An Overview of Significant Information for Sea Mist Resort Timeshare Owners

ABOUT OWNERSHIP AT SEA MIST RESORT

The structure of Sea Mist owners:
Sea Mist was originally established as a motel condominium and still functions as such today, with the added dimension of timeshare ownership and use. When the resort first opened in 1987 there was only one classification of owners and each owner owned an entire unit, all 52 weeks.

In the mid-1990s the Association voted to allow units to be sold as timeshare estates. All owners at that time had the option to participate in timeshare sales; approximately half the owners decided to participate, and the sale of timeshare estates commenced. This action created three different classifications of owners: Whole Unit owners, Trust Participant owners, and Timeshare owners.

The executive Board and the Timeshare Trust voted to end Timeshare sales and the Timeshare Trust as of January 1, 2012. At that time all Trust assets were sold or transferred to DDDS Partnership. As a result there are now only two classes of owners: Whole Unit owners (which includes prorated DDDS Partnership owned weeks) and Timeshare owners.

1. WHOLE UNIT OWNERS – Own all 52 Weeks of a Single Unit (Original/ Regular Owners) or DDDS Partnership controlled weeks: MOST OF THESE OWNERS OWN THEIR ENTIRE UNIT AND THERE ARE NO TIMESHARE WEEKS AVAILABLE FOR SALE FROM THESE UNITS. A SUBSET OF WHOLE UNIT OWNERS IS THE DDDS PARTNERSHIP, WHICH CONTROLS THE REMAINING UNSOLD TIMESHARE WEEKS FROM UNITS THAT WERE BROKEN INTO TO FACILITATE TIMESHARE SALES. THESE WEEKS CAN BE SOLD OR TRANSFERRED.
These owners do not participate in the timeshare program and are free to rent or use their units as they choose as dictated by Town ordinances. If these owners wish to join RCI, they are free to do so and can trade weeks as desired. These are not considered timeshare weeks. These WHOLE UNIT or REGULAR owners own approximately three-quarters of the units at Sea Mist.

These owners make quarterly maintenance fee payments as well as pay monthly operation expenses.

2. TIMESHARE/WEEKLY OWNERS – (Weekly Owners):
THESE ARE OWNERS WHO HAVE PURCHASED ONE OR MORE TIMESHARE ESTATES.
These owners are free to use, rent, or trade their weeks as they choose as long as all maintenance fees are paid.
At the time of the approval of the amendment that allowed timeshare sales, the Association voted that all costs specifically related to weekly timeshare owners would be the responsibility of weekly timeshare owners. The deficit reserve line item within the timeshare portion of the budget was set up to guarantee that these responsibilities were met.

These owners make annual, or biennial maintenance fee payments based on ownership (every, even or odd years).

THE TIMESHARE TRUST, WHICH WAS CREATED TO GUARANTEE EQUITY IN THE DISTRIBUTION SALES INCOME FROM TIMESHARE SALES NO LONGER EXISTS.

SEA MIST BUDGETS
When Sea Mist first opened, the Association had two sections to a single budget, the “condo budget”, and the “operations budget”. This division was somewhat arbitrary, and an amendment was approved at the 2002 annual meeting to guarantee that it was clear to all that both sections existed under a single umbrella. The reason for the two sections relates to the method by which certain line items are paid. In the “condo budget” regular owners pay dues on a quarterly basis; in the “operations budget” section, fees (dues) are paid on a monthly basis during the time that the resort is open and operating as a motel.

With the advent of weekly timeshare owners, it was necessary to combine the “condo budget” and the “operations budget” into a single budget to establish a single maintenance fee for the year for weekly timeshare owners. When this was done, additional costs specifically associated with weekly timeshare owners were incorporated into what has been generally referred to as the “Timeshare Budget”.

For all intents and purposes there is a single budget for the resort and its various classifications of owners. Accommodations have been made for the method of payment and the need to identify those costs unique to weekly timeshare owners or other owners.

When the ”Timeshare Budget” was established there was a real question of how it should be presented. It was decided to establish a total budget based on the assumption that ALL UNITS in the resort, and ALL WEEKS in each unit, were timeshare estates. We have done this since the initiation of timeshare sales.

Because of the manner in which the timeshare budget is presented, it is somewhat difficult for new timeshare owners to gain a thorough understanding immediately. However, we see no other clear alternative. As a result, we include some detailed examples with the budget packet each year, which should go a long way in assisting new timeshare owners.

It is incumbent for all owners, but particularly weekly timeshare owners, to understand the manner in which the “timeshare budget” is presented.