• Text size      
  • Send this article to a friend
  • Print this article

Timeshare exit fee by Macdonald Resorts disputed

A CONSUMER group has warned an initiative by Macdonald Resorts to enable owners to exit timeshare contracts on payment of up to £2,500 per week of ownership is unenforceable and owners could walk away.

Macdonald's proposals are being voted on this week by more than 20,000 owners at eight resorts including three in Scotland, with the first vote at a resort in England having already received 90 per cent backing from owners.

It is endorsed by The Association of Timeshare Owners Committees (TATOC) as a solution to the crisis of an ageing timeshare ownership locked into "in perpetuity" contracts.

But the Timeshare Consumers Association, an independent voluntary group, says TATOC has strong industry links. It is urging owners to take legal advice if the resorts adopt the new 30-page constitutions being proposed by Macdonald - part of the Bathgate-based hotel group .

Meanwhile owners at the Dalfaber resort near Aviemore plan to challenge the proposals at their club's special meeting tomorrow, accusing Macdonald Resorts Ltd (MRL) of trying to "asset strip" the resort and gain control of a "valuable estate" from the presently-constituted club committee.

Owner Joan Scott said the proposal to convert from a fixed week in a fixed property to a flexible week in a flexible property, based on a points system, would mean satisfied owners potentially surrendering the property and week they had paid a capital sum for. She has told Macdonald: "The committee fails to clearly explain that this apparent much-desired flexibility comes at a huge price - the passing of all operational, physical and financial control of the Dalfaber estate to MRL."

In future MRL would have the power to remove properties, develop the estate, decide points values, and set the maintenance fees. Mrs Scott said: "The proposed constitution essentially removes all our rights. If we don't want to be part of this new arrangement we have to pay to hand over this asset which we own to MRL at the not inconsiderable cost of four year's annual maintenance charges."

She said this appeared to be a penalty clause which "cannot be inserted into an existing contract without the agreement of the party who might be penalised".

Mrs Scott added: "Those who don't want to participate in the new arrangements must be allowed to walk away with no penalty imposed."

Gary Smith, a director of Praetorian Legal, a claims firm trying to extricate owners from contracts, said the exit fee was "still a very hefty sum of money for a retired pensioner to find". He added: "We would say that the demand of four times the current maintenance fee charge is tantamount to exit penalty which is unlawful."

The TCA says TATOC, which styles itself the Timeshare Association, was "a pseudo owners association linked to trade body RDO" (Resorts Development Organisation), and owners needed independent advice.

Harry Taylor, executive chairman of TATOC, said the organisation was not run or funded by the industry.

A spokesman for Macdonald Resorts said: "The proposed changes in the constitution that members are being asked to vote upon have been drafted by the same legal firm that created the original club constitutions.

"The club committees and Macdonald Resorts have every confidence in their legal robustness.

"Individual members may share a different view or have sought separate advice including that from the Timeshare Consumers Association a self-appointed body.

"However, should the proposals be approved at the respective SGMs, Macdonald Resorts will be in a position to provide a simple exit mechanism as requested by various club committees and owners over recent years."

Contextual targeting label: 
Business

Commenting & Moderation

We moderate all comments on HeraldScotland on either a pre-moderated or post-moderated basis.
If you're a relatively new user then your comments will be reviewed before publication and if we know you well and trust you then your comments will be subject to moderation only if other users or the moderators believe you've broken the rules

Moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours. Please be patient if your posts are not approved instantly.

252504