Much like the UK London Gazette, Spain has a similar publication known as the Boletin Oficial Del Estado, commonly abbreviated to BOE. This publication catalogues the actions of companies in Spain. Published between the 18th and 21st December four bulletins were posted by the BOE each bulletin confirmed the voluntary bankruptcy of the following Club La Costa companies:
We reported in November that Club la Costa had suspended all of their sales operations for the foreseeable future; this was followed by another statement saying that sales had been permanently ceased. This move was rather strange, but the announcements of these bankruptcies are even more puzzling.
What does this mean for owners?
It is not unusual for companies that develop over time to create ancillary companies along the way, when these companies become superfluous to requirement they are placed into administration and subsequently wound up. The question we cannot answer at this stage is what assets were held in these wound up companies? The corollary of this is we cannot definitively state what affect this will have on owners.
We certainly know that Club La Costa (UK) PLC Surcursal España was the company responsible for the sale of timeshare and fractional ownerships, so in line with the announcement in November the winding up of this company was not unexpected, what we can say for certain is that this company was the focus of the mis selling claims against CLC World and as such will have liabilities to account for in order to satisfy Spanish court orders that have been awarded to owners in possession of illegal ownership contracts.
Pure speculation
As regular readers will know, TCA have been saying for many years that the current model of timeshare, despite years’ of tweaking, is outmoded and out dated. Many smaller individual owned resorts have been selling off the real estate for many years. We understand that one such resort on the Costa del Sol has just 17% of the original 100% of timeshare owners left. Needless to say when an apartment becomes unencumbered and is free of owners it has been sold. So it is fair to say that over the coming years the whole resort will be entirely privately owned without a single timeshare owner in sight.
We know that Club La Costa Ltd recently announced a name change, which was registered at UK companies house, to Jade Realty Ltd, realty is the common description given to American estate agents. Club La Costa already has an active estate agency division called CLC Estates Below is confirmation of this:
The goose and the golden egg
With creative booking staff and the advent of points based ownership, it’s not impossible to work out that freeing up individual properties for future sale is not only achievable but desirable. Taking a logical view, the apartments in the picture above are probably in blocks of 6. Having been sold in points or floating weeks, probably many times over, the development cost has been covered umpteen times, add in years of maintenance payments and it becomes obvious that this piece of real estate has shown a significant return on capital investment by the developer, being Club La Costa.
Now if you can sell these 6 apartments for €145,000 that represents a cool profit of €870,000! Add this to the significant profits already achieved and it may be concluded that this piece of real estate is certainly a goose that has laid not one, but several golden eggs.
Conclusion
As we stated above, we can only speculate on the ulterior motive behind these bankruptcies but for one of Europe’s largest timeshare companies, it does beg the question, why? No doubt further information will emerge over the coming weeks but we believe it is fair to say that these steps will not have been taken for the benefit of owners.
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