After the dust has settled ( I think)

[jarta]

CCNs are only amended by the requisite vote of the owner/members of the association. Starwood cannot unilaterally change them when it enters into a management contract when it comes to a resort.

 

[Pit]

Because I am at Lagunamar and all my documents are at home. I am enjoying immensely my TS trip.

In that case, you should be at the pool bar, instead of posting on TUG. Consider it a homework assignment.

 

[jarta]

I think we all should be sticking to issues.

 

[jerseygirl]

my three snippets came from a WSJ Hillside Svn document. As i stated earlier [may be on another thread - I'm on my phone so hard to type and follow>, the rules vary by state and location. CCRs are amended - especially when SVN is overlaid.

meant to say varies by SVN vs non SVN and state/Location. Sorry. We give them LOTS of leeway when we sign SVN agreements. Hence my recent posts <as Ive been researching this> that SVN is not so great when you peel back the layers. We would all be way better off under a marriott system <With a PFL feature of course>. If marriott is about to move to a more Starwood like system you can bet your last dollar its not for the owners benefit!!

 

[DanCali]

A week ago Sunday, the same claim was made.

I had asked that someone post the language where such an arrangement was set forth. The last response was from LisaRex who was leafing through her owner's documents to find the language. She never posted anything.

I'm not saying such an agreement doesn't exist. I'd just like to have the language posted to see if it is being interpreted the right way. Also, since it is such an important complaint about Starwood, perhaps it could be posted in one of the stickys so that everyone could be directed to the exact language.

If you have access to any such language allowing Starwood to keep all of the rental proceeds and give none to the HOA, could you please post it? TIA. ... eom

jarta - Here is another one that probably affects you directly - this one from WKV:

12.3 The developer has the right to reserve any Use Period that, for any reason, is not reserved as of 60 days before the check in day...

12.4 The Developer may use its Vacation Periods for any purpose, no matter what else the Vacation Plan Documents provide. This includes, among other things, use for rentals, sales and other commercial purposes permitted by law... If the Developer rents these Use Periods, it alone is entitled to keep the rent...

And in case I misinerpret or omitted something feel free to correct me from the Lagunamar pool... Here is the link to the doc.

 

[DavidnRobin]

Again, I don't understand how you would identify a VOI Starwood has rented as being one that specifically came from a default on maint. payments vs. one they are entitled to from other sources(SVN/non-use/etc.)?

Say you have 100 VOI's - 10 weeks are in default on maint. fees, 20 weeks are just unused, and 70 weeks are SVN trade outs. Starwood puts 100 weeks up for rent and 75 rent out. Why wouldn't you expect them to just say they rented out their 70 SVN weeks and 5 unused weeks? Not saying this is ethical, but with a floating system you can't identify a specific defaulted VOI as being "the" one which was defaulted.

Therefore Starwood has written the rules to apply to the rental pool as a whole. I don't think this is necessarily unfair (and is probably the most practical thing to do), however limiting rental receipts to a max of 2.5% of overall HOA budget may be too restrictive in periods where maint. fee defaults are high.

I attempted to be clear - but obviously failed - it is clear to me...

Step 1) Did a Owner become deliquent on their MFs? If not - Owner paid their MFs and it went to the HOA as normal. If they were delinquent, then...
Step 2) SVO takes control of the VOI (per CCRs) and can use it how they see fit (I assume via resort rentals, SVN/II exchanges, SPG program).
Step 3) if is SVO using the VOI - does the HOA get reimbursed by SVO and by how much, and if so where is the transparency of this reimbursment?

Does SVO let them sit empty? {I doubt it in most cases}
Follow the money...

If it can not be easily answered in a few sentences - then I simply ask for transparency. And that as OWNERS in the HOA - we should be entitled to the answer and transparency.

This is separate from the SVO/Owner rental agreement...

btw - in the discussion of the contents of the CCRs - it is important to differentiate between SVO Owned VOIs and those that are defaulted - there has been no where in the CCRs that I have where this is clear... I did not create this problem - only looking for a simple answer.

As well... I never got a chance to vote (that I am aware of since it was never specifically stated in any proxy) in regards to the creation of the BV section of WSJ. Did WKORV Owners vote on teh formation of WKORVN? I think not...

 

[ocdb8r]

From the WKV document DanCali linked to...I paraphrased or summarized some things and just put in parenthesis...

11.4 ….Any Use Periods that are unreserved due to an Owner’s delinquency that are not rented by the Association, may be reserved and rented by the Developer or Plan Operator, pursuant to Charpters Twelve and Thirteen.
12.3 (Basically says Developer may reserve any units not reserved within 60 days as well as units delinquent which the association has not elected to rent out)
12.4 The Developer may use its Vacation Periods for any purpose, no matter what else the Vacation Plan Documents provide. This includes, among other things, use for rentals, sales and other commercial purposes permitted by law... If the Developer rents these Use Periods, it alone is entitled to keep the rent...
12.5 The developer ALSO gets an extra week anytime there is a 53rd use week….
12.6 The developer has the right to rent Use Periods reserved by the Developer in its capacity as an Owner of a Vacation Ownership Interest, pursuant to Section 12.4 above, is unrestricted. (same thing for VOI’s it may rent under 12.5)


SO, what sticks out to me is that 1) the developer or club operator gets to rent and keep the proceeds for any week it rents, 2) either of these two entities may rent delinquent VOI's if the association doesn't (and then keep the proceeds).

Begs the question...what the _____ is the Association (BOD) doing to try to rent these weeks to get some income for the Association!?!??! It looks like NOTHING!

I especially love if you read all of section 11.4. If the Association rents the week, it can deduct costs of running the week and the apply whatever is left against the delinquent account...however, if the Association doesn't rent the week, the Developer or Club operator can rent the week and KEEP all proceeds. Classic.

 

[James1975NY]

I think a more productive lawsuit would look at how SVO reserves weeks for rental income they keep. This is the REAL reason for the change. They don't want to compete with us exchangers in nabbing good weeks for deposit that they could nab for padding their own pockets with rental income. I have been too lazy to look at all the documents, but it sure seems like there may be something fishy giong on with the way SVO gets to reserve and rent out weeks for it's own use.

I can see the interest on SVO's behalf with having "controls" over how the inventory is being manipulated whether it be for (in no particular oder):

a.) SPG
b.) II
c.) Owner Use
d.) SVN
e.) Rental etc....

....what I think is consistently being exajurated here is SVO's intention and what the negative impact really is with regards to their management of the inventory.

Remember, SVO is audited once a year on how inventory is managed and if they are deemed to be outside the lines, they will be charged stiff penalties which I understand are not recoverable through the owner base.

The common thread with Tuggers on these boards is either a.) maintenance fees or b.) the change in exchange rules with II. Whether or not any will believe, I do understand and appreciate the "meat" of the concern. I have always been a pro-ponent of being able to deposit a week at your home resort, same season if you are able to reserve it.

Is SVO in the business for the money? Well, last I knew they were a publicly traded - for profit company (Yes).

Do I think the maintenance fees are comparatively high? Yup.

I also believe that there will be a better balance in the future and would rest assured knowing that there is real substance behind the increases - much of which is beyond their control. There is also a lot of benefit in the changes made to the exchange rules with II (another popular statement here) that may not be accepted by the small population of owners represented here on TUG but are real improvements for the majority.

 

[ocdb8r]

I can see the interest on SVO's behalf with having "controls" over how the inventory is being manipulated whether it be for (in no particular oder):

a.) SPG
b.) II
c.) Owner Use
d.) SVN
e.) Rental etc....

....what I think is consistently being exajurated here is SVO's intention and what the negative impact really is with regards to their management of the inventory.

Remember, SVO is audited once a year on how inventory is managed and if they are deemed to be outside the lines, they will be charged stiff penalties which I understand are not recoverable through the owner base.

I accept the there is likely some exaggeration as to how SVO manipulates inventory, HOWEVER, as you can see from the WKV example I outline in post 57 above, the "lines" are drawn QUITE liberally in favor of SVO. Even operating within those lines gives pause for concern.

Out of curiosity, WHO audits their inventory management?

 

[James1975NY]

I accept the there is likely some exaggeration as to how SVO manipulates inventory, HOWEVER, as you can see from the WKV example I outline in post 57 above, the "lines" are drawn QUITE liberally in favor of SVO. Even operating within those lines gives pause for concern.

Out of curiosity, WHO audits their inventory management?

I believe they are audited by a third party company of SVO's choice.

JUST KIDDING!!! - I had to.

They are ultimately audited by the state who may or may not use a third party company. Similar to how companies were sourced for Sarbanes Oxley (sp?) compliance.

 

[DeniseM]

And who would owners contact for a copy of the audit?

 

[James1975NY]

SO, what sticks out to me is that 1) the developer or club operator gets to rent and keep the proceeds for any week it rents, 2) either of these two entities may rent delinquent VOI's if the association doesn't (and then keep the proceeds).

1.) Between SPG conversion, 60-day inventory and owner rental particiption - yes.

2.) Not sure I understand the statment or question.

Begs the question...what the _____ is the Association (BOD) doing to try to rent these weeks to get some income for the Association!?!??! It looks like NOTHING!

When an owner goes delinquint, their account is locked out by request of the HOA and ultimately a week can be assigned for rental. The challenge here is that the billings are all done in January, owners that do not pay go into lock-out status I would say in February if not paid. If the owner did not have a week already reserved, the HOA is going to have a hard time finding a reasonably high demand week to come close to recovering the costs. Does this make sense or am I rambling?

 

[James1975NY]

And who would owners contact for a copy of the audit?

Not sure that it is available to the public. If it were, I have NO idea where one would obtain it.

 

[ocdb8r]

2.) Not sure I understand the statment or question.

The statement is that the docs give the Developer/Club Operator the right to rent delinquent VOI's with out any reimbursement to the Association.

When an owner goes delinquint, their account is locked out by request of the HOA and ultimately a week can be assigned for rental. The challenge here is that the billings are all done in January, owners that do not pay go into lock-out status I would say in February if not paid. If the owner did not have a week already reserved, the HOA is going to have a hard time finding a reasonably high demand week to come close to recovering the costs. Does this make sense or am I rambling?

So, are you saying there is even any attempt...or just implicating the Association shouldn't bother trying to do anything because it would be difficult? Seems to me SVO thought there might be value to those weeks, why else build in their right to them into the docs?

Also, this assumes owners are only delinquent for one year. If delinquent for longer there would be plenty of advance notice to reserve "prime" weeks.

Finally, why couldn't the BOD exercise VOI reservation rights as soon as they were delinquent (or within a reasonable time after delinquency). Say April 1st, 2010 if fees haven't been paid, they start reserving 2011 weeks to rent toward their delinquent account. If/when the owner pays off their account, the inventory is released and the owner is free to reserve their week.

 

[DanCali]

I especially love if you read all of section 11.4. If the Association rents the week, it can deduct costs of running the week and the apply whatever is left against the delinquent account...however, if the Association doesn't rent the week, the Developer or Club operator can rent the week and KEEP all proceeds. Classic.

These sounds like key statements...

11.4 deals with renting delinquent weeks. It does specify here that "whatever is left" goes against the delinquent acount. Renting those weeks is the HOA's responsibility and I don't think we can necessarily say they are not doing it.

But you are right that the last sentence is weird and sounds like it says that if the association doesn't rent delinquent weeks, the Developer can benefit from that.

The two key statements in 11.4 are:

"The Association shall not be required to solicit rentals for every or any delinquent owner's reserved use period..." and (if they do rent, they need to try to obtain a compettiv rate and revenue is split after commissions, housekeeping fees etc...)

"Any use periods that are unreserved due to an Owner's delinquency that are not rented by the Association may be reserved and rented by the Developer or Plan Operator pursuant to Chapters 12 and 13....

and I requote 12.4

12.4 The Developer may use its Vacation Periods for any purpose, no matter what else the Vacation Plan Documents provide. This includes, among other things, use for rentals, sales and other commercial purposes permitted by law... If the Developer rents these Use Periods, it alone is entitled to keep the rent...


So not only can they reserve vacant units at 60 days out and keep 100% of the rental (too bad for the owners who had to cancel a reservation and can only reserve at 60 days out...) - but the HOA doesn't have to solicit rentals for delinquent accounts (maybe they are, maybe not) and if they don't Starwood can rent delinquent units and keep 100% of the rental...

 

[DanCali]

A different point is that timing is also of the essence at a resort where Platinum season basically ends at week 21... This is more particular to the desert resorts.

 

[jerseygirl]

I attended a recent board meeting for a SVO resort where most of the weeks are fixed. I suggested that we consider changing the due date to make maintenance fees due 90-days prior to the usage date so as to allow for a timely owner rental program. (This was after it was confirmed that January owners who had not paid were definitely being allowed to use their units). I was told that it would be very difficult to do. I responded that a lot of things are difficult ... doing nothing doesn't seem to be working ... we need to think out of the box and come up with a plan that will work.

This particular resort had not yet processed one foreclosure (that's apparently difficult as well).

I was also told:

-- Units for delinquent owners are eventually rented
-- A delinquent owner can show up on his/her usage date (e.g., June 30th) with a check in hand and he/she will be permitted to occupy.

Is it just me or do those two statements contradict one another (unless eventually means 2011, 2012, etc.)?

It was also stated that they were blind-sighted (my words ... but that's essentially what was being said) by the delinquecies. Perhaps we should all pitch in and buy the executives subscriptions to the Wall St Journal because they apparently hadn't heard about the worst recession since WWII / Great Depression (depending on which economist you trust).

There was one owner board member who appeared to be truly on the side of the owners -- was voting "no" to budgets, challenging everything, etc. There was a second owner who spoke as if he shared our general concerns, but unfortunately his voting pattern left me uncertain.

Suffice it to say I was flabbergasted by the whole situation. I own a rinky dink, "location location location," no-name resort in Florida that is so much better run. Starwood should be ashamed of themselves -- it's up to us, the owners, to get answers to questions such as the above and hold them accountable.

 

[jarta]

DanCali, ... "Here is the link to the doc."

The link doesn't work now.

But, take a look at section 12.6. It says that the Developer gets to keep all the rental income from units it owns (section 12.4) and week 53 units (section 12.5).

The specification of those situations having Starwood keep all the rent and the lack of such a statement about the rentals of 60 day reservations (section 12.3) leads me to believe that Starwood would not keep all the money in that situation.

But, can I say it for sure? No I can't.

The legal principal involved is:

http://legal-dictionary.thefreedictionary.com/Expressio+unius+est+exclusio+alterius

11.4 only applies to rentals of delinquent units. ... eom

 

[nodge]

I attended a recent board meeting for a SVO resort where most of the weeks are fixed. [...] I was flabbergasted by the whole situation. [...] Starwood should be ashamed of themselves.

I think I found this footage from that board meeting.

-nodge

 

[DanCali]

DanCali, ... "Here is the link to the doc."

The link doesn't work now.

But, take a look at section 12.6. It says that the Developer gets to keep all the rental income from units it owns (section 12.4) and week 53 units (section 12.5).

The specification of those situations having Starwood keep all the rent and the lack of such a statement about the rentals of 60 day reservations (section 12.3) leads me to believe that Starwood would not keep all the money in that situation.

But, can I say it for sure? No I can't.

The legal principal involved is:

http://legal-dictionary.thefreedictionary.com/Expressio+unius+est+exclusio+alterius

11.4 only applies to rentals of delinquent units. ... eom

You're right - looks like the Maricopa County server is down for the night.

I didn't download the doc so I'll have to take a look tomorrow... but I understand what you are trying to say.

And it doesn't bother you that it's that vague and they might be getting all that rental income? As far as I recall, you do own here...

 

[jarta]

DanCali, ... What bothers me is that some people are saying Starwood definitely gets all of the rental income based on something that you refer to as vague (but is not so under the legal principle). It appears to me that those declarations are spurred on by suspicion and mind-set, not facts.

I'd accept some proof that all of the rental income (not just rental income from units Starwood still owns and week 53 which it retains rights to under the Declaration) goes to Starwood. I cannot say it doesn't occur. But, I have seen no proof posted.

If all of the rental money for 60 day reservations is going to Starwood, the WKV HOA should be making noises to have Starwood assign the 60 day reservations to the association, as section 12.3 provides can be done.

Re-read the WKV Declaration. I also saw nothing in it that would give anyone (HOA or Starwood) the right to reserve and rent out any WKV week prior to the 60 day window. It seems like this is deemed necessary to protect the right to internally trade into WKV for the "Club" (SVN) members during the 8-2 month before arrival internal SVN trading period. But, that's another issue. It's not how or whether the 60 day rental proceeds are split. ... eom

 

[jerseygirl]

If you guys are looking at CCRs without SVN disclosure overlay, you're not dealing with the full information by a longshot.

 

[DanCali]

That document linked to above was the SVN disclosure. I'll posted links to both once their server is back up...

 

[DanCali]

WKV Docs

Here are the CC&Rs: http://156.42.40.50/UnOfficialDocs/pdf/20020790609.pdf

Accompanying SVN Doc: http://156.42.40.50/UnOfficialDocs/pdf/20020790610.pdf

Not sure why the link from before stopped working but in case these stop working, the docs are accessoble the Maricopa County ecorder website:

http://recorder.maricopa.gov/recdocdata/

using document numbers: 2002 0790609 (CC&Rs) and 2002 0790610 (SVO Docs)

just search for these docs and the unofficial document can be downloaded for free by clicking the link embedded in the "number of pages"

 

[DanCali]

I also saw nothing in it that would give anyone (HOA or Starwood) the right to reserve and rent out any WKV week prior to the 60 day window.

This is in 5.2.d

"The reservation rules may create one or more reservation periods during which the developer and/or the club operator may reserve any Use Period in a Club Unit that nobody else reserved and that no other person has exclusive rights to reserve (I read this as anything but fixed weeks or the first 60 days in the home resort reservation period -i.e. 12-10 months window - discussed in 5.2.a.i). This means that owners and other club members may have to compete with the developer and/or club operator for a reservation."