Collections - The Lifeblood of any Resort (Updated 1/15/05)

Every condominium, timeshare or whole ownership, depends on the income from each owner to operate and maintain the property. In most cases the original sale price goes to the developer not the homeowners association. That Association acts on behalf of all owners to staff and operate the facility. The buildings, the common areas such as the Clubhouse and pool and all the grounds are usually maintained by the HOA at any condominium project thus spreading the work and expense for those shared items to all owners. In the case of timeshares everything at the resort is maintained by the Association. The actual units themselves and all the furnishings and equipment in the units are also shared. Add in the need to handle reservations and the transient nature of the guests/owners and the timeshare Association operates a facility closer to a hotel than a whole ownership condominium. Also rather than collecting from one owner, often on site, a timeshare needs to collect from as many as 51 owners, living around the world, for each unit in the complex. In the case of Cypress Pointe Resort that number is nearly 10,000 owners of our 8,568 weeks as some owners have alternate year deeds. Simply getting the bills to that many owners is an annual challenge.

Once the bills are in the mail the collection process starts. The goal is to have the invoice mailed on or before October 1 each year. The due date is December 31. Allowing nearly three months gives our owners a chance to budget for the expense. A reminder notice is mailed around December 1 in case an owner misplaces the original bill.

Payments are another project. At Cypress Pointe Resort we encourage payment by mail or by our secure Internet web page. These are the least labor intensive and allow an easy method of payment for owners. But we do have a Customer Service phone number to call and make a payment if that is your preference. The big problem with phone payments is the need to have someone on the resort side answer that call. Our Customer Service area is staffed by two full time employees for both Cypress Pointe resorts. Nine months a year they can handle the call volume and offer assistance to our callers. But during the busy payment period of November to January they simply cannot handle the massive volume of calls. Many calls go to voicemail to be handled as time is available. During the past three years additional temporary help has been brought in during that peak period. However we are physically limited by space, phone line capacity and available terminals as to how many representatives can be put on these calls. Personnel cost money and require training to fill these spots. We simply cannot budget for enough people to handle 10,000 potential requests.

For 2004 going forward new options are in place to streamline the phone based payment process. The use of an outside payment service and an improved call routing procedure has been set up in addition to our web site payment area. The possibility of additional staff was also reviewed but the impact on annual fees was too large to justify. Future changes will be made based on the feedback from owners at our next Annual meeting in March 2005.

After all that what happens if an owner hasn't paid? For far too long prior to 2001 very little. In fact many owners became accustomed to ignoring the bills they owed to the resort and having few consequences. That problem was compounded by the lack of a verified owners list during that same period. It is very hard to collect if you don't know who owns the week(s). When VRI was brought in one of the top priorities they were given was to fix the collection process and create a valid owners list. That process is now complete. Since the 2002 annual billing no owner has been allowed to be delinquent longer than 90 days without action by our designated collection agencies. If that process is ignored the owner is given a notice of lien and the credit agencies are notified. After 180 days, if there is no mortgage on the week, it is sent to foreclosure. Since that procedure has been enforced, it was always on the books, collections have soared from 48% to a projected 90%+ in 2005. Delinquent owners have discovered they need to act to bring their payments up to date or sell their time. Those who don't find they have lost their weeks to a foreclosure and have a negative credit report filed. The paying owners are not subsidizing delinquent weeks and our bad debt has been slashed as a result.

While there will always be some weeks that are in a non paid situation, if the number is small the Association can rent those weeks to recover most of the fees. The key to collections is that everyone understands all owners are treated the same. If an individual owner has a problem it is critical that they take action to handle their obligation before it is too late. The owners of Cypress Pointe Resort can be assured that everyone is carrying their fair share of the cost to run our resort.

Past owners messages:

Annual Proxy

View the November 2001 Owners Message

The "Club" Myth

What if I have to sell?

Why am I asked to buy more?

The new look at Cypress Pointe