Aren't the resort management agreements time limited and have to be renewed periodically? I was thinking they were on a 5 year cycle.
Each resort's Management Agreement can differ in minor details but I'd expect them all to be similar in regards to renewals. From SurfWatch docs:
"... The term of this Agreement (the "Term") shall be for a period of ten (10) years commencing on the Effective Date. [Note: I believe SW was 2006]
The Term may thereafter be renewed by Manager, at its option (on the same terms and conditions contained in this Agreement) for each of five (5) successive periods of ten (10) Fiscal Years each ("Renewal Terms").
All they'd have to do would be to either let it expire or sell the management rights to another company such as Bluegreen, Hilton or Wyndham. I also suspect there are for cause terminations built in which they could work from if they truly wantee to.
But can they sell a Management Agreement? I'm seeing language that says the Manager can assign some management responsibilities to third parties (and not surprisingly, that ongoing/additional costs for such assigns would fall on the owners) but nothing to say that the Agreement can be sold outright. Instead it would require a separation of Marriott and the resort, whether initiated by Marriott or the Board/owners, followed by the Board then entering into a new Management Agreement with a non-Marriott entity.
I'm sure that just as the terms of the Management Agreement might differ among the resorts' individual docs, so would the separation allowances. Meaning, the legalities wouldn't substantially differ but minor details may. Again from the SurfWatch docs:
"
... If the Board does not approve the estimated Common Expenses and Time Share Expenses for a Fiscal Year (hereinafter referred to as "Estimated Operating Budget" pursuant to Sec 6.03 of this Agreement or any special assessments proposed by Manager, and Manager believes that the reduced Estimated Operating Budget that is approved or the failure to implement needed special assessments will cause the Association resources to be inadequate to operate the Time Sharing Plan and the Condominium Property to MVCI Brand Standards or, if the Board takes any action that, in Manager's sole, but reasonable opinion, undermines or detracts from MVCI's Brand Standards, then Manager may terminate this agreement upon ninety (90) days prior written notice to the Association.
"Further, Manager may terminate this Agreement at any time and for any reason upon one hundred eighty (180) days written notice to the Association. Likewise, the Association may terminate this Agreement at any time and for any reason upon one hundred eighty (180) days written notice to Manager, provided that prior to such notice, the decision to terminate was supported by the affirmative vote of at least seventy-five percent (75%) of all votes in the Association."
I think they'd have a few options. For enrolled owners they'd likely just terminate them from Abound. For the trust all they'd have to do would be to swap out with another location. I suspect they'd have to give the NJ owner the option to terminate their enrollment. I am told that for the first round of resort terminations early on, they gave those owners who'd bought directly a reasonable option to swap out. This did not happen with the last round (Spicebush, etc) even though some owners pushed for it.
Like you I vaguely remember swaps happening in the early days, among separated resorts but also specifically among HHI owners who were given the option to swap out of older unseparated resorts for the newer resorts as they were built (example, Harbour Point owners could swap for GO, Barony or SurfWatch as each came online.) I thought all of those involved selling the old back and buying the new with every transaction subject to the prices current at the time. So, not equal 2BR swaps, for example.
The Trust and Enrollment docs have terms regarding separations of Management Agreements which pretty much say that Trust intervals "may" be removed from the Trust upon separation. I wouldn't think that any swaps would have to be made in individual Club Points deeds (or certificates, or whatever the mechanism of purchase,) though, because those don't stipulate certain resorts tied to the purchase. Do they?
As for Enrolled Members, the docs state that they could lose their associated enrollment status and Abound Points allocations upon separation. So if somebody owns one enrolled Week and that resort separates, they could be terminated from Abound and the allotments would end. But somebody who owns other Abound-related products, either enrolled Weeks at other resorts or purchased Club Points, would retain their Abound membership with their Abound status and Club Points allotments decreased accordingly by the separation. I think I said, though, in an earlier post that the Trust set-up appears to allow non-Marriott-branded resorts to be included, so it's possible that Weeks from later-separated resorts could theoretically remain conveyed, and owners of Enrolled Weeks in later-separated resorts could remain enrolled - all at Marriott's discretion if they see value in those Weeks??
