2015)

johnrsrq said:


> I read that quite differently. The share of uninsured losses, if any, will be divided among the interval owners(PGM, DRI Converts, DRI). DRI still get management fees as expected and, they get to build out more inventory for DRI purposes. Might help those in the club with potentially more inventory.
> 
> My take is if insurance doesn't fully cover losses (wondering about loss of use), then expect a Special Assessment.  We shall see.


I agree with this take on the situation.

Also note that at the same that DRI repairs the existing units, they will be building new inventory.  This creates ample opportunity to move expenses associated with the new construction to the repair project.  Existing owners should demand outside auditing of the accounting practices to ensure that costs associated with new construction are properly identified and not charged to the repair project.


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## EAPoe (Feb 23, 2015)

*No Reply to E-Mail Inquiry*

On February 6 I sent the following e-mail via DRI's "ask your directors" webpage.  There has been no reply so far.  It seems to me that the MGV directors owe a responsibility to the MGV owners to provide regular updates and not leave us in the dark if indeed a SA is on the way. 

Heading:
Will there be any "special assessment" for the damage by Hurricane Odile at Cabo Azul?


Body:
There are some reports circulating on the message boards that there is going to be a significant "special assessment" charged against Monarch Grand Vacation owners.  Supposedly salespeople are telling MGV owners about this while they are trying to get them to convert to a Diamond membership.  What is the current estimate for Cabo Azul repairs?  What portion will (or will not) be covered by insurance?  Is there going to be any "special assessment" levied against MGV owners?  Other than various e-mails regarding the continuing delays of re-opening Cabo Azul -- it would be unfortunate if there may be some financial impact coming which we are not being notified about.  Thank you.


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## rojocrandall (Feb 23, 2015)

Thanks to all of you for your replies and efforts!


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## EAPoe (Feb 27, 2015)

Ok, I have a significant amount of points (equivalent to about a month in a 2 BD every other year) so this thread has gotten me thinking....

(Still no reply to my e-mail.)

However, MGV has rules and by-laws which address any Special Assessment (SA) as follows:

"5.5 Special Assessments.
If the Basic Assessment allocable to VOP is, or will become,
inadequate to meet all expenses incurred by the Association
hereunder (other than for items constituting Personal Charges) for
any reason, including nonpayment by any vacation Ownership Plan
Owner of Assessments on a current basis, the Association shall
*immediately* determine the approximate amount of such inadequacy,
prepare and distribute a supplemental budget and levy a special
assessment (the "Special Assessment") upon the same basis as
prescribed under Paragraph 5.4 for the levying of the Basic
Assessments, in an amount sufficient to provide for such
inadequacy; provided, however, that without the vote or written
assent of a majority of the voting power of the Association
residing in members other than the Declarant, *Special Assessments
shall not, in the aggregate, exceed: (1) five percent (5%) of Basic
Expenses for the applicable Fiscal Year or (2) for a special
as ses sment for repair or rebuilding of dwelling unit (s) r ten
percent (10%) of the Basic Expenses.* Any Special Assessment shall
be payable in one lump sum or periodically, as determined by the
Association and shall be payable within fifteen (15) days after
receipt of a statement therefor. Nothing in this Paragraph 5.6
shall be construed to affect or impair Declarant's obligation to
pay "Deficiencies", as set forth in the Subsidy Agreement."

(The original is a PDF -- I see that the cut-and-paste wasn't perfect.)

First, once an inadequacy is discovered, the budget shall be revised "immediately."  If indeed there was going to be an inadequacy then that would have been known months ago.  There has since been a 2015 budget posted.

Second, if the SA is imposed for the building or repair, then that SA is limited to 10% of that fiscal years' basic expenses.  *Any higher than that requires a "the vote or written assent of the majority of the voting power".*

I would like to hear anyone else's thoughts on this -- but it seems to me that any SA is going to have to be capped-out at roughly 10-percent of any owners' annual fees per the by-laws. . . .


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## rojocrandall (Feb 28, 2015)

*MGVOA meeting coming up...*

I wish I could attend the 3/27 meeting at the Tropicana to be present for the Q&A session at the end. 

Looking at the candidate summaries, I see 6-7 long term MVG owners running for the board positions that could get my vote.


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