Diversified Resorts Additional Management Fee

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Offline JulieJ

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Re: Diversified Resorts Additional Management Fee
« Reply #20 on: July 29, 2016, 13:31:05 »
I just joined this Forum and notice this post.  As I am a retired UK solicitor a friend asked me to help him with this letter recently.

Please note that although I am still on the roll at the SRA I no longer have a practising certificate or any professional indemnity insurance as I have retired from the profession.  My role at Spanish firm JLCA Lawyers is purely marketing as I am not qualified to advise on Spanish law.

My views in this post are given freely and willingly.   However, if you are considering acting to your detriment in reliance on them you should take formal advice from a practising UK solicitor, who will have professional indemnity insurance.


Owners of these DR points are responsible for paying ‘Maintenance Fees’ to the Seller or the Collection Agent, in this case RCI.  The initial Maintenance Fees are stated in Part C of the purchase contract, but these may change from year to year.

A separate document entitled “Maintenance Fee Explanation”, which forms part of the contract, confirms that the annual maintenance fees are set in advance and are estimated - it also confirms that in some unforeseen circumstances the estimate may not be accurate and that “an exceptional Maintenance Fee may be charged”.

So the question is whether these invoices relate to ‘an exceptional Maintenance Fee within the terms of the Scheme Rules'?

Clause 4 of the purchase contract provides that capitalised words and expressions used in the contract, such as “Maintenance Fees”, have the meanings set out in the Scheme Rules.  

“Maintenance Fees" is defined in clause 1.22 of the "Scheme Rules” as sums in respect of:
   •   the maintenance, repair, redecoration, cleaning and (where necessary) renewal or preservation of the Accommodation, Common Property or any Movables [all these terms are also defined in clause 1 of the Scheme Rules]
   •   maintaining a reserve fund
   •   the costs of utilities and insurance and other outgoings incurred in respect of the maintenance of Accommodation,
   •   the provision of services and facilities at the Resort(s), 
   •   owner’s association fees, 
   •   special levies or charges solely attributable to the Member arising from the exercise of Occupancy Rights
   •   specific services rendered as required by or at a Members’ instance or on that Member’s behalf
   •   a reasonable sum with respect to the costs of providing maintenance and equivalent services and/or and all other fees or charges payable in connection with the same

Although a lengthy definition, there is no reference to any tax assessment on a resort within the Points Club as being something that can justify an exceptional Maintenance Fee charge.  

There is no separate definition of an 'exceptional Maintenance Fee’.  In the Maintenance Fee Explanation document there is a reference to ‘exceptional Maintenance Fees’ which this relates to an adjustment to the fees having to be made to the estimated fees due to an unforeseen event.  The question is whether an unexpected tax bill is covered.  This is doubtful because tax is not one of the expenses that can be taken into account when determining the Maintenance Fees.  

You could also argue about the use of the term ‘Additional Management Fee’ in the letters and invoices - i.e. that there is no provision in the contract for charging an ‘Additional Management Fee’,  but DR could just send an amended letter and invoice using the correct terminology.  

The key point is that unexpected tax bills are not included in what you originally agreed to pay under the contract.  

Have the Scheme Rules been amended to cover unexpected tax bills?

Clause 9.6 of the Scheme Rules provides that an Affiliate (i.e. a Resort operator within the Points Club) can ‘vary the basis upon which Maintenance Fees are calculated in respect of its Resort(s)’.  The third paragraph at the beginning of the Scheme Rules, on page 3 above “Definitions”, provides that the Scheme Rules may be amended from time to time but that members will be notified in advance of any changes in accordance with provisions in the Scheme Rules.  The notice provisions are also within the Scheme Rules.

The only possible justification for the invoices might be if DR have amended the Scheme Rules (i.e. properly on notice in accordance with the third paragraph at the beginning of the Scheme Rules, on page 3 above “Definitions”) to include unexpected tax bills.  See also clause 32 of the Scheme Rules for the ways in which you ought to have been notified of any relevant changes to the Scheme Rules (clause 32 overrides the general notice provisions in clause 34).  If DR claim they have changed the Scheme Rules then you can ask for a copy of the notification that should have been sent to you at the time.

So, have you received any notice of a relevant change to the Scheme Rules since you purchased?  Assuming no change has been made, the next step is to challenge RCI/DR on how the ‘one-time Spanish tax assessment’ on Sunset Beach Club referred to in the letters falls within the definition of Maintenance Fees and justifies an ‘exceptional Maintenance Fee’. 

If they cannot satisfy you on this point you need to consider whether you are willing to pay or not, to avoid the hassle of having your points suspended and not being able to book your next holiday through RCI until this issue is resolved.  If you have already booked or have holiday plans and want to book, you may feel that the holiday you want to book is more important than arguing over this payment and you are happy to pay and be philosophical about it.  

Please note that although I am still on the roll at the SRA I no longer have a practising certificate or any professional indemnity insurance as I have retired from the profession.  My role at Spanish firm JLCA Lawyers is purely marketing as I am not qualified to advise on Spanish law.

My views in this post are given freely and willingly.   However, if you are considering acting to your detriment in reliance on them you should take formal advice from a practising UK solicitor, who will have professional indemnity insurance.


Offline AndyC

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Re: Diversified Resorts Additional Management Fee
« Reply #21 on: December 13, 2016, 17:16:06 »
This matter has very much taken a step backards in the past few months, but today we had a telephone call from a man claiming to be from RCI, on further questioning we found out he worked for FNTC who it apears manage the collection of fee's for various companies RCI and Diversified resorts included. We explained that as far a we were concerned we wanted nothing more to do with timeshare. He then said ok I will send you a surrender form whats your email address. I will then ring you back and we can go through it together. As yet no email and no follow up call. I'm not surprised,but I am a bit dissapointed. I will post more if any thing happens.

Andy