The Park Record Editorial, May 9, 2009
May 8, 2009
Former Deer Valley Lodging employees are still reeling from losing their jobs, and the bad news keeps on coming. Many are just now learning that the benefit packages they were counting on will not be included in their final paychecks.
The company is asking them to be ‘patient.’ But patience doesn’t cut it when the rent is due.
The astonishing demise of one of Park City’s largest property-management firms is being felt in many sectors of the business community. Because of the enormous range of services property managers offer, the line of unpaid creditors includes everyone from florists to plumbers. But it is those who relied on Deer Valley Lodging as their sole income who may be in the most dire straits.
It was hoped, briefly, that an investor would step in to assume the company’s financial obligations, but it appears now that will not happen. Deer Valley Resort is forming its own property-management arm and hopefully will hire many of Deer Valley Lodging’s staff, but the resort will not be obligated to honor the benefits promised by their former employer. It is also unclear at this point how many property owners who have yet to receive their share of reservation fees collected by Deer Valley Lodging will be willing to put their faith and their properties back in the rental pool.
One of the only positive outcomes that could come from this debacle would be a reform of the state’s legal code pertaining to property management. Unfortunately, in the past, no one has been willing to take on the powerful lodging and real estate lobbies that typically resist stronger oversight.
Although it would be in their best long-range interest to do so, property managers are unlikely to champion tighter regulation of their own industry. The impetus will have to come from the property owners, their homeowner associations, merchants who regularly interact with property-management companies and employees.
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As Deer Valley Lodging’s creditors begin wrangling for their money, it would be wise for them to also enlist the support of state and local lawmakers to begin writing new rules to prevent this from happening again. The first step in that process would be to require property management companies hold in escrow a portion of all advance reservation fees that are collected until they are turned over to the property owners.
The road ahead for the property owners and employees affected by Deer Valley Lodging’s collapse promises to be difficult, but if it is carefully repaved with stronger regulations, those who follow will not fall into the same potholes.