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

[vacationtime1]

E&O coverage doesn’t cover for intentional misconduct. E&O doesn’t cover punitive damages either. E&O doesn’t typically provide for the breach of fiduciary claims you’re talking about when you believe the person will basically do whatever MVW wants to the detriment of the HOA. That isn’t how the business world works. And “Marriott” cannot fire any BOD member. That’s not how a BOD works.

Please be real. Of course the Board members didn't do anything wrong "intentionally"; they exercised their "business judgment" in Marriott's favor after reviewing relevant information presented as reflected in the Board minutes. That is how the business world works.

On what basis can you possibly state that Marriott cannot fire its employees (or not promote them, not pay them bonuses ,or otherwise make their lives miserable)? Of course Marriott will build a dossier on those employees' "misdeeds" unrelated to their Board activities -- especially if that is it the reason they are being fired or not promoted. That is how the business world works.

I am not suggesting that Marriott employees serving on HOA boards are dishonest. However, they come with an institutional bias which may result in them seeing an issue from a perspective different than the one most people (or most owners) would have.

 

[bizaro86]

I am not suggesting that Marriott employees serving on HOA boards are dishonest. However, they come with an institutional bias which may result in them seeing an issue from a perspective different than the one most people (or most owners) would have.

Yeah. If I'm picking someone to act on my behalf, 10/10 times I pick the person whose incentives match mine, not the person who owes me a fiduciary duty.

 

[DanCali]

Yeah. If I'm picking someone to act on my behalf, 10/10 times I pick the person whose incentives match mine, not the person who owes me a fiduciary duty.

If a current budget says it takes $600 to do housekeeping for a 2BR unit, and next year's budget will say it's $620, I suspect all board members will just say a 3.3% increase "sounds right" and move on. No board member will get sued for breach of fiduciary duty for that. And nobody will ask how we even got to a budget of $600 to clean a 2BR unit after an owner checks out (6 "man hours" for $600?), while at the same time not even having a midweek tidy, eliminating individual bars of soap and shampoos, and no turndown service like they do at the Ritz properties.

I'm dumbfounded every time I look at the line item (it's a huge part of every budget)... Are the housekeepers working for a separate (MVC-owned?) company that is managed by a separate (MVC-owned?) agency and they all pass the funds down to the housekeepers (who work for a lot less than $100/hour) while retaining profits along the way? How can that amount be justified in any reasonable way?

FWIW, I did notice that "housekeeping" line item going down by ~3% in 2025 in a proposed budget at one of the resorts (not the overall dues heaven forbid... just that line item). Maybe they're starting to realize reasonableness was completely out the door with the 30%+ MF increases in the past 2 years. The stock is down 10%+ in a year the stock market is up 20%+ (and Marriott hotels is also up 15%+)... that should be a wake up call for the people who care at least about that.

 

[dioxide45]

I'm dumbfounded every time I look at the line item (it's a huge part of every budget)... Are the housekeepers working for a separate (MVC-owned?) company that is managed by a separate (MVC-owned?) agency and they all pass the funds down to the housekeepers (who work for a lot less than $100/hour) while retaining profits along the way? How can that amount be justified in any reasonable way?

I think there is a lot of things like this. I know Marriott has its own renovation services company. Thus they are the general contractor for any bids they win. This was a bone of contention about 10 years ago at Grande Vista. A board member (president) wanted to go with a different bid but the other board members wanted Marriott Renovation Services. He was ousted as president and was not re-elected to the board. It almost seems like these resorts are like a franchise model where you have to buy the products and services from the corporation and you pay a markup vs if you could just buy it direct from the manufacturer or distributor.

I see that housekeeping is budgeted down almost 5% at Grande Vista. Though overall operating fee is up over 4%.

 

[frank808]

I am not saying that you take anyone’s word for it. The risk of personal liability for breach of fiduciary duty is real. In everything, there has to be some level of trust. It does no good in the business world to destroy a reputation or create one that says the company is engaged in egregious conduct and self serving actions. And not sure which charts you’re referring to, but as to the reserve analysis, that’s completed by a third party. An independent company. It’s not corporate creating charts to support its position.

I would think MVC heavy board, would not waste time and resources, in trying to bring about a lawsuit for breach of fiduciary duty. One thing to bring about a lawsuit and another to actually win it. From what I understand, the latest settlement for the self dealing by MVC regarding the foreclosed units at GRC took some time and effort. That foreclosure suit seems a lot easier to prove and win than someone breaching fiduciary duty, in my opinion.

Why would I appoint a person to an executive board that was not favorable to my cause? Especially if this affects my bottom line as a publicly traded company. The publicly traded company is beholden to one thing...profits. Which GRC management fees are a part of. I would think management fees would be a large part of MVC profits. I am guessing second to sales.

Sent from my SM-S928U using Tapatalk

 

[jshriber]

Hello everyone,
I still have one question. The thing you do before you go into any meeting room for a business meeting (virtual or not) is ask who is going to be at the meeting? Lesliedet, ocdbr and Hindsite are you owners at GRC? What is your full and exact affiliation with all of Marriott’s entities past and present? I am an owner and I apologize for letting everyone know of my background in such a bold way several pages ago.

 

[igopogo]

If a current budget says it takes $600 to do housekeeping for a 2BR unit, and next year's budget will say it's $620, I suspect all board members will just say a 3.3% increase "sounds right" and move on. No board member will get sued for breach of fiduciary duty for that. And nobody will ask how we even got to a budget of $600 to clean a 2BR unit after an owner checks out (6 "man hours" for $600?), while at the same time not even having a midweek tidy, eliminating individual bars of soap and shampoos, and no turndown service like they do at the Ritz properties.

I'm dumbfounded every time I look at the line item (it's a huge part of every budget)... Are the housekeepers working for a separate (MVC-owned?) company that is managed by a separate (MVC-owned?) agency and they all pass the funds down to the housekeepers (who work for a lot less than $100/hour) while retaining profits along the way? How can that amount be justified in any reasonable way?

FWIW, I did notice that "housekeeping" line item going down by ~3% in 2025 in a proposed budget at one of the resorts (not the overall dues heaven forbid... just that line item). Maybe they're starting to realize reasonableness was completely out the door with the 30%+ MF increases in the past 2 years. The stock is down 10%+ in a year the stock market is up 20%+ (and Marriott hotels is also up 15%+)... that should be a wake up call for the people who care at least about that.

Funny thing is, if we use our weeks at GRC we also pay a housekeeping fee.

 

[Hindsite]

Hello everyone,
I still have one question. The thing you do before you go into any meeting room for a business meeting (virtual or not) is ask who is going to be at the meeting? Lesliedet, ocdbr and Hindsite are you owners at GRC? What is your full and exact affiliation with all of Marriott’s entities past and present? I am an owner and I apologize for letting everyone know of my background in such a bold way several pages ago.

That's two questions and this isn't a business meeting, so do tell why you feel the need to ask them....

 

[SueDonJ]

Hello everyone,
I still have one question. The thing you do before you go into any meeting room for a business meeting (virtual or not) is ask who is going to be at the meeting? Lesliedet, ocdbr and Hindsite are you owners at GRC? What is your full and exact affiliation with all of Marriott’s entities past and present? I am an owner and I apologize for letting everyone know of my background in such a bold way several pages ago.

I’ve never understood what difference it makes whether anyone who chooses to participate in TUG discussions is an Owner at the specific resort at issue in specific threads. Marriott as a management company manages all its properties as uniformly as possible, meaning very often how they approach an issue at one can be an indicator of how they’ll approach the same issue at all (barring any legal impediments, of course.) So there’s wisdom to be gained, and shared, by all Owners/Members here - including those who don’t own at GRC.

I’m not a GRC Owner but I am a Marriott Owner, I’ve always been fascinated by the contractual legalities, and I appreciate that TUGgers bring all kinds of perspectives to the table - as owners at specific resorts, owners under the umbrella with longtime experience, and/or professionals who can speak to the many, many issues in play. TUG wouldn’t be nearly as valuable a resource if only owners were allowed or encouraged to contribute to threads that are specific to a single resort.

 

[jshriber]

I’ve never understood what difference it makes whether anyone who chooses to participate in TUG discussions is an Owner at the specific resort at issue in specific threads. Marriott as a management company manages all its properties as uniformly as possible, meaning very often how they approach an issue at one can be an indicator of how they’ll approach the same issue at all (barring any legal impediments, of course.) So there’s wisdom to be gained, and shared, by all Owners/Members here - including those who don’t own at GRC.

I’m not a GRC Owner but I am a Marriott Owner, I’ve always been fascinated by the contractual legalities, and I appreciate that TUGgers bring all kinds of perspectives to the table - as owners at specific resorts, owners under the umbrella with longtime experience, and/or professionals who can speak to the many, many issues in play. TUG wouldn’t be nearly as valuable a resource if only owners were allowed or encouraged to contribute to threads that are specific to a single resort.

Did I ever say only owners should be allowed to contribute? I agree anyone interested should contribute. I ask the question because different stakeholders have different objectives.

 

[SueDonJ]

Did I ever say only owners should be allowed to contribute? I agree anyone interested should contribute. I ask the question because different stakeholders have different objectives.

“Are you Owners?” You asked that question of three specific people whose contributions have seemingly supported at least some of Marriott’s perspectives and actions in this matter. Why raise the question at all, or why not ask it of every contributor, if it’s not meant to be an implicit suggestion that those three specifically could/would not objectively find fault with Marriott if they’re proven to have engaged in wrongdoing?

 

[jshriber]

Did I ever say only owners should be allowed to contribute? I agree anyone interested should contribute. I ask the question because different stakeholders have different objectives.

Sometimes the no answer is the answer. There are GRC owners out there that have saved to buy a fractional as a family dream. Frankly, a budget as outlined above will put them in a fire sale position on their ownership. They come to tug to discuss the problem and it frankly feels like they are getting beat up by a bunch of corporate lawyers who specialize in this type of law- not a fair fight for your average Joe.

 

[SueDonJ]

Sometimes the no answer is the answer. There are GRC owners out there that have saved to buy a fractional as a family dream. Frankly, a budget as outlined above will put them in a fire sale position on their ownership. They come to tug to discuss the problem and it frankly feels like they are getting beat up by a bunch of corporate lawyers who specialize in this type of law- not a fair fight for your average Joe.

You don’t think it’s helpful for the people who are being personally impacted by this situation, to get free advice and direction from people who obviously have expertise in the matters at hand?

 

[Eric B]

In my view, postings by lawyers that have spent years practicing in this area add a great deal of value to the conversation here on TUG. I look at it is providing information and perspective on how things work not only on the legal side of things but also on the management and costing side. Following the posts of many in the thread and throughout TUG leads me to conclude they are not Marriott employees or "corporate attorneys" trying to influence folks here negatively.

I also have the impression that many folks on TUG come here to learn things like that rather than to merely vent. I don't have a problem with the venting, though I don't really perceive it as anyone being in a competition here in a way that there could ever be an unfair fight. Those that are bothered by lawyers posting based on decades of experience in the legal profession in this area of the law always have the option of ignoring the lawyers' postings after all. Personally, I prefer to read all sides of the issues and draw my own conclusions and have only ignored a few posters here.

 

[TimGolobic]

I am not saying that you take anyone’s word for it. The risk of personal liability for breach of fiduciary duty is real. In everything, there has to be some level of trust. It does no good in the business world to destroy a reputation or create one that says the company is engaged in egregious conduct and self serving actions. And not sure which charts you’re referring to, but as to the reserve analysis, that’s completed by a third party. An independent company. It’s not corporate creating charts to support its position.

A Marriott-heavy board choosing not to sue the manager over improper management isn't necessarily the fiduciary breach that you think would proactively prevent the board from "doing the right thing". As we've seen this discussion progress, the board member(s) can simply "agree" that the pursuit of legal action isn't worthwhile in their "business judgement" and ultimately is without significant benefit to outweigh any perceived harm to the Association. It is swept under the rug and goes away.

One of the real-life instances that the GRC board fought back on was a settlement regarding what I recall to be an overtime wage violation at Newport Coast (apologies if I don't have it precisely correct, but the spirit of it is true). MVW expected every property in the West Region to share in the settlement costs, despite it being specific to NC. The GRC board said "uh, no". MVW basically tried to override that and said "uh, yeah". Until the threat of legal action put an end to that. The GRC board clearly acted properly as a fiduciary; MVW clearly acted in their self-interest. A board with a makeup more friendly to MVW would have said "oh well, I guess we have to suck this up and take it", as it would appear happened at other properties in the West Region. But then trying to prove that the MVW-friendly board breached their responsibility is impossible, let alone even the issue being disclosed to the general ownership.

1 - Why should all Associations share in the costs of illegal management issues isolated to one property?
2 - Why should ANY Association share in the costs of illegal management issues at all and shouldn't it be 100% a corporate-level cost?

This. This. This is why MVW should have as few seats on a board as possible. Yes, as you put it "there has to be some level of trust", but MVW REPEATEDLY proves themselves to be untrustworthy. And thus the imperative need for a strong and independent board willing to stand up, as is their responsibility.

 

[jshriber]

You don’t think it’s helpful for the people who are being personally impacted by this situation, to get free advice and direction from people who obviously have expertise in the matters at hand?

I never said it was not helpful for people. As I stated in my previous post I found the conversation to be very helpful. It is also ok for me to share that I felt like I was in a courtroom being attacked by corporate attorneys in this discussion. I hope that I will not be attacked for sharing this too…your best customers/colleagues are those who are courageous enough to be honest about their experience. I hope that all involved will remember there are real people and families involved in this who are hoping to be represented by their boards and hope that the budget will be managed as if it were their family budget.

 

[SueDonJ]

A Marriott-heavy board choosing not to sue the manager over improper management isn't necessarily the fiduciary breach that you think would proactively prevent the board from "doing the right thing". As we've seen this discussion progress, the board member(s) can simply "agree" that the pursuit of legal action isn't worthwhile in their "business judgement" and ultimately is without significant benefit to outweigh any perceived harm to the Association. It is swept under the rug and goes away.

One of the real-life instances that the GRC board fought back on was a settlement regarding what I recall to be an overtime wage violation at Newport Coast (apologies if I don't have it precisely correct, but the spirit of it is true). MVW expected every property in the West Region to share in the settlement costs, despite it being specific to NC. The GRC board said "uh, no". MVW basically tried to override that and said "uh, yeah". Until the threat of legal action put an end to that. The GRC board clearly acted properly as a fiduciary; MVW clearly acted in their self-interest. A board with a makeup more friendly to MVW would have said "oh well, I guess we have to suck this up and take it", as it would appear happened at other properties in the West Region. But then trying to prove that the MVW-friendly board breached their responsibility is impossible, let alone even the issue being disclosed to the general ownership.

1 - Why should all Associations share in the costs of illegal management issues isolated to one property?
2 - Why should ANY Association share in the costs of illegal management issues at all and shouldn't it be 100% a corporate-level cost?

This. This. This is why MVW should have as few seats on a board as possible. Yes, as you put it "there has to be some level of trust", but MVW REPEATEDLY proves themselves to be untrustworthy. And thus the imperative need for a strong and independent board willing to stand up, as is their responsibility.

Isn't there an explanation from @LeslieDet, someone who obviously has expertise in the matter, somewhere way back in this thread that explains why legally GRC and other resorts were on the hook for their share of a settlement involving overtime wages at that other resort (I don't remember either but I think it was Newport Coast?) Something about rules related to representative classes?

Note I'm not absolving Marriott of everything they've ever done here. I just think this one item was explained seemingly in Marriott's favor so it might not be the best one to use as an example here.

 

[dioxide45]

I tend to find what people think is fiduciary responsibility and the reality of fiduciary responsibility are two very different things.

 

[Eric B]

I tend to find what people think is fiduciary responsibility and the reality of fiduciary responsibility are two very different things.

This is precisely why I like to read what practitioners in that area have to say.

 

[SueDonJ]

I never said it was not helpful for people. As I stated in my previous post I found the conversation to be very helpful. It is also ok for me to share that I felt like I was in a courtroom being attacked by corporate attorneys in this discussion. I hope that I will not be attacked for sharing this too…your best customers/colleagues are those who are courageous enough to be honest about their experience. I hope that all involved will remember there are real people and families involved in this who are hoping to be represented by their boards and hope that the budget will be managed as if it were their family budget.

I'm truly sorry if any GRC owners are being made to feel as though any thread participants here aren't sympathetic to their situation. I think I can safely say that it's precisely because we can imagine ourselves in similar dire circumstances that so many of us participate in these types of threads.

The objective truth here is that only recently GRC owners have learned that the entity that's tasked with protecting their interests, the HOA Board, has been engaged in legal quagmires with the entity whose name is on the door of their resort for a period of years, and neither side has provided ongoing status updates or complete explanations for their actions. From all appearances neither side is completely correct or wrong. But legal situations can't be resolved without engaging in a whole lot of legalities, so I think I can also safely say that the contributors of legal-speak to this thread aren't at all meaning to bludgeon owners about the head but rather to help them gain understanding (and perhaps provide focus to save time/money should owners wish to involve their own attorneys.)

 

[wuv pooh]

I will say that I know Melissa from Horizons Orlando and she is good people. Marriott is obviously taking things seriously and is bringing in an excellent GM to start fresh after the settlements.

Can't really speak to the projected budget increases but there is a vast difference between operating expenses and reserve expenses. You can argue about if the reserve money is being spent by the "best value" contractor but the actual budget is informed by a third party and the owners are the sole beneficiary of the reserves. Even if it is not spent, the reserves accrue to the owners and are not wasted. It is not really an option to maintain the property and deferred maintenance leads to special assessments so it is a false economy. Since my home repair contractors seem to charge about 2x what they did prior to Covid I can only imagine the increases in a remote corner of the mountains in CA/Nevada if you can even get a contractor at all.

 

[jshriber]

In my view, postings by lawyers that have spent years practicing in this area add a great deal of value to the conversation here on TUG. I look at it is providing information and perspective on how things work not only on the legal side of things but also on the management and costing side. Following the posts of many in the thread and throughout TUG leads me to conclude they are not Marriott employees or "corporate attorneys" trying to influence folks here negatively.

I also have the impression that many folks on TUG come here to learn things like that rather than to merely vent. I don't have a problem with the venting, though I don't really perceive it as anyone being in a competition here in a way that there could ever be an unfair fight. Those that are bothered by lawyers posting based on decades of experience in the legal profession in this area of the law always have the option of ignoring the lawyers' postings after all. Personally, I prefer to read all sides of the issues and draw my own conclusions and have only ignored a few posters here.

Yes I agree - but it would be good to know if the person responding is being bankrolled by Marriott - you are not getting the objective insight you seek.

 

[jshriber]

I will say that I know Melissa from Horizons Orlando and she is good people. Marriott is obviously taking things seriously and is bringing in an excellent GM to start fresh after the settlements.

Can't really speak to the projected budget increases but there is a vast difference between operating expenses and reserve expenses. You can argue about if the reserve money is being spent by the "best value" contractor but the actual budget is informed by a third party and the owners are the sole beneficiary of the reserves. Even if it is not spent, the reserves accrue to the owners and are not wasted. It is not really an option to maintain the property and deferred maintenance leads to special assessments so it is a false economy. Since my home repair contractors seem to charge about 2x what they did prior to Covid I can only imagine the increases in a remote corner of the mountains in CA/Nevada if you can even get a contractor at all.

The reserve number does not need to be 100 percent accurate (it is an estimate). I would rather carry a low reserve number - keep the money carried in my account than in a third party reserve. Financially it is better to pay a special assessment for capex for a budget line item that is highly scrutinized than have it be in an allowance slush fund with less oversight.

 

[davidvel]

“Are you Owners?” You asked that question of three specific people whose contributions have seemingly supported at least some of Marriott’s perspectives and actions in this matter. Why raise the question at all, or why not ask it of every contributor, if it’s not meant to be an implicit suggestion that those three specifically could/would not objectively find fault with Marriott if they’re proven to have engaged in wrongdoing?

This is a huge stretch. They never mentioned that non owners should not participate in the discussion but you assume that is what they meant? Huh? Nothing in that post implied that they only wanted owners to discuss this issue. Some of the people mentioned have been strident MVC defenders on every issue. They made it clear that they wanted to know the backgrounds of those posters.

 

[SueDonJ]

Yes I agree - but it would be good to know if the person responding is being bankrolled by Marriott - you are not getting the objective insight you seek.

Ah. Now we're finally here at the ages-old TUGism that anybody who seeks/finds justification for the actions of a timeshare developer/manager must be employed in some capacity by that developer/manager. Because we all know that the developer/manager is always wrong and the owners are always right, I guess?