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Re: Important Update Affecting Resale Purchasers (by Beck):

danachat wrote:

Oh, glad to see I am not the only one complaining to SVC about their fees. We own five weeks at the 'Beach Club' and simply love the resort. When we got our new maintenance fee invoice they had hiked the fees up to over $1,300.00 per week fro $1,063.00 in 2009. In fairness this was supposed to be the last year of the "special assessment" of an extra $250.00 per year over five years to modernize the resort but their new reason given was the large number of delinquent accounts!! I emailed a four page letter outlining the twisted logic their proposed 2010 budget contained. How in the world could a 70 unit complex completely redone four years ago carry a $1.3 million for repair budget which didn't include the extra carried for the two elevators? I questioned that the raised maintenance fees would prompt others to walk away from their units therefore increasing the burden on the non delinquent owners next year. It really is simple economics. If the money is needed to cover other peoples maintenance fees why is this not budgeted as a loan to the corporation rather than a non returnable feethat the Owner's receive no credit? We then included a breakdown of the various comparable or higher quality two bedroom resorts along the coast and the Keys. They were all under a $1,000.00/year. We have not received a reply in the two weeks we gave them. Now it is in my wife's hands and perhaps legally challenging the actions through her law firm. A class action suit would be very entertaining to make Starwood actually explain the shell game they are playing. They are encouraging by their actions the lowering of the value of the units and stimulating people to walk away in droves. What a pity.

I've always been suprised when owners are told we bear the cost of delinquencies. After all, if a unit is forclosed, it is then resold right? The resale funds which includes the delinquencies are then returned to the HOA and thus it is my theory the owners are potentially made whole.

What appears to be a hole in my understanding of this process is that the proceeds from the foreclosure doesn't appear to go to the HOA/owners. It appears to me that we owners are footing the bill for delinquncies but when foreclosure occurs, the unit is aquired by the developer and not the HOA and the delinquency funds are not reimbursed to the HOA/Owners. Then the developer in many cases sells the unit as a direct sale unit.

I only know of one resort (Cypress Pointe 1 in Orlando) where the HOA has complete control over the foreclosure and resale of units. Their procedure is probably typical of resorts where developer sales and developer control of the resort are no longer ocurring. Cypress Pointe 1 ultimately auctions the foreclosed units, so they do not realize much profit from the sale of the units. But they do recoup the delinquency costs. Thus, since the cost of delinquencies are recovered there is effectively no impact in the long term on owners.