We have recently achieved a satisfactory outcome for the 612 owners of an aging Timeshare Resort.
The timeshare resorts formula for selling occupation weeks to individual owners has been and continues to be popular for those not wishing to purchase their own holiday home, but nevertheless looking to enjoy a week’s holiday each year in either their own timeshare resort or an exchange resort elsewhere. Over time, the timeshare resorts in New Zealand have shown a need for increased annual levies to be paid by each timeshare week owner to maintain the quality and standard of the buildings and facilities offered by the resort. At the present time, these are generally in the region of $700.00-$1,000.00 per annum. These charges may not seem excessive having regard to the quality of the resort being provided, however, many of the owners of the timeshare weeks are now elderly and on fixed incomes and are increasingly finding that the maintenance fee and levies from time to time are a significant handicap to them in their retirement. Also the age of the accommodation can diminish the resort experience over time.
An answer to the question of how to retire a timeshare resort was found recently in an application to the High Court for the Phoenix Timeshare Resort in Taupō. Our Property Team made the application following a resolution of the owners of the timeshare weeks, that they wished to terminate the unit plan which created the timeshare weeks in order to sell the resort as a motel going-concern. Sections 187 to 189 of the Unit Titles Act 2010 provide that where 75% of the eligible owners resolve to cancel the unit plan, that the Court has the power, when it considers it just and equitable, to cancel the unit plan. A successful outcome was concluded and the timeshare weeks which had previously been unsaleable due to the high maintenance fees, netted a return in excess of $2,000.00 per timeshare week to the 612 owners following the successful sale of the property as a motel going-concern on 1 January 2016.
For further information relating to unit titles in general, please contact Gerry Sullivan at this office for further information.