Listen to this bizarre story and tell me if you think there needs to be a change in the law governing timeshares.
Fairmont, B.C. has a lot of timeshare resorts with many Alberta users and from what I understand, most are well run and owners are very happy with the arrangement.
A typical contract has the buyer pay a lump sum up front for a 40-year contract that gives you the right to use the property for one week a year if you pay a modest annual maintenance fee. There are many people who happily enjoy this arrangement and pass it on to family members for a lifetime of fun experiences.
But when it goes wrong, it can go really wrong – and it appears there is no legal recourse.
The story of what happened in Sunchaser Villas is a cautionary tale and something the Alberta and B.C. Governments need to take a closer look at. To be clear, the courts sided with the developer, Northmont. When I contacted the company they declined to be interviewed but sent me this link to the legal judgment, with a note that said, “nothing we could say would be more persuasive than the 10 justices of the B.C. and Alberta courts affirming the resorts actions and dismissing the allegations of your tipster.”
This judgment suggests to me that timeshares should be more heavily regulated. But, you be the judge.
The problems started in 2010 when Northmont bought the resort through a bankruptcy proceeding and intended to do renovations. What the timeshare owners may not have realized at the time is that renovation costs were to be passed on to them.
Get daily National news
In 2013, the timeshare owners were given a pay-to-stay or pay-to-leave option and owners had to make a choice. For instance, one owner, Linda, said she had bought the timeshare at a price of $5,000 per week. The option she was given was to pay another $4,000 to keep what they had bought in 1994, or pay Northmont $4,000 and give the company back the lease, and walk away with nothing.
One group paid to stay, one group paid to leave and a third group of about 1,500 owners banded together to fight the fees, which they thought were illegal. They didn’t think the owner could unilaterally change the terms of their contract or ask for more money. Many owners who contacted me said on the advice of legal counsel they even stopped paying the annual maintenance fees until it could be sorted out in court.
WATCH BELOW: Advice on getting out of expensive timeshares
The group that went to court got a harsh lesson in the law. The B.C. Supreme court sided with the developer. The group appealed in Alberta and lost again. Now their problems have compounded. Not only do they have to pay the lump sum renovation fee and the missed maintenance fees, but they are being charged an annual rate of 27 per cent interest for the late payments.
I gasped when I heard some of the amounts the developer is demanding. Truth Renaissance, who I interviewed about this story, got a bill for $11,000; Laurie has to pay $27,000 and Larry, who inherited the timeshare, is told he now owes $40,000. The more weeks you have, the more you owe. I’m told one family was invoiced for $100,000!
I’m still perplexed at how a company is able to rewrite the terms of a timeshare contract without the approval of the owners. It’s also peculiar that there appears to be no requirement for a “board” or “owner association” to ensure that owners’ rights are protected during a change in ownership. Plus, 27 per cent interest rates on outstanding charges? Give me a break.
Maybe it is the case that Northmont followed the letter of the law… but if that is the case, the law needs to be changed to give balanced protection for buyers. If not, there is nothing stopping this sad situation from happening again.
Comments