With the reported scams and misselling practices in the timeshare industry, any potential owner may feel unsecured with this type of deal. In fact, some current owners experience things that don’t adhere to what have been agreed upon during the signing of the contract. Thus, many of these owners tried to get out of their timeshare units later on. However, such problems can be mitigated through the trustee system. It is highly sophisticated and refined and it offers numerous advantages to both the resort developer and the purchaser, giving security and credibility to the product, as well as playing a key role in the industry.
The aim of a trustee system is to give complete legal security to the purchaser in respect of the rights of occupancy they have acquired in timeshare ownership or fractional accommodation. Usually, this is achieved through the transfer of the legal ownership of the said accommodation from the developer entity to the Trustee by using a non-trading owning company solely controlled by the Trustee or its nominees. Hence, it protects the consumers’ rights against the possible demise of the developer. It can also provide maximum protection to the purchasers as the trust structure is also normally established by combining local property law with English trust law.
After the legal structure of a project has been agreed upon, the Trustee will also get involved in drafting the relevant documentation such as the Deed of Trust, the Rules of Occupation, the Purchase Agreement, the Management Agreement and any other Disclosure documentation that maybe required. Moreover, the role of the Trustee is on-going and continues long after a resort is sold out.
Nowadays, some owners face certain legal issues regarding their timeshare ownership. In a number of cases, these owners simply get rid of their timeshares to avoid such hassle. One of the key functions of the Trustee is to ensure that the legal structure of the resort is maintained and the rights of the owners and members are fully protected for the duration of the “life” of the Club, or Resort, which in some case can be in perpetuity.