News has reached us of a court win for a developer/ property management company in British Columbia (BC), Canada in what can only be described as a very unusual case. The timeshare resort, Northwynd Sunchaser Villas, Fairmont, BC recently changed management companies. After taking over, the new management company decided that the resort was so dilapidated that a massive investment would be needed to bring the resort up to scratch.
TCA recently reported on “special assessments” in the USA, effectively this is a cost passed on to timeshare owners where there are monies to be spent on the resort outside of the usual maintenance fees. In this case, the new company, Northwynd, contacted the estimated 14000 timeshare owners who were given the choice to either pay $4000, their share of a $40 million renovation, or $3000 to walk away.
The court action
As you may well imagine, the majority of the timeshare owners were not at all happy with the fait accompli they were given. Collectively a class action was presented to the court in BC, the court has ruled in favour of the property management company and now at the Sunchaser timeshare owners will have to decide whether they stay or pay to get out. Northwynd says 7000 of the 14000 timeshare owners haven’t made a choice yet. The company adds that of the 7000 that have decided, about half have stayed and half have left. An excerpt from the court ruling is shown below:
To avoid confusion, Northmont is a subsidiary company of Northwynd Resort Properties Ltd.
TCA Comment
This is almost a case of six of one and half dozen of the other. On the one hand you see a management company that wants’ to bring the resort up to date but presumably can’t bear all the costs, and timeshare owners who feel previous maintenance fees should have been spent properly on such updates.
A logical question to ask is why did the owners stay loyal to the resort when if $40m is required to update and renovate they must have seen the decline over the years? That aside it’s plain to see that it’s a lose lose scenario for owners but a win win for the management company.
Given that timeshare is still selling well across the Atlantic, to leave will cost $3,000 giving the developer free weeks/points to resell. On the figures as stated above, already there are a minimum of 3,500 owners who have paid the required $3,000 and thus ceded their ownership into the sales inventory, providing yet another means to a cash injection.
Whether it be $3,000 to leave or $4,000 to stay, it’s the timeshare owners that will foot the bill either way. Presumably there may be a right to appeal but the reality is that this will cost more money and the final result will almost certainly stay the same.
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