MRL Action Group Web Site

Consumer Assistance

Consumers have expressed a wish to challenge the MRL proposal at the various SGMs. Those proposals intend to change the constitution and vary the underlying contractual rights enjoyed by timeshare consumers in their respective unincorporated clubs.

Pursuant to that expressed wish, the TCA is inviting consumers to join together and challenge the actions of MRL in a group.

In so doing the proposed group structure will enable the consumer to have access to Justice at a manageable cost, even if the claim is unsuccessful. It will also comply with the court’s overriding objective and will afford a good foundation to deal with the issues the consumer faces.

This proposal is not the only way to deal with such matters and all consumers ought to consider their own needs before embarking on legal investigations/actions in pursuit of damages.

The service being offered by the Athena Law and is entirely fee based (whereby the Athena Law will be engaged by consumers to carry out tasks and in the best interests of Consumers).

The Issues

MRL wants your fixed week!

They want them now and you have to comply immediately with the MRL demand!

MRL do offer you an exchange in that they will give you a points based timeshare, however if you do not accept this proposal then MRL will charge you 4 times your annual maintenance fee (say £2,200) per week to exit.

That is the message and as usual the squad of spin appeared in the form of the consumer association TATOC. They attended the MRL road shows and stated:

1) It’s a landmark proposal.
2) A ground-breaking deal
3) It is offered after extensive negotiations with the club committees
4) It will have a ripple effect throughout the entire timeshare industry.
5) Macdonald Resorts should be commended for this initiative
6) TATOC will provide its full support to Macdonald Resorts

The TCA say differently and question the reasoning behind the praise and indeed the offer itself.

Why Is It Being Done?

MacDonald Resorts Limited (MRL) is just a change of name from the company Barratt International Resorts Ltd. It is exactly the same company but in a new dress.

MRL are based in Scotland with resorts in Scotland, England, Wales and Spain with an estimated 22,000 members. MRL has established a reputation for being a high annual maintenance fees charger, by the use of strange accounting practices.

At present MRL have a reported timeshare management income of approximately £10.5 million.

They received approximately £220 million when the properties where converted into timeshare resorts (in or about 1980’s). At today’s prices it could be £500,000,000.

At present the ownership of the resorts are believed to be held in a collection of trust companies whose shares are all registered in the benefit of a trust and for the benefit of the members of a selection of unincorporated clubs. You the timeshare owners are the beneficiaries of these trust companies and consequently have an interest in the property rights that are held on trust.

The underlying assets are locked in fractional ownership (like pieces in a jigsaw) and the market for that fractional ownership is collapsed. In single and unencumbered ownership the underlying values will substantially vary upwards whereby as a whole the asset will be enriched and be worth more (a single piece of jigsaw is worthless but if all the pieces are available the whole has a monitory value). By estimation we expect the entire resorts to be worth £450m. Divided by 22,000 these figures are admittedly subject to valuation evidence and disclosure as to the total number of beneficiaries holding timeshare weeks.

The Club Asset Values Shift

The club and its underlying assets belong to the members of the club. In the event the entire membership changes from multi parties to one single controlling member, the underlying asset will become an unencumbered asset of that member and the values of the asset will rise.

The members were given express promises in a Barratt charter. Those promises stated as follows:

“to protect and maintain the members legal right in deed and title to occupy the owners holiday apartment or lodge in the week or weeks of their choice and forever.”

Also MRL make further representations in that:

“Independent trustees hold the title to the lodges and apartments on behalf of the owners.”

“If MRL becomes insolvent title to the lodges and apartments would be safe”

“Owner will receive an audited statement detailing the expenditure on management and how the management fees are calculated.”

“MRL is committed to making all potential owners fully aware of their rights under the Barratt Charter. The company will continue to seek means of protecting the consumer’s interests and provide even greater confidence in their purchase.”

“The Holiday Certificate is evidence of Legal Title.”

“The right which all joint title holders have of insisting that the subjects be sold and the proceeds divided amongst the joint owners.”

“The purchasers are not granted leases as such but, by virtue of being members of the Club and holding the requisite Holiday Certificates, they are entitled to occupation of specific apartments for specific periods in each year. Thus protection is given not only to the purchasers’ interest in the underlying property but also to his right of occupation of that property. Further security is given by virtue of the fact that the title to the property is held by an Institutional Custodian Trustee on behalf of the Club.”

“For how many years does title last? Effectively, it lasts forever.”

This Charter is for all timeshare owners in the following resorts:

• Elmers Court Country Club, Hampshire
• Dalfaber Golf and Country Club, Aviemore
• Forest Hills Trossachs Club, Aberfoyle-by-Sterling
• Lochanully Woodland Club, Inverness-shire
• Plas-Talgarth Health & Leisure Club, Powys
• Leila Playa Club, Malaga
• Villacana Club, Malaga
• Dona Lola Club, Malaga

The above paragraphs are facts not advice and the above statements are all contained in the MRL (Barrett’s charter).

The holiday certificate mirrors the charter and the clubs are constituted for a purpose. That purpose is expressed in the constitution as:

“protection is given to the purchasers’ interest in the underlying property”

“Also to his right of occupation of that property”

The property is described as a fixed week in a fixed property at a particular resort.

Those are the promises and pre and post contractual representations in this matter.

In the event that those pre-contractual representations do not reflect the events post contract, then the seller has breached the sales contract due to misrepresentations and the contract could be voided.

Why Are MRL Doing What They Are Doing?

MRL are a business and they operate a company where its primary purpose is to make money for its investors. The directors have a duty to MRL to operate in this mindset as they have a single duty of care and that is to the company who employ them. MRL do not owe you the consumer any such duty. If you consumer think otherwise you are wrong.

As a result of the present market, timeshare is worthless. As they have a considerable amount of timeshare, they want the underlining asset value to increase. One way to do this is to acquire all the fractions so that MRL own the entire resort. At that stage MRL can revalue the asset as it will be unencumbered (or what you might call freehold).
MRL could obtain this goal by way of a negotiation with each member of the club however it would be costly and some will hold out for a better price. The entire process could be very drawn out and costly.

That all said if they could alter the constitution of the club and force everyone to hand over the ownership to them the task would be far cheaper and quicker and the underlying asset will become unencumbered. The asset can be re-valued and placed into a revaluation reserve and then MRL will add value to their balance sheet.

The consumer, in short, loses nothing as the timeshare ownership is worthless, however MRL stand to make a huge gains by bringing all the fractions together.

The TCA have written an article which is titled the Beautiful Twist. In that article if the offer was a good and fair offer then if the parties are reversed the offer would still be a good offer. However the consumers would have the benefit of the equitable interest in the resort and MRL would exit in accordance with their own ‘fair’ terms. In short it’s very clever, wholly legal and designed to provide betterment for the company who employ the minds of the MRL offering.

By way of an offering MRL are prepared to offer you a less equitable timeshare with a get out clause, however if you do not accept the MRL offering then they want you to pay a sum (of £2,000 approx) for an exit, they in fact want you to exit.

If you want out of your MRL timeshare (and that is truly what you want) this is a good plan for you as it addresses those wants.

If you consider that you want a controlled exit in the future then again this will fulfil that want. That said you are advised to check the small print so as to determine whether or not in fact MRL can avoid any part of the promise made.

If you consider that you want out of the timeshare and wish to seek damages equal to the amount you paid as this action of MRL is a breach of the contract as ‘I own it forever’ then you should reject the offer or not respond to the MRL offer and then issue is a damage based claim against MRL after September 2014 (date of effective breach of contract act).

If you consider that you want out of the timeshare and wish to seek exemplary damages equal to the amount you paid initially and an award which is a punishment based uplift, then you should reject the offer or not respond to the MRL offer and then issue a damage and exemplary damages based claim against MRL after September 2014 (date of effective breach of contract act).

http://mrlactiongroup.co.uk/