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Apparently a resort I owned took on a developer as a management company sometime last year (somewhere between June and November). There have been what I considered misconduct on their part and 1 director resigned in protest. Sounded of the 3 remaining director, 1 is not very active and 2 others more active ones are not very savvy.
Some of the actions are:
1. Tried to send mailings in fall 2011 to get his people on the board. That failed but after one of the directors resigned in protest, the develop got one of his subcontractors in as secretary.
2. Contacted owners that are behind to deed intervals to them the developer rather than the HOA.
3. Do not pay MF on the units they own and/or the units they control that are behind in MF. Rents those out and as far as we can tell non of the money from rentals goes to the HOA. Payment from owners for MF and rentals goes to the for profit company the management company controls with a similar name to the HOA.
4. They tried to raise the MF for 2012 but directors said he had agreement to keep MF steady for 2 years. In return they never did budget for 2012 and 2013 proposed budget was a copy of 2011 budget which is a minor adaptation of 2010.
5. Budgets and any actuals are very sketchy... no real breakdown of the number of owners that are current, and what other income since owner rentals of their weeks the Management company or HOA takes a 35-40% cut.
6. There was a single line in the 2011 actuals provided less than 1 hr before the board meeting before the annual meeting of over 600K for renovation (not approved by the budget and not covered by the reserves in 2011).
7. There was a owner in dispute with a highly demanded week regarding what he owes since he claimed to have prepaid a said year and the management company claimed it was still owning.. This owner was told to send information directly to the resort on behalf of the directors but no guarantee the directors received those mail.
8. They are now contacting owners that are behind to either pay up (with no consideration since the management company/developer may have rented the weeks in the past for profit) or deed the intervals to them for a fee to the management company with none of those fee apparently going to the HOA.
I am really concerned.. I have Hyatt and have seen the more professional P&L which I am used to. I think a lot are being hidden in the management company books (a for profit company) and little accurate information are being given to directors and owners. Some of the information demanded are claimed to be in the hands of one of the manager that is part of the developer (family member) and that person was conveniently sick for the annual meeting.
I can bet you that the information demanded will be similar to request for the annual budget of 2012 which was promised multiple times but never send since they did not even bother to cut and paste a previous years budget like they did for the budget of 2013 from 2011.
Basically it sounds as if the directors allowed the developer to take over the resorts since by some estimation the develop now control (not sure own directly or control via dilliquency) over 25% of the resort since if I calculate by the MF it is counting about 75% of ownership, down about 300+ from a few years ago.
Some of the actions are:
1. Tried to send mailings in fall 2011 to get his people on the board. That failed but after one of the directors resigned in protest, the develop got one of his subcontractors in as secretary.
2. Contacted owners that are behind to deed intervals to them the developer rather than the HOA.
3. Do not pay MF on the units they own and/or the units they control that are behind in MF. Rents those out and as far as we can tell non of the money from rentals goes to the HOA. Payment from owners for MF and rentals goes to the for profit company the management company controls with a similar name to the HOA.
4. They tried to raise the MF for 2012 but directors said he had agreement to keep MF steady for 2 years. In return they never did budget for 2012 and 2013 proposed budget was a copy of 2011 budget which is a minor adaptation of 2010.
5. Budgets and any actuals are very sketchy... no real breakdown of the number of owners that are current, and what other income since owner rentals of their weeks the Management company or HOA takes a 35-40% cut.
6. There was a single line in the 2011 actuals provided less than 1 hr before the board meeting before the annual meeting of over 600K for renovation (not approved by the budget and not covered by the reserves in 2011).
7. There was a owner in dispute with a highly demanded week regarding what he owes since he claimed to have prepaid a said year and the management company claimed it was still owning.. This owner was told to send information directly to the resort on behalf of the directors but no guarantee the directors received those mail.
8. They are now contacting owners that are behind to either pay up (with no consideration since the management company/developer may have rented the weeks in the past for profit) or deed the intervals to them for a fee to the management company with none of those fee apparently going to the HOA.
I am really concerned.. I have Hyatt and have seen the more professional P&L which I am used to. I think a lot are being hidden in the management company books (a for profit company) and little accurate information are being given to directors and owners. Some of the information demanded are claimed to be in the hands of one of the manager that is part of the developer (family member) and that person was conveniently sick for the annual meeting.
I can bet you that the information demanded will be similar to request for the annual budget of 2012 which was promised multiple times but never send since they did not even bother to cut and paste a previous years budget like they did for the budget of 2013 from 2011.
Basically it sounds as if the directors allowed the developer to take over the resorts since by some estimation the develop now control (not sure own directly or control via dilliquency) over 25% of the resort since if I calculate by the MF it is counting about 75% of ownership, down about 300+ from a few years ago.
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