Is Starwood management failing owners ?

[LisaRex]

Please read the actual transcript of the plan commission hearing for the 2nd SMA. I have posted the link below. It seems the locals and neighbors do not share your attitude about Starwood.

My attitude about Starwood is that they are pissing off the local politicians, who couldn't be clearer that they don't want more timeshares. Maui has retaliated by passing outrageously high property tax assessments aimed squarely upon timeshare developments.

Pages 19-20 of your own link reveals that bias, as do other articles and resolutions. Which makes me wonder why they are choosing to pursue this project, in this crappy economy, and in a place that clearly doesn't welcome them. The only thing I can figure is that they are desperate. Do you have another take on the matter?

http://pacific.bizjournals.com/pacific/stories/2006/07/10/story1.html
http://www.mauicounty.gov/archives/117/080307.pdf (see No. 08-72)
http://www.mauinews.com/page/content.detail/id/500583.html?nav=10

 

[Transit]

Do you have another take on the matter?

Wouldn't building a 3rd TS in that same area seriously further diminish the values of the first two? I thought that project was DOA

 

[DeniseM]

Wouldn't building a 3rd TS in that same area seriously further diminish the values of the first two? I thought that project was DOA

Starwood already owns the property and has broken ground- I think they figure that when the economy improves, it will be sellable. I doubt if they are willing to lose the investment they have already made in developing the 3rd resort. Plus, remember that they don't care what happens to resale prices.

 

[jarta]

LisaRex, ... "Pages 19-20 of your own link reveals that bias, as do other articles and resolutions."

I posted link to the transcript because you called Starwood vicious, tenacious, mean and "flipping the bird" to the Maui authorities.

The link to what the neighbors and locals around WKROV said at the SMA hearing certainly is different than your name-calling. Did you actually read the transcript? At pages 18-23 a long-time opponent of development on Maui was explaining why he supported Starwood and Maui 3. At page 18-19 a commissioner asked him why he supported this development along the ocean while he had opposed so many, many others. Mr. Lindsey then distinguished between parasitic developers who add nothing to Maui (destroy environment and bulldoze archeological sites) and symbiotic developers (like Starwood - his words, not mine) who work with the locals to maintain the environment and Hawaiian traditions and sites.

Here's the link again. Please read what it says. And, for once, be fair in categorizing what is said there about Starwood:

http://www.co.maui.hi.us/archives/85/112707.min.part 1.pg1-50.pdf

Others, testifying at the beginning (Mr. Pluta president of the not-for-profit West Maui Improvement Association and the West Maui Taxpayers Association and a Lahaina resident for 35 years and the native woman, Auntie Patti Nishiyama, born and bred in Lahaina, who stated that Starwood was going to build a park dedicated to late (deceased) Lahaina kapunas) had some pretty nice things to say, too. These native Hawaiians thought Maui 3 would be pretty "pono."

Pono, according to the Pukui/Elbert Hawaiian dictionary, means goodness, uprightness, morality, moral qualities, correct or proper procedure, excellence, well-being, prosperity, welfare, benefit, behalf, equity, proper, righteous, right, upright, just, virtuous, fair, beneficial, successful...and more.

http://leslienotes.typepad.com/the_long_and_short_of_it_/2008/03/pono-is-a-very.html

Who's the one who is vicious here?

... eom

 

[James1975NY]

They are making money at our expense via excessive management fees, housekeeping fees, rental fees etc... In fact, you can argue that the more delinquencies, the better off Starwood is because the pocket more rental commissions and hosekeeping fees which otherwise they wouldn't get. This is a cash cow for them (at least on the management side) - I can't see them giving it up voluntarily.

The sales effort is a different story. TUG negatie sentiment here seems to affect quite a few buyers in backing away from a purchase decision... that's probably hurting Starwood, but since they are not developing new resorts I don'tknow how much they care.

I do not think that SVO is making much on renting delinquint owners weeks after the HOA is paid. There are so many rental opportunities without getting SVO involved at all.

 

[jarta]

kapunas, usually referred to as Aunties and Uncles, are life changing ancestors and elders. Here's an example of what a kapuna can mean to a Hawaiian:

http://www.moolelo.com/naiwi.html

... eom

 

[Fredm]

LisaRex, ... "Pages 19-20 of your own link reveals that bias, as do other articles and resolutions."

I posted link to the transcript because you called Starwood vicious, tenacious, mean and "flipping the bird" to the Maui authorities.

The link to what the neighbors and locals around WKROV said at the SMA hearing certainly is different than your name-calling. Did you actually read the transcript? At pages 18-23 a long-time opponent of development on Maui was explaining why he supported Starwood and Maui 3. At page 18-19 a commissioner asked him why he supported this development along the ocean while he had opposed so many, many others. Mr. Lindsey then distinguished between parasitic developers who add nothing to Maui (destroy environment and bulldoze archeological sites) and symbiotic developers (like Starwood - his words, not mine) who work with the locals to maintain the environment and Hawaiian traditions and sites.

Here's the link again. Please read what it says. And, for once, be fair in categorizing what is said there about Starwood:

http://www.co.maui.hi.us/archives/85/112707.min.part 1.pg1-50.pdf

Others, testifying at the beginning (Mr. Pluta president of the not-for-profit West Maui Improvement Association and the West Maui Taxpayers Association and a Lahaina resident for 35 years and the native woman, Auntie Patti Nishiyama, born and bred in Lahaina, who stated that Starwood was going to build a park dedicated to late (deceased) Lahaina kapunas) had some pretty nice things to say, too. These native Hawaiians thought Maui 3 would be pretty "pono."

Pono, according to the Pukui/Elbert Hawaiian dictionary, means goodness, uprightness, morality, moral qualities, correct or proper procedure, excellence, well-being, prosperity, welfare, benefit, behalf, equity, proper, righteous, right, upright, just, virtuous, fair, beneficial, successful...and more.

http://leslienotes.typepad.com/the_long_and_short_of_it_/2008/03/pono-is-a-very.html

Who's the one who is vicious here?

... eom

I was impressed by the contributions Starwood has made, and its commitments to future support of Hawaiian cultural preservation, and schools.

Maui is currently burdened by a few elected officials who could not make a decision without the aid of a wind sock.

 

[DanCali]

I do not think that SVO is making much on renting delinquint owners weeks after the HOA is paid. There are so many rental opportunities without getting SVO involved at all.

I thought it's the other way around. Not much left for the HOA after SVO is paid...

My impression was the HOA uses Starwood to rent the units and first Starwoods gets a rental commission, then they get daily housekeeping fees, then the HOA gets paid (if anything is left over). I would be glad if someone would show any evidence that it works in a different manner...

Almost any other way to rent delinquent units would be more efficient for owners, but since Starwood would be worse off it won't happen. The HOA can allow other owners to rent them ("adopt a week"), post them on a HOA website etc... but I haven't seen any of this.

In fact the HOA would be better off talking over delinquent units, converting the to StarPoints (thus ceding the week to Starwood) and selling Starpoints to owners for say $1500 for 80K SPs (Starwood would need to allow this to happen of course). I doubt the HOA makes anywhere close to $1500 on a WKORV delinquent unit after rental comissions and housekeeping fees... But since I think Starwood keeps most of the rentals cash anyway (commissions+housekeeping), and doesn't have to pay StarPoints, this won't happen either...

 

[gregb]

If I am not mistaken, Starwood has a rental program where they will rent out an owner's week, keeping 50% of the rental for their efforts. I expect that the HOA would get the same deal.

Greg

 

[DanCali]

If I am not mistaken, Starwood has a rental program where they will rent out an owner's week, keeping 50% of the rental for their efforts. I expect that the HOA would get the same deal.

Greg

As far as I know that program was discontinued a while ago for owners. If they did rent it for a paying owner though, arguably that owner paid for housekeeping so there is no need to charge again for that (although it could be 7 times vs 2 times, but maybe that difference somehow gets included in the rental commission)

I wouldn't be surpised if they do get a 50% commission from the HOA for renting delinquent units. But they also provide daily housekeeping which they likely charge for because delinquent units haven't paid for that... Cleaning up a 2BR villa is not cheap and probably doesn't come from the rental commission.

I have no idea how the accounting here works so I can only speculate. What I am pretty certain is that it benefits Starwood more than the HOA... If rental revenues went to the HOA perhaps our bills would be lower.

 

[gregb]

As far as I know that program was discontinued a while ago for owners. If they did rent it for a paying owner though, arguably that owner paid for housekeeping so there is no need to charge again for that (although it could be 7 times vs 2 times, but maybe that difference somehow gets included in the rental commission)

I wouldn't be surpised if they do get a 50% commission from the HOA for renting delinquent units. But they also provide daily housekeeping which they likely charge for because delinquent units haven't paid for that... Cleaning up a 2BR villa is not cheap and probably doesn't come from the rental commission.

I have no idea how the accounting here works so I can only speculate. What I am pretty certain is that it benefits Starwood more than the HOA... If rental revenues went to the HOA perhaps our bills would be lower.

Well I think that since current owners are making up the difference for the MF of the delinquent owners, the MF for delinquent owners has effectively been paid and the HOA would just be trying to recoup the value.

Greg

 

[gregb]

Please read the actual transcript of the plan commission hearing for the 2nd SMA. I have posted the link below. It seems the locals and neighbors do not share your attitude about Starwood.

http://www.co.maui.hi.us/archives/85/112707.min.part 1.pg1-50.pdf

Jarta, Thanks for the link. I was reading it, but could not find part 2. How did you find those minutes? I looked on the Maui County archives
http://www.co.maui.hi.us/Archive.aspx?AMID=91 and I don't see any planning committee meeting on 11/27/2007. Thanks for any pointers you can provide.

I appreciate that you provide references for your assertions.

Greg

Edit: Ok I found it. I googled "Maui County Planning Commission" and it took me to the correct pages for the Planning Commission. Guess that is different from the Planning Committee of the County Council. The link to the commission minutes is:
http://www.co.maui.hi.us/Archive.aspx?AMID=85

Greg

 

[DanCali]

Well I think that since current owners are making up the difference for the MF of the delinquent owners, the MF for delinquent owners has effectively been paid and the HOA would just be trying to recoup the value.

Greg

But this is not a one time shortfall... If owners at SVV didn't pay MFs when they were $1100, they won't start paying when MFs are $1600. If anything it will just get worse. The same goes for other resorts.

Unless HOAs fine a better way to deal with delinquencies (other than getting rental commissions and hosekeeping fees into SVO's pockets) some of these resorts are on an inevitable crash and burn course.

Almost anything would be better than letting Starwood to the rentals for us.

 

[jarta]

Dan, ... "Unless HOAs fine a better way to deal with delinquencies (other than getting rental commissions and hosekeeping fees into SVO's pockets) some of these resorts are on an inevitable crash and burn course.

Almost anything would be better than letting Starwood to the rentals for us."

You've gotta be kidding! One housekeeping staff just for timeshare users and another whole housekeeping staff just for rentals of delinquent units? Think of it! Two sets of maids pushing two sets of carts holding duplicate towels and soap around the resort? lol!

One rental company advertising, keeping records, collecting money and accounting for delinquent rentals; another doing the same thing for everything else at the resort? That's the way to run a resort? Yikes!

The rental commissions and the housekeeping fees are paid by the delinquent owner as a deduction from the rent. I posted that prevalent State law on delinquencies long ago. Didn't you read it?

The net rental is applied against the delinquency and any shortfall still has to be paid to the HOA by the delinquent owner. If anyone is "cheated" by the charges for rental commissions and housekeeping fees which are deducted from the rent, it is the deadbeat owner, not the resort HOA. So, who cares? ... eom

 

[DanCali]

Dan, ... "Unless HOAs fine a better way to deal with delinquencies (other than getting rental commissions and hosekeeping fees into SVO's pockets) some of these resorts are on an inevitable crash and burn course.

Almost anything would be better than letting Starwood to the rentals for us."

You've gotta be kidding! One housekeeping staff just for timeshare users and another whole housekeeping staff just for rentals of delinquent units? Think of it! Two sets of maids pushing two sets of carts holding duplicate towels and soap around the resort? lol!

One rental company advertising, keeping records, collecting money and accounting for delinquent rentals; another doing the same thing for everything else at the resort? That's the way to run a resort? Yikes!

The rental commissions and the housekeeping fees are paid by the delinquent owner as a deduction from the rent. I posted that prevalent State law on delinquencies long ago. Didn't you read it?

The net rental is applied against the delinquency and any shortfall still has to be paid to the HOA by the delinquent owner. If anyone is "cheated" by the charges for rental commissions and housekeeping fees which are deducted from the rent, it is the deadbeat owner, not the resort HOA. So, who cares? ... eom

Jarta,

I am sure your love and loyalty to the Starwood organization are genuine and well-intentioned, but you never cease to amaze me how you can take one or two sentences someone posts, twist them completely out of context, and digress in directions which COMPLETELY MISS THE MAIN POINTS!!!!

So let's hone in on why almost anything would be better than the current status quo... I'll start by using SVV as an example since it has lots of delinquencies.

Starwood can rent a 2BR at SVV for roughly $150 to $200 per night. Let's be optimistic and say they do it for $200/night. On a 7 night rental they gross $1400. From that the owner or HOA or whoever pay them a 50% commission so we are left with $700. We still need to pay 7 housekeeping charges for a 2BR... how much does that cost? Since we know owners get billed $200-$400 for 1.5 housekeeping charges via MFs, I'd say $100/night is pretty optimistic. So if Starwood charges $100/night for 7 nights what's left to the HOA after this rental is a big ZERO. Note that Starwood made quite a bit of money on it though...

Now when I said "Almost anything would be better than letting Starwood to the rentals for us" I obviously mean that there are pretty simple and constructive ways that even a high school kid can think of in which the HOA can do better than $0. Of course you can come up with ideas on how the HOA can do worse, but for some reason it is obvious to everyone that is not what I meant - except you...

For example, the WKORV HOA can have a website and allow WKORV owners to rent delinquent weeks for the value of MFs. After some period, if delinquent weeks are left over, they could allow SVN owners from other resorts or even the general public to rent weeks for "fair market value", which may even be profitable to the HOA and cover the website maintenance costs (which I am sure you will comment on). Neither of these require 7 housekeeping charges by the way - 1.5 cleanups should suffice and the HOA can pay Starwood for that. All the remaining revenue would go to the HOA. Is this better than $0? Probably...

By the way - if Starwood runs the website for the HOAs we can pay them some fixed cost for that - I don't care. I just think 50% commissions on rentals and 7 housekeeping charges leaves nothing or close to nothing for the HOAs...

How about the idea that the HOAs should be able to take over and cede delinquent units to Starwood in exchange for StarPoints, just like a (developer) owner can. They can even do it by the March 31 deadline and Starwood can do what they want with the units (rent them and keep all the revenues). The HOAs though should then be allowed to sell or auction Starpoints to owners at that resort with the revenue covering MF shortfall. It may not cover the entire shortfall, but would it do better than $0? Probably...

The point is that we can do much better if the HOAs were in the driver's seat in making the decisions and Starwood cooperated to help the HOAs too, not just itself.

As for your comment "If anyone is "cheated" by the charges for rental commissions and housekeeping fees which are deducted from the rent, it is the deadbeat owner, not the resort HOA. So, who cares?" - are YOU kidding me? If the "deadbeat" owner has less to pay for the delinquent MFs, and the shortfall at the end of the year is greater because Starwood gets all the rental revenue then who gets punished at the end of the year? The obvious answer here is that we do since our MFs go up - I think we all learned that the hard way... So I do care and so should you!

 

[LisaRex]

I posted link to the transcript because you called Starwood vicious, tenacious, mean and "flipping the bird" to the Maui authorities.The link to what the neighbors and locals around WKROV said at the SMA hearing certainly is different than your name-calling.

I'm not sure if you're deliberately being obtuse or you're just pretending. So instead of arguing, I'm just going to ask other folks to read my comments and try to understand them vs. relying on your interpretation of what you think I said.

Who's the one who is vicious here?

Someone tries to rob, cheat, and swindle me and I'll fight back. It's going to take more than a 9" wood chipper to get this chick to back down.

 

[jarta]

Dan, ... You complain that my response misses your points.

I could do the same. Your response misses my points.

That does not mean that your points are right and my points are wrong (or vice versa). It means that in discussing Starwood everything is not black and white. There are good things and bad things. There is arrogance, spin, high maintenance fees, an inability or lack of desire to communicate clearly (see arrogance) and extremely high prices for the initial product.

There is also well-kept resorts, great beds, well-designed lockoff units adding to your options of use, washers and dryers in every unit, ease and flexibility of trading (II or Staroptions; with II even now getting you more bang for your buck on trades), extremely professional management, the benefits to the resort brought by association with the Starwood name and the resorts (most of them) are in very nice locations.

You look at the delinquencies and see incompetence. I look at them and see a management company that is being proactive in adding a realistic amount for delinquencies caused by people down on their luck because of the economy. You look at the high taxes in Maui and see something wrong with Starwood. I read the actual transcripts of the planning commission and see self-important government officials who are cutting their own throat by coming down hard on a developer that has $100M invested and has met every question that was raised by locals. You look at locations like SBP and see trading nirvana. I look at SBP and would never go there because I went there once and didn't like the schtick or tacky ambience of Myrtle Beach. You look at the phone-in reservation system and see an out-moded service. I look and see a company wanting to retain a personal touch with the owners.

I am happy with my Starwood purchases and I don't appreciate the attacks which I see as merely mean, vicious and tenacious attempts to "flip the bird" at Starwood and, as a result, to drive down the value of what you and I own. You are unhappy with Starwood. I understand why. It's expensive. I guess you need a place to vent about it. TUG has a lot of venters - about 25 of them.

You cannot understand why I am happy. In being happy, I don't think I am alone.

IMO, the inflamatory language goes too far. There is no evidence of robbing, cheating or swindling owners by Starwood when it manages properties. I'm still waiting to see the evidence posted. But, all I see posted is the accusation - without evidence that it is true.

So, we will continue to differ and, from time to time, I will point out the unsupported or misinformed nature of the attacks - and I will be accused of missing the point. (But, I still enjoy reading your posts, Dan.) ... eom

 

[timeos2]

When its required its no favor

You look at the delinquencies and see incompetence. I look at them and see a management company that is being proactive in adding a realistic amount for delinquencies caused by people down on their luck because of the economy.

Realize there is nothing being done for the good of the owners by grace of Starwood regarding delinquent accounts. It is pretty much standard law everywhere that condo/timeshare associations/management are REQUIRED to take take every step possible to reduce delinquencies and, when they do occur, take steps to cover them through any available source up to and including assessing the paying owners. It does seem to smack of incompetence when other management groups are able to both keep the number of delinquencies lower and do a much better job of recovering those fees from sources other than increased fees than what Starwood has been prone to do. It isn't proactive planning to handle accounts after they go sour - it's proactive to have a plan to avoid delinquencies altogether and to minimize them when they do occur. Neither approach seems to be Starwoods MO.

 

[DanCali]

You look at the delinquencies and see incompetence. I look at them and see a management company that is being proactive in adding a realistic amount for delinquencies caused by people down on their luck because of the economy.

Jarta - you again managed to switch the topic from discussing how monies are allocated in delinquency rentals to heavenly beds and washers/dryers...

My previous post had a hypothetical example of how delinquency monies may be allocated in the case of SVV. In that example there was not much left for the HOA (in fact nothing). That example can be extended to SBP, WKORV etc and in all those cases if indeed Starwood charges a 50% commission and 7 housekeeping charges we'll reach the conclusion that there is not much left for the HOA (but Starwood made a nice profit from a "deadbeat" owner).

In trying to keep on point - do you disagree with my SVV example? Do you think monies are allocated in a manner way which leaves more for the HOA and less for Starwood (there is X amount of rental revenue so this is a zero sum game between what Starwood gets and what the HOA gets)?

How about the hypothetical ideas I proposed to make things better? - do they leave more for the HOA? Do you have any ideas so that rental revenues actually go to cover delinquencies rather than enriching Starwood? Do you disagree with my assessment that if things don't change in the way rentals are handled then the situation will get a lot worse?

 

[Fredm]

Jarta - you again managed to switch the topic from discussing how monies are allocated in delinquency rentals to heavenly beds and washers/dryers...

My previous post had a hypothetical example of how delinquency monies may be allocated in the case of SVV. In that example there was not much left for the HOA (in fact nothing). That example can be extended to SBP, WKORV etc and in all those cases if indeed Starwood charges a 50% commission and 7 housekeeping charges we'll reach the conclusion that there is not much left for the HOA (but Starwood made a nice profit from a "deadbeat" owner).

In trying to keep on point - do you disagree with my SVV example? Do you think monies are allocated in a manner way which leaves more for the HOA and less for Starwood (there is X amount of rental revenue so this is a zero sum game between what Starwood gets and what the HOA gets)?

How about the hypothetical ideas I proposed to make things better? - do they leave more for the HOA? Do you have any ideas so that rental revenues actually go to cover delinquencies rather than enriching Starwood? Do you disagree with my assessment that if things don't change in the way rentals are handled then the situation will get a lot worse?

The POINT being missed here is that your "solutions" are theoretical, however "better" they may be.
Owners have no means to enact alternative procedures. Unless, of course, the manager is dumped.

You have stated in other postings that you have no time or inclination for such pursuits. So, why the constant grinding?

 

[jarta]

timeos, ... "It does seem to smack of incompetence when other management groups are able to both keep the number of delinquencies lower and do a much better job of recovering those fees from sources other than increased fees than what Starwood has been prone to do. It isn't proactive planning to handle accounts after they go sour - it's proactive to have a plan to avoid delinquencies altogether and to minimize them when they do occur."

You are entitled to your opinion. I am entitled to mine.

First, the property manager and the HOA cannot make people pay. They can only rent out the property and deposit the net proceeds to the delinquent account. Under modern timeshare law they have recently (thanks to ARDA's lobbying) been provided with a quick remedy for delinquencies - non-judicial foreclosure of the lien.

The timing of when to file that foreclosure proceeding is a matter of discretion for the HOA and management to decide. If there is any blame that can be affixed, it is that several Starwood managed properties may not have filed for non-judicial forclosure fast enough. But, perhaps they got caught in a situation where the rentals of delinquent units had always been sufficient in amount and number so that there were no previous shortfalls if an owner was late in paying. The decrease in rental demand for timeshares due to the economy may have caught them with their pants down and caused a large shortfall for the first time. These are unusal economic times.

So, having been stung once, Starwood seems to have all Starwood resorts adding something to the 2010 budget to cover future delinquent owners. I see that as proactive.

As far as I can tell, Starwood is the only timeshare chain to be doing this. I cannot believe that the situation will get better any time soon and I cannot believe Starwood is the only place with delinquency problems. Maybe they are because of the high maintenance fees. But, I suspect that other chains will be announcing soon that they have 2010 delinquencies. We will see soon enough.

If they don't have delinquencies, good for them. But, if they do, can they still rely on rental income to bail them out?

I have never said the higher assessment "death spiral" argument is wrong. In the long term, it may be right. I am willing to take the risk that it is not.

Where I part company with other posters here is when they start posting that Starwood is merely lining its pockets by robbing and stealing from the fees to maintain the resorts. Everyone has their vision of what the degree of improvements, finish and amenities should be. Not everyone is willing to pay the price it takes to maintain them.

Like Dan's posts, I enjoy yours, too, because they are rational, not over the top or venomous and they are delivered by someone who has obviously been there. ... eom

 

[DanCali]

The POINT being missed here is that your "solutions" are theoretical, however "better" they may be.
Owners have no means to enact alternative procedures. Unless, of course, the manager is dumped.

You have stated in other postings that you have no time or inclination for such pursuits. So, why the constant grinding?

Of couse they are theoretical because Starwood would never agree to something that makes the HOA better off at Starwood's expense... It was suggested that rentals of delinquent units are an optimal solution to delinquencies - I was suggesting that the current manner in which it is done does not help our cause at all and there are better ways, however hypothetical they may be.

But main takeaway point is that it looks like the "rentals," which some people think are the solution to the delinquencies, are not bringing in much if anything to the HOAs. Unless someone understands the money allocation differently... If we keep saying "they will rent the deinquent units to cover MF shortfalls" that will not solve anything for the resorts and will make matters even worse when MFs rise in the subsequent years. Current rental revenues go mostly or solely to Starwood (again, this is a conjecture so feel free to correct me on this).

While I don't have much desire to take on Starwood head on - I keep grinding on this because I believe it is important to keep our eyes open to what is happening and not get diverted into talking about washers/dryers...

 

[jarta]

DanCali, ... "Current rental revenues go mostly or solely to Starwood (again, this is a conjecture so feel free to correct me on this).

Can you accept this correction?

By agreement, rental revenues on non-delinquent properties that would go unused are split 50/50 between the resort and Starwood until the rental income for the resort exceeds 2.5% (usually) of the resort's budget for the fiscal year. Then, the entire "overage" rental goes to Starwood.

By statute (in most States), rental revenues on delinquent properties (after deduction of rental costs and housekeeping) goes to the delinquent account and is used to offset all or a portion of the delinquency. ... eom

 

[jarta]

DanCali, ... And, all this is done within the resort's operating budget.

Starwood double dips by collecting an additional amount from the delinquent owner by charging for rental costs. The HOA double dips by collecting an additional amount for the housekeeping. The delinquent owner pays twice for these services if the delinquent account is brought current. ... eom

 

[DanCali]

Starwood can rent a 2BR at SVV for roughly $150 to $200 per night. Let's be optimistic and say they do it for $200/night. On a 7 night rental they gross $1400. From that the owner or HOA or whoever pay them a 50% commission so we are left with $700. We still need to pay 7 housekeeping charges for a 2BR... how much does that cost? Since we know owners get billed $200-$400 for 1.5 housekeeping charges via MFs, I'd say $100/night is pretty optimistic. So if Starwood charges $100/night for 7 nights what's left to the HOA after this rental is a big ZERO. Note that Starwood made quite a bit of money on it though...

Can you accept this correction?

By statute (in most States), rental revenues on delinquent properties (after deduction of rental costs and housekeeping) goes to the delinquent account and is used to offset all or a portion of the delinquency. ... eom

I'm not sure I understand what is the "correction"...

We were discussing rentals of delinquent units and it sounds like we both agree that Starwood first gets commissions, then housekeeping and only then the HOA gets paid.

You may think that is fair and that is the right way to go. Using realistic numbers, I have already argued a couple of posts ago that this leaves almost nothing or close to nothing to conver delinquencies. 50% commissions and 7 housekeeping charges eat up all the rental revenues...

It is not a solution that helps owners or HOAs deal with delinquencies if Starwood gets 100% of rental revenues and there is nothing left over for delinquencies...

Slowly but surely you are getting to my point!