Developers and Management Companies
If you buy a timeshare unit from a new-resort developer, the chances are good that you will have minimal, if any, maintenance or other responsibilities beyond paying your annual fees — at least for the first few years of your ownership experience. Heck, that is one of the reasons you bought a timeshare, right? Hands-off ownership without a blade of grass to mow, ever!
In many cases, developers will oversee everything from maintenance to capital improvements during the first year or two of a resort's existence, often even subsidizing annual maintenance fees to make them appear lower to you and other would-be buyers. Their goal, of course, is to make timeshare ownership as attractive to you as possible — and that means taking on the majority of headaches and hassles themselves.
Some of the things the developer may look after during your initial period of new-resort unit ownership could include:
• Maintenance fee collection
• Property tax collection
• Insurance premium payments
• Reserve account balance
• Resort repairs
As with all good things, though, this initial period is bound to come to an end. Your timeshare paperwork will often specify exactly what percentage of a resort's units need to be sold before this happens, but rest assured that eventually, when most or all of the timeshare units are taken, the developer will turn over the day-to-day management of the resort to a body called a Resort Property Owners' Association, a Homeowners' Association, or a Condominium Owners' Association.
Are timeshare management companies similar to condominium management companies?
Yes, they are similar in that they oversee the duties that a homeowners' association might otherwise handle. These include the collection of annual maintenance fees, capital expenditures, insurance policy premiums, and the like. Sometimes, the timeshare groups are even called Condominium Owners' Associations.
This is when your responsibilities as a timeshare owner will begin to take shape, either in the form of helping to elect officers or by running for a seat on the board of directors yourself. In some cases, you and the other homeowners' association officers will be responsible for everything from the resort's expenses and upkeep to its future viability and infrastructure improvements (more on that later in this chapter). In the vast majority of cases, though, you will simply cast a vote aimed at selecting a management company to oversee those homeowners' association duties and more.
With many brand-name resorts, such as Marriott, your association will generally contract with the development company to continue providing oversight and services of everything from the planting of flowerbeds to the services provided by the front desk. And why not, as long as the price is competitive? Their management system was good enough in your mind to buy the timeshare in the first place, so why not just let them keep running it in the same manner?
Other resorts, though, look to outside management companies such as Utah-based Owners' Resorts & Exchange and South Carolina — based Defender Resorts, which manage more than a dozen timeshare homeownership associations apiece at various resorts all over the United States. Owners' Resorts & Exchange, for instance, prides itself on adding two new homeowner associations — or approximately one thousand timeshare units — to its stable of customers each year. These companies' fees, of course, are rolled into the annual maintenance premium paid by you and the rest of your fellow homeowners' association members. The fees vary based on the services provided, and they typically will make up a relatively small percentage of your overall maintenance fee payment each year.
Whether your homeowners' association contracts with a brand-name developer or other management company, it will be that hired hand's job to ensure that you and all of the other members of your homeowners' association get everything that you need and want.
If your association decides to forgo a management company's fees and take the do-it-yourself approach, you will have to be much more conscious about the details that are involved with homeowner association responsibilities — if only to make sure that yours are being met, to keep your timeshare unit's value as high as possible.