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Experts "Duty is a very personal thing. It is what
comes from knowing the need to Way back in 1969 Gary Terry and Bill Ingersoll had formed the American Land Development Association (ALDA) to lobby Capital Hill on behalf of the Land Development Industry. In those days many ALDA Member Developers were considering this new idea that became the Timeshare Business. In 1973, ALDA sponsored the first Timeshare Conference in Chicago. As a result of that meeting the Resort Timesharing Council was formed as a subsidiary of ALDA. As the Timeshare or Vacation Ownership Industry grew, ALDA and its Timeshare Council evolved into what is currently the American Resort Development Association (ARDA). It is the mission of ARDA to foster and promote the growth of the industry and to serve its 1000 + members through Education; Public Relations and Communications; Legislative Advocacy; Membership Development; and Ethics Enforcement. In order to fulfill this mission, it is the Duty of the staff of ARDA and its Volunteer Leadership, to be responsive to the Interest of the various segments that make up the Industry and the majority of the ARDA membership. Collectively those various segments create a very complex entity. Each of those segments perceives their interest somewhat differently and consequently exercise their influence upon or within the industry with diverse objectives. Primary among these segments is that which encompasses the product Development Firms and those whom they directly employ to market and sell the products being created. Among those areas of importance to this segment would be regulatory, funding, public relations, human resource, research and profitability issues. In order to maintain or increase their profitability, their interests are focused on:
The next segment of the industry would be that most closely associated with the first and who primarily provide essential services to the Developmental Segment. Consequently, this segment could be identified as the Development Servicing segment and would include providers of products and/or services associated with Funding and/or Financial Servicing, Legal and Accounting, Architect and Design, Exchange, Technology, Media, Human Resource and/or Training, Management and, Prospect or Lead Generation. Many of these Firms actually crossover into other segments of the industry, as well as other categories within this segment. Typical of this crossover trending is Resort Condominiums International (RCI) and its parent company Cendant. The important issues of this segment closely parallel those of the Developmental Segment. This segment is mostly dependent upon the growth, profitability, and longevity in Development for its own prosperity. Consequently, those closely associated with this segment find themselves hesitant to pursue interests or issues that may be perceived by the Development Segment to be detrimental. Because of the very nature of the American Resort Development Association (ARDA) its primary purpose is to serve the interests of those who make up its membership. The overwhelming majority of ARDA members are to be found in the ranks of the Development Firms, those whom they directly employ and the Development Servicing segments. Those who are ARDA Trustees and those who serve on the ARDA Board of Directors and its Officers, The ARDA International Foundation (AIF), and The Legislative and Regulatory Policy Advisory Committee (LARPAC), and the other 34 ARDA Committees are almost all representatives of these two dominating segments. At ARDA’s recent Fall Conference in Washington, DC, the AIF sponsored Think Tank X . Anne Crawford, of Anne Crawford and Associates, reported on the results of that effort in the December 2000 issue of Developments indicating that some 100 resort professionals developed nearly three dozen "One Year Desired Results Statements." The top 10 of those statements are presented as a side bar to Anne’s article. While this think tank was primarily directed toward marketing issues, it was not surprising that the forthcoming "Statements", closely parallel the perceived interests and duties of the two dominating industry segments. There is one additional segment of the Timeshare or Vacation Ownership industry and, for lack of a better descriptive title, here to be known as the Product User Oriented Segment. It is this segment that encompasses the consumer of the product previously produced, marketed and sold by the Developmental Segment and those who serve their needs on a day to day basis. Various elements of this third segment would include Owner Associations and those firms, consultants or providers of Management, Insurance, Financial Servicing, Property Tax, Reserve considerations, and Resale assistance. Also included are those who crossover into this segment such as Exchange, Legal & Accounting, Technology, and/or Human Resource and/or Training. While this segment includes the majority of those individuals involved in Timesharing, it is the least significant as it relates to membership in ARDA. As an example of this, let me reference the planning cycle for the ARDA-Arizona Regional Management Conference, held in Scottsdale in late August of 2000. In a discussion with Randy Goodhope, Director of ARDA’s Educational Institute and coordinator of the Regional Management Conferences, I asked to be provided with the contact individuals of all the Owner Association Members of ARDA within the Region. Randy indicated that he did not have that information at hand but would get it and send it to me ASAP, so we could immediately begin contacting them to encourage attendance at the upcoming conference. Both Randy and I were very surprised that only three such Memberships in ARDA existed. Those members were the Scottsdale Camelback Resort, the Roundhouse Resort and Sedona's Arroyo Roble Resort Owner Associations. It is obvious that this industry segment contains many more elements than just the Owner Associations. Many of those elements, such as Management Firms, Exchange Firms, and others, are members of ARDA and most would consider that individual Owners and Owner Associations are adequately represented by these members. It is my opinion that the dominating interests and issues of this Product User Oriented Segment differ considerably from those of the other two segments, and somewhat from those within this segment who are ARDA members, in particular the crossover elements. The ARDA Resort Owners Coalition (ARDA-ROC) and the ARDA-ROC PAC is totally funded by voluntary contributions from individual timeshare owners through their Annual Assessment or Maintenance Fee. In FY 2000, these contributions generated $1.3 million. The Leadership of ARDA-ROC Chairman Lynn Weas, Sandra DePoy ARDA Director of Federal Relations, the ARDA State Affairs Office under the direction of ARDA Sr. VP Stephany Madsen, supported by State Legislative Counsels Toby Weas and Dave Evans, insured effective administration and use of the clout provided by this Owner funding. The clout, demonstrated through ARDA-ROC, is only an indication of how effective Owners, working through their Owner Associations, could be if every Owners Association within the Industry held an active membership in ARDA. Active membership means participating in the affairs of the Industry by more than paying membership dues or making voluntary contributions to ARDA-ROC. Attendance at the several National and Regional Conferences sponsored by ARDA provides unlimited knowledge and networking occasions. Knowledge provides informed power and networking provides opportunity to demonstrate or exercise that power. The cost of this clout is a little time and the negligible sum of $275.00 annually for the Owners Association to hold a Class S membership in ARDA. Obviously, additional costs would occur when Owner Association appointees attend ARDA Regional or National Conferences. These costs would be truly insignificant in relation to the benefits that would accrue to the Association and its members. Generally, each Owners’ Association is required by State Law or Statutes, to be formed as a Corporation and have a Board of Directors. In most instances these Board Members are volunteers elected from and by the Members of the Association. The exception to this is new or young Associations where the Developer appoints some of the Board Members. Whether appointee or elected, these Board Members have the same Duty to the Association and its Members.
Because this article is unable to quote the specifics of every State Law or Statutes where Timeshare Resort Owners’ Associations exist we will reference Chapter 2, Rights and Liabilities of Directors from the Laws of Condominium Operations as published by Clark - Boardman - Callaghan (a division of Thomson Legal Publishing, Inc.) as a generalization of applicable law.
What does all of this legal mumbo-jumbo have to do with ARDA and Owner Association Membership? It is simply used to point out that the members of an owners’ association have the right to expect that their elected Board of Directors will fulfill their duties to make policies and informed decisions that are in the best interest of the association and its members, and that board members have a fiduciary duty to act reasonably and in good faith and that they cannot delegate those responsibilities to others. The point being these questions: "If the elected (or appointed) Board of Directors for a Timeshare Resort Owners’ Association were aware that a source of unlimited information, which would greatly assist them in making informed decisions, and that board made the decision not to become involved with such source (or delegated said involvement to others), then would the individual board members of said association breach their Duty to Direct, their Fiduciary Responsibility, their Policy (or Decision) Making Responsibility or the Common Law Rule?" "If the elected (or appointed) Board of Directors for a Timeshare Resort Owners Association were aware that a source of unlimited information, which clearly would comply with conditions imposed concerning information they could rely upon, and that board made the decision not to avail themselves of such source, then would the individual board members of said association breach their Duty to Direct, their Fiduciary Responsibility, their Policy (or Decision) Making Responsibility or the Common Law Rule?" Final Thought Not being an attorney myself, I would not pretend to provide answers to these or any other questions of a legal nature, however, I do understand the reasonable man concept and believe the following clearly comply with that concept;
Understanding public perception of the timeshare industry and receiving recommendations for increasing positive perceptions. Increases in the current timeshare industry consumer-favorability rating of 41 percent to 55 percent. Support for ARDA in efforts to develop a long-term public education / consumer awareness program. Understanding consumer values so that advertising could be more effective. Generally increasing the positive image of timesharing. This past December I had the chance to discuss the potential positive impact that having more Timeshare Owner Associations, as part of ARDA could bring, with its new President Howard Nusbaum. This occasion presented itself when Howard was in Arizona to present the new ARDA-Arizona Economic Impact Study to the media. I came away from that breakfast meeting with a sense that Howard believed, like I, that ARDA should represent all the different segments of the industry however, its mission is "to foster and promote the growth of the industry and to serve its 1000 + members". It is difficult to fault ARDA with regards to Owner Association issues with so few Associations holding ARDA membership. Both Howard and I agreed that Memberships and that active participation by more and more Owner Associations could be a good thing for both ARDA and all Timeshare Resort Owner Associations. In 1911, Edger Watson Howell wrote the following in Country Town Sayings; " I declare my belief that it is not your duty to do anything that is not in your own interest. Whenever it is unquestionably your duty to do a thing, then it will benefit you to perform that duty." Duty calls! |
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Jerry Sikes, RRP / CHA, is President of Professional Resort Operators, Inc., Scottsdale, Arizona. He has 35 years in the Hospitality Industry / 25 years in Timesharing, and is the current Co-Chairman of ARDA Arizona as well as Chairman of the Arizona Timeshare Management Association. Jerry is a frequent guest speaker regionally and nationally on all aspects of Timeshare Management and a frequent contributor of articles for industry publications. Email: boyjerry@cox.net Phone 480-947-3300 Fax 480-947-6853 Web site: http://www.protimeshare.com |
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