Do Developers/HOAs pay the same Maintenance fee as Owners?

[Fredflintstone]

I’m just curious. If the HOA owns some units, do they pay the same maintenance fee amount that owners are charged? Or, do they not factor in those units and just calculate Maintenance fees based on active ownership? The same question holds true with Developer owned weeks.

I know owners pay for owner defaults through bad debt expenses in their maintenance fees. Which, at least in theory, means you are paying more than your week as this money applies to non performing inventory fees in weeks you don’t own. I assume bad debt expenses would cover foreclosure costs too. Once foreclosed, I assume the HOA pays the maintenance fees until sold. But, maybe that’s taken out of bad debt expenses too.

Does anyone know?


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[JohnPaul]

I can't say about HOA weeks but generally Developer owned weeks pay MF. I would assume HOA owned weeks don't as the HOA would pay and the only place they would get the money to pay is from other owners.

 

[Fredflintstone]

I can't say about HOA weeks but generally Developer owned weeks pay MF. I would assume HOA owned weeks don't as the HOA would pay and the only place they would get the money to pay is from other owners.

Ok, so we can assume the developer pays the same amount as regular owners to the HOA.

If the HOA does not pay maintenance fees, I am safe to assume they try to rent their units and apply that towards maintenance costs. If they are short, the owners are the ones pitching in to the costs? You are right, the owner probably gets stuck with any shortfall regardless.

I would also assume they have a duty to try to rent out their units as best they can to offshoot costs to other owners?


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[Fredflintstone]

https://tug2.net/timeshare_advice/who_runs_my_timeshare.html

According to this TUG article, the actual owner of the resort is the HOA. The “owners” are really members but have a say.

I suppose since the HOA owns the resort, they are not members in a sense. The membership pays dues or maintenance fees to remain a member.

The reason why I’m asking is I know a board member of an HOA and he said the owners pay 32 percent of their fees to cover HOA owned units. It’s 32 percent because they have 32 percent of the weeks. He did say they try to rent out these units to offshoot costs and try hard to resell too. I do suspect though most HOAs don’t own many weeks.




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[Makai Guy]

I do suspect though most HOAs don’t own many weeks

I think you'd be surprised how many units most HOAs own, through foreclosures for nonpayment of maintenance fees, heirs that choose not to accept the unit, etc.

 

[Fredflintstone]

I think you'd be surprised how many units most HOAs own, through foreclosures for nonpayment of maintenance fees, heirs that choose not to accept the unit, etc.

Yes, I was surprised at 32 percent. Mind you, this is a legacy resort and that might explain the number.

Maybe that’s why dues or fees or assessments are averaging over 1 k per member to cover this?

Knowing this, one is best to get into high demand resorts with very low non performing inventory. It’s a question to ask the HOA before taking the plunge to buy.


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[DeniseM]

Knowing this, one is best to get into high demand resorts with very low non performing inventory. It’s a question to ask the HOA before taking the plunge to buy.

The HOA has no obligation to provide this info to a non-owner.

 

[Fredflintstone]

The HOA has no obligation to provide this info to a non-owner.

True but then it can be perceived that they have something to hide and you wouldn’t proceed with the purchase.


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[DeniseM]

True but then it can be perceived that they have something to hide and you wouldn’t proceed with the purchase.

I don't think this is accurate - I think you are expecting HOA's to do something that is not part of their function. It's simply not their job to assist non-owners, who are buying resale. Besides, this isn't info that can be "hidden," because it's part of their annual financial report that they send to owners - who they do have an obligation to.

If it's a small local resort, with onsite HOA management employees that you can go in and talk to, you might get some info. But if you request info from any of the large corporate HOA's, I think they will simply ignore you.

 

[davidvel]

https://tug2.net/timeshare_advice/who_runs_my_timeshare.html

According to this TUG article, the actual owner of the resort is the HOA. The “owners” are really members but have a say.

I suppose since the HOA owns the resort, they are not members in a sense. The membership pays dues or maintenance fees to remain a member.

The reason why I’m asking is I know a board member of an HOA and he said the owners pay 32 percent of their fees to cover HOA owned units. It’s 32 percent because they have 32 percent of the weeks. He did say they try to rent out these units to offshoot costs and try hard to resell too. I do suspect though most HOAs don’t own many weeks.




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This article's contention that the HOA is an owner of the resort is completely wrong from a legal perspective. The Association generally doesn't own anything at all, not even the common areas. Also, the bylaws are not particularly important, at least as compared to the CC&Rs.

 

[Fredflintstone]

I don't think this is accurate - I think you are expecting HOA's to do something that is not part of their function. It's simply not their job to assist non-owners, who are buying resale. Besides, this isn't info that can be "hidden," because it's part of their annual financial report that they send to owners - who they do have an obligation to.

If it's a small local resort, with onsite HOA management employees that you can go in and talk to, you might get some info. But if you request info from any of the large corporate HOA's, I think they will simply ignore you.

I have looked at many HOA financial reports to owners with MF bills and have never seen them disclose their non performing inventory numbers.

You are right, HOAs are not obliged to talk to non owners. However that can be perceived either rightly or not as hiding something. Prior to posting this my friend who owns a timeshare asked his HOA for the number of timeshares they currently held and they told him they aren’t obliged to share that information either.

You are so right about small resorts and thats why maybe they are the way to go because they seem more cooperative then the big corporates.





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[dioxide45]

The HOA are made up of the owners. The owners pay bad debts from weeks where either the owner doesn't pay or they are HOA held weeks. If the HOA can perhaps rent out the weeks that they hold, they can offset the bad debts to some extent. So in reality, the HOA, AKA owners, are paying additional MFs to cover HOA held weeks.

 

[dioxide45]

For developers, they may or may not be paying the same MFs as owners. In Florida at least, they can provide a guarantee when a resort is being built out. If the amount of MFs collected from those that have already purchased isn't enough to cover all the costs of operating the resort, the developer provides the difference as the guarantee. It may not be the same amount that those weeks would cost if they were sold to owners. There are also developer subsidies within MFs when a resort is new, but that is usually just there to deflate the MFs to make it an easier sell.

 

[Fredflintstone]

For developers, they may or may not be paying the same MFs as owners. In Florida at least, they can provide a guarantee when a resort is being built out. If the amount of MFs collected from those that have already purchased isn't enough to cover all the costs of operating the resort, the developer provides the difference as the guarantee. It may not be the same amount that those weeks would cost if they were sold to owners. There are also developer subsidies within MFs when a resort is new, but that is usually just there to deflate the MFs to make it an easier sell.

Thanks. This is what makes maintenance fee assessments flawed and in my view deceptive. The common thinking is each owner pays the same based on what they purchased. So if they purchased a week or 1/52 of a unit, they think they should pay 1/52 and 1/52 of all units for common area. Yet, if they pay for HOA units, developer units and whatever else, they are paying more than what they purchased. Yet, they only get to use one week.

This explains why a weekly maintenance fee bill can hit 1 k and up which results in a rise in defaults. Its like a deck of cards that can potentially fall if the fees get out of hand.

Its really too bad these costs aren’t fully disclosed prior to making a purchase decision. At least if you knew you might be paying other peoples bills, you go in with your eyes wide open and can accept that you will pay more than what you purchased.




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[Panina]

Thanks. This is what makes maintenance fee assessments flawed and in my view deceptive. The common thinking is each owner pays the same based on what they purchased. So if they purchased a week or 1/52 of a unit, they think they should pay 1/52 and 1/52 of all units for common area. Yet, if they pay for HOA units, developer units and whatever else, they are paying more than what they purchased. Yet, they only get to use one week.

This explains why a weekly maintenance fee bill can hit 1 k and up which results in a rise in defaults. Its like a deck of cards that can potentially fall if the fees get out of hand.

Its really too bad these costs aren’t fully disclosed prior to making a purchase decision. At least if you knew you might be paying other peoples bills, you go in with your eyes wide open and can accept that you will pay more than what you purchased.




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It is not just timeshares. This is how it works with all HOA’s, houses, condos, townhomes, co-ops. I own a house in a community that has an HOA for the shared amenities in the community. For the houses that don’t pay the rest of us have to make up the difference including the legal costs to make them pay.

 

[Fredflintstone]

It is not just timeshares. This is how it works with all HOA’s, houses, condos, townhomes, co-ops. I own a house in a community that has an HOA for the shared amenities in the community. For the houses that don’t pay the rest of us have to make up the difference including the legal costs to make them pay.

Oh my have i been lucky. Every house Ive owned i have never had HOA fees.

Say do you receive a check or credit if they end up paying in full?


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[bluehende]

Since paying owners are in effect paying the maintenance fees on these weeks it would be nice if they got some value of that. Some resorts are good at trying to rent them out. I would love to see resorts go to free weeks of use for their owners. If 20% are in default then every five years a free week that can be reserved or deposited for exchange is available.

 

[JohnPaul]

I think you'd be surprised how many units most HOAs own, through foreclosures for nonpayment of maintenance fees, heirs that choose not to accept the unit, etc.

When I stay (exchange) at an independent timeshare our check in material often includes a list of HOA owned weeks for sale. If they don't do that, there is often a sign in the lobby to the effect of "Ask us about available weeks to buy"

The lists are usually one to two pages in not very large type.

 

[Fredflintstone]

When I stay (exchange) at an independent timeshare our check in material often includes a list of HOA owned weeks for sale. If they don't do that, there is often a sign in the lobby to the effect of "Ask us about available weeks to buy"

The lists are usually one to two pages in not very large type.

Thats good to know. It could be possible to calculate costs by adding up the timeshares for sale. I have seen in the HOA newsletters offering resales just not the number available.


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[WinniWoman]

It is not just timeshares. This is how it works with all HOA’s, houses, condos, townhomes, co-ops. I own a house in a community that has an HOA for the shared amenities in the community. For the houses that don’t pay the rest of us have to make up the difference including the legal costs to make them pay.

This is the one thing I do not like about community living, though we will be looking into those when we move. You get tied into the rules of the hOA and other owners' problems and so on.Bad enough we are already tied into the town we live in and taxed to the hilt (through school and property taxes)for things that have nothing to do with what we utilize.

 

[WinniWoman]

It is not just timeshares. This is how it works with all HOA’s, houses, condos, townhomes, co-ops. I own a house in a community that has an HOA for the shared amenities in the community. For the houses that don’t pay the rest of us have to make up the difference including the legal costs to make them pay.

This is the one thing I do not like about community living, though we will be looking into those when we move. You get tied into the rules of the HOA and other owners' problems and so on.Bad enough we are already tied into the town we live in and taxed to the hilt (through school and property taxes)for things that have nothing to do with what we utilize.

 

[Panina]

Oh my have i been lucky. Every house Ive owned i have never had HOA fees.

Say do you receive a check or credit if they end up paying in full?


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Money goes back into HOA accounts towards HOA expenses.

 

[Panina]

This is the one thing I do not like about community living, though we will be looking into those when we move. You get tied into the rules of the hOA and other owners' problems and so on.Bad enough we are already tied into the town we live in and taxed to the hilt (through school and property taxes)for things that have nothing to do with what we utilize.

Community living has its advantages and disadvantages. For me the advantages outweighs the disadvantages.