• The TUGBBS forums are completely free and open to the public and exist as the absolute best place for owners to get help and advice about their timeshares for more than 27 years!

    Join tens of thousands of other owners just like you here to get any and all Timeshare questions answered!
  • TUG started 28 years ago in October 1993 as a group of regular Timeshare owners just like you!

    Check out our happy birthday post here: Happy Birthday TUG!
  • TUG is asking for recent reviews of older resorts, earn a free year membership!

    Read more here
  • TUG has now saved timeshare owners more than $17,000,000 dollars just by finding us in time to rescind a new Timeshare purchase! A truly incredible milestone!

    Read more here: TUG saves owners more than $17 Million dollars
  • Follow the TUG Member Banner as it travels the world on vacation with Timeshare owners! Also sign up to get the banner sent to you so you can submit a photo of your vacation with the banner to share with TUG! Banner Thread
  • Sign up to get the TUG Newsletter for free! Join tens of thousands of other owners who get this every week! Latest resort reviews and the most important topics discussed by owners during the week!
  • Our official "end my sales presentation early" T-shirts are available again! Also come with the option for a free membership extension with purchase to offset the cost!

    Read more Here
  • A few of the most common links here on the forums for newbies and guests!

Lawsuit Against Management Co. Based On Annual Fees?

Hoc

TUG Lifetime Member
Joined
Jun 7, 2005
Messages
2,559
Reaction score
1
Points
373
Location
Orange County, CA
I've been thinking about this for a couple of weeks now. When I first started timesharing, owners' annual fees were around $350 or so per week owned. Now, in the last nine years or so, they have climbed to the point where they are almost all in the thousand dollar range or so. Virtually every one of my timeshares this year declared a special assessment, usually in the $200 to $300 range.

I'm just wondering whether these annual fees are truly justified based on cost increases, or whether the management company has inflated their staff, management salaries, and fees to the point where the interests of the owners have gone by the wayside. I realize that the prevailing thought is that management companies have a contractual relationship with the owners. However, in some instances (such as the case of DRI, where the owners have no choice but to keep them as management based on the contracts) I wonder whether they can be said to have a fiduciary relationship with owners.

A fiduciary relationship differs from a contractual relationship in that a fiduciary has a duty to act in the best interest of the owners, a duty of loyalty, a duty of competence, and a duty to avoid self-dealing. What do you think? You think there is a basis for a claim against management companies for racking up unnecessary fees in a bad economy at the expense of owners? Any specific examples?
 

DeniseM

Moderator
Joined
Jun 6, 2005
Messages
55,473
Reaction score
6,107
Points
1,699
Hoc - we are having a lively discussion about this on the Starwood Board. Starwood selects the candidates who can run for the BOD's and many of the boards are more than 50% Starwood employees. Every year MF's increase by 10%+ at many of the resorts, and Starwood had a lot of special assessments this year, too.

How do you guys feel about Starwood MF's increases?
 
Last edited:

dougp26364

TUG Review Crew: Expert
TUG Member
Joined
Jun 6, 2005
Messages
13,332
Reaction score
1,559
Points
498
Location
Kansas
Resorts Owned
Marriott Grand Chateau
Marriott Shadow Ridge
Marriott Ocean Pointe
Marriott Destination Club Points
Hilton Grand Vacation Club Las Vegas Blvd
Grand Colorado on Peak 8
Spinnaker French Quarter Resort Branson
I have often wondered this myself. Especially since the rules seem to be set up so that the developer can stack the HOA and BOD with owner/members sympathetic (read employee's) to their needs. The president of the BOD at Polo Towers is an excellent example of a developer employee that is also an owner. However, IMHO his ownership is only an ownership on face value. The interests of the HOA/BOD appear to favor the developer (in this case DRI) more so than the owners.

The problem, as I see it, is to get enough owners onboard to do something about it. Even getting enough owners to vote in an election is tough enough let alone getting enough together to actually take control of their resort. Until owners can get together to flex their muscle in mass, I'm afraid nothing can be done.

After all, if all the ticked off Westgate owners can't get enough of them on the same page to do something about Westgate's heavy handed tactics, what chance do owners in other timeshare systems have?
 

kdrew

Guest
Joined
Aug 23, 2005
Messages
59
Reaction score
0
Points
6
Location
Northeast.....burrr..........
Take it from me...................

Here's what you need to do- check out who is on your Board of Directors. Are they developer friendly? Are they owners? Do they own one unit?

You can find many answers from just that. Get on the Board and ask hard questions.

Who is the management company? Are they appointed by the developer or the Board? Do they charge fees based on the budget or a flat fee?

This tells you if the fees are real or not.

And finally- check you costs of insurance and utilities. Also make sure that any projects are being bid on by more than two suppliers.


Why do I say trust me? :shrug: Go read about Bluebeard's Castle on this list.......we settled a lawsuit against the developer for over $23M after 6 long years.


Good luck- :deadhorse:

Ken


I've been thinking about this for a couple of weeks now. When I first started timesharing, owners' annual fees were around $350 or so per week owned. Now, in the last nine years or so, they have climbed to the point where they are almost all in the thousand dollar range or so. Virtually every one of my timeshares this year declared a special assessment, usually in the $200 to $300 range.

I'm just wondering whether these annual fees are truly justified based on cost increases, or whether the management company has inflated their staff, management salaries, and fees to the point where the interests of the owners have gone by the wayside. I realize that the prevailing thought is that management companies have a contractual relationship with the owners. However, in some instances (such as the case of DRI, where the owners have no choice but to keep them as management based on the contracts) I wonder whether they can be said to have a fiduciary relationship with owners.

A fiduciary relationship differs from a contractual relationship in that a fiduciary has a duty to act in the best interest of the owners, a duty of loyalty, a duty of competence, and a duty to avoid self-dealing. What do you think? You think there is a basis for a claim against management companies for racking up unnecessary fees in a bad economy at the expense of owners? Any specific examples?
 

Poobah

TUG Member
Joined
Jun 26, 2005
Messages
445
Reaction score
19
Points
228
Location
Burnsville, MN
Owner Reps on BODs

I am an owner at Poipu Point and a couple of years ago was at the HOA annual meeting. The BOD was essentially all SunTerra Employees. At that time the President of the HOA was not even an owner at Poipu.

The whole meeting was chaired and run by SunTerra employees. Managing the annual meeting was one of the "services" provided by SunTerra to the owners. The entire function of the President of HOA was to call the meeting to order and turn it over to a lawyer from SunTerra. This woman was on the BOD of some 20 SunTerra properties. She provided the BODs with legal "services."

I was a teller on the election of officers. All of the SunTerra candidates would have lost (substantially) had it not been for SunTerra's Proxy vote.

The proxies held by the developer/owner control the election. We will see how it goes, but I suspect it will be no different.

What needs to happen is that some positions on the BOD should be allocated to owners who have no affiliation with DRI.

Cheers,

Paul
 
Top