Annual Budget and Foreclosure expense item

[F1or1da1]

Has anyone else noticed the Foreclosure expense line in our Maintenance Fee that is growing bigger every year? It seems to be passing the cost along to those remaining. It would seem at some point the last few owners will be paying for all who stopped paying.

 

[CPNY]

Has anyone else noticed the Foreclosure expense line in our Maintenance Fee that is growing bigger every year? It seems to be passing the cost along to those remaining. It would seem at some point the last few owners will be paying for all who stopped paying.

I was just thinking... with the TPU boost for early payment, does VV have less delinquent owners? I just pre paid my 2022 MF’s so I can use 2022 points for 2021 reservations.

 

[tschwa2]

I was just thinking... with the TPU boost for early payment, does VV have less delinquent owners? I just pre paid my 2022 MF’s so I can use 2022 points for 2021 reservations.

VV doesn't have the boost as far as I know. Its only Massanutten.

 

[CPNY]

VV doesn't have the boost as far as I know. Its only Massanutten.

An ok that’s interesting, I thought it was all of vacation village. I haven’t checked my maint fee statement since I’ve been paying a year in advance since Ive owned. Does VV spread out delinquent owners among all VV owners?

 

[tschwa2]

An ok that’s interesting, I thought it was all of vacation village. I haven’t checked my maint fee statement since I’ve been paying a year in advance since Ive owned. Does VV spread out delinquent owners among all VV owners?

All resorts spread out delinquent owners to the other owners at that specific resort. VV at Parkway points owners also don't have to prepay their MF's in order to use future points, I believe. That is also something that is pretty unique to Massanutten. So there is no incentive to pay early at VV at Parkway. If you have weeks and want to deposit in RCI you are required to prepay the MF's.

 

[CPNY]

All resorts spread out delinquent owners to the other owners at that specific resort. VV at Parkway points owners also don't have to prepay their MF's in order to use future points, I believe. That is also something that is pretty unique to Massanutten. So there is no incentive to pay early at VV at Parkway. If you have weeks and want to deposit in RCI you are required to prepay the MF's.

Thanks, I’m used to pre paying maint fees with vistana to bring star options forward of exchanging in interval.

I should probably look at my maint fee statement with regal vista.

 

[Eric B]

VV doesn't have the boost as far as I know. Its only Massanutten.

That's true, but the intent seems to be to act as an incentive to MF payment and limit delinquencies. Still, bad debt allowance is about 11.6% of the maintenance fee expenses at least at Woodstone, which is higher than some of the other TS I own. It's closer to 23% of total expenses at VV Williamsburg, though, based on the last audit report I got.

An ok that’s interesting, I thought it was all of vacation village. I haven’t checked my maint fee statement since I’ve been paying a year in advance since Ive owned. Does VV spread out delinquent owners among all VV owners?

It's fairly typical to see bad debt listed as a line item in the budgets for the HOAs, so it gets spread out among all the owners in that particular HOA. For example, as a Regal Vistas owner, you're contributing to covering the bad debt expense item for the Regal Vistas HOA.

 

[Eric B]

Thanks, I’m used to pre paying maint fees with vistana to bring star options forward of exchanging in interval.

I should probably look at my maint fee statement with regal vista.

If you look at the budget for SVV Bella, the bad debt expense is about 8% of operating expenses; at VGV it's about 6%. Not sure about other Vistana ones.

 

[CPNY]

If you look at the budget for SVV Bella, the bad debt expense is about 8% of operating expenses; at VGV it's about 6%. Not sure about other Vistana ones.

I’m on the owners site for massanutten and I can’t find a maint fee statement. Is it not posted electronically?

 

[Eric B]

The budget information is posted in the newsletter for Winter 2021 towards the last few pages. There's a link to "View Newsletters" in the green box on the right side. I prepay my MFs there to get the Trading Power Boost every year, so haven't ever looked for a maintenance fee statement.

 

[tschwa2]

covid is likely going to be accelerating the bad debt in most resorts. People don't have the money to pay for luxury items and even if they do they feel like why should they pay when they can't travel or use them. There are also owners that have rented out to cover MF's and for many the rental marked collapsed in 2020 (not for all resorts but for many) and doesn't look that much better in 2021.

In normal good times a well run resort should have a bad debt of 5% or under. If it keeps spiraling up it will cause more and more owners to default and the timeshare will collapse. True 4 season resorts that don't have more inventory than demand won't have this problem as the resort can usually easily rent out the non performing weeks to cover the MF's. Not so for mega resorts in places like Orlando, Williamsburg and Massanutten or resorts where more than half of the year is off season.

 

[F1or1da1]

covid is likely going to be accelerating the bad debt in most resorts. People don't have the money to pay for luxury items and even if they do they feel like why should they pay when they can't travel or use them. There are also owners that have rented out to cover MF's and for many the rental marked collapsed in 2020 (not for all resorts but for many) and doesn't look that much better in 2021.

In normal good times a well run resort should have a bad debt of 5% or under. If it keeps spiraling up it will cause more and more owners to default and the timeshare will collapse. True 4 season resorts that don't have more inventory than demand won't have this problem as the resort can usually easily rent out the non performing weeks to cover the MF's. Not so for mega resorts in places like Orlando, Williamsburg and Massanutten or resorts where more than half of the year is off season.

As bad debt % rises I’m more seriously considering a deedback if VV @ Parkway will allow. If not, I’ll take my chances on non-Payment after 3 more years when I turn 76 and my wife stops working/retires.

 

[9969hi]

I bought up the bad debt expense at owner meeting of Mizner Place and VV at Weston. It is over 25% of budget. In talking to even mysales ladies there, it turns out that many salesmen just get new owners to put down payment on credit card and don't do a very good job of determining if the new owner can afford the payments, the salesman gets commission out of down payment and the owners are left paying for foreclosures and unpaid maintenance fees. At the meeting the CFO of Mizner place said it was a problem with young military who couldn't afford to pay.

 

[Eric B]

At the meeting the CFO of Mizner place said it was a problem with young military who couldn't afford to pay.

I suppose that's one way to look at it. It could be that the problem is more related to their sales practices and he's really the CFO for the sales organization rather than the HOA that has to support the bad debt expenses.