“The bears have been baiting each other, and Supper Trucker (aka MacDonalds Resorts) advances to faces of the allegations of a couple of bingo players”.
“The pigtailed consumer is entering the prickly park with barristers leaping about on pogo sticks delivering word boogies on argument boulevard.
The History
Many disgruntled timeshare consumers have expressed a desire to challenge the MacDonalds Resorts limited (MRL) proposals presented at the various SGMs in 2014.
The proposals made by MRL intended to transform the timeshare clubs, constitutions and to vary the fundamental contractual rights [appreciated by the many MRL timeshare consumers] contained in their respective unincorporated clubs.
Pursuant to that expressed wish, consumers were invited to band together and contest the actions of MRL.
The group structure could enable the many consumers to obtain access to Justice and at a manageable cost, (even if the claim is non-meritorious).
It would also comply with the Court’s “overriding objective” and could afford a good foundation to deal with the many issues, the consumers face in light of MRL’s contentious actions.
This proposal was not the only way to deal with such matters as all timeshare consumers ought to consider their own needs before boarding the big legal train which will be obliged to carry out many investigations and actions in pursuit of damages.
Some may want to and have instructed TESS privately. To date, I believe we now have about 35 such clients.
The service being offered is an entirely fee-based.
Repeating the Issues
MRL wants or has taken away from many consumers the timeshare they bought. i.e. a fixed week!
MRL insisted that consumers comply immediately with their demands or else!
MRL did offer an alternative in that they would an exchange the presently fixed week timeshare into a point based timeshare or MRL will charge consumers 4 times your annual maintenance fee (say £2,200) and evict them from the club.
That was the message, and as usual, the spin appeared in many forms and from many strange places. One such place was the so-called consumer association TATOC now bankrupted by TESS. They (having little regard for some of the consumer views) attended the MRL road shows and hailed the proposal:
A landmark proposal. (when it wasn’t).
As ground-breaking deal (when it wasn’t).
It is being offered, after extensive negotiations with the club committees. (when it wasn’t)
It will have a ripple effect throughout the entire timeshare industry. (when it didn’t)
Macdonald Resorts should be commended for this initiative. (and they were not).
TATOC expressed that they will provide its full support to MacDonald Resorts (however silent in respect to full and individual consumer support).
Why Is It Being Done?
Does anyone believe that this proposal will NOT benefit MRL?
Does anyone believe that the changes would have been welcomed by everyone?
Clearly, some of the RED Week Timeshare owners don’t, and some have claimed it to be a “land Grab”.
To refresh; MacDonald Resorts Limited (MRL) is just a change of name from the original company Barratt International Resorts Ltd. It is exactly the same company but in a new costume.
MRL are grounded in Scotland with resorts in Scotland, England, Wales and Spain. With over 15 thousand consumers (some of which are rather disgruntled) they cannot be classed as small-time. Trouble seems to follow MRL, as it has been reported (many times) that they have established a reputation as being a high annual maintenance fees charger, by the use of strange accounting practices.
At present MRL have been awarded every single management contract, at every single resort. Each award was unopposed and unquestioned. They appear to retain a position in each club, whereby they win every management contract. They also claim to own the list of the members.
It was reported that the long-term management contracts, net MRL approximately £10.5 million each and every year, therefore, it’s management contracts are not insignificant.
When all the MRL timeshare were sold, it is believed that MRL received upwards of £200 million. At today’s prices, it could be north of £500,000,000.
All the underlying property is at present owned and held in a collection of trust companies. No doubt when the dust settles and the entire inventory has changed to “Points”, this underlying trust will be dispensed with and the property transfer to MRL and at the possible expense of the many consumers. Therefore, they sold the timeshare took it back, only to maybe resell it later to others
Needless to say, in the present arrangement shares in the companies (holding the asserts) are all registered in the benefit of a trust and for the benefit of the club members.
You the timeshare owners should be the beneficiaries of these trusts companies and consequently should have an interest in the property rights that are being held in trust for you. That all said; many of the trust company are sponsors of the timeshare industry organisation RDO. “He who pays the piper” might come into play here!
The underlying rights to occupy could be quite valuable, as the assets are locked in fractional ownership (like pieces in a jigsaw) and the market for that fractional ownership is collapsed.
In a single and unencumbered ownership, the underlying values will substantially head north, whereby (as a whole) the asset will be worth more (a single piece of jigsaw may be worthless but if all the pieces are available to a single owner the monitory value heads to yippee).
By my estimation, it is expected the entire resorts could be worth £450 m and each and every owner has lost out, but MRL will not be one of them.
If MRL is suggesting the present proposal is such a good deal, reverse it and let MRL pay the exit fee to the timeshare owners and see who starts howling. This happened at Loch Rannoch and the resort became an independent resort. When MRL spat the dummy out and sued, the independent resort was legally meritorious.
I supposed that is what you get if consumers stick together.
The Club Asset Values Shift
In 2014 the club and its underlying assets did belong to the members of each club. In the event the entire membership changed from multi parties to one single controlling member, the asset will become an unencumbered asset, and will fill the coffers of MRL and their Directors.
When each and every timeshare was sold, the members were given express promises. Those promises were contained in a “Barratt charter” and was made by MRL (previously named Barrett’s).
Those promises stated as follows:
“to protect and maintain the members legal right indeed and title to occupy the owners holiday apartment or lodge in the week or weeks of their choice and forever.”
You cannot get any clearer than that. This promise has been exchanged for “you will have reserved a selection of points, which you can buy each and every year and spend on acquiring holiday accommodation IF available.
Imagine you bought an apartment and joined a club [so that the entire apartment block could be maintained effectively] and that club had rules. Say, one such rule allowed the maintenance company to take off you, your apartment ownership and the manager give you the option to buy points, which you can only spend with him. If spent, you could only spend those points on living in the same apartment you once own and IF available.
Also, MRL makes further representations in that:
“Independent trustees hold the title to the lodges and apartments on behalf of the owners.”
As the trustees are paid by MRL, he who pays the piper might be considered less independent.
“If MRL becomes insolvent title to the lodges and apartments would be safe”
Therefore, if MRL is having financial problems or expect them in the future, surely that is not the timeshare owners’ problem.
“Owner will receive an audited statement detailing the expenditure on management and how the management fees are calculated.”
I expect financial statements have been done, but have they been audited? Are the committees fully aware what an audit is? If not has anyone seen an audit?
(An audit costs about £50,000 to produce)
“MRL is committed to making all potential owners fully aware of their rights under the Barratt Charter. The company will continue to seek means of protecting the consumer’s interests and provide even greater confidence in their purchase.”
I think the relevant part here is fully aware and if the constitution can be changed by the company, who sold the timeshare so that they can get access to the underlying property, fully might not have been complied with.
“The Holiday Certificate is evidence of Legal Title.”
That legal title is being taken away from consumers, not because they have broken a rule or late in paying bills. It’s being taken away because the seller wants it back. Again, assume that you bought a house for £10,000, 20 years ago. Is it just that the builder can come back and take it off you without a specific contractual term.
“The right which all joint title holders have of insisting that the subjects are sold and the proceeds divided amongst the joint owners.”
“The purchasers are not granted leases as such but, by virtue of being members of the Club and holding the requisite Holiday Certificates, they are entitled to occupation of specific apartments for specific periods in each year. Thus, protection is given not only to the purchasers’ interest in the underlying property but also to his right of occupation of that property. Further security is given by virtue of the fact that the title to the property is held by an Institutional Custodian Trustee on behalf of the Club.”
“For how many years does title last? Effectively, it lasts forever.”
The Charter was authored for all timeshare owners in the following resorts:
- Elmers Court Country Club, Hampshire
- Dalfaber Golf and Country Club, Aviemore
- Forest Hills Trossachs Club, Aberfoyle-by-Sterling
- Lochanully Woodland Club, Inverness-shire
- Plas-Talgarth Health & Leisure Club, Powys
- Leila Playa Club, Malaga
- Dona Lola Club, Malaga
The above paragraphs are facts not advice and the above statements are all contained in the MRL (Barrett’s charter).
The holiday certificate mirrors the charter and the clubs are constituted for a purpose. That purpose is expressed in the constitution as:
“protection is given to the purchasers’ interest in the underlying property”
“Also to his right of occupation of that property”
The property is described as a fixed week in a fixed property and at a particular resort.
Those are the promises and pre-and post-contractual representations in the MRL matter.
In the event those pre-contractual representations do not reflect the events post contract, the seller has breached the sales contract, due to misrepresentations and the contract could be voided and the clubs liquidated.
MRL is a business, they operate a company where its primary purpose is to make money for its investors.
The Directors have a duty to MRL (not customers) and to operate for profit. To obtain profit they serve the consumers who pay them money.
In the selling process, MRL has a single duty of care and that is to the company who employs them. MRL do not owe you [the consumer] any such duty. If a consumer thinks otherwise you are wrong.
MRL do however owe consumers a duty of care in their position as manager and that is where some of the battlegrounds will take place.
MRL could obtain its goal by way of a negotiation with each member of the club, however, it would be costly and some will hold out for a better price. Clearly, the best way is to just take it and as they have done.
If you consider you want out of the timeshare and wish to seek damages equal to the amount you paid MRL you need to act.
“No Win No Fee” Compensation Claims Please contact Mrs Glynn on 01253 208482
Monster Credits/ ABC Lawyers Claims Please contact Miss Ali on 01253 208488
Club La Costa compensation Claims Please Contact Miss Jenkinson 01253 208 483
Terminations of your Timeshare Please Contact Mrs Trippier 01253 729683.
Accounts jacqueline@tesslimited.co.uk>
Exits and Terminations: dianne@tesslimited.co.uk
Compensation: rachel@tesslimited.co.uk
Institute of Paralegal Practising Certificate Number IoP 794115
Posted on: 10th August 2017
