Fairmont Hot Springs - Columbia Valley - Resolution Still Sought
By Julie Forestell
Nestled in Fairmont Hot Springs in the Columbia Valley, a group of timeshare resort owners still seek a solution to their on-going troubles.
As discussions continue regarding what possible options might come forward from the new administrator of Carriage Hills and Carriage Ridge Resorts, it may be relevant to read what happened to a similar resort in Western Canada. What was most interesting to me was the proposal presented after there was as admission of financial troubles. Given an option of pay to stay or pay to go, what would you choose?
Back in 1993 Fairmont Resort Properties began selling timeshare leases at Fairmont Vacation Villas (see also Riverside Resort, Riverside Villas, Hillside Villas, and Riverview Villas), in Hot Springs, B.C. These 40 year leases allowed owners to enjoy one week vacations based availability and the purchase price (higher demand weeks came with a higher purchase price). The resort grew to more than 15,000 owners. Owners received regular financial reports over the years, and nominal increases to their maintenance fees to meet with inflation. In reality, the “owners” were really “leasees” because once the leases ended, the developer would have clear title to the resort properties. The developer was the true and legal owner.
In 2009, Fairmont Resort Properties’ financial challenges made them subject to proceedings under the Companies’ Creditors Arrangement Act. As a result of their insolvency, the developer’s interest of Fairmont Vacation Villas was sold off to Northwynd Resort Properties Ltd. group of companies in June 2010. One of Northwynd’s subsidiaries, Northmont Resort Properties Ltd. took over as the Developer of the Resort. Another subsidiary, Resort Villa Management Ltd., took over as Property Manager of the Resort. The resort was rebranded to Sunchaser Vacation Villas which still exists today.
Over the years, under Northmont as developer, the resort was not maintained and the reserved funds were depleted. From court documents is was clear that Northmont was spending funds to investigate and plan for refurbishment and upgrades. The owners were left in the dark, as details regarding the spending were not shared. From January 2010 to January 2013, the annual maintenance fees were increased over 22%. Perhaps important to note that during this time a new program was introduced to invite owners to pay an additional fee to join the RCI points program and extend their contracts in perpetuity. Embedded in these contracts is language that converted the 30% who bought in from leases to actual owners which translates to them being responsible for costs for improving and maintaining the resort.
January of 2013 saw Northmont communicating that there were indeed issues with the resort and that all “owners” (owners and leaseholders) would be invoiced the costs of a multi-year renovation plan.
In April 2013, people were notified of their options; they had to pay more to stay or pay more to leave. The letter outlined the on-going obligations. In short, they would be liable for between $3000 to $4000 for upgrades for both 2013 and 2014 or they could pay a fee of up to just over $3000 to surrender their rights to their timeshare. From the letter sent: “In order to allow Timeshare Members to cancel their Vacation Interval Agreements, we developed a cancellation option that fairly compensates the Developer for the lost property management fees, ensures the deficit at the Resort is properly recovered, and recovers some of the administrative and trustee costs of the process.”
There was clearly an outcry. As leasees, not owners, why would they be liable for all these additional fees? Review of their lease agreements confirmed that they were no provisions for special assessments. The expectation of all “owners” was that their maintenance fee was their sole obligation and that funds would have been set aside in the reserved fund to handle costs of refurbishment.
What has transpired over the last 7 years is a series of court cases and petitions by both Northmont and other impacted parties to try to resolve who was accountable for the costs of the capital improvements. And for owners, especially those who did not pay to leave, some are left with lawyer’s fees, increasing maintenance fees and often penalties and interest for those who are still fighting to dispute these costs.
While there are distinct differences between Sunchaser and Carriage Hills and Carriage Ridge Resorts, insofar as leases versus purchases, and regulations that may vary by province, this real life example provides some insight into the battles others have faced with costs to maintain resorts and costs to exit.
April 2013 Letter to ‘Owners’ communicating option and need for refurbishing resort
CTV News web article on massive bills for costs for improvements, maintenance fees, penalties and interest:
TUG Board on Sunchaser (222 pages, over 5500 posts)
For more information on court cases, you can review them here:
(Use Northmont in the Document Text box when searching)
Or on Sunchaser Villa’s own website: