Giving Up a Timeshare Agreement for person with Dementia

Tammer

I really hope someone can offer some solid advice on what I should do.  All of the following is in Scotland.

Context

My mum has been deteriorating for the last few years and is now in a nursing home with dementia. I have power of attorney and am dealing with her affairs.

One of the things I’m dealing with is my mum’s membership of a holiday club in Scotland.  She bought this in 1987 – a “timeshare” arrangement with a week at the club and the chance to swap for week’s elsewhere in the world, in theory.     The membership came with an obligation to pay an annual management charge for the upkeep of the holiday resort that she is a member of.   Over the years, she had a week in March where she would use one of the holiday lodges.

The Problem

My mum was in hospital for a few months before going into a nursing home.  She went into hospital in late 2019 and into a nursing home in May 2020.  She has therefore been unable to use the holiday club from 2020 onwards.  With the pandemic, no one would be using it anyway due to lockdown.

The first thing I came across was a letter from a debt management company (Network Credit Services) for a bill of £500 for the holiday club.  I have gone through all my mum’s correspondence and emails (no mean feat) and have seen no other correspondence or bill for this amount.  I phoned them and they explained what it was and suggested I contact the firm behind the holiday club (a large hotel group here in Scotland).    

I contacted the hotel group to ask if this was genuine and, if so, what it relates to.  After a lengthy lockdown delay, they said it is the management fee for 2020 (and since then 2021 has become due too).  I explained my mum’s condition and asked how this can be cancelled along with her membership. They said that giving up membership can be done at specific times and requires payment of all outstanding management fees plus 4 years management fees in lieu of 4 years’ notice (So £2100 + £1000 management fees). They say that the membership can be sold or passed on to a family member – not likely to be appealing to anyone given the management fees.

I feel that 3 aspects of this are unfair and possibly may not be legally enforceable:

1.        The management fees of £1,000 when no one can have been using the facilities due to lockdown.   They will also be charging interest on this.

2.       The termination fee of 4 years’ worth of fees is extortionate.

3.       No means of getting out of this due to my mum’s health. I am not even sure what would happen if she were to die.  They would probably try to pass the membership on to me.

As my mum’s attorney, I have to seek out the best value for money for her so cannot sanction paying over £3000 to cancel this arrangement as all her funds are going towards her Nursing Home fees of £4k a month.

I have read the holiday club’s constitution and it says that termination can be notified every 2 years and the termination payment is “determined from time to time by the Founding Member” (the parent company). 

I have worked on product costs in Financial Services in my job and we are not allowed to have vague rules on how much we charge, that we can change from time to time, due to the Unfair Contract Terms Act - which makes me think this agreement is dodgy.

 

What can I do to bring this to a satisfactory conclusion from my mum’s perspective? Is there anywhere I can get help?

What would people advise me to do?

Thanks in advance,

T

Skibunny40

I went through this with my parents. Afraid to say they ended up paying the "escape" settlement amount. However, at the time they paid it (2014?2015?) they got "vouchers" for the equivalent holidays to use over the next four years -is there anything like that in your offer? Although they couldn't use the vouchers (weren't fit to go on holiday, that's why they were getting rid of the timeshare in the first place) they booked every year & just didn't turn up - didn't cost them anything but stopped the management company (same name as a burger chain, by any chance??) from renting out the week and making even more money on it.

Grumpelstiltskin

If you put Timeshare in the forum search you will see plenty of threads come up.

Search — MoneySavingExpert Forum

Some of them have similar problems.

Grumpy_chap

OK, so your mother had a timeshare and, using PoA, you need to do the best for her. 

It seems as though the fees for 2020 & 2021 are due, so that is £1k that needs to be paid.  Assuming she is solvent, not settling this past liability cannot be in her best interest, so it needs to be settled.

Then, the claimed 4-year notice period or fees-in-lieu, so that is £2k to be paid, either right away or over the coming 4 years.
Knowing nothing about these agreements and legal rules, 4-year notice period seems excessive to my simple lay-person mind.
Can you locate any original agreement that sets out this time period? 
Does that agreement have any exceptions, such as health-related termination of the time-share?
If there is documentation, then this is also a liability that needs to be settled in time, either upfront or over four years.
Unless the rate is likely to increase each year, then the best for your mother is that you serve the notice and pay the £500 per year as each year becomes due.  That is better for cash-flow.  (It may even be permitted for another family member to take the week in place of your mother?)

The rules you quote about the constitution seem unreasonable - hopefully someone on here with better legal knowledge can comment, but your reference to unfair contracts seems reasonable (if that applies as far back as when the agreement was set in 1987), or the general contra-preferentum rules.  Trouble is, for only £2k, beyond free advice from CAB or similar, it won't warrant taking paid-for legal advice.

The final comment you make is about your mother needing to meet Nursing Home fees of £4k per month so therefore you cannot spend £2k (or £3k) on the time-share. 
In practice will that actually make any difference? 
As I see it, the fee to the timeshare are a contractual obligation from 1987 so to meet that obligation would not be deprivation of capital. 
Is it possible that your mother's funds will be depleted down to the point where the state take over and meet the Nursing Home fees? 
If so, the £3k paid to the timeshare will only make a difference of 1 month before that event occurs. 
In that case, it is possibly better for your mother that the time-share money is settled sooner rather than later, otherwise, the funds could be depleted until the state meets Nursing Home fees and then the liability for the timeshare comes out from the residual.
The other option is that your mother has very ample funds that will not be depleted by Nursing Home fees, in which case paying another £3k will also still make little difference in the end.
I have purposefully not put values at which the state meets the Nursing Home fees as they may be different to the figures that applied for my father (in England and a few years back).

Good luck.

Keep_pedalling

It is difficult to advise on this, but from what I have seen elsewhere you do have easy and relatively cheap get out solution, that will avoid you being involved in a long winded, stressful and potentially expensive process. 

If you mother is not likely live 4 years then I would consider just paying the maintenance fees as the contract ends on her death, and they can’t change any fees after that. You could look at going down the legal route but that might be more expensive. There are lots of websites claiming to be able to get people out of TS contracts, but many of them are scams run by the same people who sold TS in the first place so you should be very careful about contacting any of those.

You might get some better advice from U.K. holidays board.

Tammer

Thanks all. Lots of good input here.  I am inclined to pay the management fees that are outstanding at the moment and give my termination notice, but I will think about it a bit more.
One thing that I remember is that the Debt chasing firm were sending back the 2020 management fee cost on a list to the holiday company headed "write off".  I can't help thinking that it might have gone away if I hadn't got in touch with them, although advice is generally not to ignore debts. 

sassyblue

Would it be an option to see a Solicitor, google one skilled in timeshare agreements, in an effort to find a loophole. I’d be totally against giving them a penny, they’re all scams.