Fractional ownership was intended to be an “ownership” system whereby several unrelated parties can share in, and mitigate the risk of, ownership of a high-value tangible asset like holiday accommodation.
Timeshare Point Systems are a holiday club, whereby for a consideration a consumer can join a club which can deliver holidays into the future if a membership fee is paid, and if holidays are available.
Both points and fractional ownership
The concept of holiday clubs and Timeshare property ownership receives many complaints and should be investigated with regards to the legal principles, concepts, expectations, deliverability benefits and burdens. To date no-one has tackled the many fractional systems and points clubs and simply rely upon their own experiences in actions they raise in the courts.
When delivering a case into court, a consumer is required to prove its case and on many occasions that case is finely balanced, as the resorts can afford good counsel, whilst the consumers cannot. Equally the consumers can only rely upon their own experience, whist the resorts can rely upon many documents in their position and control. As the consumers case fundamentally consists of misrepresentations on many occasions it comes down to “he said she said” evidence and the courts are entitled to take one collection of testimony over that of another. By carrying out a full survey and providing a report, many consumers can rely upon “similar fact evidence” which may reinforce their own case.
This exercise will of course assist consumer who wish to make a claim and will assist them is setting out their case correctly. Equally it will ostensibly provide good knowledge, so as to limit or avoid an un-meritorious claim.
Fractional ownership
By way of example a house is the UK is a prime assert and can be owned by a collection of people. In a simple example a house can be owned by a husband and wife each owning the equitable interest 50% each. Of course others can be included on the deed and the fraction of ownership will relate to the numbers of owners. Further the actual ownership of each proportion can have a rider in support of the actual proportion of equitable interest reflecting 1 owns 60% another owns 10%, another owns 15% and 4th owners owns 25%.
In timeshare of course these percentages will be a lot lower, as each holiday dwelling might be owned by a variety of owners who do own segments of weeks, therefore 1 might own 8/52nds another 4/52nds right down to 1/52nd. Each will, by proportion pay their allotted maintenance fees proportionately.
In timeshare, it appears that a trust company is involved and when the fractional ownership is acquired the deed of ownership is donated to them, to look after and on behalf of the Consumer owner. In normal transactions involving property and the ownership or fractional ownership, one party can force the sale of the property even if the other parties do not want a sale. In timeshare those rights appear to be denied the owner, as the trust either frustrates the sale or places erroneous terms which can result in the ownership going back to the seller, its servants agents or connected parties. The obvious implication is that the equitable interest is lost and the consumer ends up with little in return.
In respect to points systems
A club is formed and a consumer is required to pay high sums of money to become a member of the club. When a member, they are then required to pay a “membership fee” and once this is paid they are then required to acquire a currency called “points”. When the points are acquired the consumer can spend the points of holiday accommodation [this is the key bit] IF available.
Therefore, on the face of it, the consumer pays a sum of money for a possible benefit, not a certain benefit. Is this lawful? Are consumer paying money and not receiving a benefit? If this is the case, does the expected balance exist required in “contract law”.
Both Fractional Ownership and Points
Another issue was the maintenance fees involved and the prices charge. Are they fair? Are they compatible to each other or are some being charge more than others? There are many questions and very few answers, yet the many consumers have “nuggets” of information which when shared, can and will provide a window to the products themselves.
One of the main motivators for a fractional purchase is the ability to share the actual costs of maintaining an asset that will not be used full time by each owner.
However, like many timeshare products the maintenance fees are regulated by the association each owner is a member of. If that club or entity controls the maintenance fees and levies, are the disproportionately high. Is there a mis-balance? Are they charged proportionately? Are the club’s structures fair and reasonable or are they controlled by the one party who inflicts unreasonable power over another member.?
TESS is told is that all timeshare models are sold for high prices, yet are worthless on the re sale market, is this lack of re sale purposeful and designed to send all the delinquent timeshare back to the seller to be re sold again and again?
Is the end term of Fraction and point system real or illusory?
Timeshare over the years has been the subject on much criticism, many claims did and still exist in respect to mis-selling and many fake institutions have come into existence which seek to address claims when again they appear illusory. As the years go by, the original timeshare concepts have vanished and other products have entered the market with little in the way of researched by way of collect fact evidence. We have witnessed morphing from fixed weeks to floating weeks’ points and now fractional weeks. In this ever moving switch of products, the contracts have changes and the overall claims of consumer remain the same, in that the products are mis-sold mis-described and can be a sham.
Upon inspection of various fraction ownership systems, we are discovering that when you do acquire a fraction ownership you are required to donate the week back to the seller in exchange for points and the rights of that ownership are lost. Having received a documents which claims that essentially the product is another form of timeshare, are the fractional systems compatible to legislation, as on the face of it, they are at best, questionable. Therefore, TESS has been asked to investigate the entire concept of 9 types of fractional and points based timeshare schemes, so as to fully evaluate if they are compatible to legislation.
Shortly TESS will be issuing a question and answer enquiry, so that “similar fact evidence” can be collated from a variety of consumers who have bought into the points and fractional schemes. When complete, the report will be disseminated amongst those who participates and free of charge.
Hopefully a full and unfetter appraisal will then be available to assist those who claim they have been either mislead or misguided into acquiring the product.
TESS carries out many investigations into timeshare and long-term holiday products and does share the information with others, so that consumers can fully understand the products they acquired. In modern litigation it is sometime difficult to establish your case as each litigant can only rely upon the individual facts, with many other consumers contributing to the survey, the individual can rely upon the many statements of others, so as to establish a pattern of either mis-selling or lawful selling.
In timeshare matters, many consumers are subject to sales presentations which are “one on one” events, by collating “similar fact evidence” quite clearly, their own cases will be stronger as the pattern will be exposed, if present.
Many will be aware that TESS has carried out and published a report on Monster Travel/sellmytimeshare.tv which contained many facts and much data. This report has winged its way all over the UK and many claims are proceeding against Monster Travel and its cluster entities. In that survey over 460 witness statements were given and all surveyed appeared to be saying the same thing. As a result of the work TESS did, many are now seeking justice and many solid claims for damages exist supported by way of “no win no fee funding”.
Posted on: 27th October 2016
