VRI bill arrived

[jbercu]

When you see a special assessment - especially a huge one- it is a clear indication that past management/Boards did not properly fund operations and/or reserves. Often you will see it happen when a new management steps in and they have to try to fix years of neglect and underfunding. The worst, IMO, is when the same management that helped create the problem is left in charge to "handle" the fix. Usually they aren't capable of that work or they would have handled it properly to begin with. Of course there can be the occasional situation where a management has recommended funding and collection levels that would support the resort but were ignored by a Board that insists on holding down fees. That is often a very false economy and ends up in the type of massive special assessment we may be seeing here.

All properties require adequate ongoing operational funds as well as reasonable collection of future funding for upgrades, maintenance and repairs. Refusing to acknowledge those needs or stretching the existing buildings, furnishings and fixtures beyond reasonable life spans doesn't save money it leads to large, one time (or, in extreme cases of poor planning multiple large) assessments to rebuild.

In many cases it is not the current Board or Management that is at fault but years of bad management, all too often Developer based management that hold fees artificially "low" to spur sales, that finally cannot be ignored any longer if the resort is going to remain viable. Yes it makes the current management and Board look like the heavies but they are really only doing the work at the going cost that must get done.

...the year the developers turned the property over to the owners elected Board of Directors, (who, by the way, happen to have currently 3 Bd. members with the experience of serving during this entire 25 year period).
Palmtree7339

What the owners need to do now is to concentrate on getting their resort back in shape and protecting what they have already spent. Support the Board and the resort if you wish to protect your investment.

John:
Can you clarify after finding out that the majority of the Board has been in place for 25 years you would still recommend support of the Board? Based on your earlier post I thought you would recommend getting rid of the Board.
Also, I still believe that it is the Board responsibility to plan not only the remodel, but also how to deal with the owners that either cannot afford the S.A or no longer want to be members.
The discussion about “Bailing” would be more meaningful if the recommendation was to bail on this Board. Why would anybody buy this resort even for $1 if the Board remains the same, is beyond me.
Fool me once, Shame on you. Fool me twice, Shame on me.

 

[timeos2]

What is the history?

John:
Can you clarify after finding out that the majority of the Board has been in place for 25 years you would still recommend support of the Board? Based on your earlier post I thought you would recommend getting rid of the Board.
Also, I still believe that it is the Board responsibility to plan not only the remodel, but also how to deal with the owners that either cannot afford the S.A or no longer want to be members.
The discussion about “Bailing” would be more meaningful if the recommendation was to bail on this Board. Why would anybody buy this resort even for $1 if the Board remains the same, is beyond me.
Fool me once, Shame on you. Fool me twice, Shame on me.

This one gets to be a tough call if the primary goal is to place blame. I don't know how many Board members there are - do the 3 - 25 year members represent the majority? If so it may be time (past time) to vote them out. Maybe. Have they been the majority all that time or did the developer hold the control? Are they now making up for their own poor decisions to hold down fees too long and not plan for required upgrades or did they try to make changes that got voted down or overruled? Too many unknowns for me to make a call like that. If someone can post a bit more of the history and how things got to this point it would be helpful.

If the main goal is to get the resort back into shape then the proper moves are being made. Then it's a question of the owners trusting the current Board to see it through correctly. They already made the tough, and always unpopular, decision to have the needed assessment - now they should be actively doing all they can to sell it as the best choice for owners and to get owner support both in words and dollars. It is NOT the time to go into hiding or to simply say "we can do it and we did". It can be defended as a requirement to keep the resort viable and they should be out in the open beating the drum.

If this Board doesn't have the support of the owners then vote them out. Doesn't change the assessment or the need for it but it would put fresh eyes and perhaps a different approach in charge going forward. Once this money is spent and the resort back up to standards the Board needs to be proactive in keeping ahead of future issues so it never happens again. If they don't have the backbone to do that then get one that does.

Dealing with the owners that can't afford the SA or just want out doesn't really fall to the Board to handle. If owners do want out they need to find a buyer or to arrange to give it away for the cost of the SA - or whatever they can work out. For those that can't afford it it's no different than taxes. You owe it and no one but you the owner has the responsibility of seeing that it gets paid or you lose the property. That's the obligation you take on when you decide to buy real estate / timeshares. You don't have it just when you and the resort/home are in good times. It is still there to be handled good times or bad for either or both sides.

 

[JACKJMP]

CCHE Conversion & SA

My Real Problem With CCHE Is 2 Years Ago Resort Went From A Weeks Resort To A Points Conversion Resort-cost To Do It $3500+
Why ? Who Was To Benefit CCHE Or VRI? Did We Vote On This?
Now The SA. Who Is To Benefit And Did We Vote On This?
Can The BOD Do Whatever They Want?
What Is Next? Jack

 

[timeos2]

Points are just another exchange

My Real Problem With Cche Is 2 Years Ago Resort Went From A Weeks Resort To A Points Conversion Resort-cost To Do It $3500+
Why ? Who Was To Benefit Cche Or Vri? Did We Vote On This?
Now The Sa. Who Is To Benefit And Did We Vote On This?
Can The Bod Do Whatever They Want?
What Is Next? Jack

A "conversion to points" has nothing to do with the daily operation/cost of a timeshare. It is strictly another exchange option just like being affiliated with RCi. II - whoever. The cost goes to whoever has the contract to sell points at that resort. The resort itself may or may not get any of that money. It would have nothing whatsoever to do with the need for the SA.

In fact, done correctly, points have been a way to stabilize resorts - especially highly seasonal areas- by getting value back for owners that see none if they try to only do week for week trades. After investing in the conversion cost and the fact that points are much easier to obtain trades for (you can adjust your request or your points or both to fit what you own as well as borrow, rent or pool points) the owners are much more likely to pay their fees.

Can the BOD do whatever they want? Of course not. But they can and should do what they are authorized to do which includes collecting whatever the amount needed to operate and maintain /upgrade the resort requires. They can also decide to allow more options to owners - such as the ability to use RCI Points - as that is strictly a voluntary item. Most would argue against limiting owner choices vs giving them as many as possible which allowing points as well as multiple exchange affiliations does. I find Boards that choose to limit owners choices to be the heavy handed groups not those that open up a number of owner options.

 

[e.bram]

Timeos2:
What investment are we talking about protecting here. Most of the TS units will never be worth more than a Dollar(maybe less or negative)no matter what is done(area to seasonal). Paying the SA is just throwing good money after bad! If an owner can't comfortably afford it in this economy and their financial condition, they shouldn't. If that happens a lot the mfs will go up so high that this TS could be doomed as a TS, but liquidated for whole ownership, with the proceeds divided equally among all unit owners.A good deal for all except maybe the few prime week owners(25-33). what is best for the majority should prevail.This option should be presented to the owners for a vote.

 

[timeos2]

They can't sell and they can't let it fall apart.

Timeos2:
What investment are we talking about protecting here. Most of the TS units will never be worth more than a Dollar(maybe less or negative)no matter what is done(area to seasonal). Paying the SA is just throwing good money after bad! If an owner can't comfortably afford it in this economy and their financial condition, they shouldn't. If that happens a lot the mfs will go up so high that this TS could be doomed as a TS, but liquidated for whole ownership, with the proceeds divided equally among all unit owners.A good deal for all except maybe the few prime week owners(25-33). what is best for the majority should prevail.This option should be presented to the owners for a vote.

I'm not in total opposition to that but you have to realize that getting the necessary vote (most likely a super majority of 70-80%) to vote for it is almost impossible. That would be true for any weeks the developer still controls (which may by itself kill any possibility of a successful vote) and it is highly unlikely that anyone who just paid to buy into points would turn around and vote to risk a sell out that may or may not occur.

The reality is that this is a very seasonal timeshare. Everyone that bought there knew that (or should have). The best they can do is make it the best it can be and get the value out as use. That is all anyone can expect from most timeshares. They do not follow the rules of real estate as there are too many restrictions for them to show the increased value of the property in a liquid form that can translate to return to owners.

In hindsight the set up of most timesharing may be too restrictive and not a particularly wise way to develop and sell property. Look at the near disaster the obviously beneficial move of Summer Bay in Las Vegas created - they nearly blew a tremendous upgrade by bickering over the value. Then there is the more real estate based collapse of "Briny Breezes" where trailer owners were to get a windfall but things got delayed, the economy collapsed and now they own what they always had. No instant millionaires. But since timeshare exist and have many owners it behooves us to find ways to maximize the value, not to try to destroy it. A good Board will try to protect the resort and the owners as best they possibly can.

 

[e.bram]

Timeos2:
GM and Chrysler were more and longer established that most TSs and look what it took to save them. Maybe some TSes need the same to save the facility. Once having millions of owners(analog TS owners) they now have two(the USA and UAW). TSes should shrink their ownerships to whole ownerships, and do it before it is too late and the suffer the fate of GM and Chrysler share and bondholders. Most CCHE units will never have any value as TSes no matter what improvements are done. END OF STORY!!!
With the BOD picking the contractors the value for dollar won't be there either. Somebody will get fat from the construction job.

 

[vacationhopeful]

As a VRI resort, any owner who converted to RCI Points now has HOME GROUP RESORT priority at other VRI resorts at month 11 vs the masses of other RCI Points owners who can only exchange into the other resorts at month 10. There is also the VRI*ety exchange platform among many of the other VRI managed resorts.

Education and learning is critical to use any TS system for exchanging, whether it is RCI, II, Redweek, SFX, Wyndham, etc. for the best outcome for the TS owner. I know I am on TUG to learn as much as possible.

 

[Vaca720]

CCH has 7 trustees. A few are original board members, a couple are within the past 5 years or so and a couple are within just the past year. Every year there is an election with incumbents or new candidates for the board. There is a mailing on such that is sent out every year prior to the annual homeowners meeting with this information including incumbent/candidate profiles and ballot forms.

 

[timeos2]

The owners seem to support the Board. Keep them talking & sell the work needed

CCH has 7 trustees. A few are original board members, a couple are within the past 5 years or so and a couple are within just the past year. Every year there is an election with incumbents or new candidates for the board. There is a mailing on such that is sent out every year prior to the annual homeowners meeting with this information including incumbent/candidate profiles and ballot forms.

So there are 3 original members but they are not the majority. Sounds like owners are satisfied with them and have had the chance to vote them off if they felt that was needed. This backs up my original thought that the Board should have owner support as they try to turn things around. I'd guess that in the past there has been a great reluctance to raise the needed fees - especially for reserves - that now are coming due. If you divide the current number over those years you'd find a much more palatable per year amount BUT that was never paid so think of it as deferred payment. All those years the existing resort features were being used up or wearing out now they need to be replaced and the money to pay for it has to be raised from - you got it - the owners that got the use benefits through use or trade over those years.

Now in retrospect those smaller increases that would have put the money in the bank for the work don't look so bad but the chance & time to do that is now gone. They need the money NOW to do the work NOW - and will hopefully realize going forward that fees need to really reflect the true cost of resort operation, upgrades and maintenance. I bet they see that clearly and won't make the same mistakes again. It isn't uncommon, no one wants it to happen but once it does it has to be addressed. Deferring collections are easy when things "look fine" but when they suddenly don't anymore and the funds aren't there what should have been planned work becomes effectively an emergency. Special assessments are meant to cover that when it happens.

 

[palmtree7339]

CCHE $8,000 Painting Contract Clarified.

Read it again or ask the Board to clarify that line item. It almost has to be an error or a misread of the budgeted amount. That CANNOT be correct (if it is then you have a real valid complaint and should question the whole renovation very closely!)

After reading your post, I decided to inquire as to the $8,000 cost attributed to painting the interior of one unit at CCHE, since I too felt that this cost was excessive, on its face.

The facts are that the painting contractor charged this amount for the following, in addition to the obvious interior wall painting:

The finish work on sheetrock and the skylights, the relocation of all of the wall switches and outlets, the den slider trim inside and outside, the kitchen wallpapering, the painting of the new interior doors, the painting of the exterior where the den slider was replaced by a picture window, and the painting of the entire front exterior of the home, where the new picture window replaced the old floor to ceiling slider, in order for the new lumber to match.

So, as anyone should readily see, owners and others should not jump to false conclusions until they have all of the facts presented to them.

CCHE owners should expect more renovation details in the next edition of the Resort Newsletter.

I hope the above clarifies the issue of
the painting expense.

Palmtree

 

[timeos2]

More than it would have seemed

The facts are that the painting contractor charged this amount for the following, in addition to the obvious interior wall painting:

The finish work on sheetrock and the skylights, the relocation of all of the wall switches and outlets, the den slider trim inside and outside, the kitchen wallpapering, the painting of the new interior doors, the painting of the exterior where the den slider was replaced by a picture window, and the painting of the entire front exterior of the home, where the new picture window replaced the old floor to ceiling slider, in order for the new lumber to match.

So, as anyone should readily see, owners and others should not jump to false conclusions until they have all of the facts presented to them.

Obviously far more work than what "interior painting" would seem to usually include. In fact it seems like it was mislabeled as "painting" as that is the smallest part of the work. Now the number makes sense but it didn't as it showed up on a simple budget summary.

Thanks for the informative update.

 

[susette]

CCHE Special Assessment Violates Rules of Condo Trust

Hi Folks,

I obtained a copy of Cape Cod Holiday Estates (CCHE) Master Deed and Condominium Trust this week. Section 5 of the Condominum Trust might be of particular interest to anyone who thinks the Special Assessment for condo renovations should not be allowed

Well, YOU ARE RIGHT! Because VRI and the Trustees have violated the rules of the condominium trust, which specificially state the Trustees must get approval in writing by 75% of the cono Unit Owners. To get approval, they should have sent all of us forms in the mail to SIGN! I received no such form, and i never agreed to this assessment.

For your convenience, I have typed up Section 5 of the Condominum Trust, which pertains to this Special Assessment. Here it is.....

On Page 17 of the Condo trust, under "Section 5. Rebuilding and Restoration, Improvements", paragraph B, the document reads

"If and whenever the Trustees shall propose to make any improvements to the common areas and facilities of the Condominium, or shall be requested in writing by the Unit Owners holding twenty-five (25%) percent or more of the beneficial interest in this trust to make any such improvements, the Trustees shall submit to all Unit Ownsers (a) a form of agreement (which may be in several counterparts) specifying the improvement or improvements proposed to be made and the estimated cost thereof,and authorizing the Trustees to proceed to make the same, and (b) a copy of hte provisions of Section 18 of said Chapter 183A. Upon (a) receipt by the Trustees of such agreement signed by the Unit Owners holding seventy-five (75%) percent or more of the beneficial interest or (b) the expiration of ninety (90) days after such agreement was first submitted to the Unit Owners, whichever of said (a) and (b) shall first occur, the Trustees shall notify all Unit Owners of the aggregate percentage of beneficial interest held by Unit Owners who have signed such agreement. If such percentage exceeds fifty (50%) percent, the Trustees shall proceed to make the improvement or improvements specified in such agreement.

c: Notwithstanding anything in the preceeding Paragraphs A and B contained, (a) in the event that any Unit Owner or Owners shall by notice in writing to the Trustees dissent from any determination of the Trustee with respect to the value of the Condominium or any other determination or action of the Trustees under this Section 5, and such dispute shall not be resolved within thirty (30) days after such notice, then either the Trustees or the dissenting Unit Owner or Owners may submit the matter to arbitration, and for that purpose (1) arbitrator shall be designated by the Trustee, one (1) by the dissenting Unit Owner or Owners and a third by the two arbitrators so designated, and such arbitration shall be conducted in accordance with the Rules and Procedures of the American Arbitration Association, and (b) the Trustees shall not in any event be obliged to proceed with any repair, rebuilding or restoration, or any improvement, unless and until they have received funds in the amount equal to the estimate of the Trustees of all costs therof."

My attorney is reviewing the Master Deed and Condo Trust this week.

Your comments are most welcome. Thanks!

Susette

 

[timeos2]

Hi Folks,

I obtained a copy of Cape Cod Holiday Estates (CCHE) Master Deed and Condominium Trust this week. Section 5 of the Condominum Trust might be of particular interest to anyone who thinks the Special Assessment for condo renovations should not be allowed

State and /or Federal laws / regulations take precedence over documents. Most States, I believe Mass is among them, have laws that require Condo/Timeshare Associations to maintain the project and to raise any funds needed to do so from the owners. Even if that requires a Special Assessment. In that case the need for the owners to vote on it would be overruled by the State requirement that the Board/Association take the proper measures to fund the preservation and upkeep of the property. They could still choose to have a vote of owners but it most likely is not required.

 

[jbercu]

State and /or Federal laws / regulations take precedence over documents. Most States, I believe Mass is among them, have laws that require Condo/Timeshare Associations to maintain the project and to raise any funds needed to do so from the owners. Even if that requires a Special Assessment. In that case the need for the owners to vote on it would be overruled by the State requirement that the Board/Association take the proper measures to fund the preservation and upkeep of the property. They could still choose to have a vote of owners but it most likely is not required.

In all states, Federal and State Law take precedence over documents, in cases where big government is necessary. In issues of health, safety, security, discrimination, free speech, placement of solar power equipment, placement of dishes to receive TV/Radio signal … Federal and state laws take precedence. I do not know of any state of federal laws that dictate how often Timeshare units interiors should be painted, or when flat screen TV’s should be installed. Furthermore, any language in the association documents that are out of sync with the State and Federal laws need to be updated as soon as new laws are adopted at the state and federal level that make the documents unenforceable.
If the quoted document is the current document, either the Board is not following association procedures, or the Board is grossly negligent in not having the association documents in sync with state and federal laws. Is there any part of the remodel that can be considered an emergency health or safety issue?
Thanks

 

[susette]

CCHE SP Violates Rules of Condo Trust AND MA Law

State and /or Federal laws / regulations take precedence over documents. Most States, I believe Mass is among them, have laws that require Condo/Timeshare Associations to maintain the project and to raise any funds needed to do so from the owners. Even if that requires a Special Assessment.

WRONG! John, I'm sorry but you really need to start looking up facts before giving your opinion or bad advice. The Massachusetts law is quite clear and can be found at http://www.mass.gov/legis/laws/mgl/183a-18.htm.

Here is what it says:

"Chapter 183A: Section 18. Improvements; costs

Section 18. (a) If fifty per cent or more but less than seventy-five per cent of the unit owners agree to make an improvement to the common areas and facilities, the cost of such improvement shall be borne solely by the owners so agreeing.

(b) Seventy-five per cent or more of the unit owners may agree to make an improvement to the common areas and facilities and assess the cost thereof to all unit owners as a common expense, but if such improvement shall cost in excess of ten per cent of the then value of the condominium, any unit owner not so agreeing may apply to the superior court of the county in which the property is located, on such notice to the organization of unit owners as the court shall direct, for an order directing the purchase of his unit by the organization of unit owners at fair market value thereof as approved by the court. The cost of any such purchase shall be a common expense. "

Again, CCHE has completely violated MA state law and their own Condominium Trust by proceeding with this $3 Million renovation without permission of the Unit Owners.

Susette

 

[susette]

Is there any part of the remodel that can be considered an emergency health or safety issue?
Thanks

Jberg,

Good question! I took a tour of CCHE's premises and one of the condo units last weekend. To be honest, except a little wear and tear, the place looks great! There is absolutely nothing wrong with CCHE. Also, anything wrong enough to constitute an emergency health or safety issue would (or should have) shut down the place. But they are open for business and even offered to rent me a unit for the night.

So to answer your question, the Condo Trust is in synch with MASS law, and CCHE has completely ignored both when they decided to completely remodel the facilities, at the prompting of VRI. As a result, I believe they have violated the law.

I also plan to take steps to rectify this situation for ALL CCHE unit owners. But I don't want to get ahead of myself.

I will post more information this topic and CCHE / VRI once I create a new website for CCHE owners (only) called www.ccheowners.com. I should have the site online by the end of the week.

Please check the web address in the next few days. Again it will be www.ccheowners.com

Thanks!
Susette

 

[timeos2]

They aren't putting in a water park!

Section 18. (a) If fifty per cent or more but less than seventy-five per cent of the unit owners agree to make an improvement to the common areas and facilities, the cost of such improvement shall be borne solely by the owners so agreeing.

COMMON areas. Those are NOT the units themselves but the shared areas common to all. The BOD is not looking to change the common areas but the basic resort elements - the sections they are charged with maintaining for the 50+ individual week owners. Different animal. That section applies to things like deciding to add a new pool - that would require an owner vote. Not upgrade & maintenance to the units.

You of course can interpret the laws any way you want but, based on 20+ years of timeshare operations (not pure condo ownerships which, due to both operational as well as ownership differences would tend to be handled differently) the Board has acted within the law. Anyone can challenge it as you may have decided to do, but I'll place my bet that ultimately the BOD actions will stand. Time (and expenses) will tell.

 

[susette]

CCHE and MA Law

Then the MA law definitely applies here. This Special Assessment included improvements to all common areas and facilities:

- upgrades to all units
- Community Center Mechanical
- Community Center Furniture
- Lodge Building Equipment and Furniture
- Indoor Pool and Building
- Grounds, Roads and General Property

 

[susette]

Paid Ringers on this board

John Chase,

Its not clear to me why you insert your opinion on any complaint against a management company or condo association. Who is your employer?

 

[susette]

CCHE owners,

There are also several clauses in the MA law that states that the cost of any renovations to the Units cannot exceed 10% of value of property without 75% of Owner's approval. I think this Special Assessment of $3.5 million far exceeds 10% of the value of CCHE, but I have to wait for the valuation to come through before I can speculate on that legal requirement.

Looking forward to finding out this information! Will post to the website as soon as I receive confirmation.

 

[timeos2]

Management shill? I think not.

John Chase,

Its not clear to me why you insert your opinion on any complaint against a management company or condo association. Who is your employer?

Me. I retired after 30 years in local government and have operated my own computer company since 1986 - full time since 2002.

Having served on timeshare boards since 1998, having gone through the incredible process of fighting to get control of an Association from a Developer and seeing exactly how the legal system / State impacts Associations I have a hands on experience to draw on. I shudder when I see naive assumptions by well meaning owners who think they can selectively read laws/documents and know how things work. Most Associations docs are hundreds of pages, the laws made up of many intertwined statutes and sections. There are no simple, absolutes - mostly gray areas open to interpretation. Management companies as well as Developer tend to be far more "in tune" with realities than the casual owner who first gets involved when something like a special assessment stirs things up. It is just fact that the owners tend to lack the background needed to fully understand the situation.

I applaud those who choose to become involved but they need to get up to speed and not assume they know it all from a quick perusal of things. And they need to realize that costs add up quick both for the challengers who are on their own and that as owners they pay for the Association to handle the legal challenges. Again, thats just the way it is.

 

[timeos2]

It is a term that carries a meaning.

The MA law seems pretty clear John, and applies to Improvements to common area and facilities, not just common areas.

You are absolutely correct that it is clear. The term "common area & facilities" carries a specific, legal definition. It is NOT the individual, deeded units that make up the Association and its owner/members. It is the areas/facilities owned & shared by them - and only those areas. You are trying to take a term and apply it to the wrong part of the resort. Ask your legal council what it means if you are uncertain.

 

[susette]

CCHE SA includes common areas

You are absolutely correct that it is clear. The term "common area & facilities" carries a specific, legal definition. It is NOT the individual, deeded units that make up the Association and its owner/members. It is the areas/facilities owned & shared by them - and only those areas. You are trying to take a term and apply it to the wrong part of the resort. Ask your legal council what it means if you are uncertain.

John, this renovation includes ALL facilities on the CCHE premises. I thought you somehow knew that. Sorry for the confusion.

Here is what he project includes:
- upgrades to all units
- Community Center Mechanical
- Community Center Furniture
- Lodge Building Equipment and Furniture
- Indoor Pool and Building
- Grounds, Roads and General Property

and a ton of money on Inflation and "unforseen"

Are we on the same page now??

 

[susette]

Me. I retired after 30 years in local government and have operated my own computer company since 1986 - full time since 2002.
.

So who pays you to monitor this board and subdue the Unit Owners when they get restless?