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The Trust System

The aim of a trustee system is to give complete legal security to the Purchaser of their right to use the timeshare/fractional unit and thereby to provide increased credibility and security in order to increase sales and reduce cancellations.

This is effected by transferring legal ownership of the timeshare/fractional unit to a Trustee whilst reserving all the practical benefits of ownership to the Developer. This normally involves combining the advantages of local property law with English Trust law which protects all parties against the repercussions of the demise of any of the others.

The main beneficiaries of such are system are:

• Marketers/Developers
• Finance Companies
• Exchange Companies
• Consumers

Principal Services of the Trustee

• Arrange the setting up and administration of the Owning/Holding Company with the provision of two direc­tors, Company secretary, shareholders and registered office.
• Set up any additional companies required, such as sales Company, marketing Company, management Company etc.
• Draw up draft Project Documentation.
• Arrange visit to resort to inspect the apartments to be placed in trust and to record their current status.
• Provide the following administration service:
  1. Provide standard procedure manual.
  2. Set up database for recording clients' personal details, unit/week purchased, payment schedule, etc.
  3. Register all completed sales and resultant Holiday Ownerships notified to the Trustee.
  4. Prepare and issue new and replacement Holiday Certificates.
  5. Produce report of unit/weeks sold to the Developer at a frequency to be agreed.
  6. Maintain the Resort’s mailing list.
  7. Process Forms of Surrender and Request, and issue new Holiday Certificates.
  8. Process repossessions.
• Receive and record confirmation that apartments have been comple­ted, that they are fully furnished to Vacation Ownership standard and ready for immediate occupa­tion.
• Receive and record confirmation from the Exchange Company that affiliation is completed and apartments passed by them.
• Receive and record confirmation that there are no mortgages or other encumbrances on the apartments on which certificates are to be issued and/or funds released.
• Undertake annual review and/or inspection of resort.
• Funds: (This section does not apply to “Custodian only” trusteeships)
  1. Set up and maintain separate client bank accounts for the collection of payments received from purchasers.  Distribute these funds as required reporting to Developer in a standard format.
  2. Receive and hold in escrow the initial deposit, where this is permissible by law, until the balance payment has been received.
  3. Hold in escrow any funds the Trustee receives which are required to be retained in accordance with the Deed of Trust and/or Escrow Agreement.
  4. Administer the registration of clients with the appropriate exchange organisation (if required).
• Deal with forfeited deposits in accordance with Developer/Marketer agreement.

The stengths and advantages of the Trustee system

1. A Highly Sophisticated and Refined System
   The world has proved a thousand times that prototypes are costly, both in time and money.  Almost without exception, it is the innovator rather than the inventor who ends up making the most profit.  We, as Trustees, together with early Vacation Ownership Developers were the inventors; you can be the innovators.
2. Flexibility
   The Trustee System is flexible and can be adapted to almost any system in any country in an efficient and cost effective way. 
3. Evolution
   The Vacation Ownership world is changing continuously and the Trustee System is ideally placed to cope with new ideas and new projects.
4. Management Charges
   Having established the level of the annual management charge, it is imperative that an efficient deterrent exists against non-payers.  The ability to suspend and ultimately repossess the use rights of the persistent non-payer is embodied in the Trustee System.
5. Synergy with Exchange Organisations
   Much of the information required by the International Exchange Organisations on a resort is obtained by putting the property into trust and the Trustee’s expertise is therefore useful in assisting with the resort's affiliation with the Exchange Organisation in a timely fashion.
6. Ongoing Commitments
   Depending on each Developer’s viewpoint, they may either wish to maintain control of the management of the resort or transfer this to the Holiday Owners.  Both options can be accommodated under the Trustee System.
7. Government Restrictions
   In many countries, governments have introduced tough and inflexible laws which impose significant restrictions on vacation ownership Developers.  This often happens where purchasers have not been given what they have paid for by non-trust resorts.  The Trustee System protects against this and therefore reduces the likelihood of unreasonable legislation.
8. Inventory Control
   Inventory shortages, as a result of good sales performances, are not uncommon.  The Trustee System can deal with this problem, without reducing the sales volume, by retaining all sales proceeds it receives from purchasers in escrow until such time as further inventory is placed in trust.
9. Upgrades
   The Trustee System provides a cheap and efficient method of processing both new sales and upgrades.
10. Industry confidence
    Wherever your resort is located in the world, the failure of one resort raises doubts about others and will affect your sales.  The Trustee System can provide the necessary guarantees to the purchasers such that their confidence will not be reduced by the failure of another development.