In October 2018 the owners of the timeshare weeks at the Village Resort Taupo passed a Special Resolution to wind up their timeshare. An Extraordinary General Meeting had been called by the Body Corporation Chairman following a majority decision at the AGM to explore this option.
In March this year we successfully applied to the High Court and obtained orders under sections 187 to 189 of the Land Titles Act to collapse the timeshare ownership weeks into a single freehold title for the purpose of sale.
The Court ruled that where no less than 75% of eligible owners who voted wished to sell that it was just and equitable for the unit plan to be cancelled in this way. The voting on the Special Resolution was not unanimous but around 90% of votes were in favour. One owner made submissions to the Court opposing the order. The Court considered the arguments presented but ruled that it was proper for the resort to be wound up and sold and the proceeds to be distributed back to the timeshare week owners. In this case, approximately $5,000 per timeshare floating week and $10,000 per fixed week.
The timeshare week at the Village Resort had, for some years, become expensive to own with annual levies up about $900 per annum payable. This had proven difficult for those owners on fixed incomes and the need for further maintenance meant that further increases in levies were inevitable. The Court acknowledged there was no market for the timeshare weeks and with a clear mandate from owners, it was just and equitable to enable them to exit the present ownership.
The sale of the resort for $6,500,000 following a competitive tender round, has meant the resort will now operate as an independently owned motel.
Our property team’s cancellation of the timeshare complex follows our earlier successful cancellation of the Phoenix Timeshare Resort in Taupo in 2016. The owners of those timeshare weeks had similarly voted in favour of a sale and we obtained a Court Order for the cancellation of the unit plan and the timeshare ownership structure.
If we can assist with advice regarding timeshare ownership and the process for cancellation and sale, please contact:
Phone: 022 185 3135
Email: jon@slw.co.nz