What’s An HOA and Why Should I Care?

Notice: Please consider participating in Holiday’s upcoming webinar, “What Is a Home Owners Association and Why Should You Care?” The free virtual seminar will take place on Thursday July 30th from 5:30 to 6:00 pm PDT. Special guests will include Lisa Ann Schreirer and others. There will be a question and answer session afterwards in which viewers can participate. Please visit https://www1.gotomeeting.com/register/147286120 for information on registration, or email to webinars@holidaygroup.com.

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Timeshare  Home Owners Associations are one of the most misunderstood and perhaps one of the most mysterious aspects of timesharing in the United States.

Whether you purchase from the developer or on the secondary market, the odds are greatly against you that anyone will enlighten you as to what an HOA is and why you should (and you absolutely should) care.

I interviewed two HOA professionals (Cindy Thomas and Mike Weber) for this article and urge all owners to read it carefully and become more involved in your ownership. Contact information for all three follows at the end.

Lisa: What exactly does your HOA do?

Cindy: A Homeowners Association is meant to maintain the integrity of the association from a fiscal and fiduciary point of view on behalf of its members and in the best interests of its members.

Mike: We meet 9 months of the year at the resort, no meetings in June, July, or August.  We represent the owners.  We discuss, vote on and oversee major improvements and expenditures of funds, as well as resolve any issues brought up by the owners or the management team.

Lisa: How much of what the HOA does or oversees is impacted by the owners? 

Cindy: Everything that the homeowners association does is by and for the owners. 

Mike: We investigate any issues or complaints brought up by the owners. Usually there are very few.

Lisa:  Are all owners at your resort automatically part of the HOA, or is it something that they have to join?

Cindy: Automatic.

Mike: All owners are automatically a part of the HOA.

Lisa: Can any owner become the HOA President or Director, and if so, how? 

Cindy: Yes, the board is elected by the members and the board selects its directors from the elected board.

Mike: Yes, any owner can run for a board position. We ask for nominations in the spring and the annual election is held at the May meeting.

Lisa: What is the biggest issue facing your HOA today?

Cindy: I believe the biggest issue is that of resale and viability of the timeshare product. In my opinion, the timeshare product needs to remain a timeshare product.

Mike: Some owners are walking away from their units by not paying their annual taxes and maintenance fees. 

Lisa: How has that changed in the past 10 years?

Cindy: I am seriously concerned about the dilution of the timeshare product in the exchange world. My question back to the group would be – How are resorts handling the issue of owners at the end of their timeshare ownership? Deed in Lieu of Foreclosure, etcetera. Does anyone believe that the postcard companies or relief companies are thriving, in part due to the resale industry and resorts’ stances on getting out from one’s timeshare week, along with the dilution of the timeshare product, whether perceived or true? If so, how do we think-tank a solution to this? Who, on a management level, wants to spearhead this subject?

Mike: Not sure. I have only been on the board for 2 years.

Lisa: Do you wish that more owners participated in your HOA?

Cindy: We have good participation. What I wish for our owners is a more effective way for them to fully understand the timeshare product and what it can do for their vacation experience. When I meet an owner who has not used their timeshare week in years or doesn’t understand the exchange world, I see that as an opportunity to re-educate them, excite them about what they own and invite them, in some cases, to bring along their next generation to an educational session with our staff so that they may transfer that week to their kids in a way that their kids not only understand what they are getting but appreciate the value. Timeshare never sold itself, and passing it along to the next generation takes almost the same educational program.

With that said, we have run such a program for quite some time and there are still issues in getting people to take action to come to such free educational sessions. Maybe I have it all wrong; maybe if you charge for it, it will have value?  What do you all think about that?

Mike: Yes, I would like to see more owners attend the meetings to express their concerns in person.

Lisa: What’s the one question that prospective timeshare owners should ask about a resort’s HOA?

Cindy: Sorry Lisa, one question? I could go on and on! Here are the top questions:

-How does my timeshare trade in the exchange world?
-How are reserves funded?
-Who is in control of the association?
-What percentage of the board is controlled by the developers as compared to the association, and what is the succession plan for association control?
-Where and how are the reserve funds invested?
-How are the easements surrounding the resort?
-Are there any implied contracts that might not stand up over time, and if so, will they affect the membership?

Mike:  What is the HOA’s financial reserves position?

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About Lisa Ann Schreier
Lisa Ann Schreier, “The Timeshare Crusader,” is the founder of the consumer consulting company Timeshare Insights. A timeshare thought leader, Lisa is the author of both Surviving A Timeshare Presentation and Timeshare Vacations For Dummies, and is also a frequent blogger and speaker. She can be reached at lisa@timehareinsights.com.

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