Special assessments

[Mike S]

We own a week in a small timeshare resort on longboat key. (15) units.
We trade this a lot and hadn’t seen it for about 10 years. When we used it this year I was shocked to see the same furniture.
Every year they set aside reserves for F,F&E
(Furniture, fixture and equipment). About 50k.
At the end of the year the reserve is wiped out without buying any furniture.
When I inquired what happens to the reserve the property manager said they use it for routine maintenance.
Now they’re talking about a special assessment of 2k per week to buy furniture, upgrade flooring and replace sliders and windows.
Mind you the kitchens and flooring in kitchen was upgraded about 5 years ago ver nicely.
I can’t see how they would need over 100k per unit to upgrade the rest.
The 3 member board never responds to mailed letters and doesn’t even have a contact email.
My question is what’s our recourse? We like the area and the units but feel owners are not being treated fairly.

 

[TheTimeTraveler]

We own a week in a small timeshare resort on longboat key. (15) units.
We trade this a lot and hadn’t seen it for about 10 years. When we used it this year I was shocked to see the same furniture.
Every year they set aside reserves for F,F&E
(Furniture, fixture and equipment). About 50k.
At the end of the year the reserve is wiped out without buying any furniture.
When I inquired what happens to the reserve the property manager said they use it for routine maintenance.
Now they’re talking about a special assessment of 2k per week to buy furniture, upgrade flooring and replace sliders and windows.
Mind you the kitchens and flooring in kitchen was upgraded about 5 years ago ver nicely.
I can’t see how they would need over 100k per unit to upgrade the rest.
The 3 member board never responds to mailed letters and doesn’t even have a contact email.
My question is what’s our recourse? We like the area and the units but feel owners are not being treated fairly.

I would suggest a forensic accountant take a look at the books (i.e. a detailed look at exactly where the money is being spent). Hopefully the income isn't being diverted to an area where it shouldn't be going.

Best of luck with trying to get the audit accomplished.





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[ScoopKona]

I would suggest a forensic accountant take a look at the books (i.e. a detailed look at exactly where the money is being spent). Hopefully the income isn't being diverted to an area where it shouldn't be going.

Best of luck with trying to get the audit accomplished.
.

That isn't how Florida corruption works -- the books will reconcile. But everyone involved charges a dollar to do a job that should cost a dime. They do a dime's worth of work and pocket the rest. And anyone who oversees them is on the take.

The entire government in my home town was occasionally rounded up and incarcerated for this sort of thing. It's called a "Bubba Bust."

 

[Bunk]

Do you receive audited financial statements annually? Florida Timeshare Law §721 requires that audited financial statements be prepared and distributed annually. I looked cursorily and didn’t see an exception based on the size of the HOA or the amount of income received.

How much have you been paying as maintenance annually? Do the financials show that enough money is being collected as maintenance to cover the expenses.

I would send a letter to management stating that you request: (i) copies of audited financial statements over the past 6 years (unless you already have them): (ii) a detailed explanation as to how the reserves were held or disbursed over the last 6 years; (iii) disclosure of the amount held as reserves at the end of each fiscal year for the last 6 years; (iv) copies of any reports discussing the need for a special assessment over the last 6 years; (v) copies of all reports, including estimates and bids, relating to the proposed special assessment; (vi) copies of records that show whether reserves for deferred maintenance and capital expenditures were transferred to an operating account and (vii) copies of records that show the owners were given notice of such a proposed transfer and that the Board received the consent of a majority of the owners as required by §721.13. If you are local, you should also state that you’d like to review the minutes of the Board meetings at the management office.

§721.13 states that funds in any deferred maintenance or capital expenditure reserve account may not be transferred to any operating account without the consent of a majority of the unit owners

 

[Mike S]

Thanks for the responses. I always felt the maintenance fees were low. I know fixed expenses for a small resort can get out of hand.
I felt if maintenance fees were too low they should have increased them and let reserves
be reserves.
Only thing posted is the yearly budget.
Board meets once a year on zoom for 20 minutes and approves the budget.
Can’t even get in touch with a board member!

 

[Mike S]

And budget is audited every year.

 

[montygz]

We own a week in a small timeshare resort on longboat key. (15) units.
We trade this a lot and hadn’t seen it for about 10 years. When we used it this year I was shocked to see the same furniture.
Every year they set aside reserves for F,F&E
(Furniture, fixture and equipment). About 50k.
At the end of the year the reserve is wiped out without buying any furniture.
When I inquired what happens to the reserve the property manager said they use it for routine maintenance.
Now they’re talking about a special assessment of 2k per week to buy furniture, upgrade flooring and replace sliders and windows.
Mind you the kitchens and flooring in kitchen was upgraded about 5 years ago ver nicely.
I can’t see how they would need over 100k per unit to upgrade the rest.
The 3 member board never responds to mailed letters and doesn’t even have a contact email.
My question is what’s our recourse? We like the area and the units but feel owners are not being treated fairly.

I would start by talking more with the property manager. It sounds like the board is just approving that person's decisions.

The property manager should be able to give more detail on the spending.

For example, the resort may be installing custom hurricane-resistant windows that are expensive. There may have been some damage from Hurricane Ian. The cost of labor in Longboat Key is more costly than ever.

In any event, if you persist they should provide you with documentation.

 

[AJCts411]

Audit...a check is wrtten to cover an invoice...check. Does not make an invoice legitimate, not checked. There is a resort in KW that has had somewhere around 250,000 gone missing aka embezzled by a manger. Also audited per Florida regs.

 

[Carolinian]

I would bet that your HOA is organized as a non-profit corporation, as every one I have ever seen in the US has been (the timeshare I used to own in the Netherlands was organized as a cooperative, but I have never seen that in the US). As a member of a non-profit corporation, you have certain statutory rights and you need to either talk to a Florida attorney or look them up online and read them yourself to learn what they are. Then exercise them. Demand access to records and make copies, something you are also likely to have a right to do.

The key is the HOA board, which is who has the power. I have seen cases on the NC Outer Banks where local management companies tried to or actually did stack HOA boards with their own flunkies, which can be really dangerous for resort finances. Most non-profit corporation laws grant a window prior to the HOA annual meeting when any member can obtain a list of all members including contact information. Use that to organize a concerned owners group to challenge the existing board. I have known of a number of such challenges on the Outer Banks where such an effort succeeded in changing the board.

Lastly, see if the Florida Real Estate Commission is willing to help. They are the entity with regulatory authority over timeshare, but states vary as to how proactive they are in these situations. For years, the NC Real Estate Commission was extremely proactive for members against misbehaving management and HOA boards during the years Blackwell Brogden was at their helm. But do your research first so you can zero in on what the problems are.

 

[Talent312]

SA's are always a bit of a shocker.
Its like a dentist saying you need work costing $xxxx.
You may get a 2nd opinion. But in the end you'll pay...
(while gritting your teeth, so to speak).

Mine was only $300 based on a unexpected shortage,
I paid up, but jeesh, couldn't they forsee that?

 

[Carolinian]

Spending ten years on an HOA board, three as president, I see some obvious problems here. A competent HOA board has a reserve study done and has a good idea of how much they need to collect and retain in reserves. There should be a line item for routine repairs and those should not be coming out of reserve funds. A board spending twenty minutes on a phone approving a budget indicates a board that does not seem to be paying attention. Our budget meetings typically ran four or five hours and we went over the budget with a fine tooth comb and we also met two or three other times during the year.

I would urge thorough research in both finances and management of the HOA. Understand your rights under both timeshare law and non-profit corporation law as to what you are allowed to inspect and copy. You should definitely get a copy of the board minutes going back at least five year, perhaps more. You should get all financials. It would also be worthwhile to ask if the board members have errors and omissions insurance coverage.

How are special assessments approved at this resort, which should be in the Declaration of Covenants? Some require a full membership vote while others give authority to the HOA board.

 

[Jan M.]

And budget is audited every year.

The timeshare audits only verify that the numbers add up correctly. A forensic audit looks into whether or not the money was spent appropriately and other important details. However a forensic audit costs big bucks.

As @Carolinian stated routine maintenance should be it's own line item in the buget. Taking money from reserves set aside for unit updates to the furniture, fixtures and equipment is a misappropriation of funds.

 

[Mike S]

I agree with scoopkona and Jan m.
The budget shows 60k a year for accounting. And 6k for an audit every year.
Seems like the property manager runs the show.
50k a year for 10 years is 500k for FF&E that never got spent on FF&E.
Now over 100k in special assessments per unit times 15 units is another 1.5 million. Probably a little less because of association owned units.
I’m no accountant but I can read a budget.

 

[bocamike]

We own a week in a small timeshare resort on longboat key. (15) units.
We trade this a lot and hadn’t seen it for about 10 years. When we used it this year I was shocked to see the same furniture.
Every year they set aside reserves for F,F&E
(Furniture, fixture and equipment). About 50k.
At the end of the year the reserve is wiped out without buying any furniture.
When I inquired what happens to the reserve the property manager said they use it for routine maintenance.
Now they’re talking about a special assessment of 2k per week to buy furniture, upgrade flooring and replace sliders and windows.
Mind you the kitchens and flooring in kitchen was upgraded about 5 years ago ver nicely.
I can’t see how they would need over 100k per unit to upgrade the rest.
The 3 member board never responds to mailed letters and doesn’t even have a contact email.
My question is what’s our recourse? We like the area and the units but feel owners are not being treated fairly.

Hi Has this special assessment been passed? Sounds like a lot.

 

[Mike S]

Maintenance fees going up around 35%!
Doesn’t include special assessments yet.
30% of weeks don’t pay maintenance fees or are resort owned.
Just gets worse

 

[dioxide45]

What resort is it, this resort should consider sunsetting and sell the resort off as whole ownership or to a larger developer to convert it to something else.

 

[Mike S]

Longboat bay club

 

[Mike S]

Special assessment supposedly being proposed by management company is 3k per week!
Had annual meeting with no board members in attendance!

 

[theo]

Special assessment supposedly being proposed by management company is 3k per week!
Had annual meeting with no board members in attendance!

Is an annual meeting "conducted" with no board members present even a legitimate or meaningful annual meeting in the first place?

 

[TUGBrian]

agreed, how did they vote on anything?

 

[rickandcindy23]

$3,000 is definitely a lot of money per week owned. I am sure there are a significant number of people not paying at an old resort. What are they going to do with the money, exactly? Does this also include funding reserves and increasing insurance coverage?

I am dealing with similar issues at Blue Ridge Village in North Carolina, huge special assessments by Bluegreen. I am not a happy owner to get bills for deferred maintenance on pools, retaining walls, and whatever else needs to be done, but I am a responsible owner. The fees have also increased significantly.

 

[chapjim]

Special assessment supposedly being proposed by management company is 3k per week!
Had annual meeting with no board members in attendance!

Kind of inexcusable considering options like Zoom, MS Teams, etc.

 

[Mike S]

It was titled “A live electronic meeting of the board of directors of Longboat Bay Club”
When they didn’t show it turned into an info meeting by the property manager who seems to run everything.
So after being mismanaged there’s a 35% maintenance fee increase approved and a 3k dollar special assessment pending approval.

 

[chapjim]

It was titled “A live electronic meeting of the board of directors of Longboat Bay Club”
When they didn’t show it turned into an info meeting by the property manager who seems to run everything.
So after being mismanaged there’s a 35% maintenance fee increase approved and a 3k dollar special assessment pending approval.

They couldn't even call in to a virtual meeting? Who are these guys?

 

[scootr5]

It was titled “A live electronic meeting of the board of directors of Longboat Bay Club”
When they didn’t show it turned into an info meeting by the property manager who seems to run everything.
So after being mismanaged there’s a 35% maintenance fee increase approved and a 3k dollar special assessment pending approval.

The property manager can’t approve a maintenance fee increase.