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

[ERW]

Please correct me if I am wrong but I thought I read at one time that they were not selling any timeshares at this time? Maybe I'm incorrect, so speak up if I am. But if I did hear correctly, why is there a need for show suites?

 

[condomama]

Please correct me if I am wrong but I thought I read at one time that they were not selling any timeshares at this time? Maybe I'm incorrect, so speak up if I am. But if I did hear correctly, why is there a need for show suites?

My understanding was it was to convince the owners of the need for these renovations!
I agree that we certainly thought there would be more upgrades and design changes.

When the first model suite at 703 was unveiled a few years back, we tried it out for our annual week. Only a few months after it opened, there was damage already to the walls behind the new table and chairs in the B side, where guests had jammed them into the wall. Space was tight, it was going to happen. Looks like nothing has changed in the latest 'model'. Also, B side bedroom 'armoire' doesn't hold nearly as much as the old regular closets did. Wish they'd kept them instead of going for so much 'style'. Newest kitchen cupboards are an improvement over the tall ceiling ones in 703 which only a basketball player could reach (they'd put the wine glasses up there!). We'd have needed a ladder to go with it!

When we were out in June they were painting the 400 building charcoal and I thought 'ugh' then! Part of the appeal when we bought back in the 90s was the 'California" appearance of the buildings as we came up the highway from Cranbrook. I suppose they are trying to integrate the Riverview building, which we always thought, although beautiful inside, looked a little 'institutional' from the golf course. Black definitely needs 'softening'. I can't picture the whole of Riverside painted black, but I guess that's what's happening. Good to go elsewhere.

 

[Donsterama]

Fairmont Special Maintenance/Exit Fees

We have a bi-annual membership at Fairmont we took over from my parents and 6 months later the special maintenance fee and/or pay to get out fee was introduced.

We feel like they should have told us this was coming and as a result we have done nothing. Not paid the special fee or paid to get out. We are just sitting back and seeing what is going to happen.

Does anyone know if we need to join a class action lawsuit and pay the legal fees to be covered? Am I not covered automatically by being an owner? I know this is a legal question but you may be aware of this.

Obviously by doing nothing I cannot use the resort, but is anyone aware if they have started going after people yet that have not paid with claims?

Does it not make more sense just to see how it will all play out at this stage.

Appreciate any thoughts people have.

 

[GypsyOne]

Donsterama, you are asking questions to which one can only speculate. It seems reasonable that if the courts rule in favour of the Owners and against the Companies that it will benefit all owners. If the Companies win, the cash grab could go on forever - it will be a never-ending money pit because it appears major parts of the buildings need reconstruction and upgrading. But, to defeat the Companies, we need legal representation. I am aware of three law firms that are taking on clients and are working in tandem on our behalf: Geldert Law, Cox Taylor, and Docken Klyme (see previous post for addresses.) There is another, Kellie Hamilton, who is taking a somewhat different and independent approach on behalf of her clients. To sign on these three law firms are asking for a retainer of from between $100 to $500. If we want our interests protected and if we want justice done, we need to sign on and pay our share. If the owners work co-operatively and each contribute, the cost will be minimal. It is the right and the responsible thing to do, otherwise we lose and we pay forever for the benefit of the Companies.

I am not aware of the Companies taking legal action to collect either of their assessments. I doubt if they will until they get a favourable court ruling. In any case, no one should pay the Company anything until this matter is legally settled.

 

[Meow]

Well said, GypsyOne.
If you disagree with Northwynd's actions you should 'put your money where your mouth is' and sign up with one of the legal groups.
The numbers of timeshare owners/lessees that have joined in legal actions may even have some bearing on the judge's decision.

 

[tdjanzen]

Well said, GypsyOne.
If you disagree with Northwynd's actions you should 'put your money where your mouth is' and sign up with one of the legal groups.
The numbers of timeshare owners/lessees that have joined in legal actions may even have some bearing on the judge's decision.

Indeed, GypsyOne and Meow make an excellent point.

Finally, it is my understanding that a judge can only make a ruling on information that is presented to them. Therefore a ruling more than likely will not likely be a blanket statement of "Northwynd you can't do this" but rather "in these situations, Northwynd you can not do this" . Therefore, owners that have legal representation would have already proved their circumstance and hopefully why they will not be required to pay any fee to Northwynd. However, owners that have chosen not to have representation have not had their circumstance verified in any way. How is a judge supposed to deal with them. It would not surprise me that the judge won't.

Normally, the act of doing nothing falls under the legal term "acquiescence" and could be interpreted that the terms have been agreed upon simply because the one party didn't do anything to state they didn't agree with the terms.

I hope that this works out for everyone in the long run. I made the decision to retain legal representation because I wanted it on the record that I don't agree with Northwynd's actions or planned course of action. I believe that in this case, relying on others to do the heavy lifting could have some negative consequences.

 

[Rancher]

I am not sure what all the lawsuits and ill feelings are about on this site as I have just skimmed through some of the postings. From what I gather owners do not wish to pay their maintenance fees and a special assessment.
When you bought the units I am sure you were aware that maintenance fees would have to be paid on each unit. They go up every year and thats a fact. Some go up more than others but that's life.
Now no one likes a special assessment but you are not the first owners to receive one. At times they are necessary and unfortunately have to be paid. I have seen some as high as $10,000 per unit so yours is not out of line.
You also have a chance to get out of your unit forever for about $4000 I believe I think you should be happy if this is the case as many people are stuck with their timeshare for ever. At least in your case you can bring it to an end and never have to pay your maintenance fee again. This is a lot cheaper and safer than paying a PCC to take it off your hands.
I know many will not agree with me but just my thoughts.

 

[Tacoma]

Hi Rancher (I think it's Dennis but I do know we've met)

While I understand your thoughts and I do not renege on my obligations the details you seem to be missing are that we do not trust these people for many reasons. In short and I'm sure I'm missing some of the details they did not produce financial statements for at least 2 years while they roped people into paying more for legacy for life. They have pulled off these kind of things before and then either sold the resort(s) or let it go. They have no permission to change the terms of the existing contracts and they used scare tactics to extract as much money as possible before getting permission to do it. I really like how they blame Fairmont for everything but in effect they are the old Fairmont group. Although I was given my week on this forum I have decided to join in a legal group to fight these people. I would rather pay the lawyers than pay these crooks any more money. Some people here gave away their timeshares knowing this assessment was coming. Others are letting a small group of us fight and hoping it will save them as well. Everyone has to live with their decisions. I have paid assessments before and if I trusted this company I might have again but the trust is not there. I believe it's important to pick your battles and this is one I have chosen to fight.

Joan

 

[Spark1]

I am not sure what all the lawsuits and ill feelings are about on this site as I have just skimmed through some of the postings. From what I gather owners do not wish to pay their maintenance fees and a special assessment.
When you bought the units I am sure you were aware that maintenance fees would have to be paid on each unit. They go up every year and thats a fact. Some go up more than others but that's life.
Now no one likes a special assessment but you are not the first owners to receive one. At times they are necessary and unfortunately have to be paid. I have seen some as high as $10,000 per unit so yours is not out of line.
You also have a chance to get out of your unit forever for about $4000 I believe I think you should be happy if this is the case as many people are stuck with their timeshare for ever. At least in your case you can bring it to an end and never have to pay your maintenance fee again. This is a lot cheaper and safer than paying a PCC to take it off your hands.



I know many will not agree with me but just my thoughts.

What goes with owning a business like Fairmont now Northwynn is trust and that they will also respect the agreements they signed with the timeshare owners. They have not done this. I have talked to owners of legacy for life owners and they were told that the buildings were in good shape and there was lots of money in the bank for maintaining. Can you trust timeshare sales people? No you can not. I blame the lazy governments for not monitoring these agreements and there are a lot of loopholes with these agreements that crooks like Northwynn can use to screw time owners out of their money. There was a lot of time owners that paid the 100 dollar Reno fee just so they could use the resort this summer. Will they pay their next maintenance fee after seeing how Northwynn runs their business. I guess not.

 

[tdjanzen]

I am not sure what all the lawsuits and ill feelings are about on this site as I have just skimmed through some of the postings. From what I gather owners do not wish to pay their maintenance fees and a special assessment.
When you bought the units I am sure you were aware that maintenance fees would have to be paid on each unit. They go up every year and thats a fact. Some go up more than others but that's life.
Now no one likes a special assessment but you are not the first owners to receive one. At times they are necessary and unfortunately have to be paid. I have seen some as high as $10,000 per unit so yours is not out of line.
You also have a chance to get out of your unit forever for about $4000 I believe I think you should be happy if this is the case as many people are stuck with their timeshare for ever. At least in your case you can bring it to an end and never have to pay your maintenance fee again. This is a lot cheaper and safer than paying a PCC to take it off your hands.
I know many will not agree with me but just my thoughts.

I would suggest that many of the posters here have paid their maintenance fees but take exception to the special assessments

I can only speak for myself but I have the following reasons why I object to paying the special assessment fee at this time (note I have never said that I won't pay it; but I'll make that decision if and when a judge tells me that I have to pay it).

1) My contract is from 1996. There is no mention (not even vaguely) to a special assessment. However, I believe that many people's contracts do; particularly the changes included in the new "Legacy for Life" documents. I've looked at the sample contracts on the Sunchaser site and there is different language used in the newer contracts.

2) Trust is all we have with a time-share management company; I'll list the ways that I don't believe that they are trustworthy:
a) They continued to sell Legacy for Life while in bankruptcy and even under the name of the old management company.
b) Many of the people involved still have significant ties to the former management company.
c) They didn't provide financial statements for two to three years (depends on how you figure the start date). These financial statements are actually a contractual obligation that the timeshare management company has to provide to timeshare owners. BTW when they did release the statements two of the years could not be audited because of incompleteness of records (that is remarkably convenient). And I get to pay back several million dollars of deficits incurred in those years even though the accounting firm can't audit them.
d) The wording on contracts was consistently changed in newer versions that gave the timeshare management company more and more ability to enforce their current plans.

3) Northwynd has access to all of the monies (the maintenance fees, the special assessments whether you go or whether you stay). Don't you think that it might be important for the owners that wish to stay to have the monies in trust to guarantee payment for the renovations. Personally, I am shocked that the contractors wouldn't want it in trust. To date, legal representatives of Northwynd have been reluctant to put any funds in trust.

4) Finally, there are plenty of Internet reports about Northwynd's property in Belize. Google it and read how the owners there got treated. They all were charged an assessment and once the funds were collected, the property was shut down.

5) Discovery is a funny thing. And one never knows what type of information will be dug up and put in front of you. It's one thing to lie to 14,000 timeshare owners; it is a whole different thing to lie to a judge.

6) Any amounts paid to a timeshare management company that shuts down will be next to impossible to collect. Particularly a time management company that owes over $40+ million to secured bondholders (BTW those people really want their money back). And in Canada, secured debt always gets paid before unsecured. This means that ALL of the bond debt would have to be repaid before the timeshare owners get a cent.

7) Maintenance fees have more than doubled in the past 10 years. The current management is suggesting that it should more than tripled to be truly representative of actual costs. The funny thing is that it is hard to see where they have done a ton of renovating. Indeed, there have been a couple of significant projects but really the day-to-day repair has been duct tape cosmetic repair. Last year, I think the maintenance budget was over $1.5 million. Where did all the money go? the only thing we know is that the auditors don't have enough information to tell us.

I'm lucky. I am only out the amount of the value of the next 23 years they still owe me. But honestly, I can rent a house in Fairmont for less than what the maintenance fees are. However, I believe the Legacy for Life people were de-frauded. They truly should be able to sue the timeshare management company for damages.

It will probably take more than an "epiphany" to make that happen.

Sadly, Northwynd will likely have folded and the characters of this drama will just switch chairs and try to trick the next set of owners.

 

[GypsyOne]

I am not sure what all the lawsuits and ill feelings are about on this site as I have just skimmed through some of the postings. From what I gather owners do not wish to pay their maintenance fees and a special assessment.
When you bought the units I am sure you were aware that maintenance fees would have to be paid on each unit. They go up every year and thats a fact. Some go up more than others but that's life.
Now no one likes a special assessment but you are not the first owners to receive one. At times they are necessary and unfortunately have to be paid. I have seen some as high as $10,000 per unit so yours is not out of line.
You also have a chance to get out of your unit forever for about $4000 I believe I think you should be happy if this is the case as many people are stuck with their timeshare for ever. At least in your case you can bring it to an end and never have to pay your maintenance fee again. This is a lot cheaper and safer than paying a PCC to take it off your hands.
I know many will not agree with me but just my thoughts.

Rancher, you are entitled to your thoughts, but I come to quite different conclusions. I was part of a group that did a detailed review of Northwynd's proposals and the companies' performance under the contracts we signed. We identified a total of twelve breaches of contract and misrepresentations. Our report formed the basis for a group of owners filing Affidavits and Form 67s with the B.C. Supreme Court protesting the Companies' petition. I will cover some of the grievances.

You are wrong that we don't wish to pay maintenance fees or that we didn't expect maintenance would increase over time. We would just love to be paying maintenance fees, but only for the services for which we contracted and for the lessor/lessee relationship we entered into. But, as a result of bad management and a prematurely deteriorating facility, the Companies are attempting to change the rules and off-load the responsibility of a failing facility to the timeshare owners.

A major breach of contract is failure of the manager to manage and maintain the Vacation Resort in a prudent and workmanlike manner. This failure has resulted in significant loss of value to Timeshare Owners, unreasonably increased maintenance costs, diminished the quality of our vacation experience, and placed the future of the complex under doubt and uncertainty. This bad management was manifest in numerous ways, is self-evident, and is freely admitted to by Company management. This in itself could be justification for timeshare owners suing for damages.

Another misconception you have Rancher, is that the timeshare owners are owners of the resort. By saying that we should not be surprised at special assessments, you seem to be equating our interest in a timeshare to an interest in a condominium, where the owner has fee-simple ownership along with associated benefits. We are not owners of the resort, nor do we have the rights and privileges of ownership, such as participating in management or having an equity interest in the resort. Read the contract. It clearly states we have entered into a lease and that the parties have a Lessor/Lessee relationship. Lessees are not responsible for capital improvements. As Lessees we have right of habitability for a fixed period of forty years and then our rights expire with zero residual value. But, the Companies are expecting the timeshare owners to pay for capital restoration of the buildings for which we do not have an equity interest and only they, the real owners of the resort, will benefit. Of course it has to be mentioned that the Companies attempted to shore up this little problem in saddling us with capital costs by attempting to convince timeshare owners to convert (for a price) to "Legacy for Life" contracts and thus responsible for capital restoration of the buildings. Those that did convert claim non-disclosure of serious deficiencies in the property and contract liability for capital improvements.

Another strange interpretation you have is that somehow we should be happy the Company is prepared to take our timeshare back for a cost of about $3,200. So for me, I paid $16,000 for the timeshare and I pay another $3,200 for the Company to take it back for a total cost of $19,200, and I am done out of about 28 years of timeshare benefits. Could anything be any more ridiculous in its absurdity? And they offer this deal despite Clause 13 of the contract that provides a formula for them paying me out at a discounted amount if I default, which is more the way it should work!

I'll state once again that this Company must not be allowed to win in court. If the precedent is court sanctioned that the timeshare owners can be charged for upgrades to capital structures, there will be a never-ending parade of requests for more money for upgrades. And why wouldn't they? They are the real owners of the resort and only they will benefit from a more valuable property. We are lessees and our rights expire with zero residual value after forty years.

This is no time for apathy. If you haven't signed up already, sign on with one of the lawyers representing the owners. If we work co-operatively, the cost per individual will be minimal. If we lose this case, we all lose heavily.

 

[jekebc]

Owners who paid Cancellation Fee

I have been in contact with a Calgary Law firm that is prepared to start an action on behalf of Sunchaser timeshare Owners that have paid the cancellation fee. The action would be based on the Alberta Fair Trading Act and would be intended to get all cancellation fees refunded and still get an unconditional release for the Owners. The action would be started in Alberta, but the Law Firm involved would work in cooperation with the three law firms (excluding Kellie Hamilton) that are currently involved in the Petition before the BC Court.

Please email me - thebelfrys@shaw.ca if you wish to join in this action and I will forward contact details for the law firm involved. They also require details re your timeshare - please complete the survey at:
https://www.surveymonkey.com/s/SunchaserTimeshare

Jim Belfry, Victoria, BC

 

[DarkLord]

I'll state once again that this Company must not be allowed to win in court. If the precedent is court sanctioned that the timeshare owners can be charged for upgrades to capital structures, there will be a never-ending parade of requests for more money for upgrades. And why wouldn't they?

If this case sets the precedents, I believe the timeshare industry in Canada is doomed. All timeshare companies will just renovate and pass the costs to owners who don't own equity interest in the property.

Wouldn't that be swell to the timeshare companies not to mention they charge certain percentage of management fees to boot? So the higher the capital expenditure, the better.

 

[Spark1]

Rancher, you are entitled to your thoughts, but I come to quite different conclusions. I was part of a group that did a detailed review of Northwynd's proposals and the companies' performance under the contracts we signed. We identified a total of twelve breaches of contract and misrepresentations. Our report formed the basis for a group of owners filing Affidavits and Form 67s with the B.C. Supreme Court protesting the Companies' petition. I will cover some of the grievances.

You are wrong that we don't wish to pay maintenance fees or that we didn't expect maintenance would increase over time. We would just love to be paying maintenance fees, but only for the services for which we contracted and for the lessor/lessee relationship we entered into. But, as a result of bad management and a prematurely deteriorating facility, the Companies are attempting to change the rules and off-load the responsibility of a failing facility to the timeshare owners.



A major breach of contract is failure of the manager to manage and maintain the Vacation Resort in a prudent and workmanlike manner. This failure has resulted in significant loss of value to Timeshare Owners, unreasonably increased maintenance costs, diminished the quality of our vacation experience, and placed the future of the complex under doubt and uncertainty. This bad management was manifest in numerous ways, is self-evident, and is freely admitted to by Company management. This in itself could be justification for timeshare owners suing for damages.

Another misconception you have Rancher, is that the timeshare owners are owners of the resort. By saying that we should not be surprised at special assessments, you seem to be equating our interest in a timeshare to an interest in a condominium, where the owner has fee-simple ownership along with associated benefits. We are not owners of the resort, nor do we have the rights and privileges of ownership, such as participating in management or having an equity interest in the resort. Read the contract. It clearly states we have entered into a lease and that the parties have a Lessor/Lessee relationship. Lessees are not responsible for capital improvements. As Lessees we have right of habitability for a fixed period of forty years and then our rights expire with zero residual value. But, the Companies are expecting the timeshare owners to pay for capital restoration of the buildings for which we do not have an equity interest and only they, the real owners of the resort, will benefit. Of course it has to be mentioned that the Companies attempted to shore up this little problem in saddling us with capital costs by attempting to convince timeshare owners to convert (for a price) to "Legacy for Life" contracts and thus responsible for capital restoration of the buildings. Those that did convert claim non-disclosure of serious deficiencies in the property and contract liability for capital improvements.

Another strange interpretation you have is that somehow we should be happy the Company is prepared to take our timeshare back for a cost of about $3,200. So for me, I paid $16,000 for the timeshare and I pay another $3,200 for the Company to take it back for a total cost of $19,200, and I am done out of about 28 years of timeshare benefits. Could anything be any more ridiculous in its absurdity? And they offer this deal despite Clause 13 of the contract that provides a formula for them paying me out at a discounted amount if I default, which is more the way it should work!

I'll state once again that this Company must not be allowed to win in court. If the precedent is court sanctioned that the timeshare owners can be charged for upgrades to capital structures, there will be a never-ending parade of requests for more money for upgrades. And why wouldn't they? They are the real owners of the resort and only they will benefit from a more valuable property. We are lessees and our rights expire with zero residual value after forty years.

This is no time for apathy. If you haven't signed up already, sign on with one of the lawyers representing the owners. If we work co-operatively, the cost per individual will be minimal. If we lose this case, we all lose heavily.

Hello: gypsyone would you please list the 12 breaches of contract and misrepresentation that your group dug up about Northwynn. This could really help the rest of us that follow this forum. Thanks

 

[GypsyOne]

Spark1 As requested, here is an excerpt from our report:

Breaches:

1. The Companies breached the Contract by failing to “help create, organize, establish and thereafter maintain membership in an association of lessees of the Vacation Properties” as required by the Contract.

1.1 The Companies were negligent in not carrying out their responsibility to organize an Association of Lessees. If the Companies take the position that the timeshare owners are the Owners of the Resort, then the Owners were denied that one basic right of ownership, and that is a voice in management. The Companies cannot deny the Timeshare Owners that right and then expect them to step up with massive capital contributions when the Resort falls into serious neglect and financial difficulties.

2. The Companies breached the Contract term that states “The Manager shall manage and maintain the Vacation Resort in a prudent and workmanlike manner.”

2.1 Fairmont and its successors, the Companies, have failed on an on-going basis to address the repairs and replacements as required to maintain the Resort as at the condition and quality at time of entering the Contract. At time of purchasing the assets of Fairmont, the Companies knew or ought to have known, the state of disrepair of the Resort. In a letter of December 2012, the Companies admit that the Resort had a “significant maintenance deficit” in 2010 and now “a renovation of the Resort is an absolute necessity.” In a legal opinion dated February 5, 2013, Northwynd’s solicitor, Norton Rose states in #11 of Conclusions: “The buildings and common area at the Resort have various deferred maintenance issues which will require significant expenditures to correct.” The Contract requires that the Companies maintain and repair the Resort throughout the period of the lease and invoice the timeshare owners for those costs on an annual basis as part of the maintenance fees. They have failed to do so.

2.2 The Companies have failed on an on-going basis to address the replacements of furniture and equipment required to maintain the standard of those items that were in the Resort at time of the Contract. The December 10, 2012 letter to timeshare owners identified required replacement of furniture, fixtures, and equipment totalling from $2.75 to $3.5 million. The Financial Reports released February 2013 revealed a deficit of $1.5 million in the Replacement Reserve. The Contract requires that the Companies establish a Replacement Reserve, conduct an annual assessment of the furnishings and fixtures, and include the necessary amount for replacements in the budget. They have failed to do so.

2.3 The Companies have failed to provide an appropriate budget for the 2013 Operating Costs, Replacement Reserves and Management Fees. The Financial Reports for 2010/11 reveal a total deficit of $3.2 million. The Contract requires that any deficit from previous periods be included in the budget for the calculation of maintenance fees. The Companies have failed to do so.

2.4 The Companies have failed in their obligation to provide audited accounting statements by the dates stipulated in the Contract. The 2010 Financial Reports due March 31, 2011 and the 2011 Financial Reports due on March 31, 2012 were not provided until February 2013. As a result of not having the statements available, the timeshare owners were not made aware of the significant amounts of accumulated deficit and bad debt expense, thus being prevented from making timely management decisions regarding their timeshare. The 2012 Financial Reports were required to be produced by March 31, 2013 and have not been made available to the timeshare owners as at this date.

This egregious failure to manage the complex in a prudent and workmanlike manner has resulted in significant loss of value to Owners, unreasonably increased maintenance costs, diminished quality of our vacation experience, and placed the future of the complex under a cloud of doubt and uncertainty.


3. By virtue of their position as Lessor and Manager of the Resort, the Companies are acting as Agent for the timeshare owners, and as such have failed to follow the tenets of Agency Law in their role as Agent for the Lessees.
3.1 The Companies have failed in their obligation to adhere to the stipulated budget amounts for 2010 and 2011 in that the Financial Reports for 2011 reveal that the Companies have incurred expenses in excess of the stipulated budget to the extent of $3.2 million to the end of 2011. Due to the lack of Financial reports for 2012, there is no information available as to the deficit as at the end of 2012. There is no provision in the Contract that allows the Lessor or the Manager to expend monies in excess of the stipulated budget. As Agents for the timeshare owners, the Companies have violated Agency Law by exceeding the authority given to them as Agent.

3.2 The Companies have failed to pursue the collection of maintenance fees from timeshare owners in default. The 2009, 2010, and 2011 Financial Reports reveal that in excess of $500,000 in bad debt expense was incurred in each year. The Companies collected management fees of approximately $75,000 in relation to these unpaid fees. Furthermore, we have learned that the Companies are collecting and retaining for their own use fees of approximately $3,000 per account, which some timeshare owners have paid as a penalty to terminate their contracts. In both situations, the Companies have violated Agency Law by putting their own interests ahead of those of their Principals, the timeshare owners.

Misrepresentations:

4. The Companies misrepresented the construction quality and thus the longevity of the Resort buildings and failed to properly disclose known construction and structural problems with the buildings to potential timeshare buyers.

4.1 Villas were constructed between 1990 and 2004. Thus, the oldest buildings are twenty-three years old and the newest ones nine years old. Well constructed buildings will easily last forty, fifty, and even sixty years without major restorations. The Lessor sold leasehold interests for a forty year term, thus implying a lifetime on structures of at least forty years. Purchasers would naturally assume that normal annual maintenance and upkeep would substantially maintain the structural quality of their facility for the term of the forty-year lease, at which point the lease expires with no residual value. But with the buildings still relatively new, major construction deficiencies are being reported. The December 10, 2012 letter from the GM states a maintenance deficit of $19 million when RVM took over. But the current estimates are for costs of $28 million to $38 million to bring the complex up to standard. There can be no other conclusion than that purchasers were deceived in the quality of the facility they were buying into.

5. The Companies misrepresented the cost effectiveness of timeshare vacation experience. The prospectus provided with the sale of timeshares emphasized how much more economical a timeshare vacation is in comparison to a traditional vacation in a hotel or motel. Furthermore, it was represented that weekly vacation costs are largely fixed by purchasing a timeshare. The prospectus stated, "Only the maid/maintenance cost can move up with the cost of living." But in actuality over the past eight years, maintenance fees have increased over 77%, which is over four times the rate of inflation (16.8%) for the same time period. Total timeshare costs on a one-week basis, including maintenance, lock-off, and exchange fee, now cost more than a one-week stay in a similar quality hotel.

6. The Companies breached the Contract by billing, or stated intentions to bill, for capital costs related to restoring structural components of resort buildings. The Contract does not provide for including capital costs in maintenance expenses. Asking the leaseholders to pay for capital costs violates the traditional rights and responsibilities that have long existed between the Lessor and the Lessee

In Frequently Asked Questions (Sunchaservillas.ca website Page 2), the Companies state: “The annual maintenance fee has two components: operating costs and refurbishment reserve. Operating costs are the day to day expenses of the resort such as housekeeping, utilities, insurance, and vacation ownership services. Refurbishment reserve has historically only addressed minor priority projects and upkeep such as the deck replacements, roof replacements and outdoor pool repairs.”

It was our understanding, as confirmed by the wording of the Prospectus given to us at time of purchase that the Resort was to be maintained in the condition and quality as at the date we entered into the Lease. The Contract makes no provision for improvement or modernization of the quality of the buildings, the equipment, or the furnishings. By their own admission in letter of December 7, 2011, the Companies have utilized funds in the Replacement Reserve Account to pay for items that are Capital Costs. We were not made aware of the extent of these costs until the 2011 Financial Reports that were provided in February 2013 revealed a deficit of $1.5 million in the Replacement Reserve.

Hope this helps you out.
GypsyOne

 

[Spark1]

Spark1 As requested, here is an excerpt from our report:

Breaches:

1. The Companies breached the Contract by failing to “help create, organize, establish and thereafter maintain membership in an association of lessees of the Vacation Properties” as required by the Contract.

1.1 The Companies were negligent in not carrying out their responsibility to organize an Association of Lessees. If the Companies take the position that the timeshare owners are the Owners of the Resort, then the Owners were denied that one basic right of ownership, and that is a voice in management. The Companies cannot deny the Timeshare Owners that right and then expect them to step up with massive capital contributions when the Resort falls into serious neglect and financial difficulties.

2. The Companies breached the Contract term that states “The Manager shall manage and maintain the Vacation Resort in a prudent and workmanlike manner.”

2.1 Fairmont and its successors, the Companies, have failed on an on-going basis to address the repairs and replacements as required to maintain the Resort as at the condition and quality at time of entering the Contract. At time of purchasing the assets of Fairmont, the Companies knew or ought to have known, the state of disrepair of the Resort. In a letter of December 2012, the Companies admit that the Resort had a “significant maintenance deficit” in 2010 and now “a renovation of the Resort is an absolute necessity.” In a legal opinion dated February 5, 2013, Northwynd’s solicitor, Norton Rose states in #11 of Conclusions: “The buildings and common area at the Resort have various deferred maintenance issues which will require significant expenditures to correct.” The Contract requires that the Companies maintain and repair the Resort throughout the period of the lease and invoice the timeshare owners for those costs on an annual basis as part of the maintenance fees. They have failed to do so.

2.2 The Companies have failed on an on-going basis to address the replacements of furniture and equipment required to maintain the standard of those items that were in the Resort at time of the Contract. The December 10, 2012 letter to timeshare owners identified required replacement of furniture, fixtures, and equipment totalling from $2.75 to $3.5 million. The Financial Reports released February 2013 revealed a deficit of $1.5 million in the Replacement Reserve. The Contract requires that the Companies establish a Replacement Reserve, conduct an annual assessment of the furnishings and fixtures, and include the necessary amount for replacements in the budget. They have failed to do so.

2.3 The Companies have failed to provide an appropriate budget for the 2013 Operating Costs, Replacement Reserves and Management Fees. The Financial Reports for 2010/11 reveal a total deficit of $3.2 million. The Contract requires that any deficit from previous periods be included in the budget for the calculation of maintenance fees. The Companies have failed to do so.

2.4 The Companies have failed in their obligation to provide audited accounting statements by the dates stipulated in the Contract. The 2010 Financial Reports due March 31, 2011 and the 2011 Financial Reports due on March 31, 2012 were not provided until February 2013. As a result of not having the statements available, the timeshare owners were not made aware of the significant amounts of accumulated deficit and bad debt expense, thus being prevented from making timely management decisions regarding their timeshare. The 2012 Financial Reports were required to be produced by March 31, 2013 and have not been made available to the timeshare owners as at this date.

This egregious failure to manage the complex in a prudent and workmanlike manner has resulted in significant loss of value to Owners, unreasonably increased maintenance costs, diminished quality of our vacation experience, and placed the future of the complex under a cloud of doubt and uncertainty.


3. By virtue of their position as Lessor and Manager of the Resort, the Companies are acting as Agent for the timeshare owners, and as such have failed to follow the tenets of Agency Law in their role as Agent for the Lessees.
3.1 The Companies have failed in their obligation to adhere to the stipulated budget amounts for 2010 and 2011 in that the Financial Reports for 2011 reveal that the Companies have incurred expenses in excess of the stipulated budget to the extent of $3.2 million to the end of 2011. Due to the lack of Financial reports for 2012, there is no information available as to the deficit as at the end of 2012. There is no provision in the Contract that allows the Lessor or the Manager to expend monies in excess of the stipulated budget. As Agents for the timeshare owners, the Companies have violated Agency Law by exceeding the authority given to them as Agent.

3.2 The Companies have failed to pursue the collection of maintenance fees from timeshare owners in default. The 2009, 2010, and 2011 Financial Reports reveal that in excess of $500,000 in bad debt expense was incurred in each year. The Companies collected management fees of approximately $75,000 in relation to these unpaid fees. Furthermore, we have learned that the Companies are collecting and retaining for their own use fees of approximately $3,000 per account, which some timeshare owners have paid as a penalty to terminate their contracts. In both situations, the Companies have violated Agency Law by putting their own interests ahead of those of their Principals, the timeshare owners.

Misrepresentations:

4. The Companies misrepresented the construction quality and thus the longevity of the Resort buildings and failed to properly disclose known construction and structural problems with the buildings to potential timeshare buyers.

4.1 Villas were constructed between 1990 and 2004. Thus, the oldest buildings are twenty-three years old and the newest ones nine years old. Well constructed buildings will easily last forty, fifty, and even sixty years without major restorations. The Lessor sold leasehold interests for a forty year term, thus implying a lifetime on structures of at least forty years. Purchasers would naturally assume that normal annual maintenance and upkeep would substantially maintain the structural quality of their facility for the term of the forty-year lease, at which point the lease expires with no residual value. But with the buildings still relatively new, major construction deficiencies are being reported. The December 10, 2012 letter from the GM states a maintenance deficit of $19 million when RVM took over. But the current estimates are for costs of $28 million to $38 million to bring the complex up to standard. There can be no other conclusion than that purchasers were deceived in the quality of the facility they were buying into.

5. The Companies misrepresented the cost effectiveness of timeshare vacation experience. The prospectus provided with the sale of timeshares emphasized how much more economical a timeshare vacation is in comparison to a traditional vacation in a hotel or motel. Furthermore, it was represented that weekly vacation costs are largely fixed by purchasing a timeshare. The prospectus stated, "Only the maid/maintenance cost can move up with the cost of living." But in actuality over the past eight years, maintenance fees have increased over 77%, which is over four times the rate of inflation (16.8%) for the same time period. Total timeshare costs on a one-week basis, including maintenance, lock-off, and exchange fee, now cost more than a one-week stay in a similar quality hotel.

6. The Companies breached the Contract by billing, or stated intentions to bill, for capital costs related to restoring structural components of resort buildings. The Contract does not provide for including capital costs in maintenance expenses. Asking the leaseholders to pay for capital costs violates the traditional rights and responsibilities that have long existed between the Lessor and the Lessee

In Frequently Asked Questions (Sunchaservillas.ca website Page 2), the Companies state: “The annual maintenance fee has two components: operating costs and refurbishment reserve. Operating costs are the day to day expenses of the resort such as housekeeping, utilities, insurance, and vacation ownership services. Refurbishment reserve has historically only addressed minor priority projects and upkeep such as the deck replacements, roof replacements and outdoor pool repairs.”

It was our understanding, as confirmed by the wording of the Prospectus given to us at time of purchase that the Resort was to be maintained in the condition and quality as at the date we entered into the Lease. The Contract makes no provision for improvement or modernization of the quality of the buildings, the equipment, or the furnishings. By their own admission in letter of December 7, 2011, the Companies have utilized funds in the Replacement Reserve Account to pay for items that are Capital Costs. We were not made aware of the extent of these costs until the 2011 Financial Reports that were provided in February 2013 revealed a deficit of $1.5 million in the Replacement Reserve.

Hope this helps you out.
GypsyOne

Thanks GypsyOne ,this really does help and I am sure a lot more timeshare owners.

 

[Hillside]

New to this forum and I think the report is excellent. I have seen figures 18,000 leases of which approx. 14,000 leases have been sold. This would imply that the lessor should be covering the costs on 4,000 leases. Have they been paying?

 

[GypsyOne]

New to this forum and I think the report is excellent. I have seen figures 18,000 leases of which approx. 14,000 leases have been sold. This would imply that the lessor should be covering the costs on 4,000 leases. Have they been paying?

Hillside, there is strong evidence they have not been paying their fair share. Jim Belfry, a timeshare owner who has posted on these pages, has reviewed in detail the financial statements over a number of years. He reports that financial statements for the years 2011 and 2012 appear to show the Developer has paid nothing to the resort for the units they rent out and units they control. Furthermore, this could account for half the accumulated deficit that they claim is the responsibility of the timeshare owners.

Another owner reports the timeshare units at Fairmont this summer are full despite so many owners opting out. The implication being that Sunchasers is renting out the surplus space through RCI or Interval to generate extra revenue for themselves and pocketing the money previously credited as income to the resort.

These are credible observations that have yet to be proven, but it appears the companies have much to answer to.

The three law companies are preparing our case for an October 8-10 hearing before the B.C. Supreme Court.

Once again, it is important that as many owners as possible sign up with one of the three law firms (see previous posts) representing the owners. Two reasons:

1. There is strength in numbers. The Companies are using the argument that the Owners who have NOT taken a visible stand against this egregious money grab are in fact in support of one of the two assessments. The more owners the lawyers can claim as clients, the more support and weight our case will have before the court.

2. We need lawyers to represent our interests. The cost spread over a large number of owners is minimal - considerably less that the Companies' blackmail and most certainly significantly less than one year's maintenance cost.

Another timeshare owner reports that Geldert Law of Victoria has informed him they are still taking clients. You can get more information at patriciamaito@geldertlaw.com or info@geldertlaw.com.

When resistance to this money grab started out early this year, it looked like David against Goliath. But David is gaining strength and Goliath is worried.

"We are only as strong as we are united, as weak as we are divided." J.K. Rowling, Harry Potter and the Goblet of Fire.

 

[TS Migraine]

If this case sets the precedents, I believe the timeshare industry in Canada is doomed. All timeshare companies will just renovate and pass the costs to owners who don't own equity interest in the property.

Wouldn't that be swell to the timeshare companies not to mention they charge certain percentage of management fees to boot? So the higher the capital expenditure, the better.

In effect, being able to bill TS owners for Capital Cost expenditures makes TS owners the T S ( MIS) Management's bank. Whenever they mess up their money management and need more money, they just go get it from the "bank." Since they have proven themselves incompetent in maintenance money Management precipitating their present position of bankruptcy, I expect all of the TS owners could look forward to the same plight if they keep sending them their hard earned, judiciously managed money. Come up with some retainer money instead, join a Law Firm, and be sure your position against the Petition is Voiced audibly! You will benefit, and so will everyone else.

 

[Beaverjfw]

New Court Update

There is new information on the Fairmont case posted on the Sunchaser web site. Looks like the new round will be in October.
I found this information to be important.

7. The determinations made arising out of the hearing of the Special Case are binding on all of Leaseholders and Timeshare Owners who have been served;
a. Service of this Order and of all Orders or proceedings In this matter is
deemed to be effective by posting on the website
(www.sunchaserresort.com) and by service on counsel for the Respondents
or by service In the manner specified in filed Responses; an

 

[Beaverjfw]

Court Update

In my previous post I see that the web site given in the Court Order for "service" doesn't exist. It should be:
http://sunchaservillas.ca/renovation-program/bc-supreme-court-petition/
I trust the lawyers will fix this.

 

[TS Migraine]

Thanks for the Heads Up Beaverjfw. So, if you have not retained legal representation to keep you posted on what is happening in the BC Court, you best be checking out the sunchaservillas.ca/renovations website in order to stay informed.

 

[CleoB]

New Trick

Well here's something new that Sunchaser is trying. I'm not legal guru but I have to wonder if someone signs this are they giving up their legal right to sue them in a class action suit? We were presented this upon check-in on Sept 7/13. We asked for a copy so we could review it; that we weren't prepared to sign it at the front desk. Here's what the form stated



ACKNOWLEDGEMENT AND WAIVER AND RELEASE OF LIABILITY

TO: RESORT VILLA MANAGEMENT LITD. (“Releasee”)

WHEREAS:

A. The undersigned (the “Releasor”) is an owner or guest at Sunchaser Vacation Villas, 5129 Riverview Gate Road, in Fairmont Hot Springs, British Columbia (the “Resort”).

B. The “Resort” herine refers to any one of the multiple locations of Sunchaser Vacation Villas within Fairmont Hot Springs, British Columbia located at 5129 Riverview Gate Rd., 5052 Riverview Rd, and 5240 Riverside Dr.

C. The Resort provides certain common property, facilities, amenities and activities for the use and enjoyment of owners and guests of the Resort (collectively, the “Amenities and Activites”), including but not limited to (i) an outdoor pool, indoor pool, waterslide, spray park, outdoor hot tubs, indoor hot tubs, a sauna, and steam room; (ii) tennis courts, basketball courts and volleyball courts; (iii) fitness centre; (iv) games room and craft room; (v) stairways and internal roadways; (vi) kid’s camp and related activities; (vii) recreation activities, both on and off the Resort; (viii) children’s playground; (ix) common BBQ area and picnic area; and (x) the use of personal or rental equipment within the Resort.

D. The Releasor wishes to utilize some or all of the Amenities and Activities, for himself and his guests and/or family members.

THE RELEASOR, on his own behalf and on behalf of any of his children, other individuals under the age of 18 years for whom the Releasaor is responsible (a “Minor”) and any of his guests using or participating in any of the Amenities and Activities, hereby acknowledges and agrees as follows:

1. The Releasor herby acknowledges that at all times he will be aware of the use of the amenities and participation of activities which his guest(s) and Minor(s) will be involved in.

2. The Releasor is aware that the use of or participation in the Amenities and Activites has risks, dangers and hazards (collectively “Risks”) and injuries resulting from these Risks, including death, may occur. The Releasor is aware of the Risks and has full knowledge of the nature and extent of the Risks associated with the use of or participation in the Amenities and Activities.

3. In consideration of being able to use or participate in any of the Amenities and Activities, the Releasor herby voluntarily assumes full responsibility of all Risks and loss, property damage or personal injury, including death. The Releasor hereby waives any and all rights he may have against RVM and its affiliates, officers, directors, employees, representatives and agents (collectively, the “Releasee”) to claim for damages or otherwise resulting from injury to property or person arising during such times as the Releasor or his guests and/or Minors use or participate in any of the Amenities and Activities, whether such injury to property of person occurs at the Resort or elsewhere, and whether such damages may have been cause or contributed to by the negligence of any Releasee or otherwise.

4. The Releasor does hereby remise, release and forever discharge the Releasee of and from any and all manner of actions, causes of action, claims and demands which the Releasor every had, now has, or can, shall or may hereafter have for any cause, matter or thing in any way connected with, arising out of, or in respect of and and all use of or participation in any of the Amenities and the Activities.

5. The Releasor agrees to indemnify the Releasee from any costs (including but not limited to legal fees and disbursements on a solicitor and own client basis ) associated with defending or litigating any claims, demands, actions or rights of action, whether asserted by the Releasor or a third party, arising out of or in any way connected with the use or participation by the Releasor or the Releasor’s guests and/or Minors in any of the Amenities and Activities.

6. The Releasor confirms that he has had sufficient time to read and understand this Acknowledgment and Waiver and Release of Liability in its entirety and understands that this agreement represents the entire agreement between the Releasor and the Releasee.

7. The Releasor confirms that this Acknowledgment and Waiver and Release of Liability is binding on the Releasor and his heirs, next of kin, executors, administrators, successors and assigns and that it ensures to the benefit of the Releasee as well as to each of their respective heirs, next of kin, executors, administrators, successors and assigns.

8. Wherever the context so requires, any term used in this Acknowledgment and Waiver and Release of Liability importing the singular number only shall include the plural and vice versa and words importing any gender shall include all other genders.

9. This Acknowledgement and Waiver and Release of Liability shall be governed by the laws of the Province of British Columbia and the laws of Canada applicable therein.

10. If any provision of this Acknowledgment and Waiver and Release of Liability or part thereof or the application thereof to any person or circumstance, shall be invalid or unenforceable to any extent, the remainder of this Acknowledge and Waiver and Release of Liability or the application of such covenant, obligation or agreement or part thereof to any person, party or circumstance other than those in respect of which it is held invalid or unenforceable shall not be affected thereby. Each covenant, obligation and agreement in this Acknowledgment and Waiver and Release of Liability shall be separately valid and enforceable to the fullest extent permitted by law.

11. The Releasor represents and acknowledges the following:

a) he is the full age of 21 years;
b) has completely read and understood this Acknowledgment and Waiver and Release of Liability;
c) is executing this Acknowledgment and Waiver and Release of Liability freely and voluntarily without any compulsion on the part of any of the Releasee’
d) may obtain the advice of independent legal counsel in connection with this Acknowledgment and Waiver and Release of Liability;
e) that by signing this Acknowledgement and Waiver and Release of Liability, the Releasor is relinquishing legal rights and remedies that may have otherwise been available to the Releasor’
f) that this Acknowledgement and Waiver and Release of Liability is mandatory;
g) not signing the waiver does not force the Resort to re-schedule your reservation for a different timeframe.

IN WITNESS WHEREOF the Releasor has signed this Acknowledgment and Waiver and Release of Liability effective on, , 201 .




Releasor Name of Releasor






Witness Name of Witness

 

[gnorth16]

Looks like a simple liability waiver. Nothing related to the lawsuit, just if you injure yourself on the property. Same thing goes over in BC at the sister resort.

 

[Quadmaniac]

Looks like a simple liability waiver. Nothing related to the lawsuit, just if you injure yourself on the property. Same thing goes over in BC at the sister resort.

I would suggest re-reading items 4 and 5. I would never sign this and they can not force you to in order to check in. Why would you sign away your rights, even if it was a simple liability waiver without 4 and 5 ? No chance in hell. It would be a fair expectation to be safe if the resort and if something has not been maintained properly causing harm, you bet they are going to be liable.