Should Maintenance Fees be regulated by the State?

[Fredflintstone]

https://goo.gl/images/ttuWTR

Let’s face it. Owners don’t mind paying the ACTUAL cost of maintaining their share of the resort. But does it really cost the amounts some timeshares invoice? How do you really know you are not getting ripped off and making someone rich? After all most owners have resorts 1000s of miles away from their homes. Sadly, trust can easily be broken when their isn’t an overseer or regulator.

Why not have boards submit their budgets to state regulators before sending out a bill to the owners? Timeshare companies would be subject to yearly audit to ensure honesty. The honest resorts have nothing to hide so I’m sure they would be happy with a state regulator.

Why not have the Term maintenance fees clearly defined in state law by stating allowable expenses? Then everyone has the same definition and it would be easier to prosecute those getting rich from maintenance fees.

How about legislated maximum increases on maintenance fees while we are add it.


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[silentg]

Some of my timeshare resorts do this.send us a balance sheet of expenses, notify us of board meetings and general meetings. We get proxy forms if we can’t be there in person.
All of my timeshares have Maintenence fees under $1,000 each.
A couple are under$500.
Silentg

 

[Fredflintstone]

Some of my timeshare resorts do this.send us a balance sheet of expenses, notify us of board meetings and general meetings. We get proxy forms if we can’t be there in person.
All of my timeshares have Maintenence fees under $1,000 each.
A couple are under$500.
Silentg

Are these balance sheets checked by a state regulator or just approved by the board? If not, how do you know what they are claiming as maintenance fee is truly accurate?


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[silentg]

In the amount of time I’ve owned at these resorts. I am familiar with their fees and assessments.some of them have lowered Maintenence fees as a result of having a surplus.
Not that it happens very often.
Silentg

 

[bnoble]

No. It would add unnecessary expense to the vast majority of boards who operate ethically. (Any reviews would carry fees with them. The State doesn't have people just hanging around available to do audits, and I can't imagine this being paid for out of a State's general fund.)

 

[pedro47]

No! Plus, state government would add this cost / expense to all the hard working citizen in their state. They would call it a timeshare mf review tax.

 

[DeniseM]

Definitely not - this would RAISE maintenance fees!

 

[klpca]

Well, more regulation will definitely result in higher maintenance fees. And probably higher taxes too. A double whammy!

Timeshares aren't for everyone. Lots of folks regularly stay in hotels, motels, and short term vacation rentals. We do occasionally, primarily when there are no local timeshares. Our timeshares are still substantially less expensive on a per night basis than any of those choices. We have an upcoming weekend in Chicago for a wedding (in case anyone is counting, the 5th wedding this year, lol). We are staying onsite using the discounted wedding rate. $300+ per night for a 200 sq' room with 2 double beds. I looked for something less expensive, nope, unless we wanted to stay outside of the city. Things are expensive these days!

 

[bluehende]

As we would all like to be guaranteed we are not being overcharged, bringing in the state would not significantly add to that assurance.

 

[breezez]

Anytime the government gets involved it gets worse and then you have to hire more peeps to keep up with regulations, which again increase our MF costs

The problem with most MFs are the developers are cost plus. So to make more they just increase their costs.

But MF costs I think in large part are always relative to location costs, Amenities, how well HOA manages resorts and how well they manage reserves. Nice chains have very robust plans in place changing soft goods out say every 5 years and complete refurbishment of units every 10 years. They also have higher MFs Lower end places a lot of times defer maintenance items go decades without upgrades, but may have super low fees sometimes below $500 for a 2bdr week.

I think people can tell with out government involved if they are getting value for the MFs they pay. If you feel your not getting a good value, look for the exit. The only areas I could see where government should be involved is ensuring that HOAs of TS adequately fund reserves. Many TS including big name players don’t adequately fund their reserve funds and existing laws in many states allow it. To me they should have to let every member of their system no how underfunded / overfunded their reserves are. To let owners know what perils their resorts are covered for, what deductible resort/system have, and should an event occur how would deductible/shortages from insurance be covered. If a special assessment some kind of indication as to the maximum amount per point amount or unit type you may be on the hook for.

 

[am1]

One should expect timeshares over pay for fees. But because people own so little of the place it does not really matter.

 

[TravelTime]

NO - This would lead to government regulation of rents and other private market activities. As other have said, it would raise MF costs. Better to have the board managed by owners who want to keep costs down.

 

[Panina]

I say no, regulation means more expenses. I personally believe HOAs are overall honest and members do their best. It doesn’t mean they do it the best way. It is a thankless job done for free. Staying involved in your timeshares property will give you the best view on the expenses.

 

[baf99]

I was about to write a similar response as @breezez. I could maybe accept laws that tighten up regulations on reserves and use an equation (age and size of buildings, size and type of roof, etc) to calculate what levels of reserves are required, eliminating some of the wiggle room and possibly some of the potential for assessments. This could actually increase fees for some underfunded resorts and could actually require assessments to bring reserves up to required levels. What it could do is protect owners from an association bankruptcy if too many owners default if an assessment is required due to underfunded reserves. I wouldn't support anything that specified how much could be spent for maintenance, management, and furnishings.

I really don't like a lot of regulations. I figure it's up to us to pick what we want in a timeshare and decide if we will pay for it both buy-in and ongoing fees. Some people like a timeshare with low maintenance fees and they are willing to forego luxuries to maintain the low cost. Others like the luxury resort feel and are willing to pay two to three times more maintenance fees for those luxuries.
Example: I WANT Nanea but I own Carlsbad Inn which was a gift and has 1/3 the maintenance fees. I could get something less expensive but CI is well maintained and Grand Pacific is pretty open about where the money they collect goes.

 

[bogey21]

The States should keep hands off. Too many variables to take into account...

George

 

[geekette]

https://goo.gl/images/ttuWTR

Let’s face it. Owners don’t mind paying the ACTUAL cost of maintaining their share of the resort. But does it really cost the amounts some timeshares invoice? How do you really know you are not getting ripped off and making someone rich? After all most owners have resorts 1000s of miles away from their homes. Sadly, trust can easily be broken when their isn’t an overseer or regulator.

Why not have boards submit their budgets to state regulators before sending out a bill to the owners? Timeshare companies would be subject to yearly audit to ensure honesty. The honest resorts have nothing to hide so I’m sure they would be happy with a state regulator.

Why not have the Term maintenance fees clearly defined in state law by stating allowable expenses? Then everyone has the same definition and it would be easier to prosecute those getting rich from maintenance fees.

How about legislated maximum increases on maintenance fees while we are add it.


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I don't trust "state regulators" to know anything about timeshares. I wouldn't want them preventing mattress replacement every few years, for example.

One can request the budget and cash flow statements from the timeshare company if there are suspicions. Run for the board if you think your resort is not being managed correctly.

 

[rboesl]

The overall voice I'm seeing here is no to the original posting, and I agree. For the publicly traded timeshare companies this is less of an issue since they are regulated by the SEC and are required to be audited on a regular basis. The other larger HOAs are also audited on a regular basis. But, I don't know if the some of the other smaller or independents are subject to regular audit. Here is where I'd like to see some state level requirements regarding audits to insure there are no shenanigans going on with the books. Too many times I've read on this forum where an owner or manager has been lining his or her pockets rather than spending the money where it should have been spent. Audits would help to prevent that from happening.

 

[Fredflintstone]

The overall voice I'm seeing here is no to the original posting, and I agree. For the publicly traded timeshare companies this is less of an issue since they are regulated by the SEC and are required to be audited on a regular basis. The other larger HOAs are also audited on a regular basis. But, I don't know if the some of the other smaller or independents are subject to regular audit. Here is where I'd like to see some state level requirements regarding audits to insure there are no shenanigans going on with the books. Too many times I've read on this forum where an owner or manager has been lining his or her pockets rather than spending the money where it should have been spent. Audits would help to prevent that from happening.

My dad once said, “when the cats away, the mice will play.” When people sign a purchase contract, that same contract is used to lock the owner in. The question is how can Owners be assured their hard earned money is being used for what its intended for or they aren’t being overcharged for a needed item(s)? I agree that Owners need to pay to keep the pool water clean but it should not cost a fortune to do it either.

Forced regular third party audits would definitely ensure funds being allocated responsibly. Sadly, money sometimes can make good people do bad things especially when they think they have you over a barrel with a signed contract.


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[Passepartout]

It would be impossible. 'regulation' implies lower or at least more level MF cost. and since an independent, inland, no-frills, perhaps remodeled apartment complex or motel would have lower value and costs than a large- purpose-built, ocean front, hotel branded property with o n-site golf, water park, or other amenities, the annual cost of maintenance and refurbishment are VASTLY different. No gummint agency could possibly be as accurate in determining a 'proper' MF than an owner-controlled HOA.

Jim

 

[breezez]

My dad once said, “when the cats away, the mice will play.” When people sign a purchase contract, that same contract is used to lock the owner in. The question is how can Owners be assured their hard earned money is being used for what its intended for or they aren’t being overcharged for a needed item(s)? I agree that Owners need to pay to keep the pool water clean but it should not cost a fortune to do it either.

Forced regular third party audits would definitely ensure funds being allocated responsibly. Sadly, money sometimes can make good people do bad things especially when they think they have you over a barrel with a signed contract.


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The government doesn’t always use the taxes they collect for there intended purposes either, just think about social security. Using goverment to police TS MFs would be disastrous and lead to higher fees not lower ones. Every HOA would need to higher compliance peeps which get billed back to you as an owner.

 

[Fredflintstone]

The government doesn’t always use the taxes they collect for there intended purposes either, just think about social security. Using goverment to police TS MFs would be disastrous and lead to higher fees not lower ones. Every HOA would need to higher compliance peeps which get billed back to you as an owner.

True. The government is famous for waste. However regulations do help keep companies honest. Image a world free of police officers, regulators and overseers. Even though the costs to maintain law enforcement raises everyones taxes, without them it would be a free for all resulting in everyone paying more in the end. Perhaps the added costs might reduce costs given the risk of getting caught not being honest. Sadly, keeping people honest has a price tag but the price tag is lower than allowing a free for all.


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[breezez]

True. The government is famous for waste. However regulations do help keep companies honest. Image a world free of police officers, regulators and overseers. Even though the costs to maintain law enforcement raises everyones taxes, without them it would be a free for all resulting in everyone paying more in the end. Perhaps the added costs might reduce costs given the risk of getting caught not being honest. Sadly, keeping people honest has a price tag but the price tag is lower than allowing a free for all.


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I’m all for minimal regulations I just not for over regulations. Yes as a society we need common sense regulations and services of police, fire rescue, and other emergency workers.

But all to often government programs and regulations quickly get out of control and end up costing society more than they helped just google Cash for Clunkers the program that gave people rebates for gas guzzling cars if they turned them in and bought new ones.

Both left / right wing reports both in the end state this was an epic fail. The regulation cost over $24,000 to give those that got money around 690K people an average rebate of $4000 off their new car. So $20K per car to manage the regulation and that was just at the government end of things.

 

[klpca]

A quick google search turned up this regarding timeshare annual audits, which I believe are required in CA (based upon owning different CA timeshares and always receiving a copy of the audited FS):

https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/

(1) A proposed budget for each fiscal year consisting of the information required by Section 11240 shall be distributed not less than 15 days prior to the beginning of the fiscal year to which the budget applies.
(2) An audit of the financial statements of the association by an independent certified public accountant shall be performed each year and shall be made available upon request by a time-share owner 120 days after the close of the fiscal year. The audited financial statements shall be included in a report that includes all of the following:
(A) A balance sheet as of the end of the fiscal year.
(B) An operating (income) statement for the fiscal year.
(C) A statement of the net changes in the financial position of the time-share plan during the fiscal year.
(D) For any fiscal year in which the gross income to the association exceeds seventy-five thousand dollars
($75,000), a copy of the review of the annual report prepared in accordance with generally accepted accounting principles.
(E) A list of the names and methods of contacting the members of the governing body of the association.

 

[bogey21]

I don't know if the some of the other smaller or independents are subject to regular audit. Here is where I'd like to see some state level requirements regarding audits to insure there are no shenanigans going on with the books.

For almost 10 years I owned Weeks at 6 Independent HOA Controlled TimeShares. All were well managed and all kept their MFs at reasonable levels...

George

 

[Fredflintstone]

For almost 10 years I owned Weeks at 6 Independent HOA Controlled TimeShares. All were well managed and all kept their MFs at reasonable levels...

George

I am sure these well managed HOAs would all jump in to regular audits and regulatory oversights. I find straight up organizations have nothing to hide and appreciate a levelling of the playing field through regulatory oversight.


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