2012 Harborside II Maintenance Fees

I am a Harborside at Atlantis Phase 2 Owner. Since 2004 our MF have risen from $1800 (I own a three bedroom lock off) to $3150. It is clear that the Directors of our Association are doing what is good for Starwood and Kerzner (developer). One director works for SW and the other works for Kerzner.

The following are several issues worth considering:

My view (after 8 years of ownership) is that the fractional ownerships are not what SVN is really selling...what they are selling is an HOA "trap"...they make a lot more money on HOA fees than selling TS.

Once someone is locked into a TS contract they'll use if for a few years and them try to sell...many did and the economy suffered in 2008-09. Concurrently the HOA fees rise to the point that the rental value is the same as the HOA fees, thus there is no equity in the unit...but the fractional owner can't "get out" unless they "sell"...consequently the owner is held hostage to an ownership, that if foreclosed upon, will drag their credit rating down.

The collective management fees for Harborside II now exceed $3.2 million a year. The total HOA fees are close to $20 million a year...$20 million a year to maintain a large apartment complex with people coming and going on a weekly basis. It is clearly outrageous.

As an example of the sheer audacity of these guys... the fees paid to Paradise Island Tourism Development Association at $52,475 are for a website owned by a third party marketing company. It does nothing except promote all Atlantis/Kerzner related properties and take reservations. Harborside is promoted among the other Atlantis properties, say 12% of the site. ...the company has no google ads (no costs), does not purchase any keywords.

So ...Who benefits by this gargantuan yearly fee for a simple website?

All the uncollected HOA fees, which are about $1 million, are charged back to us fractional owners. If a unit is foreclosed upon, when is the unit actually sold? No accounting for this...

but ...if a foreclosed unit is sold, are some of the proceeds used to make the HOA whole again for that fractional share's unpaid fees ..I think NOT. No accounting for any of this.

I'll bet SVN holds these foreclosed units in some sort of abeyance so the developer does not have to pay the pro-rata sure of the HOA on them. SVN simply passes on the unpaid HOA fees to the remaining owners, still generating their same outrageous management fees and kickbacks. There is no incentive to sell these foreclosed units, as their marketing department can continue selling "new" unsold fractional shares, pulling new owners into the abyss.

Any inquiry as to the nature of MF costs, if services are being bid out, or inquiries about what is actually delivered is met with stonewalling or deflections.

I receive unsolicited crap from TS resellers all the time. I ask how they found me and have been told that my ownership is public record. What needs to be done is to find out who the actual fractional owners are and recruit them the vote in a new board, who can then install a new management company.

So there's a lot of due diligence and stealth discovery that needs to occur. I believe this is the tip of a huge iceberg...with 20 properties, SVO is making 100's of millions of dollars by self dealing, kickbacks, etc.

If you are interested in protecting your interests, please send me:

A. Your name, phone and email B. Contract number C. What you own

I will start creating a database of owners that have an interest in correcting this nefarious arrangement and righting the wrong.

Am speaking with a few lawyers about a class action suit against the Association as they have breached their fiduciary duty to the fractional owners. I would say HR 1 could benefit by coming on board.

I am a pit bull on a piece of raw liver when it comes to abuses like this....people who do bad things?...bad things happen to them....

As well, feel free to call and discuss.

Henry Siegel 323.680.5411