Legal position of not paying annual fee

[daviday]

quote:Originally posted by j.mcfarlane

Sorry you are very wrong. After getting rid of Macdonald, I remember being told by either privately by one of the management company of Loch Rannoch or it was mentioned at an Annual General Meeting that writs were issued against owners who defaulted on their management fees. I do not believe any cases went to court as the owners paid up.

The only owner who could not be issued with a writ was Macdonald because of the court case between them and the Loch Rannoch Highland Club.

It was the reverse - Macdonalds issued a writ against Loch Rannoch Highland Club, for the unpaid management fees that they claimed were due to be paid to them. Macdonalds did not dispute their obligation to pay management fees for their unsold units but witheld the money pending the outcome of their dispute with LRHC.  The club, having sacked Macdonalds, took the view that Macdonalds should have pursued the matter themselves, when they had the chance and it was their lack of due dilligence that had led to the debts.  I don't think they issued writs against any owners and, as far as I know, the money was not recovered.

The matter has now been settled and relations between LRHC and Macdonalds, who remain the "founder member", appear to be thawing at the moment.

[56johnmc]

quote:

It was the reverse - Macdonalds issued a writ against Loch Rannoch Highland Club, for the unpaid management fees that they claimed were due to be paid to them. Macdonalds did not dispute their obligation to pay management fees for their unsold units but witheld the money pending the outcome of their dispute with LRHC.  The club, having sacked Macdonalds, took the view that Macdonalds should have pursued the matter themselves, when they had the chance and it was their lack of due dilligence that had led to the debts.  I don't think they issued writs against any owners and, as far as I know, the money was not recovered.

The matter has now been settled and relations between LRHC and Macdonalds, who remain the "founder member", appear to be thawing at the moment.

Yes you are right in that Macdonald did issue a writ against Loch Rannoch but I never said that a writ was issued by the Club for the non payment of management fees. I said a writ could not be issued because of the court case.

In the end the case was settled out of court with the various competing claims being offset against each other. I can say what Macdonald did regarding the debt that had built up because of the accounts they published. Macdonald, in my opinion, were negligence in their failure to manage the debt properly on behalf of the owners and in their failure to apply the proper accounting conventions in writing off substantial proportions of the bad debt on a regular basis as well as being in breech of their fiduciary duty by failing to declare in the accounts the amounts earned from the sale/rental of units in default. There were debts in the accounts that went back years and should have been written off as they clearly could never be collected.

The only time the Club and Macdonald faced each other in court that I can recall was when Macdonald attempted to get an interdict (equal to an injunction in english law) to stop a SGM called to approve a number of amendments to the constitution that included an increase in the number of committee members elected by the members from 3 to 6 - a move aimed at reducing the influence of the two founder members on the committee. Macdonald failed in their attempt as the judge found insufficent reason to grant one. The judge would not allow one amendment relating to a limit on the number of units owned by any one owner to be voted on - the judge ruled that such a clause could not be allowed in law. The SGM went ahead and remaining amendments were passed.

Timeshare owners have little rights so if you feel you are being ripped off there is little you can do. I looked at the legislation a few years ago and it was seriously deficient at that time. There was nothing of any substance regarding the rights and responsibilities of owners, management companies, developers, production of accounts, meetings, etc. Timeshare  is a sizeable sector so there is a need for proper regulation. The right to hand back your timeshare for nothing after a set period such as ten years with no penalties would gave owners more power and influence as well as make timeshare more attractive as a product. You get no protection from any of the regulatory bodies in this country, DTI, OFT, trading standards. Forget it as they are not interested - I know because I have tried.

[Simoncc]

quote:Originally posted by j.mcfarlane


Oh and just a final thought. Do you know how the value of timeshares could be increased quite easily. Allow owners the right to hand their timeshares back when they no longer want it for whatever reason. People are put off timeshare because they fear a millstone round their neck in later life. Without that fear people would be more willing to buy timeshare and the timeshares would earn income from sales of the units handed back.

Think about it

I can't comment on the ins and outs of the MacDonald/Loch Rannoch battle but I do agree that the open ended nature of most timeshares is a big part of their negative image.

Ironically, I understand that the current MacDonalds management team are also aware of this issue and want to find ways to resolve it. A balance needs to be struck between giving owners a reasonable escape route whilst also protecting them against developers/management companies who might look for a cheap way to close a resort down and sell the property on for a big profit.

[Homer Share]

So a timeshare company in the UK can't get at their owners in the UK, or at least daviday doesn't think so (some clarity would be nice).

Most people on this forum have timeshare in Spain. There is no evidence of any cases brought against any management charge defaults in Spain. Others have timeshare in India and other parts of the world. There is the same lack of evidence there aswell.

These timeshare companies threaten legal action in a heavy handed manner designed to frighten owners. This will only damage their own business by frightening people off buying timeshare.

[56johnmc]

quote:Originally posted by Homer Share

So a timeshare company in the UK can't get at their owners in the UK, or at least daviday doesn't think so (some clarity would be nice).

Most people on this forum have timeshare in Spain. There is no evidence of any cases brought against any management charge defaults in Spain. Others have timeshare in India and other parts of the world. There is the same lack of evidence there aswell.

These timeshare companies threaten legal action in a heavy handed manner designed to frighten owners. This will only damage their own business by frightening people off buying timeshare.

I have told you that writs have been issued against defaulting owners at Loch Rannoch after Macdonald had been replaced but no cases came to court. There is no hidden agenda at Loch Rannoch as the outstanding amounts are the Club's money and that is all that is trying to be recovered. There is no question of unknown amounts re rentals and /or sales being retained by a third party.

I have referred to the constitutions used by Macdonald. The following link to the constitution for Villacana was posted on the Macdonald Owners site:-

http://www.villacana-owners-club.co.uk/Villacana9.html [nofollow]

It is similar to the constitution used by Macdonald at Loch Rannoch

Part 13f of the constitution is of particular interest especially sections 5 and 6 - in my opinion these could be used as a defence by a defaulting owner. I am not aware of any cases in which Macdonald has applied this part of the constitution and if they have not, the question is why not?

[daviday]

quote:Originally posted by Homer Share

So a timeshare company in the UK can't get at their owners in the UK, or at least daviday doesn't think so (some clarity would be nice).

Most people on this forum have timeshare in Spain. There is no evidence of any cases brought against any management charge defaults in Spain. Others have timeshare in India and other parts of the world. There is the same lack of evidence there aswell.

These timeshare companies threaten legal action in a heavy handed manner designed to frighten owners. This will only damage their own business by frightening people off buying timeshare.

I have never said that a UK timeshare cannot get at their owners in the UK - indeed I believe their UK owners would be the MOST likely to be sued.  

What I do say is that it would be very expensive to do so and the outcome uncertain (and in the case of Scottish timeshares, it might well be complicated by the difference in legal systems between England and Scotland)

No Spanish timeshare in their right mind would try to sue a British resident in a Spanish court - very costly and very slow - but, of course, many of the trustees of these timeshares are based in the UK and might have the right to bring an action here.

That doesn't mean the timeshare would automatically win any case for unpaid maintenance fees.  The fact that, in most cases, the timeshares repossess, rent out or allow units to be used by one of the exchange organisations, when an owner fails to pay the fees, would almost certainly lead to a costly and uncertain court battle. The loser might be liable to pay those costs (or some of them) but, if somebody can't afford to pay their maintenance fees, they'd be even less likely to be able to pay the plaintiff's costs too.

It isn't worth it for an amount likely to be less than a thousand pounds - and the bad publicity it would generate could prove incredibly damaging for the organisation concerned (remember the other MacDonalds - the hamburger people - who won a libel action but badly lost the PR war).

[Angie]

We have just been issued with a demand to pay our outstanding managment fees at Fairways in Tenerife from the small claims county court in Northampton.

[56johnmc]

Angie

How many years management fees do you owe?

Do you have any documents stating the actions open to the management company if you do not pay your fees e.g. do they have an option to sell to timeshare after a set period of time has passed? If they do, have they tried to sell your timeshare and if they haven't, why haven't they?

You should also ask if they have rented out your timeshare and how much have they get in rentals. If they rented your timeshare out, ask how much they have kept for themselves in "admin fees" and how much have they offset against the amount you owe?

It's not much but the above questions may be of help.

John

[Angie]

John
Thank you for your advise.  We owe one year management fee.  At first they told us that they would repossess if we didn't pay.  We told them we were happy for them to do that.  However, we later received a letter advising us that they would take the matter further if we didn't pay up, that is, issue us with a demand from the small claims court.  We sent back the deeds together with a letter stating that the timeshare did fulfill all its promises. The recorded delivery letter was sent back unopened because apparently we should send all correspondence to an address in Spain. Last week we received the letter from the small claims court. We have asked a solicitor to look at the constitution to see if they can do this.  The constitution does state that they are entitiled to resell the the timeshare if we do not pay the management fees.  Again, we have told them that we are happy for them to do this, but it doesn't seem to be an option for us.  Time is running out because we have only a week left to pay the small claims court.
Angie

[56johnmc]

Angie

It's difficult to say what you should do in a situation like this. Does your solicitor have an opinion about the right to sell your timeshare if you default on your management fees? Is there any obligation on the management company to try to do that before they try to recover any loss from you?

Timeshare owners have got so little protection against management companies as the regulations governing timeshare are so lax in this country. I know what I would do but I can't advise anyone else to do the same.

John

[Keitht]

quote:Originally posted by Angie

John
Thank you for your advise.  We owe one year management fee.  At first they told us that they would repossess if we didn't pay.  We told them we were happy for them to do that.  

Angie

I'm not doubting you, but is any of this in writing or just telephone conversations?  If in writing you will probably be in a much stronger position in the small claims court as they do have a tendency to err on the side of an individual against large companies.  If you do decide to let them take you to the small claims court gather as much evidence as you can of other dis-satisfied owners.

[lawnmower60]

If you have been sent a summons from the small claims court you should have a form to fill in asking if you owe the money and what reasons you have not paid and what steps you have taken to settle this matter with this company if you can prove that you have tried to deal with it and the company has not responded to your offers you should a good chance of settling the matter  if the summons you have recieved is not from a court with a court number on it it is not genuine

[Angie]

Hello Keith
All our correspondence has been via email or letter.  One of their emails stated that 'following repossession we will seek to recoup the debt through the small claims court'.
When we recieved the letter from the small claims court, we asked them why they had not repossessed as they said they would do.  This was their reply.
"In accordance with clause 11.5.5 of the Club Constitution your membership to the Club has been suspended as the maintenance fees have not been paid by the due date or within 90 days of the due date.  We have, therefore, ‘repossessed’ your right to use the unit and week but you remain the legal registered owner of such and therefore remain responsible for payment of the annual fees until the occupancy has been resold.
Our final notice of 17 April 2009 confirms the following ‘Our records show that, despite an invoice and a reminder, your maintenance fees for the above apartment(s) and week(s) are still unpaid.  If payment of the above is not received within the next seven days, we have no alternative but to act in accordance with point 11.5.5 of the Club's Constitution and formally advise you that your membership will be suspended, with no further notice.  Following the suspension the Club reserves the right to recoup the debt of fees through the Small Claims Court’."
The solicitor does not feel we should try to defend the claim.  
We are running out of time to gather evidence of other disatisfied customers.  I'm not sure how we would do this.

Angela

[Ned60]

Angie, don't give up hope before you've had a chance to put you side forward. You say "Time is running out because we have only a week left to pay the small claims court." what you really mean is that you've got a week to attend the small claims court and have your say - the outcome is by no means certain.
I used a small claims court to recover the cost of repairs to my car from an uninsured yob who decided to run into me. I expected the court session to be stressful but in the end I didn’t find it intimidating at all – for either party!
I would suggest that you go along, put you side of the case forward and concentrate it on the unfairness that there isn’t any sort of ‘get out’ clause and that the timeshare company first offered to repossess the unit if you didn’t pay and then changed their mind when that bully-boy tactic didn’t work.
It sounds like your solicitor is a bit of a woos.

[Angie]

Ned60 we are worried that we will loose and our excellent credit rating will be blackened.  I'm not sure that we want to take that risk.  Yes, I think our solicitor is a woos.  If we knew that others had defended the small claims court against their timeshare and won, we would feel more confident, but we haven't heard of this.  It makes us sick to think that the timeshare have won and we are still stuck with maintenance fees.
Angie

[daviday]

Angie, if you do not defend the case you will definitely have to pay (at the very least) the amount claimed or you will have a black mark on your credit record for the next six years. If your credit rating is particularly important, you might just decide to do that.  If you do defend the case there is always the chance that the judge may back your position - especially if the plaintiff decides it isn't worth the bother/cost of sending a representative to the hearing. In any case, if you are able to talk to the judege, you may be given the chance to pay in instalments.

You must reply to the court within seven days - the court will then set a date some time in the future for the hearing.

[gkd]

Angie I am a new member on this forum - because I am in similar situation, I searched for this topic! I just want to be rid of our points (bought from GVC way back) as we have never had the benefit - definitely mis-sold in my view. But catch 22- can't sell unless annual fees up to date, but not willing to pay extortionate interest which has been added, and we still pay finance for additional points we were 'persuaded' yo buy in 2002!! How did things turn out for you?

[Homer Share]

gkd,

I would think that Angie has got shot of this problem and does not wish to come back to this forum! If she had further problems you would think she would come back to ask for advice. That would indicate to me that either the court case didn't happen or was not contested by the other party.

[callyho77]

Hi,Coolcymru
Could you tell me when this happened, as I've got a duplex appartment at the same club in Teneriffe and been trying to get rid of it for a long time. Your way seems to be the only, As some time as past since you posted this imformation could you tell me and all other members, have they come after you for the maintenance fee's or taken you to court. THANKS CALLYHO77

[Darwin44]

I am curious!  I have just received my annual maintenance bill which also said that the charge covered owners who had not paid.  I have asked how much could this charge go up to.  Also at what point would the resort become insolvent.