Note: Please do not post ads in the timeshare forums. If you want to add a timeshare posting, go here.

Original Message:

Maintenance Fee increases (by KC):

jayjay has noted: >> It would seem to me that a resort with 500 units, each with 51 owners (considering it's sold out) with maintenance fees of $700 from each owner would total $35,700 per unit per year with total maintenance fees for the year for the resort being $17,850,000 (17 million 850 thousand dollars). This seems very excessive to me. I realize that maintenance fees also cover grounds, pools, housekeeping, maintaining units, replacing furnishings and appliances (every 5-7 years), exterior maintenance, employees etc. but if a resort has enough fees in reserves, the maintenance fees should NOT rise each and every year<< ==============================================

I don't dispute any of your observations above, but I would note that timeshare maintenance fees will (and must) virtually ALWAYS increase to some degree because:

1. Not many facilities have anywhere near 500 units. At the few facilities where I own weeks, just for example, NONE even have more than 50 units (1/10th the number of your example and, accordingly, 1/10 the annual maintenance fee income collected). The smaller the facility, the harder the hit on rising costs, with fewer owners to "share the load" of any necessary increases.

2. Inflation affects everything, everywhere. Utility bills rise right along with increasing fuel costs, for example. Timeshare facilities must pay those rate increases right along with everyone else. Maintenance fees cannot ever ever possibly stay the same without drying up the "reserves" well. I see "reserves" primarily as serving to help avoid the need for the dreaded and unwelcome "special assessments", or to absorb occasional minor repair or replacement costs.

3. Insurance is a very high (and ever increasing) cost item, particularly in hurricane prone areas like the Gulf Coast states. In the world after hurricanes Andrew, Charley, Wendy and Katrina, for example, insurance costs just absolutely skyrocketed. Some companies left the area entirely, refusing to underwrite there any more at all. Deductibles in Florida can be (and often are) HUGE before any insurance coverage even kicks in at all. Dipping into existing reserves at "a million dollars per whack" is obviously neither possible nor realistic.

4. Property taxes. While the resale market value of individual timeshare weeks may well become stagnant (or decrease), particularly in a weak economy, the assessed value of the overall physical property itself will virtually always increase, at least slightly --- more so in areas where there is simply no more desirable bulding space (the Florida Keys and Fort Myers Beach come immediately to mind as two specific examples). When property taxes increase, those increases must necessarily be passed directly along and become reflected in maintenace fee increases.

I'm certainly not defending maintenance fee increases; I don't like them any more than anyone else. That said, however, I clearly understand that these increases are simply an inevitable and indisputable fact of economic life --- and I very clearly understand why (although understanding why sure doesn't mean that I like it one bit). Unfortunately, however, it will be forever so...