Trouble - Marriott Grand Residence Tahoe [Management Agreement in Jeopardy?]

[igopogo]

You can count me in the infuriated group. The board just seems completely unrealistic, and I'm personally hoping we can make a change there soon before it's too late.

I could go either way on the activities, it’s about $300 per year for us and we get a couple bottles of cheap wine. So about on par with buying direct from the developer as a value proposition. I’m just glad the employees won’t be affected. We see them more than our own family.

But if activities is the sticking point with Marriott, then please, spin that bingo cage and let’s get on with it.

In all seriousness I doubt it’s the only point. But it may be representative of the things Marriott layers on in order to justify their pound of flesh.

 

[travelhacker]

I could go either way on the activities, it’s about $300 per year for us and we get a couple bottles of cheap wine. So about on par with buying direct from the developer as a value proposition. I’m just glad the employees won’t be affected. We see them more than our own family.

But if activities is the sticking point with Marriott, then please, spin that bingo cage and let’s get on with it.

In all seriousness I doubt it’s the only point. But it may be representative of the things Marriott layers on in order to justify their pound of flesh.

I agree completely with what you said here.

My feelings are more about the situation as a whole. I read the minutes from the budget meeting last night and it had me feeling far more upset at the board for their unreasonableness than Marriott who did not come prepared with a detailed budget.

 

[vikingsholm]

I can't even imagine a Marriott timeshare resort without activities! This whole situation is just sad to read about, although it must be infuriating for owners.

I don't care about activities, in fact am glad to see a cost savings there. I hope visitors can still use Timber Lodge for that if they want to, but it's not a main issue for us.
.
What chaps me is the resorts I sometimes trade into (non-Marriott) that charge a mandatory $25 a day for facilities and amenities that we do not care about or use.

As an owner, Grand Residence has been like a second home for over a decade, with the DC points trading and Marriott preference in Interval as our most desired features. It has been great, but things started to go downhill a bit when they made the unnecessary acquisition of Westin/Sheraton/Vistana or whatever they call it now, and got too diverted on that.

I sure hope both sides compromise some and continue to see the value in this relationship. We bought into Marriott for good reasons.

 

[dioxide45]

I don't care about activities, in fact am glad to see a cost savings there. I hope visitors can still use Timber Lodge for that if they want to, but it's not a main issue for us.

I would hope they could only use paid activities at Timber Lodge. Why should TL shirk the costs because GR guests want to go over there to use their activities.

 

[dioxide45]

I suspect that nightly or short point based stays have increased significantly for this property? That would also mean an increase in housekeeping costs. If owners are electing points more often, then it means there are possibly several check in and check outs in a week where there used to be just one. Was one of the line items with a big increase the housekeeping item?

 

[dioxide45]

I agree completely with what you said here.

My feelings are more about the situation as a whole. I read the minutes from the budget meeting last night and it had me feeling far more upset at the board for their unreasonableness than Marriott who did not come prepared with a detailed budget.

Didn't Marriott already submit a proposed budget and that is what is in dispute?

 

[travelhacker]

Didn't Marriott already submit a proposed budget and that is what is in dispute?

Correct. From the minutes, they asked specific questions about the budget proposed and the Marriott rep couldn’t answer because the budget wasn’t detailed enough.

 

[davidvel]

I don’t have the numbers in front of me, but I want to say that it went from about $150k down to about $25k. I think that savings is somewhere in the neighborhood of 1%+ of the overall budget. And for perspective, 1% is about 10% of the problem.

So much math! I'm just going with the universal answer, 42.

Earlier in the thread someone said the budget was about 7.1M. So the reduced 125K in activities would be about 1.8% of the budget.

Giving the management company 10% for every expenditure is an archaic rip off. Once they have done their basic duties, a marginal expenditure does not cost them 10%, and there is no reasonable basis to pay them that 10%. These marginal payments are a pure profit generator for the manager (Marriott whatever.) They are likely pushing up budgets and their resulting fees to make up for the crappy points product they created and can't sell.

Either way, this is the issue GR owners, and owners at all Marriott resorts (and other HOAs) should be focusing on, even more than the expenditures themselves. Pay them a fair amount to manage that is NOT based on the amount they spend. To the contrary, maybe even some bonus system for cost reduction. Of course, we all know that there would be enormous pushback from the big M, as this is an utter cash cow for them at the expense of (mostly) unknowing owners.

 

[vikingsholm]

I suspect that nightly or short point based stays have increased significantly for this property? That would also mean an increase in housekeeping costs. If owners are electing points more often, then it means there are possibly several check in and check outs in a week where there used to be just one. Was one of the line items with a big increase the housekeeping item?

I've wondered that myself.

 

[SueDonJ]

Earlier in the thread someone said the budget was about 7.1M. So the reduced 125K in activities would be about 1.8% of the budget.

Giving the management company 10% for every expenditure is an archaic rip off. Once they have done their basic duties, a marginal expenditure does not cost them 10%, and there is no reasonable basis to pay them that 10%. These marginal payments are a pure profit generator for the manager (Marriott whatever.) They are likely pushing up budgets and their resulting fees to make up for the crappy points product they created and can't sell.

Either way, this is the issue GR owners, and owners at all Marriott resorts (and other HOAs) should be focusing on, even more than the expenditures themselves. Pay them a fair amount to manage that is NOT based on the amount they spend. To the contrary, maybe even some bonus system for cost reduction. Of course, we all know that there would be enormous pushback from the big M, as this is an utter cash cow for them at the expense of (mostly) unknowing owners.

I'm not disagreeing completely; no argument that the 10% (15% at some non-US resorts) Marriott Management Fee is pure profit, and I'd go further to say that it was in fact deliberately designed that way. I might argue that it's a de facto impetus for the Manager to increase spending and/or overpay for unnecessarily high-end unit/property furnishings etc, because I don't see wasteful spending at my resorts similar to what others have mentioned, but it does seem to be a factor at some resorts.

But regardless of what we see or don't see it'd take a bolt from the heavens or an act of Congress to change the fee because the percentage is specifically written in to the governing docs of every resort in multiple docs/sections. I have no doubt that Marriott wouldn't hesitate to sever an agreement, as is their right, if ever enough owners were able to muster a majority that would revolt against it. There's no way they'd allow even the highest-performing resort to decrease it because then every resort would insist on the same - maybe they could afford to absorb the loss from one but not all!

Haven't Vistana/Sheraton/Westin/whatever resorts always had a line-item percentage-based Management Fee in their budgets? Did they not used to have one but it's new since Marriott acquired them? Something else? I would find it very hard to believe that any timeshare company would forfeit the pure profit when it's something that the state/federal regs obviously allow.

 

[SueDonJ]

I suspect that nightly or short point based stays have increased significantly for this property? That would also mean an increase in housekeeping costs. If owners are electing points more often, then it means there are possibly several check in and check outs in a week where there used to be just one. Was one of the line items with a big increase the housekeeping item?

Isn't daily housekeeping a thing at the Grand Residence resorts, as a higher-tier resort? I thought they at least used to be before COVID changed everything but if it's the case, I'd expect them to return to it at some point.

 

[dioxide45]

Isn't daily housekeeping a thing at the Grand Residence resorts, as a higher-tier resort? I thought they at least used to be before COVID changed everything but if it's the case, I'd expect them to return to it at some point.

Post #145 seems to indicate it is after a weeks stay, but an owner would need to confirm. GR may work differently than RC.

 

[Eric B]

Westin/Sheraton/Vistana or whatever they call it now

When you go to sign in on the website, they call it "Sheraton Vacation Club & Westin Vacation Club Formerly Vistana." Kind of a long name that doesn't roll of the tongue well - it reminds me of the artist formerly known as "Prince."

 

[dioxide45]

I'm not disagreeing completely; no argument that the 10% (15% at some non-US resorts) Marriott Management Fee is pure profit, and I'd go further to say that it was in fact deliberately designed that way. I might argue that it's a de facto impetus for the Manager to increase spending and/or overpay for unnecessarily high-end unit/property furnishings etc, because I don't see wasteful spending at my resorts similar to what others have mentioned, but it does seem to be a factor at some resorts.

But regardless of what we see or don't see it'd take a bolt from the heavens or an act of Congress to change the fee because the percentage is specifically written in to the governing docs of every resort in multiple docs/sections. I have no doubt that Marriott wouldn't hesitate to sever an agreement, as is their right, if ever enough owners were able to muster a majority that would revolt against it. There's no way they'd allow even the highest-performing resort to decrease it because then every resort would insist on the same - maybe they could afford to absorb the loss from one but not all!

Haven't Vistana/Sheraton/Westin/whatever resorts always had a line-item percentage-based Management Fee in their budgets? Did they not used to have one but it's new since Marriott acquired them? Something else? I would find it very hard to believe that any timeshare company would forfeit the pure profit when it's something that the state/federal regs obviously allow.

A difference I have noticed with Vistana is that the 10% management fee is based only on the operating cost and not also the reserve fee. Where MVC charges the 10% management fee on the combined operating and reserve fee.

 

[davidvel]

I'm not disagreeing completely; no argument that the 10% (15% at some non-US resorts) Marriott Management Fee is pure profit, and I'd go further to say that it was in fact deliberately designed that way. I might argue that it's a de facto impetus for the Manager to increase spending and/or overpay for unnecessarily high-end unit/property furnishings etc, because I don't see wasteful spending at my resorts similar to what others have mentioned, but it does seem to be a factor at some resorts.

But regardless of what we see or don't see it'd take a bolt from the heavens or an act of Congress to change the fee because the percentage is specifically written in to the governing docs of every resort in multiple docs/sections. I have no doubt that Marriott wouldn't hesitate to sever an agreement, as is their right, if ever enough owners were able to muster a majority that would revolt against it. There's no way they'd allow even the highest-performing resort to decrease it because then every resort would insist on the same - maybe they could afford to absorb the loss from one but not all!

Haven't Vistana/Sheraton/Westin/whatever resorts always had a line-item percentage-based Management Fee in their budgets? Did they not used to have one but it's new since Marriott acquired them? Something else? I would find it very hard to believe that any timeshare company would forfeit the pure profit when it's something that the state/federal regs obviously allow.

These types of contracts are typical for management companies of all types of HOAs, not just TS. I agree it likely has a ZERO chance of changing, certainly with Marriott as manager.

It is unclear to me whether the exemplar management agreement in (at least the MRD) governing docs requires that the fee be paid in this manner. The TS declaration states that a management agreement be "substantially" in the form of the original agreement.

What I did not know is this is built into the governing documents.

 

[igopogo]

Post #145 seems to indicate it is after a weeks stay, but an owner would need to confirm. GR may work differently than RC.

Housekeeping is end of stay or weekly for all guests. There was an on-demand option pre-covid but at this point it has not returned.

 

[igopogo]

Wild...

"December 29, 2023

Dear Fellow Grand Residence Club Lake Tahoe Owners,

The October 26, 2023, Meeting Minutes that were recently distributed by the Manager are not accurate and were not approved by the Board. To our knowledge, at no time during the last 21 years have unapproved meeting minutes ever previously been sent out by the Manager. These unapproved minutes purport to describe discussions that never occurred and otherwise were not approved by the Board.

To be clear, only the Board can approve meeting minutes, and this unprecedented and unauthorized action by the Manager reeks of heavy-handed posturing and highlights the main problem the Association has with its Manager: Marriott consistently fails to recognize the authority of the Board of the Association and acts as if they are the owners rather than the agent of the Association.

This most recent unauthorized action by the Manager is consistent with what we suspect to be the Manager’s primary objective: to discredit the Board in the hope that you will vote to replace the current Board with directors that will, in effect, rubber stamp the Manager’s improper actions and approve extreme budget increases that financially benefit the Manager.

We hope that you see the Manager’s actions for what they are. I want to assure you that the Board will continue to do everything in its power to protect your interests. Also, going forward to avoid this from reoccurring we will be requesting that the Manager audio record all meetings.

Sincerely,

James M. Deatherage
Board President
GRCLT Condominium Inc."​

 

[Ken555]

Wild...

Wow. Grab some popcorn!


Sent from my iPad using Tapatalk

 

[dioxide45]

Doesn’t the secretary, a board member, take minutes?

 

[igopogo]

I think they'd better book a bigger room for the next board meeting.

 

[davidvel]

Wild...

"December 29, 2023

Dear Fellow Grand Residence Club Lake Tahoe Owners,

The October 26, 2023, Meeting Minutes that were recently distributed by the Manager are not accurate and were not approved by the Board. To our knowledge, at no time during the last 21 years have unapproved meeting minutes ever previously been sent out by the Manager. These unapproved minutes purport to describe discussions that never occurred and otherwise were not approved by the Board.

To be clear, only the Board can approve meeting minutes, and this unprecedented and unauthorized action by the Manager reeks of heavy-handed posturing and highlights the main problem the Association has with its Manager: Marriott consistently fails to recognize the authority of the Board of the Association and acts as if they are the owners rather than the agent of the Association.

This most recent unauthorized action by the Manager is consistent with what we suspect to be the Manager’s primary objective: to discredit the Board in the hope that you will vote to replace the current Board with directors that will, in effect, rubber stamp the Manager’s improper actions and approve extreme budget increases that financially benefit the Manager.

We hope that you see the Manager’s actions for what they are. I want to assure you that the Board will continue to do everything in its power to protect your interests. Also, going forward to avoid this from reoccurring we will be requesting that the Manager audio record all meetings.

Sincerely,

James M. Deatherage
Board President
GRCLT Condominium Inc."​

The December 4 letter from the manager Marriott seems completely contrary to the fiduciary duties of an agent to its master. The house of cards is shaking.

 

[bazzap]

Doesn’t the secretary, a board member, take minutes?

For board meetings, at another MVC resort which I have been part of, the secretary was an MVC Administrator.
They would never ever release minutes before the Owner Board had signed them off though!

 

[Superchief]

For board meetings, at another MVC resort which I have been part of, the secretary was an MVC Administrator.
They would never ever release minutes before the Owner Board had signed them off though!

Perhaps the MVC manager responsible for this came from the sales department.

 

[timsi]

Wild...

"December 29, 2023

Dear Fellow Grand Residence Club Lake Tahoe Owners,

The October 26, 2023, Meeting Minutes that were recently distributed by the Manager are not accurate and were not approved by the Board. To our knowledge, at no time during the last 21 years have unapproved meeting minutes ever previously been sent out by the Manager. These unapproved minutes purport to describe discussions that never occurred and otherwise were not approved by the Board.

To be clear, only the Board can approve meeting minutes, and this unprecedented and unauthorized action by the Manager reeks of heavy-handed posturing and highlights the main problem the Association has with its Manager: Marriott consistently fails to recognize the authority of the Board of the Association and acts as if they are the owners rather than the agent of the Association.

This most recent unauthorized action by the Manager is consistent with what we suspect to be the Manager’s primary objective: to discredit the Board in the hope that you will vote to replace the current Board with directors that will, in effect, rubber stamp the Manager’s improper actions and approve extreme budget increases that financially benefit the Manager.

We hope that you see the Manager’s actions for what they are. I want to assure you that the Board will continue to do everything in its power to protect your interests. Also, going forward to avoid this from reoccurring we will be requesting that the Manager audio record all meetings.

Sincerely,

James M. Deatherage
Board President
GRCLT Condominium Inc."​

Phase 1, the attempt to discredit and bully the Board of Directors into submission, seems to be ending without achieving its intended outcome.

 

[TUGBrian]

100% have never heard of minutes being published before being approved, which almost always happens as part of the normal agenda at the NEXT board meeting so all members can review prior to approval.

the fact that the board is not only disputing the approval, but the content within is indeed wild!

shame they dont record the meetings via zoom or similar, makes it very easy to clear up any disputes!