Harborside: What is the Master Declaration Expense?

[komosatp]

I received my annual bill. Does anybody know what the Master Declaration Expense is?

P.S. does SVO think we are idiots? I like that they provided the newsletter with a narrative of why certain expenses increased. How about explaining the single largest line item in the condo's expenses (i.e., the Master Declaration Expense)?

 

[jarta]

Phase I and Phase II were built a different times and are administered by 2 different HOA sub-associations. The Master Association administers the resort as a whole.

The allocation of responsibility for expenses among the 3 associations is governed by the Declarations of the 3.

If a Phase III is ever built, there will likely be a 3rd sub-association.

I have not looked at the documents, but the Master Association would usually administer everything pertaining to the common property (property that can be used by everyone). That would be everything except the envelopes of land for the condo buildings and the buildings on that land. In other words, upkeep, staffing and replacement of the landscaping, the pool, the restaurant, the reception area, the roads, the work out room, the security at the main gate, the shuttle buses and the sales office that is probably rented from the Master Association by Starwood.

The sub-associations would handle the replacement of the condo buildings, the maid service for each and the furniture in the units (and maintenance) in their Phase.

In general, the Master Association expense is the allocated cost of running the Master Association for the benefit of the owners of both associations. That's why it is large. ... eom

 

[komosatp]

Thanks....I called a few hours after I posted this and got a similar explanation in a voicemail.

But this opens up a whole 'nother set of questions and criticisms of SVO.

Why breakdown in such detail the operating expenses of the condo and vacation club, only to bury things that would fit into the explicit line items that a reasonable person would have thought was in included in the generic line items like 'maintenance' or 'utilities' or 'Front Office' in the 'master declaration expese'.

The conclusion I keep coming to whenever I look a little deeper at this stuff is disconcerting: whenever I look at the details, I see SVO glossing over important details. I can't tell if they are feebly attempting to be transparent or if they are actually trying to deceive owners by making things hard to understand.

Here's an idea: how about a consolidated budget that rolls up the expenses from all of the various associations into one easy to understand table. It would be nice to see all the things that are 'maintenance' and 'insurance' rolled up together so I could have a better understanding of how MY resort is operating.

 

[jarta]

"how about a consolidated budget that rolls up the expenses from all of the various associations into one easy to understand table"

Unfortunately, that's probably not legal. Each association has a board of directors. The board of directors for each association adopts each budget separately. (If you mean that the budget categories should be consolidated after the budgets are adopted, it could probably be done. But, consolidation of the expenses would give you less information - not more.

Also, I sat on the Master Board and a subassociation board where I live. The budget of the Master Association has to be approved first because the pass down of Master Association expenses to the subassociations must be firm before the subassociations can pass their own budget.

"I see SVO glossing over important details. I can't tell if they are feebly attempting to be transparent or if they are actually trying to deceive owners by making things hard to understand."

I doubt Starwood is intentionally making things hard to understand. The expenses must be paid. The total bill to run the resort is pretty well established by prior year's expenses. Things go up in price. Repairs must be made or the quality of the resort goes down the drain. Kerzner sets the fee for Atlantis use. It went up quite a bit. But, do you want to go to Harborside and pay a per diem fee for the use of Atlantis facilities or would you just dump the ability to use Atlantis?

I know alot of TUGgers don't like Starwood. (Those TUGgers who own Marriottt don't like Marriott and those who own Wyndham don't like Wyndham and so it goes.) Maybe, if the economy gets really, really bad Starwood will sell its management contracts to another time share system or disband the SVO system. If that happens, it will be very bad for ownership in these existing Starwood resorts. But, you won't have Starwood to kick around any more.

Be careful what you wish for. It might be just around the corner. ... eom

 

[komosatp]

I'm not talking about replacing what they are legally obligated to provide. I'm talking about enhancing the disclosures so it would be easier to understand what is going on.

I work for a company that does exactly this. We are a very complicated financial services/real estate finance firm and it's hard to understand our financial statements. so we have a distilled one in addition to the SEC required ones that make it easier for and investor to understand what happened in the past year.

I'd agree with you on the legal point if it weren't for the glossy newsletter that came with the bill. It does exactly what I want it to do: discuss the changes in layman's terms.

But the fact that it doesn't discuss the BIGGEST line items gets me back to my feeble or misleading position. Plus the typo of calling the 'master declaration expense' the 'master depreciation expense' indicates that they didn't take this newsletter all that seriously. So was that typo a Freudian slip....trying to hide something or because they're too feeble?

And for the record, I'm not a 100% SVO hater. I think they run the operations at Harborside pretty well. The people I've dealt with have been pleasant and seemingly competent. There is just something in their organizational structure that is lacking, and that is respect for the owners who care about governance and board operations.

Plus this, which is what put me on the defensive, almost from day one of my ownership.

 

[jarta]

komosatp, ... I'm sorry. Didn't know about any typo made by Starwood. I was responding to the title of the thread and your initial message. But, I don't think it changes my explanation of what the Master Declaration Expense includes.

"Does anybody know what the Master Declaration Expense is?

P.S. does SVO think we are idiots? I like that they provided the newsletter with a narrative of why certain expenses increased. How about explaining the single largest line item in the condo's expenses (i.e., the Master Declaration Expense)?" ... eom