Declining demand for timeshare holiday accommodation sees ‘The Retreat’ sitting on 4.7 hectares of land overlooking the marina at Lake Taupo joining other local timeshares being sold up. Owners at The Retreat can anticipate a return of about $11,800 for each timeshare week sold.
In recent years, other local timeshares have been wound up and sold: Village Resort, Phoenix and Turangi Leisure. Increased maintenance and refurbishment costs plus the strictures of fitting holidays around timeshare availability has seen owners selling or abandoning their timeshare ownership. Winding up a timeshare resort under the Unit Titles Act requires a 75 per cent vote plus High Court approval.
High Court approval to wind up The Retreat was delayed following objections from the Ray Thorpe Trust, owner of two timeshare weeks. With eight accommodation units, The Retreat has ownership spread across 408 timeshare weeks. A 2021 vote to windup received 86 per cent support. Included in this majority was Murcia Holdings Ltd owned by the Clark family. Murcia alone carried votes for 225 timeshare weeks. Nearly 180 of these weeks were purchased when the original developer went bust. Over the years, Murcia had bought out owners looking to quit their interest in The Retreat. Holding 225 timeshare weeks meant Murcia was now having to pay some $216,500 in annual maintenance levies. The Clarks said they had supported The Retreat financially for over thirty years and it was time to wind up what was an uneconomic and unworkable model.
In the High Court, Ray Thorpe Trust challenged the manner of the vote. They alleged Murcia Holdings had gained control by buying up cheaply weeks offered for sale and further alleged the Clarks could benefit as insiders from any sale because they lived in accommodation on site. There was a power imbalance, the Trust said, which disadvantaged minority time-shareholders looking to co-ordinate objections.
Justice Cooke approved dissolution of the timeshare scheme subject to conditions. A $510,000 credit balance in the timeshare’s refurbishment account is to be distributed only between owners of timeshare weeks for the eight accommodation units; the unit occupied by the Clarks had not contributed to this fund. And neither the Clarks, Murcia Holdings or any interests associated with them could buy the 4.7 hectare site without first applying to the court and establishing that there were no other buyers offering a better price.
Sale by tender rather than by auction was approved by the court.
re Body Corporate 39826 – High Court (3.10.22)
22.172