Exit/Deedback of MVC destination points

[LeslieDet]

You are very knowledgeable about certain aspects of law; however, you’ve kept making this claim because there are audited financial statements everything must be above board.

As a CPA, I can tell you that this is a huge assumption. An audit does not consist of looking at every transaction and verifying that it is for a legitimate business purpose. It simply means that the accounting that has been done adds up and is compliant with accounting standards. It does not mean that the estimates (for example: reserves, MF defaults) are accurate or appropriate.

I am aware of that; but the property isn't operated in a vacuum. For example, the reserve analysis must be done by a certified reserve analyst (at least in CA). The auditors are going to make sure that the money that is reported by the HOA as being in the reserve bank accounts is actually in the bank account. If there was an unknown stash of cash there, it would need to be reported on the financials, or the auditors would not be doing their job. It isn't difficult to compare a reserve analysis report with the bank account balance, which isn't the auditor's job, rather is it the obligation of the BOD/management.

I agree with you that it isn't the auditors who are required to determine the legitimacy of the reserve balances needed/projections for replacements, etc, that is for the reserve analysts. But if the reserve report says a total of $1MM is needed for reserves in total (regardless of how the breakdown is allocated among roofing, FF&E, etc.), and there is only $1 in the reserve account (as per the AFS), then it is up to the BOD to review that and be able to comprehend that the required reserves are $1MM and the bank account only has $1, thus $999,999 is needed.

The flip side is also true. If the reserve analysis says only $1 is needed, and the account has $1MM, then the auditors would report that the account balance is $1MM as the auditors are required to verify the bank balance with the banking institution. If that account didn't have the money that the financials for the HOA says it is supposed to hold, then the auditors would note the inconsistency if they are doing their basic job. If the BOD sees that it has $1MM in the reserve account and only $1 is needed per the reserve analysis, then it is up to the BOD to act prudently and then transfer the over-funded reserve moneys to current operations or capital projects.

That is why I always come back to the BOD owes a fiduciary duty to all owners to manage the HOA using the business judgment rule. It would require a widespread conspiracy among the BOD, management, auditors, and the third party analysts (like the reserve analysts) to purposefully unreasonably increase MFs to simply create unused operation cash to hide somewhere that wasn't being reported by AFS. Now, of course, Enron did that with off shore assets, liabilities (to make the company look more profitable) and entities, but I highly doubt that is the case in the ts world.

 

[dioxide45]

Well, each deeded location I own as well as the MVC Trust have audited financial statements. I request them and review them.

And by the way, when using the term "component", I'm referring to the deeded weeks owned by the MVC Trust which the Trust refers to as "components." Also, do not forget that the Trust is a structure authorized by Florida law. The Trustee of the Trust is First American Title, which holds all equitable title of every component of the Trust. As part of its fiduciary duties to the Trust, I would expect that the Trustee would require AFS for every component location, but that is simply my assumption given a trustee's duties and responsibilities in these circumstances.

Fiduciary deficiencies are a rather difficult thing to prove and any deficiency would require a legal challenge from one of the beneficiaries of the trust or resort owner. As for increasing costs, MVC could opt to give every resort employee a 20% raise. It wouldn't be against the BOD fiduciary responsibility to approve such an expense. Spending money on resort expenses is expected and would be required. Could the BOD challenge such an increase, sure, but it wouldn't be a violation of their fiduciary responsibility to approve it without question. The same would go for just about any expense that goes back in to the resort operation or improvements. I think it was an irresponsible thing for Grande Vista to spend nearly $5 million on new tile floor for all the breezeways when repainting only cost them $127,000 a year. That still doesn't make it a fiduciary deficiency where MVC rakes in $500,000 in management fees just from the $5 million expenditure.

 

[LeslieDet]

Fiduciary deficiencies are a rather difficult thing to prove and any deficiency would require a legal challenge from one of the beneficiaries of the trust or resort owner. As for increasing costs, MVC could opt to give every resort employee a 20% raise. It wouldn't be against the BOD fiduciary responsibility to approve such an expense. Spending money on resort expenses is expected and would be required. Could the BOD challenge such an increase, sure, but it wouldn't be a violation of their fiduciary responsibility to approve it without question. The same would go for just about any expense that goes back in to the resort operation or improvements. I think it was an irresponsible thing for Grande Vista to spend nearly $5 million on new tile floor for all the breezeways when repainting only cost them $127,000 a year. That still doesn't make it a fiduciary deficiency where MVC rakes in $500,000 in management fees just from the $5 million expenditure.

I am not disagreeing with you on those examples. Remember, my comment about the AFS relates back to your comment, "I wonder if Marriott's plan to drive up MFs so they could pick up points on the cheap to replenish inventory for sale". My response was basically the BOD would have to be playing along because of how the MFs are determined, and I referenced that the properties have AFS. Then jabberwocky says well, auditors don't do what I say.

So, circling back to the comment that started this discussion, no, I do not believe it is very probably or even close to being a possibility that MVW drives up MFs for the express purpose of creating inventory to sell. To do that would require participation of a whole bunch of professionals who are charged with making sure that the financial operations of the HOAs are accurately reported. It would require the BOD playing along. It would require the third party reserve analysts to conspire with management to artificially inflate the reserve analysis reports; if money is being hoarded in some sort of secret HOA account because the MFs are high and the operating costs aren't using up the MFs collected, then the CPAs auditing the financials of each HOA would need to be part of the conspiracy to hide the account balances instead of reporting them accurately. And, if the BOD wasn't part of the conspiracy, then surely the BOD would be seeing the financials, and any monthly BOD report is going to include copies of the bank statements.

But sure, it is entirely possible that the operating costs actually go up with your hypothetical of employees getting significant raises. And as you said, the floor tile could be replaced instead of repainted, and yep, that all drives up the MFs. But paying employees more money and redoing tile doesn't result in some secret bank account where the unspent money is being hidden. Sure, it results in a high base for the 10% mgt fee to apply to, but my point is when MFs go up, so do the expenses. It isn't illusory.

It would be pretty wild to think that everyone was on board to inflate illusory operating costs to and create hidden stashes of cash, which the AFS would find, all for the purpose of driving the consumer owners to sell cheaply or give back their deeds, just so MVW could "pick up points on the cheap to replenish inventory".

 

[dioxide45]

So, circling back to the comment that started this discussion, no, I do not believe it is very probably or even close to being a possibility that MVW drives up MFs for the express purpose of creating inventory to sell. To do that would require participation of a whole bunch of professionals who are charged with making sure that the financial operations of the HOAs are accurately reported.

I don't think it would really require the participation of all these parties. Reserves aside, since they only make up about 25% of the overall budget, MVC can come to the BOD with any budget amount that they want. They don't need input from them. They bring the numbers and it is up to the BOD to approve them or push back. MVC makes the budget recommendations at these resorts. Yes, the BOD has to vote to approve, but that doesn't mean they know anything about what may be driving the reasons MVC is asking for more spending. If they think the increases are reasonable, which they seem to do at most resorts, then they vote to approve.

I also never said anything about a secret bank account of unspent money sitting anywhere. What comes in usually goes back out but it still results in higher fees that cause people to bail on their ownership.

 

[davidvel]

Wow talk about OFF TOPIC. Poor OP has not been back and who would blame them? So much I am the expert and lots of garbage legal advice that has nothing about OP's question following even worse advice that the best out is simply to deedback.

 

[dioxide45]

deleted

 

[LindaLou0624]

Does anyone have any expereince with this in working with Marriott? I am interested in getting of this program due to a life chnaging event.

Is it just straight deedback to Marriott?
Can I expect any money in return?
How long does this take?
Are there other options to exit with certainty?

I had a long conversation with Marriott about 2 weeks ago about "selling" my timeshare back to them. Given the soft market, as they put it, my only option is to give them back my deed and walk away. It won't "cost" me anything, other than the fact that my now deceased father purchased 8 2BR 2BTH Deeds which I now find are nearly impossible to book even in my own week ownership timeframe. (3 of the weeks are Platinum Weeks 1-17 Ocean Pointe). I just called today - 13 months ahead to get a reservation and there is "no availability". I don't know how people are scooping these up so quickly. And worse - when I convert the weeks to points, it's just as bad. I call Monday: Marriott Myocardial Infarction Monday. Can't sleep the night before and have a stomach ache all morning. Tuesday is Points Booking Day and I don't have a name for that, other than also no sleep and nausea.

So to answer your questions directly:
Is it just straight deedback to Marriott? YES
Can I expect any money in return? NO
How long does this take? PRETTY IMMEDIATE ONCE PAPERS SIGNED
Are there other options to exit with certainty? Timeshare Exit companies are really only for people that were deceived by the timeshare salespeople and also from what I gather after speaking to Wesley Financial, if you have a mortgage on the timeshare itself. If you own outright, then Marriott directly is your best bet.

 

[LindaLou0624]

I had a long conversation with Marriott about 2 weeks ago about "selling" my timeshare back to them. Given the soft market, as they put it, my only option is to give them back my deed and walk away. It won't "cost" me anything, other than the fact that my now deceased father purchased 8 2BR 2BTH Deeds which I now find are nearly impossible to book even in my own week ownership timeframe. (3 of the weeks are Platinum Weeks 1-17 Ocean Pointe). I just called today - 13 months ahead to get a reservation and there is "no availability". I don't know how people are scooping these up so quickly. And worse - when I convert the weeks to points, it's just as bad. I call Monday: Marriott Myocardial Infarction Monday. Can't sleep the night before and have a stomach ache all morning. Tuesday is Points Booking Day and I don't have a name for that, other than also no sleep and nausea.

So to answer your questions directly:
Is it just straight deedback to Marriott? YES
Can I expect any money in return? NO
How long does this take? PRETTY IMMEDIATE ONCE PAPERS SIGNED
Are there other options to exit with certainty? Timeshare Exit companies are really only for people that were deceived by the timeshare salespeople and also from what I gather after speaking to Wesley Financial, if you have a mortgage on the timeshare itself. If you own outright, then Marriott directly is your best bet.

Sorry - I am new on the site and there are so many advertisements, I didn't see how long this chain is. Apologize for any duplication. It looked like only 2 replies above the ad.

 

[5finny]

I would think at least the Platinum weeks have value.
I strongly suggest staying away from any "Exit" companies
Great rule of thumb--If they want upfront money from you run away
If you need to just get rid of some weeks list them as free on this Board
Good Luck

 

[LeslieDet]

(3 of the weeks are Platinum Weeks 1-17 Ocean Pointe). I just called today - 13 months ahead to get a reservation and there is "no availability".

Something doesn't sound right there - if you own 8 deeded weeks, and 3 of them are all platinum weeks at Ocean Pointe - you should be able to call at 13 months (you must call, this cannot be done online) to book your 3 deeded weeks at Ocean Pointe either concurrently or consecutively. 50% of the deeded week inventory is released at 13 months and the balance at 12 months. Also, use the "when can I book" tool resource to find the exact day you can call for the 13 month booking option for deeded weeks. It won't be the "point Tuesday". Call at opening 9 am eastern on that first day.

 

[LeslieDet]

I also never said anything about a secret bank account of unspent money sitting anywhere

I realize you never said anything about that; but you still have a paper trail. If your theory that MFs are raised excessively in order to cause owners to bail, thereby creating cheap inventory for MVW to acquire, my point is the money has to go somewhere. If the MFs increase, the money is either spent or held in reserves. If the MFs are raised unnecessarily then the money would be sitting in an account. If it is spent unnecessarily, then the BOD is one monitor, the reserve analysis is another, and the auditors will find if the money isn't being spent where the financials say it is. If the auditors are doing their job, the account balances will be verified. Thus, the point that the money can't be hidden somewhere. There is accountability. Look at the big picture. When all of the components are viewed together, it would require failures at many levels in order to get to the end result you suggested to start with, that is, raising MFs for the purpose of creating cheap inventory to resell.

 

[Dean]

I had a long conversation with Marriott about 2 weeks ago about "selling" my timeshare back to them. Given the soft market, as they put it, my only option is to give them back my deed and walk away. It won't "cost" me anything, other than the fact that my now deceased father purchased 8 2BR 2BTH Deeds which I now find are nearly impossible to book even in my own week ownership timeframe. (3 of the weeks are Platinum Weeks 1-17 Ocean Pointe). I just called today - 13 months ahead to get a reservation and there is "no availability". I don't know how people are scooping these up so quickly. And worse - when I convert the weeks to points, it's just as bad. I call Monday: Marriott Myocardial Infarction Monday. Can't sleep the night before and have a stomach ache all morning. Tuesday is Points Booking Day and I don't have a name for that, other than also no sleep and nausea.

So to answer your questions directly:
Is it just straight deedback to Marriott? YES
Can I expect any money in return? NO
How long does this take? PRETTY IMMEDIATE ONCE PAPERS SIGNED
Are there other options to exit with certainty? Timeshare Exit companies are really only for people that were deceived by the timeshare salespeople and also from what I gather after speaking to Wesley Financial, if you have a mortgage on the timeshare itself. If you own outright, then Marriott directly is your best bet.

All the timeshare exit companies I know of are poor at best, most are a scam. I would not pay anyone to try to get out of a timeshare. There are other ways to proceed that are almost always better and cheaper.

 

[suzannesimon]

All the timeshare exit companies I know of are poor at best, most are a scam. I would not pay anyone to try to get out of a timeshare. There are other ways to proceed that are almost always better and cheaper.

I talked to a man who was at his wits end trying to sell his Hilton Manhattan timeshare. He had given an exit company an $8,000 marketing fee. A year later, they sent him another bill for $8,000 to cover marketing fee for a second year. I told him to just buy an ad on Redweek. He might have gotten some money for it as I checked Redweek prices and some weeks were selling. I never heard from him again. I hope he got rid of it.