Maintenance fees?

[barrierducksleeper]

When resort management acquires ownership of a week and uses it to make money by renting out, do most ownership associations' bylaws require them to pay maintenance fees into the association or are they getting a free ride. I'm sure that as owners let units go because of fee increases, management owns more than ever.
This is fresh on my my mind as I received a bill today reflecting an almost 10% increase and an announcement that a 15% increase for next year. All this is blamed on an increase in furniture cost. It is obvious that rehab has not being done to any extent based on reviews.
I believe that members are paying their share plus those of management owned weeks at most resorts driving fees up even more.

Owner
BIS Duck

 

[Dave M]

"Resort management" needs some definition.

If you are referring to the developer acquiring weeks (such as when Marriott or another developer exercises its right of first refusal to purchase a week offered on the resale market), most HOA legal documents treat such weeks just like any other owner weeks and the developer is normally responsible for paying annual maintenance fees to the HOA.

However, if you are referring to the HOA acquiring weeks, such as through foreclosure, the HOA is we, the owners. In that case no one pays fees, but the HOA tries to resell the week to get a new fee paying owner and should try to rent the week while trying to sell it. Any rental income accrues to the HOA and reduces the fees that you would otherwise pay.

In a third category are the "new" weeks owned by the developer that the developer hasn't yet sold. Usually, the developer isn't required to pay fees on such weeks, but most developers provide a subsidy to the HOA in place of such fees until enough weeks at the resort have been sold so that the HOA is self supporting.

 

[barrierducksleeper]

Resort Management!

One would assume that by your tone as Moderator you know what I'm referring too and seem to be very defensive.
If the BBS works this way this will be my first and last time here.

 

[Dave M]

Golly! I apologize if I offended you. I certainly didn't intend to. If I didn't respond appropriately to your concern, please ask a follow-up question. We will try to do our best to be responsive.

As for my moderator designation, all moderators are here only to ensure that the forum posting rules are followed. We are all unpaid volunteers and post questions and responses just like anyone else. I was responding as a TUG member, not in any role as a moderator.

Please try again if I missed your point. Since you didn't ask a specific question, I did my best (obviously poorly) to explain some of the common situations regarding weeks owned by other than you, me and others like us. Depending on how the term is used, resort management can mean the HOA, the outside management company (if there is one) or the original developer. That's why I gave multiple responses.

 

[swift]

Ducksleeper, I am sorry you felt offended by Dave's post. I really don't believe that was his intention. I have always found Dave's posts to be full of very knowledgeable information and I feel we have been very fortunate to learn from his experiences. Sometimes because we are reading text we can misunderstand someone because we can not hear or see the body language intended. I truly believe that is what has happened here. I hope you stay around awhile and get to know us all better.

 

[Jbart74]

Ducksleeper,

I have to agree with the above posts. I think Dave did a fine job answering your question. I actually learned a few things reading his response and was shocked when I scrolled down to see your reply to him. I'm not sure what you are hinting at, in fact, I have no idea, but I'm fairly sure, having read hundreds of Dave's posts in the past that he did his best to answer your question, as it was presented to all of us.

Please take a second to reread it, if neccesary, then realize that we are all here to help. No illwill to any poster. Perhaps, if you left certain information out of your original post that might be of importance, Dave and others can further help you out.

We are a family here, and we'd sure like you to stick around!

 

[timeos2]

When resort management acquires ownership of a week and uses it to make money by renting out, do most ownership associations' bylaws require them to pay maintenance fees into the association or are they getting a free ride. I'm sure that as owners let units go because of fee increases, management owns more than ever.
This is fresh on my my mind as I received a bill today reflecting an almost 10% increase and an announcement that a 15% increase for next year. All this is blamed on an increase in furniture cost. It is obvious that rehab has not being done to any extent based on reviews.
I believe that members are paying their share plus those of management owned weeks at most resorts driving fees up even more.

Owner
BIS Duck

Resort management, as Dave stated, could be the original developer or a group hired by the Association to operate the resort. If they truly own the week(s) in question then they owe the fees. If the week(s) that the management controls actually belong to the Association then they actually belong to all ownefrs at the resort as they are the Association. Again as Dave stated they would pay the fees but through the bad debt line that makes up part of the annual budget. The management should be trying to sell off those weeks and rent them until they are sold to minimize that expense.

I haven't said anything Dave didn't say in his first reply. I can't see where his was in anyway derogatory or condescending toward your inquiry. As others have also said I though he answered as best he could to a non-specific question.

As for the costs going up because of furnishings that may refer to an increased reserve funding. Reserves are the monies set aside each year for replacement and upgrades to items with a life of over 1 year. Many resorts tend to short change those funds as it is easy to "hold fees down" there but then when items wear out they don't have enough to replace them. Raising the reserve number is usually a sign that a resort is taking the steps needed to keep things in good repair and hopefully have funds to renovate on a regular schedule.

I hope you will stick around and ask questions so you can get your resort to be fiscally responsible and enjoyable for your stays.

 

[Tia]

My one resort had bylaws requiring the developer to pay maint. fees for units owned. You need to get a copy of your resorts bylaws to see what they are legally suppose to be doing. Then you need to find a way to see if they are actually doing what they are suppose to. My one resort was suppose to be doing annual audits, they weren't, and they were suppose to be paying maint. fees... they weren't. Same resort had a developer that controlled the board and a management company that was related to the developer... not good.

 

[Mel]

One would assume that by your tone as Moderator you know what I'm referring too and seem to be very defensive.
If the BBS works this way this will be my first and last time here.

As a regular member (non-moderator) of this board, I would have answered in almost exactly the same way. This is your second post to the entire BBS, so no, we don't know who you are or what exactly you want.

You asked a question about weeks rented out by "management," but that could mean many different things.

As Dave asked - who exactly is the "management" you are talking about? If your resort is still under development, or in sales, it might be the developer. If that is the case, those weeks are treated exactly the same as weeks that the developer never sold in the first place. In your resort bylaws, and other related documents, their responsibility is spelled out. Either they pay maintenance fees for those weeks, or they pay some other set fee in lieu of maintenance fees. In a brand new development, that fee may actually be higher than maintenance fees would be, because they are trying to keep fees artificially low during sales.

But in a resort that is not in active sales, or is winding down, those weeks you are referring to may be owned by the HOA. That is, the membership as a whole. In that case, the HOA is responsible for those fees, which in effect means you are partially responsible because you are a partial owner of those weeks.

Say your resort has 200 units, used 50 weeks out of the year - or 10,000 units weeks. If all weeks are individually owned, your budget will be divided by 10,000 to get to your maintenance fee. But let's assume that 3% of the units are either owned by the HOA, and in another 2% the owners will not pay their fees, so the HOA will rent the weeks. The HOA will deternime the budget, back out the rental income (offset by any expenses) they expect for those weeks, and divide what's left by 9,500 (the remaining 95% of owners). If net rental income is higher than maintenance fees, you actually benefit from the HOA owning some weeks. Those 2% where the owners didn't pay their fees will result in a balance due in their account. If they try to sell, the resort can refuse to transfer ownership until those fees are paid, or a lein can be placed on the deed. The rental income from those weeks often must be used to offset the fees owed, since the HOA doesn't own those weeks, but they can charge a reasonable commission for renting the weeks.