Our publication today focuses on the Lake Okanagan Resort which is located in Kelowna, British Columbia, Canada. A more idyllic resort you couldn’t wish for, nestled in a magnificent forest on the shores of Lake Okangen, which was of course until the McDougall Creek Wildfire destroyed most of the resort. The damage was so extensive that really nothing is left. Before we go further, let’s take a look at the history of the resort as this is quite interesting.
Lake Okanagan Resort history
The roughly 300 acres of land was bought sometime in the 1970s by a man named Joe Reisek, who was in real estate in Edmonton at that time. Reisek was financing the project at very high interest rates. He couldn’t make the repayments so the development went into receivership under the management of Coopers Lybrand.
Coopers Lybrand brought CP Hotels in to run the resort, it flourished and it was during their time Commonwealth leaders including Margaret Thatcher visited. CP came very close to buying the resort but didn’t. Then there were a few different private owners before Fairmont Resort Properties bought it and set up the timeshare program.
Fairmont eventually went into receivership and was bought by Northwynd Resort Properties Ltd. in 2010. In 2014, they sold it to a “Chinese tourism organisation.” Estimates of the sale price range from $8.5 to $11 million. That company appears to be owned by Xiao Dong Liu and has a Richmond near Vancouver British Columbia mailing address. It’s listed in the Ministry of Environment report with the company name of 1782 Holdings Limited.
There are numerous reports that the resort was in bad need of maintenance, some even described it as dilapidated. As far back as 2019 it was stated that millions of dollars in renovations would be needed at the resort, which were impacting timeshare owners, but no word were forthcoming from the resort on just what was being done, if anything.
Timeshare owners were sent a letter in November 2019 that stated, in part, that the resort “is no longer sustainable as a timeshare community.”
Major repairs and upgrades were needed for the Terrace and Lakeside buildings’ sewer system along with the replacement of the electrical system in the Terrace building. Together, those were estimated to cost $2 million, the letter also stated that maintenance fees could more than double in 2020 over the 2019 levels.
Things must have really taken a dive because in 2022, RCI, billed as the “leading” exchange network in the world, ended its relationship with Lake Okanagan Resort, citing “quality issues.”
Current problems
Naturally, the virtual destruction of the resort is the largest problem. Will it be rebuilt, if so at what cost, was there enough insurance cover in place, these and more are all questions owners have been posing, and thus far receiving no concrete replies. In a letter sent to timeshare owners in early November last year, owners were asked to vote on a proposal by resort ownership to cease operation of the timeshare business, bearing in mind that most buildings at the resort were destroyed by the wildfire earlier in August.
The letter suggests a two-thirds vote would terminate the timeshare agreements at no cost to the owner. The alternative would see the owners have to pay their 2024 fees in full, in addition to the possibility of special levies, despite the inability to use the resort. The deadline to sign the letter was November 30, 2023. At the time of writing we are unaware of the result of the ballot. The official website for the resort states the following:
If 90% of the resort has burned down, one can only imagine how much the rebuild costs will be. On this subject, many versed commentators have stated that the resort insurance cover is unlikely to come anywhere near the cost of rebuild, this being the case, those timeshare owners that dig their heels in may end up with the dreaded “special assessment” and may have to pay many thousands of Dollars towards the rebuild.
TCA comment
Firstly, this is without doubt an unusual situation, acts of nature can hardly be predicted, and especially the ravages of wild fires, that said, the problems are only just beginning. Amongst smaller legacy resorts numbers of timeshare owners are dwindling and new sales are virtually nonexistent. In the November letter sent to timeshare owners by Lake Okanagan Resort it there were 4,517 such owners in 2014 but that number was expected to fall to about 3,500 by the end of the year.
The question would be, why would a land owner sitting on such a wonderful expanse of land want to carry on with timeshare? So far the resorts management has remained largely silent on their plans but simply applying logic, redevelopment to a luxury tourist and/or a private residential resort devoid of timeshare owners would present the most financially viable solution.
Via the resort’s facebook owners group, there are lots of comments regarding compensation. We understand that most timeshare contracts were sold on a 99 year basis, so had plenty of time to run, surely lost future use would present a valid claim for compensation, but will it?
Given the blunt ultimatum from the owners, walk away for nothing or stay and contribute whatever it costs to redevelop, we think we can see which way this is going.
Progressively, over the years, timeshare owners are more and more becoming the second class citizens of the holiday industry. This is even more noticeable with owners at legacy resorts. As has become commonplace, legacy owners are the ones whose resorts are falling into decline more rapidly than larger developers.
The writing is really on the wall when developers threaten excessive maintenance fee rises such as the mooted rises communicated in the 2019 letter. Hiking maintenance fees to unsustainable levels is a sure fire way to get owners to vote with their feet. Then to add insult to injury, not spending the hiked maintenance on maintenance takes the biscuit.
During our research for this article we found plenty of evidence regarding the lack of maintenance at the Lake Okanagan Resort. One particular distasteful complaint was regarding a failing sewage system where one complainant said that the “smell was wafting round the resort”. The upshot of this was The British Columbia Ministry of Environment imposed a fine of nearly $50,000.
Call us cynical but we think the devastating fire simply advanced the full stop being put on the end of the timeshare sentence. Time will tell but at TCA we don’t see Lake Okanagan Resort opening again anytime soon, but if or when it does, it’s unlikely there will be a single timeshare owner to be seen.
We finish with a photo of the resort during the blaze.
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