FEATURE Alex Radford
Timeshare committees:
Are you adapting your resort to the times? So asks Alex Radford, a solicitor and Spanish abogado, who considers some of the legal issues committees should address for their longterm survival.
M
any people who were originally sold timeshare in the 80s and 90s were advised they were investing in holidays for life. They would enjoy low priced, high quality future holidays at today’s prices and could exchange into other resorts around the world. Owners and developers did not realise that over the years maintenance fees would escalate, timeshare re-sale value would be much lower than the original purchase price and the re-sale market would be limited. So where are we now? Today, after many great timeshare holidays have been enjoyed, owners are growing older and no longer wish to travel. Some cannot afford or refuse to pay the maintenance fees, which have escalated and, in some cases, cost more than renting a similar unit. To compound the situation, once-bustling resorts are now empty as there have been no active sales and no new members coming
on board. Empty units cost money and this increases the maintenance fees for those remaining. So what can committees do to ensure their resorts survive for another 30 years? There is no magical wand that will wave these very real issues away. If no action is taken, the resort will quite simply not survive. Committees that are not up to the job or have the relevant skills should share the problem and call in specialist re-sale, marketing and exchange companies - and, yes, lawyers, to help develop a strategy. First steps. If your legal set up is that of a club trustee system have a very good read and make sure you understand the club constitution it is your resort’s bible. Below are some top tips to help you develop a strategy: • Can owners return their weeks? Is it viable to accept them or should you stage their return? How will this affect club finances? What income stream will replace this? • Do you take legal action against delinquent owners? Why? • If an owner does not pay the maintenance fees, do
you suspend occupation rights? How long for? • Is it fair to continue to issue membership fees to owners who will not pay? Why not repossess? • What is the procedure for returning weeks? Can you simplify this? • If you have too many empty units, release and sell them. • Is your resort sustainable as a business? Do you have the ability to develop resorts where tomorrow’s travellers wish to stay? Where would your children like to stay? • What is the duration of your club? Will your membership last this long? If not, is it time to change the duration? • What happens upon the death of a member? Make the process easy for the heirs. • Have you considered developing a short-term product that’s more attractive to new owners? If they like your resort, they might upgrade to full ownership and stay for longer.
Alex is a partner in MLS Lawyers & Solicitors, a limited liability partnership. He has been involved in the timeshare industry since 1999 and during this time has acted for committees, developers, lenders, trustees and consumers. Contact: Aradford@mylawyerinspain.com Telephone: 0845 508 2395 Sharetime issue 22 | 23