Diamond Resorts International Threatens Lawsuit
Written by: Traver
It seems there is some controversy coming out of the Hawaii timeshare community, mainly from one resort in particular the Point at Poipu. This resort is currently managed by Diamond Resorts International, a well known name in the timeshare industry. It seems that recently owners have shown a growing concern for the raise in maintenance fees at this resort which have increased by 50% in the last two years and almost doubled in the time period between 2001 and 2009. From the story I found the owners are upset because they have no say as to when and how much the maintenance fees are increased. The board of directors for the resort voted unanimously to increase the fees given to owners to help cover operating costs and upgrades throughout the resort. All board members were duly elected to their position according to Hawaii law, however three of the board members are considered “developer reps”, basically giving the management company the ability to pass any vote presented to the board. Mike Givens of Janas Consulting Management has recently started an initiative to try and find new management for the resort and bypass Diamond Resorts International. Givens said “It’s a matter of the owners taking legal steps to bring the management company to the table to get something done, as long as the majority of owners desire to do so, they can remove management.” Diamond has threatened to sue Givens for interfering with business operations and making defamatory, false statements. If you would like to read further about this situation and the parties involved the above information was pulled from the following two articles, “Diamond Resorts threatens legal action” and “Point at Po‘ipu timeshare owners struggling with management”.
Maintenance fees are a necessary evil to keep any resort in operation, after all they cover most of the day to day operations of the resorts and any improvements that the resort will undertake, ie upgrades in furniture for the rooms, new television, and new amenities throughout the resort. It seems there has been a trend lately where many resorts are raising these fees despite the current state of the economy. There are a couple of reasons that come to mind when trying to figure out the resort’s position in raising maintenance fees in a bad economy. The first goes hand in hand with the economy, since people are finding they have less money to spend and are trying to save more they may default on their timeshare property if a number of people do this the resort is forced to raise fees for the owners who are left. Simply put there are now less people paying but the cost remains the same no matter how many owners buy into a given resort. The second may have to do with inflation, which everyone is familiar with. Due to inflation the cost of items necessary to run a resort will rise such as utilities, paper goods, insurance, and other items used in the day to day operation of the facility. Since the resort is required to have all these items the cost passed along to owners in the form of maintenance fees and special assessments. Obviously these are just a couple of reasons why owners continue to see higher amounts being expected from the resort, these may not apply to every case.
We know that many of the readers of our blog are timeshare owners themselves, what do you think about your current maintenance fees, are you happy with them are they too high? If you are the owner of a resort where many owners felt the fees were to high what actions were taken by the board of directors or owners association? If you have other suggestions on why fees would rise we would love to hear those as well.
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