[ 2012 ] Fairmont / Sunchaser / Northwynd official thread with lawsuit info!

sunchasertimeshareowners.com/ said:

Background
Sunchaser Villas Timeshare

From the early 1990’s through to December 2012 approximately 15,500 people invested over $200 million to purchase timeshare interests in the Sunchaser timeshare resort in Fairmont, BC. In early 2009 the original developer of the resort became subject to proceedings under the Companies’ Creditors Arrangement Act (“CCAA”). As a result, the original Developer’s interest in the Sunchaser Resort was transferred to the Northwynd Resort Properties Ltd. (“Northwynd”) group of companies. One of Northwynd’s subsidiaries, Northmont Resort Properties Ltd. (“Northmont”) took over as the Developer of the Resort. Another subsidiary, Resort Villa Management Ltd. (“RVM”), took over as Property Manager of the Resort.

Prior to 2009 each of the timeshare interests was held as a forty (40) year lease allowing the holder to use the Resort facilities for a one week period providing they pay a prorated share of the annual operating costs and contribute to a reserve for replacement of furniture and fixtures. The timeshare “owners” were really lessees; the Developer acted as landlord and owned the residual interests and would have clear title to the Resort properties when the leases ended.

During the CCAA proceedings, a new program was introduced to encourage the timeshare owners to pay a substantial additional fee to join the RCI points program and extend their contracts in perpetuity. We estimate less than 1/3 of the owners chose this option; those that did have subsequently discovered that this conversion contract made them “co-owners” and also included a clause that Northmont interprets to mean they are responsible for a share of the capital improvements that may be required.

Documents that have been submitted to court proceedings to date confirm that at the time Northmont became involved with the Resort, they were aware of various issues of deferred maintenance at the Resort and that the Replacement Reserve had been depleted. We have now discovered that during the period from mid 2010 to December 2012, Northmont was spending monies from the Resort funds to investigate and prepare plans for a major refurbishment and upgrade for the Resort. The annual maintenance fees increased by over 22% from January 2010 to January 2013. During this period, none of the annual reports to the timeshare investors provided details re these plans and no financial statements were released to the timeshare investors. Initial disclosure of these plans to most timeshare owners came in January 2013 at which time Northmont indicated all timeshare holders (including those who were only leaseholders) would be invoiced for the full cost of the multi-year renovation plan. Further details of the plans were not provided until late April 2013 when most timeshare owners received invoices of approximately $4,000 for each annual timeshare week they held – $2,000 in each of 2013 and 2014. Those owners were also advised they could, as an alternative, surrender their rights under their timeshare contracts by paying a fee of approximately $3,000 in addition to all of the monies they had paid to date. Full details of this renovation plan have still not been made available to timeshare owners, despite ongoing and repeated requests by owners desperate to understand what is actually being done at the Resort and how it is in their best interests.

An association for the timeshare owners had never been formed despite repeated promises from the Developer to do so. Through the use of social media, some of the owners were able to contact each other and gradually organized to challenge the actions by Northmont and its associates and agents.

In April 2013, Northmont and the Resort Trustee filed a Petition in the BC Supreme Court seeking approval to unilaterally alter all the timeshare contracts at the Resort and give effect to its plans for the Resort. Approximately 800 of the timeshare owners filed responses to the Petition or retained one of several law firms to represent them in the proceedings. During the series of case planning conferences, the Court directed that a Special Case process would be used to address some issues, but there would be no consideration of the timeshare owners’ argument that Northmont had breached fundamental terms of the timeshare contracts. In November 2013, a decision was released that supported Northmont’s decision to invoice all timeshare owners for all the renovation costs.

The recent BC Court of Appeal decision has overturned the November decision and recognized that the “validity and enforceability of the Agreements was in issue” and that the timeshare owners had been required to proceed “without having had an opportunity to contest the enforceability of the underlying Agreements”. It further concluded that the lower court proceeding “failed to give proper effect to…the rights of the time share Owners. This proceeding did not favour access to justice – it precluded it.”

We believe that all of the timeshare owners who signed contracts for specific term leasehold interests have no responsibility for the cost of capital improvements at the Resort, and that even the timeshare owners who have signed contracts that include the term “capital improvements” are insulated from paying for these improvements as the Developer, by his actions, has breached fundamental terms of the timeshare contracts.

We believe that Northmont and its associated companies have failed to “manage and maintain the Resort in a prudent and workmanlike manner” as they are required to do pursuant to the timeshare contracts. We contend that:

1) The Property Manager has failed to carry out required maintenance activities at the Resort and allowed it to go into a state of disrepair even though the annual budgets provided adequate funds for this maintenance.

2) The Developer failed to construct certain buildings to acceptable standards and used substandard materials in construction. The previous Developer recognized this obligation and completed certain repairs at its cost. Northmont has failed to carry out their cost obligations, even though our understanding is that they were directed to do so as part of the CCAA proceedings.

3) The Developer has failed to provide proper accounting for its proportionate share of the maintenance fees for units it controls.

4) The Developer and Property Manager have failed to provide a full accounting for monies paid from Resort funds to the associated companies, thus failing to provide assurance to the timeshare owners that they are receiving proper value for monies paid.

5) Portions of the Resort are registered as a separate Strata Plan (Riverview Building 8100 which was completed in 2004) that is subject to the requirements of the Strata Property Act of BC. The Developer and Property Manager have failed to maintain segregated accounting records and to establish required reserves for the strata portions of the Resort as required by the Strata Property Act and are not properly licensed to act as a Strata Property Manager under the Real Estate Act of BC.

A recent update provided to the timeshare owners by Northwynd indicates the Developer and Property Manager intend to pursue collection of the renovation project fees in full, ignoring the appeal ruling that overturned the court order it relied upon as justification for charging these fees to all timeshare owners.

A different update was sent to investors in the REIT which owns the residual interests in the Resort through a subsidiary limited partnership. That document provides a chronology of Northwynd’s involvement with the Resort, including its several unsuccessful attempts to sell its interests in the Resort since 2010, and notes the success in generating substantial cash flows from cancellation fees relating to the Resort Realignment Plan.

Our group of timeshare owners has determined that the most appropriate course of action is to commence a Class Action that claims damages from Northmont and their associates on the basis they have breached fundamental terms of the timeshare contracts. Our goal is to ensure that Northmont and its associates are held accountable for their failure to manage the Resort in the best interests of timeshare owners.

Click to expand...

htusa2002 said:

HI-does anyone know what the new program they are launching for the old time owners at Fairmont/Sunchaser villas for 2013? The woman at office says they will be doing some new program for owners that have been there a while right away?

Click to expand...

Jjareed said:

I called them up this morning and chatted with a nice women about the upcoming renovation project. She told me we don't have a choice about paying the renovation cost which in my case will be between 3000 to 4000. I asked her if they would buy my unit back and she said they don't do that. I suggested just giving it back and she said they don't want them back. My reply to her was that the units must be worthless or you would take them back. I also got into a discussion of what is going to stop them from doing this later if I give in and pay. Did not have a good response, meaning she implied that they can do what they want. I asked her if we could vote on any of this and she said no. I mentioned to her that when we bought our timeshare in 97 that I was told if we didn't like what was going on we as owners could vote to change things. She didn't know if that is correct or not. She also mentioned there was a survey sent out and the majority of the owners wanted the change. I don't know if I can agree with her on. Thinking about getting out! Suggestions?

Click to expand...