Village Resort timeshare on Taupo’s Lake Terrace has sold for $6.5 million with owners holding ‘fixed weeks’ to receive about $10,000; ‘floating weeks’ $5000.
Village Resort consists of 22 units. Management told the High Court increasing costs were discouraging timeshare ownership. Owners defaulting on annual fees were proving difficult to trace. While industry-wide there is still a demand for fixed weeks (which are usually over the Christmas holidays) there is little demand for floating weeks. Annual levies of $800 to $1000 make it an expensive week’s holiday for many. The lack of value in floating weeks is evidenced by many being offered around New Zealand for sale at zero cost. The underlying property value can be paid out to existing timeshare owners by cancelling their timeshare unit title structure and having the owners jointly sell.
Breaking up a timeshare requires a majority vote by timeshare owners and High Court approval under the Unit Titles Act. Timeshare owners lose their contractual rights of occupation, becoming part-owners of the former timeshare property in shares proportionate to their timeshare interest.
At a Village Resort general meeting in October 2018, timeshare owners approved cancellation. A valuation report valued fixed weeks at twice the value of floating weeks.
Owners of two Village Resort floating weeks objected to High Court approval for cancellation. Justice Ellis overruled their objections. All procedural requirements under the Unit Titles Act had been properly followed. The objecting owners were not prejudiced; their floating weeks which in all likelihood have little economic value will be paid out at about $5000 for each week. Timeshare owners with annual fees in arrears will have these arrears deducted from their payout.
re: Body Corporate 46051 (Village Resort) – High Court (30.04.19)
19.080