Monarch Units in the Trust

[Retired2025 aka AlmostRetired]

This was posted in a Monarch FB group that I started. I am shocked that MVCI owns 31% of the units in the trust because there is no ROFR at the Monarch. It was a discussion at an HOA meeting. I find it highly unlikely there were still developer weeks given they age of the resort and the fact Marriott purchased the Monarch after 85% of the units were already sold. Wondering if MVCI picks up the defaults for free and puts them in the trust.

"Attended owners mtg on 10/9. Discussion on 2042 Declaration - if unfamiliar info posted on Marriott Owners Website. Voting to take place in next few months - you must be registered on Marriott Vacation Club website in order to vote. Will take a quorum (61%) to pass. Interesting fact Marriott currently owns approx. 31% on units/weeks in their Trust."

 

[dioxide45]

This was posted in a Monarch FB group that I started. I am shocked that MVCI owns 31% of the units in the trust because there is no ROFR at the Monarch. It was a discussion at an HOA meeting. I find it highly unlikely there were still developer weeks given they age of the resort and the fact Marriott purchased the Monarch after 85% of the units were already sold. Wondering if MVCI picks up the defaults for free and puts them in the trust.

"Attended owners mtg on 10/9. Discussion on 2042 Declaration - if unfamiliar info posted on Marriott Owners Website. Voting to take place in next few months - you must be registered on Marriott Vacation Club website in order to vote. Will take a quorum (61%) to pass. Interesting fact Marriott currently owns approx. 31% on units/weeks in their Trust."

Through 2014 conveyances, the trust only owned 470 unit weeks at Monarch. I stopped tracking back then. I don't know how many weeks they sold per unit, was it 50? If so, that means there are 6100 unit weeks meaning they own 1,900 weeks now? They added about 1,430 weeks in nine years without ROFR? I find that doubtful as weeks at legacy resorts only seem to get a trickle of weeks conveyed. At least based on my spot checking.

I know many MVC resorts HOAs have an agreement with MVC to sell them foreclosed weeks. These being weeks that fell into foreclosure for maintenance fees. MVC covers the foreclosure costs and past due fees and MVC takes ownership of the week to convey to the trust. Perhaps there has been a high rate of foreclosures at Monarch? Marriott also has their deed back program where someone can give their week back. With Monarch being older and perhaps an older ownership base, they are seeing more of these due to people "aging out" of their ownership?

 

[sudiski]

We know many original owners (many now in their 80's or 90s)that have given their week/s back to Marriott. The maintenance fees continue to go up, their spouse is deceased, their health does not permit them to continue to travel, etc. Since their children/family do not want the week , they feel the most comfortable just giving it back to Marriott. We have tried to educate many of them as to how to sell their week or give it to another owner/friend, but they just want to get rid of the maintenance fee and feel "safe" giving it back to Marriott.

 

[dioxide45]

According to the recently posted disclosures, there are 1918 weeks at Monarch conveyed to the trust, so the 30% number seems to be correct.

 

[bizaro86]

According to the recently posted disclosures, there are 1918 weeks at Monarch conveyed to the trust, so the 30% number seems to be correct.

That's a very fast growth rate.

Although in general I suppose more seasonal destinations are probably growing more quickly in the trust, because off-season weeks with minimal value probably make up the vast majority of the deed backs.

 

[DRH90277]

Is this how the Trust gets weeks - I attended an annual HOA meeting in October and there was a discussion of the bad debt expense. During this discussion, it was mentioned that the association absorbs the loss of the unpaid MF's for 2 years as bad debt expense and then MVC takes the unit off their hands. Does anyone know more about this process? I suspect MVC might even be selective in the weeks taken under this arrangement and take only the better weeks. I doubt there is even a better alternative. Any thoughts?

 

[dioxide45]

Is this how the Trust gets weeks - I attended an annual HOA meeting in October and there was a discussion of the bad debt expense. During this discussion, it was mentioned that the association absorbs the loss of the unpaid MF's for 2 years as bad debt expense and then MVC takes the unit off their hands. Does anyone know more about this process? I suspect MVC might even be selective in the weeks taken under this arrangement and take only the better weeks. I doubt there is even a better alternative. Any thoughts?

You would need to see the agreement between MVC and the HOA for how they buyback foreclosed weeks. I have seen in some where Marriott pays the past due fees and also reimburses the HOA for foreclosure expenses and takes the weeks back to add to the trust. The details of the arrangement will be in that agreement.

 

[DRH90277]

You would need to see the agreement between MVC and the HOA for how they buyback foreclosed weeks. I have seen in some where Marriott pays the past due fees and also reimburses the HOA for foreclosure expenses and takes the weeks back to add to the trust. The details of the arrangement will be in that agreement.

Thank you. This is interesting as the BOD meeting was at Custom House, a RTU property (Right to Use). I understand there are no RTU properties in the Trust so any idea where would these go?

 

[bizaro86]

Is this how the Trust gets weeks - I attended an annual HOA meeting in October and there was a discussion of the bad debt expense. During this discussion, it was mentioned that the association absorbs the loss of the unpaid MF's for 2 years as bad debt expense and then MVC takes the unit off their hands. Does anyone know more about this process? I suspect MVC might even be selective in the weeks taken under this arrangement and take only the better weeks. I doubt there is even a better alternative. Any thoughts?

I think it's unlikely this deal will get more favorable for the HOA as the % of voting control held by the MVC trust increases.

Although realistically at >30% they now have full control, as you'd never get enough owners to even vote to outweigh that.