Nearly 1,000 owners at Sunchaser Villas have entered into a class-action lawsuit against Northmont Resort Properties Ltd. in a dispute over a costly renovation project at the Fairmont Hot Springs holiday destination.
“The basis for the lawsuit is that Northmont has breached its contractual obligations to timeshare owners and leaseholders at the resort,” said Michael Geldert, managing partner at Geldert Law who is representing the claimants.
The class-action came together after costly renovation fees were charged to each owner of the 18,950 units.
Sunchaser Villas was managed by Fairmont Resort Properties Ltd., which filed for bankruptcy in 2008. Northwynd Resort Properties Ltd. purchased Sunchaser from creditors, and manages it through Northmont, which is Northwynd’s subsidiary company.
After the takeover, the new management company said that under previous management, owners had been paying unsustainably low maintenance fees and that a large renovation project would be required. Owners were given the option to either pay $4,195 to keep their timeshare unit, or $3,168 to opt out.
The Supreme Court of B.C. approved Northmont’s ability to impose those fees last fall, but a subsequent appeal was successful in reversing the decision.
Although the renovation charges were initially found to be legal, the result of the appeal did not make imposing those fees illegal.
“Whether or not that’s true is a matter of interpretation before the courts,” said Mr. Geldert.
The class action will continue collecting names until Friday, September 19th, but will be flexible if more interest is shown. A case-planning conference is scheduled for Tuesday, October 14th.
All involved parties and a trustee will be present as the procedure for being heard will be laid out.
Mr. Geldert said lawsuits of this nature normally last between one and 1.5 years, but that settlements usually take place before conclusion.
“We’re certainly open to having those settlement discussions,” he said.
He said that precedent has been set for similar lawsuits in B.C. and Alberta going back to the 1990s.
“The timeshare industry has always seemed to have issues with resort managers who, for whatever reason find themselves between a rock and a hard place, and they start making decisions that ultimately attract some liability and concern on behalf of the people they are responsible for managing,” he said.