Timeshares – buying the right to live somewhere for a week or two each year on holiday – are easy enough to get, but they can be impossible to get rid of. Many older owners are finding themselves stuck paying hundreds, even thousands of pounds a year in maintenance payments for properties they can no longer visit through age or disability. Mary and her husband are both in their eighties. They have two timeshares in Scotland. They’ve not been able to take their week’s holiday for more than a decade, but they’re still stuck paying more than £2,500 a year in fees.
MARY: Neither of us are able to travel. We are both disabled. We are absolutely stuck with paying management fees to Macdonald’s for nothing. I stopped paying the fees. We couldn’t do this because Macdonald’s constantly sent us requests for the management fee or they would take us to court. We wrote to them and said that they could have it back, we didn’t want any money for it, and they still wouldn’t take it back because you know it’s a dripping roast to them.
LEWIS: That was Mary. Well we asked Macdonald Hotels to speak to us or provide a statement. It refused. So we talked to the Resort Development Organisation. It represents 80% of the timeshare industry in Europe, but not Macdonald Hotels. I asked its Chief Executive Paul Gardner Bougaard why Mary and her husband couldn’t just give up their ownership.
GARDNER BOUGAARD: If you look at most of our RDO members, they have procedures and provisions for helping people who are in those situations.
LEWIS: How they help them?
GARDNER BOUGAARD: If, for instance, one member can’t travel anymore, they’re in financial difficulties, issues such as that, then most developers -and I’m talking here about the major developers – will be sympathetic to that and will help them to exit from their ownership. And of course there is a resale market, and if they have problems then go and talk to your developer because they will do the best they can to help you.
LEWIS: You say there’s a resale market, but this particular couple have even offered to give the timeshare back, never mind sell it, and that’s been refused. What that shows, surely, is that they’re actually worth nothing?
GARDNER BOUGAARD: No, well I don’t agree. Obviously I don’t know the particulars of this case, Paul, so I can’t help you on that, but I’ll give you another instance. I was talking to a major developer yesterday and they had a couple who were in financial difficulties and effectively were saying look, we can’t afford the maintenance, please have the weeks back. The developer said look, we can’t take the weeks back, but we’ll … 9
LEWIS: Why can’t they take them back?
GARDNER BOUGAARD: Well let me finish the story. They’re worth far too much.
In fact what they did was go and put them on the market and in fact they got £3,000 for them.
LEWIS: That’s a nice, warm story, but I get a lot of messages. I get tweets and I get emails from people desperate to sell their timeshares. So desperate that they fall prey to conmen who, as you know, are very much in this industry – pretending to buy them back and then failing to do so …
GARDNER BOUGAARD: They do indeed.
LEWIS: … because they are desperate to sell them and they cannot sell them.
GARDNER BOUGAARD: Resales like house sales in various parts of the country are difficult to do. There are some very good resale agents who are RDO members, who will do a good job for owners, and they should talk to them and see what they can do. Some resorts will look at hardship cases and will help them take the week back or help them resell it or come to an agreement with them. There are some new clubs being set up where owners in fact can lodge in their week and two or three years later they will be out of the ownership altogether, and new timeshares being sold now are being sold on a much shorter period.
LEWIS: I’m sure the contracts now may be better than the old ones.
GARDNER BOUGAARD: They are indeed.
LEWIS: But we do have this legacy of contracts. …
GARDNER BOUGAARD: We do.
LEWIS: … which last forever, that you can’t get out of, and where the value of the timeshare is virtually nothing or at least it’s very hard to sell. Shouldn’t there be some mechanism at the end of your holidaying life to get rid of what’s been a very profitable thing for the resort in an orderly fashion?
GARDNER BOUGAARD: Most of these issues arise on what we call the owner owned resorts. These are the resorts where the developers have finished the development, the weeks have been sold, and the resort is in fact being managed by an owner’s committee and there’s no longer a developer in situation. Now they’re the ones that have the major difficulties. One of the things that the owner owned resorts we will ask – or rather TATOC needs to asthe major difficultiesk them to do because they’re not RDO members – is to look at their constitutions and see if they can do something about it. But it is a legal issue. The constitution needs to change. The owners need to vote to change that in an AGM and there has to be a majority or a two thirds majority for that. So there are legal hurdles to be crossed.
LEWIS: Paul Gardner Bougaard of the Resort Development Organisation. And I understand that TATOC, Timeshare Association members, are holding AGMs over the next few months and they may change their procedures to help people like Mary. Well with me is solicitor David Greene, a senior partner at lawyers Edwin Coe. David Greene, we heard there Mary. She was so disgusted at being charged £2,500 a year for not having a holiday, she just stopped paying. Is that a good idea?
GREENE: Well it’s not a good idea. I think you need to manage it and have a look at the contract, see what’s happened in the sale process and see if there’s a way of dealing with the contract.
LEWIS: And how can you do that? How can you challenge the contract?
GREENE: Well you can have a look at the terms of the contract. The maintenance, what often happens is that the sale takes place for a product and then the tail end of 11 that product of course is the maintenance and management charges; and very often those are kept rather under wraps until you become liable for them and they’re such a problem for people as we’re seeing. That’s the nature of the problem.
LEWIS: Can you solve it though? I mean can they come to a solicitor like you and you can say yes, that contract is unenforceable?
GREENE: Yes and indeed we often do that.
LEWIS: So that’s a possibility.
GREENE: We can say that. Either there may have been misrepresentation in relation to the contract or the contract terms.
LEWIS: The danger is though they might lose and end up paying legal costs of both sides.
GREENE: It is a danger, yeah.
LEWIS: We’ve also had complaints from people, who actually never bought a timeshare, but then they inherit it from their parents and they seem bound forever to pay the management fees. Is that right?
GREENE: Well it depends on the nature of the product. “Holiday points” is slightly different from other timeshares, the weeks. But it can pass down through the will and again they can become liable for it and they need to look at the contract for misrepresentations, all of those things in relation to the enforcement of that contract.
LEWIS: But can you just refuse the inheritance? Can you just say sorry, I don’t want to inherit that bit? 12
GREENE: Well eventually someone takes the inheritance because it’ll form part of the residue. So whoever takes the residue will take that inheritance.
LEWIS: And so really apart from challenging the contract – which may be perfectly sound, you don’t know. I mean somebody said to me of course you sign these wearing flip-flops. You don’t normally have your lawyer with you, so you probably don’t know how the contract is, whether the contract’s good or not.
GREENE: Absolutely. But when you look at the contracts carefully, I think if a lawyer looks at them they can see ways around them, and, as I say, they’re very often mis-sold these contracts.
LEWIS: David Greene from Edwin Coe, thanks very much.
For more information regarding this article or assistance in any other timeshare related issues please contact the TCA on 01908 881058 or email: info@TimeshareConsumerAssociation.org.uk