Hyatt Beach House --- Structural Inspections & Reserve Funding Requirements

[Sugarcubesea]

All,

For those owners that do not receive email communication from Hyatt --- I wanted to post the email I just received in reference to Hyatt Beach House. It's listed below

Good day Owners, As you may already be aware, in May 2022, the state of Florida passed Senate Bill 4D, as well as passing Senate Bill 154 in June 2023, and most recently passed House Bill 1021, which all have elements as to structural inspections and reserve funding requirements for condominiums (together, the "Legislation"). In response to this Legislation, in late 2022, we began working with your Board of Directors to understand the effect of this new Legislation on your association. We would like to share an update with you as the management company and your Board of Directors collectively navigate the new requirements that have been mandated by the state of Florida. The Legislation has two primary components: (1) Milestone Inspection, and (2) Structural Integrity Reserve Study ("SIRS"). For reference, a high-level overview of both components is presented below for your convenience, but please note that this is not intended as legal advice and should not take the place of your own review of the Legislation.

Milestone Inspection:This is the requirement of a structural inspection of a building, including an inspection of load-bearing walls, the primary structural members, and primary structural systems for the purposes of (a) attesting to the life safety and adequacy of the structural components of the building and, (b) to the extent reasonably possible, determining the general structural condition of the building as it affects the safety of the building. Buildings that are 3 stories or more in height are required to have a Milestone Inspection by December 31 of the year in which the building reaches 30 years of age. SIRS:This is the requirement of a visual inspection of the items related to the structural integrity of the building(s), providing for the estimated remaining useful life and the estimated replacement cost or deferred maintenance expense, and providing a recommended annual reserve amount that achieves the estimated replacement cost or deferred maintenance expense by the estimated remaining life for each item being visually inspected. Associations existing on or before July 1, 2022, which are controlled by unit owners, must have a structural integrity reserve study for buildings three stories or more in height completed by December 31, 2024. Effective beginning July 1, 2024, within 45 days of receipt of the SIRS sealed by the consultant, the association must distribute a copy of the study or provide notice that the study is available.

To satisfy the requirements under the Legislation, your Board of Directors authorized the management company to engage a third-party consultant to complete the required inspections and studies. As required by the state of Florida, to request a copy for the SIRS for your association, please e-mail the association inbox at hvobeachhouse.association@vacationclub.com. Please allow 3-5 business days for response. It is important to understand that the SIRS which has been sealed by the consultant is a snapshot in time of the inspection of the building. While the Legislation continues to evolve, and state and/or local building departments may adopt new regulations imposing new or additional requirements, we will continue to work with your Board of Directors to stay in compliance with the Legislation and keep informed about any impact on the association’s annual reserve funding. Sincerely, HV Global Management Corporation cc: Board of Directors

 

[Sugarcubesea]

I have requested a copy of the SIRS report and just received it today. Since Beach House had $0 in the reserve fund at the end of 2023, I expect another very large increase in MF's this year.

 

[Scavanjer]

From the report summary at the end…..

Based on the results of the analysis, as depicted in the Cash Flow tables, the current annual contribution to the reserve fund appears to be sufficient to address repair/replacement of the structural integrity element components as outlined herein for the next 10 years.

 

[TUGBrian]

wow, roof at end of life with expected 1.7m cost to repair?

surely that has been on the budget/reserve funding radar for awahile now if that is true?

 

[klpca]

I am most shocked at a zero balance in the reserve fund. Is that normal? Have there been major renovations recently?

I really like the format of the report. When I look at other reserve studies, they always seem kind of vague. This report gives a clear assessment of current conditions. We own an older condo and a lot of things are reaching the end of their lives - roofs, paving, hvac (it feels like all at once) and the reserve studies continue to have a very optimistic tone. Our own home is almost 40 years old and the past 5 years have been one thing after another - we joke that we are rebuying our home, one thing at a time lol. The reality of the situation is that older buildings, even those that have been well maintained, are going to require a lot of work somewhere along the way, especially those near the ocean where saltwater takes a significant toll. Maintenance fee increases are going to be the reality for awhile to get these properties updated.

 

[Sugarcubesea]

wow, roof at end of life with expected 1.7m cost to repair?

surely that has been on the budget/reserve funding radar for awahile now if that is true?

@TUGBrian , yep that Roof at $1.7M is what has me worried...

 

[Sugarcubesea]

I am most shocked at a zero balance in the reserve fund. Is that normal? Have there been major renovations recently?

I really like the format of the report. When I look at other reserve studies, they always seem kind of vague. This report gives a clear assessment of current conditions. We own an older condo and a lot of things are reaching the end of their lives - roofs, paving, hvac (it feels like all at once) and the reserve studies continue to have a very optimistic tone. Our own home is almost 40 years old and the past 5 years have been one thing after another - we joke that we are rebuying our home, one thing at a time lol. The reality of the situation is that older buildings, even those that have been well maintained, are going to require a lot of work somewhere along the way, especially those near the ocean where saltwater takes a significant toll. Maintenance fee increases are going to be the reality for awhile to get these properties updated.

@klpca , I figured the reserve fund would be low or zero as we just had a huge assessment for re-doing all of the walkways steps in every building due to the salt water making the wooden stairs and walkways unsafe, this project is now completed but I feel our MF's will not go down as they will need to fund the reserve.

 

[Panina]

@TUGBrian , yep that Roof at $1.7M is what has me worried...

Even with HOA's that were 100% funded reserves roof costs have caused assessments. Roof replacement costs have increased excessively the last few years more than anyone imagined or placed in reserve.

 

[Ski-Dad]

This is great information. If purchasing a resale unit anywhere in FL, I would now be asking to see a copy of the most recent assessments. I would not be buying a place with $0 reserve fund.

 

[heitmullerj02]

I received my report from Vistana, and thankfully they have 8.5 mill in reserve with more coming this year. it will cover the costs of the repairs needed for 2024.

 

[pedro47]

Even with HOA's that were 100% funded reserves roof costs have caused assessments. Roof replacement costs have increased excessively the last few years more than anyone imagined or placed in reserve.

The high cost of roof replacements are in higher insurance premiums costs, labor costs and roofing materials . IMHO.

 

[pedro47]

I am most shocked at a zero balance in the reserve fund. Is that normal? Have there been major renovations recently?

I really like the format of the report. When I look at other reserve studies, they always seem kind of vague. This report gives a clear assessment of current conditions. We own an older condo and a lot of things are reaching the end of their lives - roofs, paving, hvac (it feels like all at once) and the reserve studies continue to have a very optimistic tone. Our own home is almost 40 years old and the past 5 years have been one thing after another - we joke that we are rebuying our home, one thing at a time lol. The reality of the situation is that older buildings, even those that have been well maintained, are going to require a lot of work somewhere along the way, especially those near the ocean where saltwater takes a significant toll. Maintenance fee increases are going to be the reality for awhile to get these properties updated.

How can a timeshare resort liked Hyatt Beach House have a zero balance in the reserve fund?

What and how have Hyatt Beach House used the reserve funds in the last three years to reach a zero balance in their reserve funds?

Have over 80% timeshare owners paid their m/f in the last three years?

Something is strange at this resort??

 

[Sugarcubesea]

How can a timeshare resort liked Hyatt Beach House have a zero balance in the reserve fund?

What and how have Hyatt Beach House used the reserve funds in the last three years to reach a zero balance in their reserve funds?

Have over 80% timeshare owners paid their m/f in the last three years?

Something is strange at this resort??

@pedro47 , We just had a huge assessment spread out over 3 years for re-doing all of the wooden walkways and steps in every building due to the salt water making the wooden stairs and walkways unsafe, this project is now completed, so that might be a reason the reserve is at zero. Prior to getting the report from the city that Beach House needed to immediately fix all of the wooden walkways and steps, they updated all of the bathrooms and bedrooms.

 

[Docsdrillers]

Ocean Pointe Owners received a verbatim letter..Curious to know how we will be affected since the resort's first building isn't 30 years old yet and we've paid ridiculous MF increases the past 2 years to fully fund the Cash Reserve..we may be nearing the end of affordability for Florida timeshares due to these new rules

 

[WBP]

What is the relatiosnhip between Hyatt Beach House, Hyatt Vacation Club, and Marriott Vacations Worldwide?

 

[dannybaker]

What is the relatiosnhip between Hyatt Beach House, Hyatt Vacation Club, and Marriott Vacations Worldwide?

That’s a great questio I’m both a Hyatt and Marriott owner.

 

[wendyleighj]

This is an unfounded alarm! The report clearly details all the financials including that the roof is already funded for current 2024 replacement.
The current annual RESERVES contribution is $3,336,545.
ROOFING SYSTEMS 2024 EXPENDITURE = $258,000.00 single-ply membrane + $1,474,605 metal. Line item in the RESERVES pertinent to SIRS is estimated to be $180+ beginning in 2025.

Unfortunately, nearly all Florida timeshare owners have irresponsibly voted not to FULLY FUND RESERVES. The new law makes it mandatory that the SIRS structural components are adequately funded as represented in the study.

 

[wendyleighj]

That’s a great questio I’m both a Hyatt and Marriott owner.

What is the relatiosnhip between Hyatt Beach House, Hyatt Vacation Club, and Marriott Vacations Worldwide?

Beach House is part of the "HERITAGE COLLECTION" (16 resorts) comprising the HYATT VACATION CLUB BRAND. The brand is one of many owned by MVW.

 

[pedro47]

This is an unfounded alarm! The report clearly details all the financials including that the roof is already funded for current 2024 replacement.
The current annual RESERVES contribution is $3,336,545.
ROOFING SYSTEMS 2024 EXPENDITURE = $258,000.00 single-ply membrane + $1,474,605 metal. Line item in the RESERVES pertinent to SIRS is estimated to be $180+ beginning in 2025.

Unfortunately, nearly all Florida timeshare owners have irresponsibly voted not to FULLY FUND RESERVES. The new law makes it mandatory that the SIRS structural components are adequately funded as represented in the study.

wendyleigh, your post makes sense. The timeshare owners at this resort should give you a standing ovation for posting the correct reserve information.
IMHO.

 

[Ski-Dad]

Higher insurance premiums would have no effect on the cost of roof replacement. Labour and materials for sure, but insurance premium costs would not impact the cost to replace a roof, nor would insurance costs impact the replacement reserve.

Insurance premiums would impact MF as part of the regular operating expenses.

 

[theo]

SIRS:This is the requirement of a visual inspection of the items related to the structural integrity of the building(s), providing for the estimated remaining useful life and the estimated replacement cost or deferred maintenance expense, and providing a recommended annual reserve amount that achieves the estimated replacement cost or deferred maintenance expense by the estimated remaining life for each item being visually inspected.

The milestone inspection requirements of SB-4 seem relatively clear and quite straightforward, but I find the annual reserve funding references (as highlighted in red above) to be puzzling and convoluted --- but maybe that's just me. It's no secret that many independent FL resorts (including several at which we have long owned fixed weeks) have grossly underfunded their financial reserves, an unwise choice facilitated by FL law historically allowing resorts to simply "opt out" of full reserve funding compliance by simple owner majority vote to do so. It's unclear to me if SB-4 now effectively terminates that prior ability to "opt out" of full funding. It is equally unclear to me how a resort can accurately project future "estimated replacement or deferred maintenance expense" --- and what exactly is "deferred maintenance expense", anyhow? Maybe I'm just dense, but I have difficulty wrapping my head around what seems to be fuzzy and ambiguous language as pertains to the financial reserves funding requirements in Florida's SB-4. Thoughts?

 

[TUGBrian]

perhaps i missed the actual financial statement showing things were all warm and fuzzy there? though im glad to hear that is the case!

the language being used is perhaps the source of much of the confusion?

I read in line 2 "current annual reserve contribution" at 3.36m (im guessing this should instead read current reserve fund balance?) though if thats correct, why does it show the 2024 "reserve fund balance" at $0?

also where does the 1.7m in "total reserve contribution" for 2024 come into play when all subsequent years that amount seems to be only 35% of that (680k)?

3rdly, how is it reasonable to budget for 0 reserve expenses for 6 years? that seems extremely optimistic?

 

[CharlesS]

(My responses are in red.) the language being used is perhaps the source of much of the confusion? Agreed

I read in line 2 "current annual reserve contribution" at 3.36m (im guessing this should instead read current reserve fund balance?) though if thats correct, why does it show the 2024 "reserve fund balance" at $0? I am confused also about the 3.36m

also where does the 1.7m in "total reserve contribution" for 2024 come into play when all subsequent years that amount seems to be only 35% of that (680k)? It would appear that there was a Special Assessment to cover major project(s). The Special Assessment was put into reserves. The project(s) brought the reserves down to zero. Now that the project(s) are finished, the Special Assessment is finished and they are returning to the normal reserves contribution.

3rdly, how is it reasonable to budget for 0 reserve expenses for 6 years? that seems extremely optimistic? I believe that the RJH report covers only reserve expenses that their inspection called for. They concede that there will be other expenses but they are not ones known at this time or that can be planned for.

Charles

 

[TUGBrian]

They concede that there will be other expenses but they are not ones known at this time or that can be planned for.

well thats the entire point of having a reserve study such as this so you can accurately plan out estimated costs years ahead of time.

general maintenance should not fall under reserve expenditures, those are reserved (ha, see what i did there?) for major/long term rehabilitation or repair projects related to amenities or infrastructure.

 

[wendyleighj]

well thats the entire point of having a reserve study such as this so you can accurately plan out estimated costs years ahead of time.

general maintenance should not fall under reserve expenditures, those are reserved (ha, see what i did there?) for major/long term rehabilitation or repair projects related to amenities or infrastructure.

This particular engineering study is SPECIFIC TO THE RESERVES' PORTION DEDICATED TO THE STATE REQUIRED SIRS STRUCTURAL COMPONENTS. It does not address or reference the entirety of the association's TOTAL RESERVES.