2026 Trust MF's Proposed Increase 6.3%

[wuv pooh]

I don’t get the math. How is a 1c increase 0.3%? Seems like 1.2%.

It is. Excel function =Roundup(0.0025,2) = .01

They round up to the next penny so 4x the actual increase. Should go into reserves - well at least 90% of it

 

[wuv pooh]

You're right that it's only Florida. But If they're leaving $650/week of reserves unfunded, to me that goes back to my earlier post. It's irresponsible. It means that if something goes wrong, there is going to be a special assessment, and those former owners who voted for waiving full reserves managed to screw the future owners who are left holding the bag. I won't vote for that, even though I know I'm in the minority. Yes, I was once a boy scout. Lol.

We did this in depth a few years back. If I remember correctly FL law requires a "full" funding based on a depreciation calculation of every building on the property. Marriott analysis looks at the cash flow required to refresh the buildings required in the plan for the next year plus a factor for unexpected repairs and inflation. No need to collect from owners' the roof bill for building 15 20 years in advance since it was just replaced last year. That is how most commercial buildings are run. The only property that I know of that has had issues was Ocean Pointe where the roof system installed failed to have the expected life. Think that has been a mess with contractor liability, insurance, etc. Not sure if there was a special assessment. My Orlando property and been maintained in top shape for 20 years and I have not seen any issues despite not fully funding since 2001.

 

[Fasttr]

Marriott analysis looks at the cash flow required to refresh the buildings required in the plan for the next year plus a factor for unexpected repairs and inflation. No need to collect from owners' the roof bill for building 15 20 years in advance since it was just replaced last year. That is how most commercial buildings are run.

I don’t believe this is correct. MVC looks out into the future many years. Look at the reserve detail on your annual budget.

 

[TolmiePeak]

It always seemed to me that waiving reserves was kicking the can forward so that future owners would be forced to pay for today's wear and tear and depreciation. I have always voted against waiving reserves but the waiver always passes. Most people only care about this year's MFs I guess. To me, waiving is irresponsible.

Agreed as the owners of the Surfside condo building unfortunately found out.

 

[dioxide45]

Agreed as the owners of the Surfside condo building unfortunately found out.

I think California lets properties basically decide for themselves what reserves are appropriate, whereas Florida, in the aftermath of collapsed buildings which were not maintained, has specific standards they have to adhere to. So I'd say Florida is extra conservative about reserves, which is a reaction to a tragedy or two. That could happen in California if a building falls down.

But I'd also note that California largely disallows tall buildings along the coast, while Florida is overrun with them.

No amount of Florida fully funded reserve funding would ever cover a complete destruction of a building. The intent isn't for reserves to cover a building if it collapses. It isn't necessarily even to prevent the collapse. That is what the new inspections are for. Funding is to cover capital improvements for the properties. We are also looking at an inland resort with Grande Vista. I am still scratching my head to understand why it somehow requires an additional $650 per unit week in reserve funding over a resort like Newport Coast Villas.

Even if we look at Waiohai in Hawaii. I had to go back to 2024 MFs, but they are only collecting $358.75 per unit week. The buildings there aren't as tall as Grande Vista, but they are on the ocean, they have the same salt air issues that could happen at a Florida coastal resort but they are a lot smaller. Maui Ocean Club Lahaina & Napili in 2023 collected $419. I need someone to explain why Florida MVC resorts needs to collect nearly three times as much for reserves if these other non Florida resorts are also apparently fully funding their reserves at much lower levels.

Comparing all the MVC resorts, it seems that they are all underfunding their reserves when compared to the Florida requirements. The resorts and buildings don't care about funding requirements, they all age and deteriorate in similar ways over many years.

 

[TolmiePeak]

Even if the reserve pays for minor maintenance capital costs that is a good thing. It prevents them from becoming major ones. It is no different that painting your house. If you do it on regular intervals it is a relatively simple process. If you wait too long and the underlying boards start rotting it is a major renovation project.

 

[craigd]

I would also like to know as I will be able to attend the meeting. Have only ever attended the annual meeting for MKO owners. Would think that there would be a bunch of Abound points owners at this meeting if open to owners. Is there a meeting room at Lakeshore large enough for 50 people?

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I would also like to know. I would also like to know the identity of the board members. Does anyone have this information?

 

[craigd]

I agree that MVC's waiver doesn't seem to put reserves into dire financial straits. But in the event of a big unexpected expense or several unexpected expenses occurring in quick succession, the likelihood that a special assessment would be necessary is greater if full reserves have been waived.

I'd rather put what the law requires into reserves, even if it makes my MF's rise by $50 or $100, and know that the property can cover itself in 98% of possible scenarios. I'm admittedly conservative on such issues. I also think it's most fair that current owners pay the true costs of their ownership, and those costs include paying fully into reserves for the very real depreciation of the properties which occurs little by little every day.

If the elevators need replacing five years earlier than planned because of corrosion due to salt air, the people who should have paid that expense are the owners over the past 15 years (or however long it's been since the last replacement), not the folks who happen to own when the bill comes due. Full funding of reserves is the best system we have for making it work that way.

This is our feeling as well, but our experience is that the majority of owners in all communities (timeshare and whole ownership) prefer to kick the can down the road. Accordingly, for our planning purposes, we are anticipating that the alternate budget that waives full funding at any component site that allows that will be what is passed. We aren't losing any sleep over it because we view our ownership as disposable at this point. If our resort is destroyed by some disaster, that will be that.

 

[bazzap]

I don’t believe this is correct. MVC looks out into the future many years. Look at the reserve detail on your annual budget.

I can’t speak for US resorts, but yes for Phuket Beach Club we regularly reviewed a 30 year budget, taking account of all projected major refurbishment projects to ensure that planned Reserve Funding would cover these going forward.


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[SueDonJ]

I think California lets properties basically decide for themselves what reserves are appropriate, whereas Florida, in the aftermath of collapsed buildings which were not maintained, has specific standards they have to adhere to. So I'd say Florida is extra conservative about reserves, which is a reaction to a tragedy or two. That could happen in California if a building falls down.

But I'd also note that California largely disallows tall buildings along the coast, while Florida is overrun with them.

Florida isn't the only state that requires a waiver of "fully funded reserves" as determined by legislation - South Carolina does as well, although FL is a yearly voting issue while SC is less frequent. Also, it's been an issue in both states since long before the relatively recent collapse of that building in Florida (but since and because of that collapse FL has enacted additional legislation that increases related reserve requirements which I don't believe owners can vote to waive.)

I'm with @dioxide45 on voting to waive, if allowed, adherence to the states' requirements because from all appearances it doesn't result in underfunding that eventually causes a Special Assessment at Marriott resorts, and in fact the MF's less the states' reserve determinations for the FL and SC resorts are closely aligned with the like Marriott resorts/unit sizes which aren't subject to similar legislation. Over all these years my SC resorts have had two, maybe three SA's that were directly related to hurricane damage, and I don't want Marriott to collect in advance via reserves and then sit on whatever monies might be needed as a result of a catastrophic incident that can't be predicted and isn't guaranteed to occur. Also, all of the SA at Marriott resorts that I've learned about on TUG weren't due to Marriott-as-Manager underfunding reserves - in two cases it was the resort boards that blatantly underfunded the budget for years in opposition to Marriott's influence, and in all others it was for one-time damage incidents and/or unknown factors that weren't and couldn't be known by the professionals who performed the reserve studies.

Whatever the reserve funding differences are between Marriott and the few states which legislate much more, there is no history of the states' definitions of "underfunded reserves" resulting in SA's at Marriott resorts. Why allow them to collect and sit on your money that's not immediately and may never be necessary, when you could be earning something on it by investing it?!

 

[craigd]

Florida isn't the only state that requires a waiver of "fully funded reserves" as determined by legislation - South Carolina does as well, although FL is a yearly voting issue while SC is less frequent. Also, it's been an issue in both states since long before the relatively recent collapse of that building in Florida (but since and because of that collapse FL has enacted additional legislation that increases related reserve requirements which I don't believe owners can vote to waive.)

I'm with @dioxide45 on voting to waive, if allowed, adherence to the states' requirements because from all appearances it doesn't result in underfunding that eventually causes a Special Assessment at Marriott resorts, and in fact the MF's less the states' reserve determinations for the FL and SC resorts are closely aligned with the like Marriott resorts/unit sizes which aren't subject to similar legislation. Over all these years my SC resorts have had two, maybe three SA's that were directly related to hurricane damage, and I don't want Marriott to collect in advance via reserves and then sit on whatever monies might be needed as a result of a catastrophic incident that can't be predicted and isn't guaranteed to occur. Also, all of the SA at Marriott resorts that I've learned about on TUG weren't due to Marriott-as-Manager underfunding reserves - in two cases it was the resort boards that blatantly underfunded the budget for years in opposition to Marriott's influence, and in all others it was for one-time damage incidents and/or unknown factors that weren't and couldn't be known by the professionals who performed the reserve studies.

Whatever the reserve funding differences are between Marriott and the few states which legislate much more, there is no history of the states' definitions of "underfunded reserves" resulting in SA's at Marriott resorts. Why allow them to collect and sit on your money that's not immediately and may never be necessary, when you could be earning something on it by investing it?!

These are all good points. Does anyone know the average age of resorts in the portfolio? I feel like this type of thing does not show up as an issue until a property is 30 years old. If Marriott has managed a resort that is older than that without special assessments not related to natural disasters, then they are doing it right regardless of what legislatures otherwise prescribe.

 

[sponger76]

These are all good points. Does anyone know the average age of resorts in the portfolio? I feel like this type of thing does not show up as an issue until a property is 30 years old. If Marriott has managed a resort that is older than that without special assessments not related to natural disasters, then they are doing it right regardless of what legislatures otherwise prescribe.

Don't know about average age being calculated, but this thread talks about when the ages of many resorts. A number of them are indeed 30 years old or more.