HPC alert for HRC owners.

[AJCts411]

Posted on HRCcowners FB page....
2023 HPC/PORTFOLIO OWNERS' ASSOCIATION BILLING*, BUDGET AND BUDGET NOTES
*note the letter states, "Board of Directors has approved a FORECLOSED INVENTORY PURCHASE AGREEMENT with an affiliate of the DEVELOPER to allow the DEVELOPER to purchase inventory that has been foreclosed upon and is owned by the HPC OWNERS' ASSOCIATION making the developer responsible for future maintenance fee payments.".

Important to read the letter and the small print of 2023 ESTIMATED OPERATING BUDGET NOTES.
(4) HPC DEVELOPER signed a one-year VOLUNTARY CONTRIBUTION AGREEMENT (9/6/22) to help mitigate Common Expenses not to exceed $100,000.
(5) HVGG (RESERVATION SERVICES OPERATOR) has agreed to rebate the HPC OWNERS' ASSOCIATION $1,095,232 for one-year, 2023.(RESERVATION SERVICES OPERATOR) has agreed to rebate the HPC OWNERS' ASSOCIATION $1,095,232 for one-year, 2023.

"primarily affects HPC owners and indicates warnings of how much cost sharing is still being voluntarily contributed by the trust developer. Not sure if HPC will also attempt to purchase HRC/deeded foreclosures at the HPC/PORTFOLIO component sites. You may wish to bring that up with your BOD."

EDITED...uploaded smaller individual pages

 

[PerryKing]

Second page is out of focus so mostly unreadable. Please redo it and post better photo of page 2. Thank you.

 

[PerryKing]

And 3 page is unreadable. Also. And fist page could be better. Pls repost all 3 pages after you redo them: in FOCUS. THANK YOU.

 

[AJCts411]

And 3 page is unreadable. Also. And fist page could be better. Pls repost all 3 pages after you redo them: in FOCUS. THANK YOU.

The single file pfd. is too large to upload, so I uploaded the individual pages.

 

[Sapper]

I can see all pages ok.

$650k in “bad debt” on the second page is making me wonder what is going on. What exactly makes up “bad debt”?

 

[ChicagoDave]

I can see all pages ok.

$650k in “bad debt” on the second page is making me wonder what is going on. What exactly makes up “bad debt”?

My guess is these are people who sign up for the points program and then can’t keep up with the monthly points and/or maintenance fee payments, so they default and stop making payments. HPC probably has a tough time collecting on these defaults because there’s really no property to foreclose on or repossess, so it’s very hard to compel payment plus they can be discharged by bankruptcy. My bet is this figure will double in next year’s budget as inflation remains high and people struggle even more to pay their bills.

 

[ivywag]

I can see all pages ok.

$650k in “bad debt” on the second page is making me wonder what is going on. What exactly makes up “bad debt”?

Usually it is unpaid maintenance fees and the paying owners at each resort have their maintenance fees increased to cover the shortfall for the non-paying owners. In this case Portfolio is buying those units. It looks like they don’t want to raise the Portfolio maintenance fees to cover the shortfall because higher maintenance fees would make it more difficult to sell the points. The developer is in effect subsidizing the maintenance fees.

 

[GTLINZ]

The developer is in effect subsidizing the maintenance fees.

Perhaps it is HRC owners who are subsidizing the HPP ownership at our resorts.

 

[dioxide45]

The bad debt on the HPP would be point owners that failed to pay maintenance fees. These bad debts would be passed on to other HPP owners until such time HRC forecloses on those points and they move back into the HPP trust. HPP would still be paying the individual HOAs even though they aren't collecting from the HPP owner.

 

[GTLINZ]

The question is - for every deeded week in the HPP trust at an HRC location, is the HPP trust paying the same amount in MFs that HRC owners are paying? (club fee excluded)

 

[alameda94501]

The question is - for every deeded week in the HPP trust at an HRC location, is the HPP trust paying the same amount in MFs that HRC owners are paying? (club fee excluded)

I've been watching the Portfolio budget for a while:

2022 Hyatt Portfolio Club - Maintenance Fees Increase (Does anyone have the 2020 budget?)

I have been comparing budgets of the Hyatt Portfolio Club from 2018, 2019, 2021, and 2022. (see attached) Sorry for the wall of numbers, but this is a summary of what I found: (For the "per-point percent difference from last year", because I'm missing 2020 I've taken 2021 from 2019 and...

tugbbs.com

And it seems like the Portfolio Trust is paying the same amount of MFs that HRC owners pay, Club Fee excluded as Marriott has been paying for Club Fees on Portfolio members' behalf for the last three years. But the "Component Site Fees" are inline and if anything higher than what a typical TUGger would pay because they don't get to optimize their unit (e.g. they aren't picking up the low MF/pt units like a 2bd at Carmel, just the dregs in the Portfolio deeds.)