After the dust has settled ( I think)

[DeniseM]

Does II usage falls under SVO usage during this period? If used via II - how then is the HOA reimbursed?

Are you asking if Starwood can deposit these weeks in II? Per James1975NYC - II doesn't reimburse Starwood anything for deposits.

 

[Transit]

My SBP unit requires maint. be paid before trading. SDO does not.I'm not sure about SVV because I've never competed a trade outside of SVN with it. I think in all fairness maint. fees should be required paid in full before a trade can be made.

 

[DeniseM]

My SBP unit requires maint. be paid before trading. SDO does not.I'm not sure about SVV because I've never competed a trade outside of SVN with it. I think in all fairness maint. fees should be required paid in full before a trade can be made.

With the number of non-paying owners, it seems like this is the only way to guarantee that the MF gets paid before the unit is used.

BTW - I exchanged my 2010 SVR week before I paid the MF - not sure if SVV is the same or not.

 

[DavidnRobin]

Are you asking if Starwood can deposit these weeks in II? Per James1975NYC - II doesn't reimburse Starwood anything for deposits.

I am trying to figure out a few things (that may involve II or not...)

In following the money theme...

1) What happens to the VOI reimbursment for deliqunent MFs?
2) For those SVO-owned VOIs is the HOA getting fair reimbusment?
3) Is the HOA getting adequately reimbursed for the expenses incurred for villas used by SVO via SVN/II exchanges and/or rented?

More importantly - trying to gain understanding via transparency of why many SVO resorts MFs have double over a 4 year time-frame? is because of the process set-up by SVO that leaves the burden to the HOA? And if so, then what is wrong with the process (and how can it be fixed) in order for the Owners not to take on an unfair burden?

simple - right? lol

it come down to transparency... (which I keep railing on about) of which is very hard to achieve it seems without taking (or threatening) legal action - or getting a Tugger on an HOA that can explain it to us clearly and concisely (hopefully).

 

[DavidnRobin]

With the number of non-paying owners, it seems like this is the only way to guarantee that the MF gets paid before the unit is used.

BTW - I exchanged my 2010 SVR week before I paid the MF - not sure if SVV is the same or not.

I think the actual numbers of non-paying Owners (in 2009) wasn't that large (%-wise) - so this does not account (to me) for the reasons for the escalating MFs year after year. The Cost-of-Living increases, energy, staff-costs, and inflation have not had >50% increase in 4 years - yet our MFs have (at some resorts) - why???

 

[DeniseM]

Hopefully, we will be asking j4sharks these questions in the near future!

 

[jarta]

l2trade, ... "I'll refute: You just stated you have 'no connections whatsoever to Starwood'. Yet, you brag all the time about being Starwood 5* Elite. Hmm... "

That's ridiculous! I really do not appreciate the personal attacks. Are you really calling me a liar? If anyone wants to debate issues, OK. If all you want to do is engage in personal attacks, it's a violation of TUG's TOU.

5 Star Elites have an even greater interest in lower assessments. They have a greater interest in making Starwood toe the line on the agreements for the property they have invested their mony in. But, being 5 Star Elite does not mean that suppositions and misinterpretations cannot be refuted here. ... eom

 

[l2trade]

l2trade, ... "I'll refute: You just stated you have 'no connections whatsoever to Starwood'. Yet, you brag all the time about being Starwood 5* Elite. Hmm... "

That's ridiculous! I really do not appreciate the personal attacks. Are you really calling me a liar? If anyone wants to debate issues, OK. If all you want to do is engage in personal attacks, it's a violation of TUG's TOU.

5 Star Elites have an even greater interest in lower assessments. They have a greater interest in making Starwood toe the line on the agreements for the property they have invested their mony in. But, being 5 Star Elite does not mean that suppositions and misinterpretations cannot be refuted here. ... eom

You just proved my point. You just misquoted me again.
I never called you a liar. I actually complimented your intelligence. Anyone can go back and read my ENTIRE post.

 

[jerseygirl]

I am trying to figure out a few things (that may involve II or not...)

In following the money theme...

1) What happens to the VOI reimbursment for deliqunent MFs?

If an owner is delinquent, a "lockout" letter must be issued and then the unit CAN be rented. However, there does not appear to be an organized, efficient rental program that would ensure the HOA is getting its money first (which they would be entitled to, less Starwood's commission, if they handled it in a uniform manner). The situation is more complicated when the resort is comprised mainly of floating weeks. I've posed detailed questions on this very subject to two different HOA members (two different resorts). Their answers were so vague that I was led to believe that, at this point, there is no real plan/procedure in place. They're leaving it up to Starwood to handle, which is scary, since Starwood can rent any unreserved weeks at the 60-day mark. I have no confidence whatsoever that Starwood is actively helping the HOAs deal with the delinquency issue.

I'm probably over complicating things -- but, where floating weeks are concerned, the HOA needs to "make reservations" as soon as they're legally able to do so for delinquent accounts, and then have an organized approach to a rental program. Relying on Starwood to handle it is probably not in the best interests of the owners (for reasons discussed earlier in this thread).

2) For those SVO-owned VOIs is the HOA getting fair reimbusment?

Wouldn't SVO have to pay the same maintenance fee everyone else has to pay for their owned units? If yes, they can do whatever they want with them and the HOA is not out any money.

3) Is the HOA getting adequately reimbursed for the expenses incurred for villas used by SVO via SVN/II exchanges and/or rented?

When a unit is exchanged (either through SVN or II), the owner SHOULD have already paid his/her maintenance fee -- the VOI is just being used by someone else. The HOA is not entitled to further funds.

Am I misunderstanding your question here?

Re the rental issue -- that's what most of this thread is about and it's very complicated. Rentals can come from:

A) Owner rental program (if the resort has one) -- in this scenario, the owner pays his/her maintenance fee, gives to Starwood to rent. Starwood attempts to rent, keeps a hefty commission, and sends any "overage" to the owner. The owner may receive $0, more than the maintenance fee, or less than the maintenance fee. But, regardless of the outcome, the HOA is not owed any funds.

B) SVO-owned units -- As long as SVO has paid its maintenance fees, HOA not owed any funds.. Starwood can rent its own units all they want ... the only cause for concern here is if they have a headstart on the best inventory.

C) SVO reserved weeks for anticipated SPG conversions -- as long as owner has paid his/her maintenance fees, HOA not owed any money. Having said that, the clause that permits Starwood to reserve weeks at the 11-month mark for anticipated SPG conversions is not really in the owners' best interests. There is nothing (that we can find) stopping Starwood from grabbing the very best weeks --- weeks owners would love to have, weeks SVN exchangers would love to have and weeks the HOA would love to have for renting delinquent owners' weeks. There also does not appear to be any public disclosure with regard to this process. If they overanticipate the demand for SPG conversions -- and therefore "over-rent" weeks, how do they balance back ... are they even required to do so? Would the HOA be owed money .... we don't really know at this point.

D) Weeks owned by delinquent owners (see #1 above).

Others are free to dispute this -- but it represents my best answers based on my research thus far.

 

[jerseygirl]

Ooops . I forgot what's possibly the VERY biggest source of rentals:

E) At most resorts (we don't have all the documents yet), Starwood is permitted to rent any un-reserved weeks at the 60-day mark.

.... If there is no organized rental program for delinquencies, there will be more inventory available for rent at the 60-day mark.

.... If "Request First" is no longer permitted by II, there will be more inventory available for rent at the 60-day mark.

The timesharing system as a whole works as well as it does because of the high number of owners who lose interest, never use their weeks, etc. It's this phenomenon that allows for:

-- Great Getaways (and, yes, some are from developer inventory but MUCH of the inventory comes from unused weeks)

-- RCI Rentals

-- II's AC's (Bonus Weeks)

-- Trade-ups

-- Etc.

This "creation of excess weeks" is probably the real reason why most resorts are sold as floating weeks these days. In the case of fixed weeks, a manager/developer can't touch a week unless, of course, the system is set up -- like Starwood's -- to force owners to confirm usage by XXX date. Most fixed week resorts don't have that clause -- it's pretty unique to Starwood and other club systems.

In the case of SVO, Starwood gains the benefit (rental income potential) for all the unused weeks --- it's a sweet deal!

.... peel back the layers, read your documents .....

 

[DavidnRobin]

wow - thanks - it is clear that you have been attempting to understand this.

I echo your concerns.
I am a pragmatic person - if it looks like a duck, walks like a duck and quacks like a duck - then good chance it is a duck...
(and when evaluating ducks - I do not care why the chicken crosses the road... <- an intended jab)

how does this relate?

MFs have increased by >50% over 4 years at WKORV and WSJ (and others?)
- as stated - cummulative overall costs have not in any realm of the imagination (at least mine)- therefore, what is behind the increases? (thus the need for transparency)

The deliquent VOIs make up very little of these increases on a relative basis - and is a recent event really (2009 to ????) - so that does not explain the total increases.

Of course SVO-owned villas are up to SVO to handle - and I can only assume that they pay MFs like we do (?).

But I keep coming back to the 'duck' - what are the cummulative things that have caused these MFs to run out of control? I can look at the HOA summaries - and see the revenues and costs - and bottom-line that goes to the annual MF, but it still does answer (to me) the ~$1200 jump in 4 years (~$1800 to ~$3000) for my WKORV Dlx villa - or WSJ going from ~$1400 to $2000 for my 2Bd TH - with these resorts 'sold-out' - especially when LIFE has not had a similiar cost increase.

While at WSJ - I have seen a number of times Hotel people occupying Villas (unique to WSJ since it shares a Hotel and SVO) that received these upgrades upon check-in. It could be very telling to follow this money. WSJ Hillside is fixed weeks/fixed villas.

At WKORV - there are Owners, SVN exchangers, II exchangers, SPG users, and SVO renters (others?) - is this money being fairly reimbursed to the HOAs? Because to me that is where the best potential for skimming money comes from that and perhaps (some or all) is not making it back to the HOA

Transparency...

 

[jerseygirl]

David -- First of all, let me say I agree with everything you have to say about the duck! And, although there are so many issues we could attack, my priorities are the following:

1) Transparency and fair maintenance fees
2) Fair inventory management

Are they related? Definitely. But, we have to try to understand each one separately before we can tie them together.

I have a couple of comments below:

While at WSJ - I have seen a number of times Hotel people occupying Villas (unique to WSJ since it shares a Hotel and SVO) that received these upgrades upon check-in. It could be very telling to follow this money. WSJ Hillside is fixed weeks/fixed villas.

Although the resort is sold-out, there are always VOIs "in transition" as Starwood sells Hillside owners on upgrades. Once the owner "upgrades" to something else (e.g., the float weeks at Bay Vista appeal to them, a combination of several resorts to gain elite status, etc.), the Hillside villas are under Starwood's control until the deeds can be transferred and the units resold. I'm told this process takes 4-5 months. Therefore, Starwood can use those units in its temporary control to upgrade hotel guests and for rentals. If it's "intra-year," chances are the original owner already paid the maintenance fees and the HOA would not be owed a second maintenance fee. If the unit is in Starwood's control at maintenance fee time,Starwood will have to pay it, but will collect it back from the new owner once its resold. Again, the HOA would not be out any money.

At WKORV - there are Owners, SVN exchangers, II exchangers, SPG users, and SVO renters (others?) - is this money being fairly reimbursed to the HOAs? Because to me that is where the best potential for skimming money comes from that and perhaps (some or all) is not making it back to the HOA

Transparency...

• Owners pay their maintenance fees
• SVN and II exchangers are using an owner's unit and that owner paid his/her maintenance fee -- no money owed
• SPG users are renters -- they're just using SPG points as their currency. So we need to throw them in the same category of renters (whether they rented from SPG.com, Expedia, Orbitz, etc.). Their money (or some sort of compensation for accepting SPG points in lieu of cash) should be going to the HOA if the inventory came from the HOA (e.g., delinquent units -- but, again, there doesn't appear to be an organized rental program for delinquencies so this is doubtful and needs to be addressed). If the inventory came from Starwood owned units, it belongs to Starwood (but, again, we need to be concerned with any unfair headstart they may have on the prime inventory). If the inventory came from Starwood in the form of anticipated SPG conversions, the money belongs to Starwood -- but I've already outlined the concerns here .... priority access to prime inventory, the possibility that they're over-anticipating the number of SPG conversions, etc. Lots of room for potential skimming here.
• If the rental inventory is unreserved owner inventory in the last 60 days, it belongs to Starwood.
• Mixed in with all of this is the "nodge clause" that has to do with the HOA being entitled to a share of rental revenue up to 2.5% of the operating budget ... I haven't wrapped my arms around this one yet but it's on my list for further exploration!

Bottom line -- our HOAs have a RESPONSIBILITY to get their collective arms around this process and ensure it is collecting its fair share of any rental revenue. Does anyone really believe that Starwood has sat them down, explained the nuances, and suggested how the HOA could ensure it's maximizing rental revenue (at the expense of Starwood)? I suspect not.

I think it's just as likely that the out-of-control maintenance fee increases are also due to reckless spending. We need line-by-line expense statements to try to identify this.

I hate for this to come to litigation, but I really don't see any other way at this point. There are just far too many smoking guns .... and we'll be chasing our tails forever until Starwood is forced to give up the goods (transparency).

 

[jerseygirl]

When I used the term "skimming" above, I'm not suggesting that Starwood is doing anything illegal. I think they set the system up in such a way that all this activity is legal. But, that doesn't mean it can't be changed by a majority vote of owners. We need to strive for transparency ... understanding .... and then possible changes designed to ensure that both sides (owners and Starwood) are getting a fair deal. As written/practiced, it doesn't appear that we have an even playing field.

 

[jw0]

It sounds like everyone could use some good old fashioned data to help sort things out.

Getting back to nodge's post with the budgets for SDO and WKV (#86)...

Thanks for posting this. It's interesting, especially comparing it to the budgets for HRA and SBP (where I own). (if I knew how to post them, I'd do it, too).

I similarly don't understand the "Club rental revenue" line item. I suspect that it does NOT reflect the revenue from renting delinquent units - it's way too small.

The one line item I find interesting is "Uncollectible accounts". At HRA, there are two items about $390K for the Common expenses, and $914K for the Phase II resort. But at SBP, this number is $2.2 MILLION! I believe this is where Starwood is basically writing off the entire amount of the unpaid MFs. It's interesting that it's similarly high at SDO (~900K?). I can't see it for WKV - am I missing it?

-John.

 

[jarta]

jw0 ... "I suspect that it does NOT reflect the revenue from renting delinquent units - it's way too small."

When delinquent units are rented, Florida and most other state statutes require that - after the costs of renting are deducted from the rent - the balance is applied to the account of the delinquent owner. If it covers more than the delinquent MF and late fees, the account of the delinquent will show a credit in that amount. If the net rent does not cover the delinquency the account of the delinquent still shows a shortfall.

The HOA gets the expenses of renting and the delinquency. And, that's all it gets. Getting more than the MF and any late fees would give the association an unpermitted windfall at the expense of the owner. ... eom

 

[jarta]

Here's a link to the Florida statute.

http://law.onecle.com/florida/real-and-personal-property/721.13.html

721.13(6)(f)1:

"(f)1. Provided that the managing entity has properly and timely given notice to a delinquent purchaser pursuant to paragraph (b) and to any affiliated exchange program pursuant to paragraph (c), the managing entity may give further notice to the delinquent purchaser that it may rent the delinquent purchaser's timeshare period, or any use rights appurtenant thereto, and will apply the proceeds of such rental, net of any rental commissions, cleaning charges, travel agent commissions, or any other commercially reasonable charges reasonably and usually incurred by the managing entity in securing rentals, to the delinquent purchaser's account." ... eom

 

[Fredm]

Marketing Blocks

I similarly don't understand the "Club rental revenue" line item. I suspect that it does NOT reflect the revenue from renting delinquent units - it's way too small.

-John.

I don't know if it applies to "Club Rental Revenue", but another source of rental revenue is the internal allocated cost applied to reserving blocks of units for marketing purposes.

For example, Marriott would charge its Marketing dept. a cost of $35/night (years ago, probably higher today) to reserve owner villas for timeshare tours. It was 'rent". Not charged to marketing if the occupied villa was owned by Marriott.

Starwood likely has something similar. Delinquent owner units may be rented to Marketing at an internally allocated cost which would cover its internal break even occupancy cost.
Similarly, excess owner inventory at sold out resorts.
Any remainder may be deposited with I.I.

Of course, in these cases there would be no excess funds available to the HOA.

I emphasize that I do not know how this is handled at Starwood. Just another potential source and disposition of funds and inventory.