Timeshare Fee Management - How Hard Could It Be?

Timeshare Fee Management – How Hard Could It Be?  At first it seems like a simple task: Collect maintenance fees from the owners and pay the bills.

balance sheetBUT when you factor in an owners’ management board who can exempt themselves from those fees, let out contracts without bids, and award themselves compensation or bonuses without oversight you set yourself up for problems.

Those problems are multiplied when these property owners management boards can make the rules.

The majority of the time board members have the property owners’ best interests as their first priority. Yet, the temptation to steal from the “cookie jar” is too much for some to resist. Generally, any business that has a group of people or person making decisions on how much money to allocate towards projects, will have a financial company or an accounting firm to provide oversight, guidance and/or approval.

THAT is the missing piece: Accounting or financial oversight.

Newport Bay Club

Newport Bay Club

Lots of older timeshare resorts are not part of large development companies. Smaller timeshare resorts often do not have the advantage of an established business model of financial accountability. Some do. But those that do not have set themselves up for problems.

The Newport Bay Club in Rhode Island is one such case. Originally built in 1835, the building is a National Historic Landmark. The former manager of the board for Newport Bay Club had been charged with embezzlement. The board itself had initiated having charges filed. But their former manager was exonerated in criminal court and he counter sued. Now he is speaking out and producing evidence of what could be described as reckless spending and non competitive bid contracts by the board members.

Owners should take note: one of the board members (an attorney) had been performing foreclosures on timeshare owners without attempting to collect delinquent fees.

The trade-off between a locally owned and managed timeshare and a “developer” built timeshare is pretty obvious. The big developers will provide a large infrastructure to manage and control the facilities and finance management. The “one resort” owners’ managed timeshare will have much more control over how their facility is managed, improved, and maintained.

Historic buildings like the one in Newport, R.I. deserve local knowledge and historic appreciation.

Most likely Newport Bay Club will succeed. All they need now (if they haven’t already done it) is professional and objective financial oversight.

 

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