Alex Radford - Returning timeshare weeks to the developer and the legal process involved

Annual Conference 2015

Alex RadfordPartner – English Solicitor &

Spanish Abogadowww.mylawyerinspain.com

Returning weeks to the developer/Legal Process

TATOC Annual Conference 2015 – Time For Change – Alex Radford – My Lawyer in Spain



Timeshare originally sold as:

1) Investment in holidays for life! Cheap, high quality holidays. Paying tomorrow’s holidays at today’s prices2) Change resorts and holiday in a variety of locations around the world3) Membership of a Club

Did this turn out to be true?

What was not known at the time was that:

4) Maintenance fees would escalate5) Timeshare resale value6) Timeshare resale market limited

Since date of purchase to now, many happy holidays enjoyed!



What did people buy and how was it legally owned?

1) Club Trustee system

Each buyer becomes a member of a club which entitles them to rights of occupation. Issued a membership certificate and governed by constitution. Property is owned by the trustee for the benefit of the members. Management company maintains the resort and collects management fees.

2) Escritura system

Each buyer has a registered week at the Land Registry. Management company maintains the resort and collects management fees.



So where are we now?

1) Elderly members who no longer wish to travel?2) Members not paying their maintenance fees. Why? Investigate?3) Members dying4) No new members and active sales5) Escalating management fees versus the cost of a rental of a similar unit6) Empty units costing money7) Lack of a strategy/no specialist companies involved?

So what can be done?

1) Time for a change or the resort will come to an end!



Club Trustee System – What does your constitution say?

1) Can weeks be returned? If so sign reverse of membership certificate/form of surrender and send to trustee2) If not, why not? Why try and keep someone as a member when they do not want to be? Is legal action right? TCF!3) Review and change constitution? Release units from trust and sell them? Talk to marketers/ rental/sales companies4) Is your resort sustainable as a business? This is the memory making hospitality industry! Asset management5) Duration of club? 1985 to 2063? Will your membership last this? If not time for a change!

“The Club shall continue in existence until 31 December 2063 unless otherwise resolved by not less than athree quarters majority of all Members entitled to attend and vote at a General Meeting.”

6) What happens upon death of a member?“In the event of death of any Member his personal representative may agree to sell such rights to a third party or to vest the same in a beneficiary subject to the third party or beneficiary becoming a Member .”Solicitors value the timeshare for probate purposes and then vest in beneficiaries who do not want the liability.



Escritura (deed) registered at the Land Registry – formal process of transfer

1) Owner can transfer to new owner. Need power of attorney from each party, tax numbers, pay transfer and capital gains tax as well as notary and land registry fees

2) Costly process.

3) What is the duration of the timeshare regime? Maximum 50 years

4) Modify timeshare regime by taking out units. Formal process. Minutes of EGM required, approval of management company and owning company

I am afraid there is no one magic solution but there is light at the end of the tunnel!

Alex Radford - Returning timeshare weeks to the developer and the legal process involved

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