Potential annual dues spike.

[Cyberc1978]

I read over on TUG than the reserve funds for Florida properties needs to be fully funded and healthy due to the new Florida Condominium law, the Florida Senate Bill 154.


At least for 1 Marriott resort most likely others too they are seeing a spike in annual dues of approx $1,000 for a 2br unit on the proposed budget for 2024.

It seems that the owners can waive the increase at least to some extent.

After reading the thread it seems the reserves needs to be fully funded for the anticipated life of the property. Does that mean that if the resort needs a new roof then the reserve should be able to cover that cost at anytime? If so then it shouldn’t be a problem as we save for it every year, but if we should have the money at anytime then what happens the year after the roof is replaced then the funds are drained, then we don’t have the funds at “anytime” at least not until the reserves are replenished?


Does anyone have any insight or knowledge on how this will or could impact the annual dues for Disneys properties? Should we expect similar spikes on the 2024 dues or are the reserve funds already fully funded?

I assume there must be a reason why Marriott is impacted, their reserves should be funded the same was as Disneys.

Link:https://tugbbs.com/forums/threads/g...o-increase-over-1000-what-is-going-on.357199/

 

[Brian Noble]

One question:

At least for 1 Marriott resort most likely others too they are seeing a spike in annual dues of approx $1,000 for a 2br unit on the proposed budget for 2024.

The actual number will be (quite a bit) lower, because (a) the owners can collectively vote to waive the requirement and (b) they almost certainly will do so.

There's also a chance that this doesn't apply in the same way to DVC, because underneath it all it is a lease, not owned property. I have no idea whether or not this changes things materially, but it could.

 

[Jwaire]

There's going to be a dues spike, but it's going to be because of continuing inflation and rising labor costs.

 

[Cyberc1978]

There's also a chance that this doesn't apply in the same way to DVC, because underneath it all it is a lease, not owned property. I have no idea whether or not this changes things materially, but it could.

That was also what I was wondering, how does it apply to DVC if it applies at all?

But even though DVC is a lease then it's still a timeshare and IMO needs to adhere to the new legislation

 

[Cyberc1978]

There's going to be a dues spike, but it's going to be because of continuing inflation and rising labor costs.

Even though nobody can foresee the future, I'd assume that at least for 2023 that the dues included the rise in inflation as that was what everyone expected would happen in 2023.

For 2024, the question is if DVC believes that the inflation is under control and will only rise in normal levels or if its still out of control.

If they think it's still out of control in 2024 AND the reserve funds needs to be fully funded then the potential spike might be more than we can imagine

 

[Brian Noble]

then it's still a timeshare

The legislation isn’t directed at timeshares specifically, but at condominiums. I don’t know if or how the owned vs leased nature of DVC impacts that.

 

[tom1944]

What is the percentage increase that would qualify as a spike?

 

[Brian Noble]

As an example: Marriott Grand Vista's fees will increase by about 65% unless they vote to waive fully funded reserves.
https://tugbbs.com/forums/threads/g...o-increase-over-1000-what-is-going-on.357199/

As a more reasonable but still large increase, Marriott Points are likely going up 15-20%
https://tugbbs.com/forums/threads/t...ts-released-15-20-increase-on-the-way.355974/

 

[tjkraz]

The actual number will be (quite a bit) lower, because (a) the owners can collectively vote to waive the requirement and (b) they almost certainly will do so.

Brian: would this waiver require a formal vote of deeded owners or could it be accomplished via the member voting representatives (assigned by DVC/DVD) who sit on the board?

 

[tom1944]

Any guess is how much this in turn impacts both the direct and resale markets?

 

[Brian Noble]

would this waiver require a formal vote of deeded owners or could it be accomplished via the member voting representatives (assigned by DVC/DVD) who sit on the board?

I imagine that depends on how the governing documents are structured.

 

[Brian Noble]

Any guess is how much this in turn impacts both the direct and resale markets?

A hypothetical thing that hasn't happened yet and has no known (or even reasonably guessable) impact on dues?

I can't see how anyone would have a guess that is even remotely credible.

 

[OKW Lover]

Brian: would this waiver require a formal vote of deeded owners or could it be accomplished via the member voting representatives (assigned by DVC/DVD) who sit on the board?

It would be the responsibility of DVD to vote on this.

 

[kneely58]

I read over on TUG than the reserve funds for Florida properties needs to be fully funded and healthy due to the new Florida Condominium law, the Florida Senate Bill 154.


At least for 1 Marriott resort most likely others too they are seeing a spike in annual dues of approx $1,000 for a 2br unit on the proposed budget for 2024.

It seems that the owners can waive the increase at least to some extent.

After reading the thread it seems the reserves needs to be fully funded for the anticipated life of the property. Does that mean that if the resort needs a new roof then the reserve should be able to cover that cost at anytime? If so then it shouldn’t be a problem as we save for it every year, but if we should have the money at anytime then what happens the year after the roof is replaced then the funds are drained, then we don’t have the funds at “anytime” at least not until the reserves are replenished?


Does anyone have any insight or knowledge on how this will or could impact the annual dues for Disneys properties? Should we expect similar spikes on the 2024 dues or are the reserve funds already fully funded?

I assume there must be a reason why Marriott is impacted, their reserves should be funded the same was as Disneys.

Link:https://tugbbs.com/forums/threads/g...o-increase-over-1000-what-is-going-on.357199/

I know there is a 15% on annual increases in dues in the docs somewhere, though I'm sure there are exclusions such as taxes

 

[Jwaire]

What is the percentage increase that would qualify as a spike?

I expect we are looking at another 6-7-8% average hike across the board for the second year in a row factoring out Aulani, Vero, Hilton Head and current selling resorts like RIV that they tend to keep lower.

 

[CarolynFH]

It would be the responsibility of DVD to vote on this.

DVD is Disney Vacation Development, which builds and sells the timeshare condominiums. Once they sell the points, we are the owners, but DVCMC, DVC Management Company, is empowered to make most decisions as our representatives. There are some major decisions which under Florida law require a vote of the owners (for instance, a decision whether or not to end the association before the stated date), but I don't know whether this issue is one of them. As Brian says above, it probably depends on the wording of the governing documents.

 

[DebbieB]

The union contract passed earlier this year gave CM's a $3/hour raise retroactive to 10/1/2022 and then $1 for each of the next 4 or 5 years. That will more likely cause an increase.

 

[OKW Lover]

DVD is Disney Vacation Development, which builds and sells the timeshare condominiums. Once they sell the points, we are the owners, but DVCMC, DVC Management Company, is empowered to make most decisions as our representatives. There are some major decisions which under Florida law require a vote of the owners (for instance, a decision whether or not to end the association before the stated date), but I don't know whether this issue is one of them. As Brian says above, it probably depends on the wording of the governing documents.

Thanks for the correction. You're right about the voting entity.

 

[CarolynFH]

Thanks for the correction. You're right about the voting entity.

No problem. Just wanted it to be clear for newbies who might be reading this thread. "DVC" is quite the jumble of entities - add in the Buena Vista Trading Company, which is responsible for managing 7-month non-home resort reservations, and it's always confusing!

 

[Sandisw]

The union contract passed earlier this year gave CM's a $3/hour raise retroactive to 10/1/2022 and then $1 for each of the next 4 or 5 years. That will more likely cause an increase.

My guess is some of that was built in to the 2023 budget in anticipation of an agreement for 2022 and 2023. But, it certainly will be added in for future years