Maintenance fees can be a tough pill to swallow. As a timeshare owner you should know what the fees are paying for. Contact your resort and request a copy of their budget. The budget should provide a clear answer as to what the maintenance fees pay for. The title “Maintenance Fee” suggests the entire fee pays for maintenance, however that is never the case. Operating fee would be a more accurate title. Common budget categories include the following: Maintenance, Personnel, Taxes, Insurance, Depreciation, Bad Debts, Deficits, and Supplies.
The cost of repairs and upkeep at the resort. Repair expenses are easy to understand, if something is broken it needs to be fixed. Upkeep, refurbishing, updating, or renovation usually represent similar costs. Every resort needs to be continuously refurbished to keep it “up to date”. Televisions are replaced with newer LCD models, beds are replaced, bathrooms are refinished, etc. Most resorts will follow pre-defined upkeep intervals that are defined by the board.
Salaries, wages, taxes, and insurance associated with staff. It is common for this to be the largest expense.
Taxes can vary greatly depending on the location. At the very least a resort will need to pay property taxes. Maui assesses a special “timeshare resort” tax.
Insurance is another item that can vary greatly. It may include hurricane, flooding, fire, liability, or other insurance.
An accounting expense, not a real expense, based on the assumption that real property will depreciate over time.
Maintenance fees and/or taxes that owners failed to pay and the fees associated with attempting to collect the debt. Eventually the resort will repossess weeks from owners who failed to pay; Those weeks will be sold to new owners.
A portion of this years budget may be used to pay off prior year deficits that the prior years budget failed to cover.
Expenses commonly associated include cleaning supplies and office supplies.
This list of categories should not be considered comprehensive. Review your resorts budget to understand their operating expenses.
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