# The DRI Timeshare Conundrum...



## Zephyr88 (Mar 6, 2014)

The DRI Resort Developer is usually also the DRI Management Company, and also controls the Home Owners Association Board of Directors.  Because the Developer/Manager (DRI) controls the board, it can vote itself Management Fees of anywhere from 10-20 % of the total budget plus additional expenses. 

While the Resort is in the early stage of active sales, the Developer has an incentive to keep Maintenance Fees low to attract sales. Once the Resort is mostly sold out the profit from the Resort comes from Management Fees and selling additional inventory it acquires from the Home Owners Association. The focus shifts to keeping things as shiny and new and "up to standards" to both keep Management Fees high and to attract buyers with the shiny new looking older property.

Besides being held hostage to high maintenance fees that have a built-in profit for the management company, the other BIG downside to owning a DRI timeshare is the fact that there is NO exit strategy in the business model.  DRI’s only statement seems to be 'you own it forever and can pass it to your heirs’.  And because a DRI timeshare has basically no re-sale value, it is nearly impossible to even give away.  This leaves owners, whose life circumstances have changed, with no exit strategy other than default.


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## csalter2 (Mar 6, 2014)

*Marriott is doing the same*

I own a Marriott timeshare and they obviously read the DRI handbook, because they are replicating the same process as DRI since the began selling points. 

I am sure some of the other timeshare companies are dong the same if not worse. I am not saying that I like this but I think we should not think that any one company is alone in this concept. 






Zephyr88 said:


> The DRI Resort Developer is usually also the DRI Management Company, and also controls the Home Owners Association Board of Directors.  Because the Developer/Manager (DRI) controls the board, it can vote itself Management Fees of anywhere from 10-20 % of the total budget plus additional expenses.
> 
> While the Resort is in the early stage of active sales, the Developer has an incentive to keep Maintenance Fees low to attract sales. Once the Resort is mostly sold out the profit from the Resort comes from Management Fees and selling additional inventory it acquires from the Home Owners Association. The focus shifts to keeping things as shiny and new and "up to standards" to both keep Management Fees high and to attract buyers with the shiny new looking older property.
> 
> Besides being held hostage to high maintenance fees that have a built-in profit for the management company, the other BIG downside to owning a DRI timeshare is the fact that there is NO exit strategy in the business model.  DRI’s only statement seems to be 'you own it forever and can pass it to your heirs’.  And because a DRI timeshare has basically no re-sale value, it is nearly impossible to even give away.  This leaves owners, whose life circumstances have changed, with no exit strategy other than default.


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## artringwald (Mar 6, 2014)

When an owner stops paying MF's, DRI takes over payments so the HOA doesn't have to. That sounds generous of them, but they also get ownership of the unit. They can then add it to the collection trust, sell more points, and get a larger percentage of the HOA vote.

Does anyone know if points owners get to vote for board members of the collection trust?


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## dougp26364 (Mar 6, 2014)

Zephyr88 said:


> The DRI Resort Developer is usually also the DRI Management Company, and also controls the Home Owners Association Board of Directors.  Because the Developer/Manager (DRI) controls the board, it can vote itself Management Fees of anywhere from 10-20 % of the total budget plus additional expenses.
> 
> While the Resort is in the early stage of active sales, the Developer has an incentive to keep Maintenance Fees low to attract sales. Once the Resort is mostly sold out the profit from the Resort comes from Management Fees and selling additional inventory it acquires from the Home Owners Association. The focus shifts to keeping things as shiny and new and "up to standards" to both keep Management Fees high and to attract buyers with the shiny new looking older property.
> 
> Besides being held hostage to high maintenance fees that have a built-in profit for the management company, the other BIG downside to owning a DRI timeshare is the fact that there is NO exit strategy in the business model.  DRI’s only statement seems to be 'you own it forever and can pass it to your heirs’.  And because a DRI timeshare has basically no re-sale value, it is nearly impossible to even give away.  This leaves owners, whose life circumstances have changed, with no exit strategy other than default.



This is generic throughout timeshares. It's not a unique concept and is not unique to DRI. 

Disney, to the best of my knowledge, started the trend of trust based ownership vs deeded weeks ownership. Sunterra jumped on that idea and began sales of trust points and conversion of deeded weeks to trust points. Other developers are following this practice, MVCI being one of them. Trust ownership interests give the developer/management company the ultimate in control of the resorts they manage. DRI saw the opportunity when Sunterra went bankrupt and took the challange.

Typically, with ANY timeshare you own, you're an owner in name only. The reality is you have little ability to affect decisions and, for the most part, you're just along for the ride.


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## Zephyr88 (Mar 7, 2014)

*Default Exit Strategy*



artringwald said:


> When an owner stops paying MF's, DRI takes over payments so the HOA doesn't have to. That sounds generous of them, but they also get ownership of the unit. They can then add it to the collection trust, sell more points, and get a larger percentage of the HOA vote.



Art... Do you (or anyone) know what DRIs current procedure is for a surrendered deed (in lieu of foreclosure)?  This would be for owners with no loan and current on all fees but have been unable to sell/give the timeshare away and are looking for an exit strategy.

Once the owner decides to stop paying the MFs, I would assume DRI sends them to collections for 3-6 months before entertaining a deed-back; along with reporting it to credit agencies.  But other than some collections harassment and a ding to credit for a few years (both of which aren't too problematic for retired seniors), is there anything else DRI is doing?


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## T_R_Oglodyte (Mar 7, 2014)

artringwald said:


> When an owner stops paying MF's, DRI takes over payments so the HOA doesn't have to. That sounds generous of them, but they also get ownership of the unit. They can then add it to the collection trust, sell more points, and get a larger percentage of the HOA vote.
> 
> Does anyone know if points owners get to vote for board members of the collection trust?


Yes, trust members elect the trust Board of Directors. I do not know what percentage of the trust is owned by DRI.


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## artringwald (Mar 7, 2014)

Zephyr88 said:


> Art... Do you (or anyone) know what DRIs current procedure is for a surrendered deed (in lieu of foreclosure)?  This would be for owners with no loan and current on all fees but have been unable to sell/give the timeshare away and are looking for an exit strategy.
> 
> Once the owner decides to stop paying the MFs, I would assume DRI sends them to collections for 3-6 months before entertaining a deed-back; along with reporting it to credit agencies.  But other than some collections harassment and a ding to credit for a few years (both of which aren't too problematic for retired seniors), is there anything else DRI is doing?



It's been awhile since I've heard, but others have said DRI wasn't accepting deed surrenders.


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