Trustee Services
Drawing from more than 30 years experience in the industry, we are able to evaluate the correct Trust structure for new projects. We have legal contacts in all countries in which we are represented, which enables us to assist new Developers in ensuring they have the correct structure in place to comply with local legislative requirements.
- Initial project / product identification meetings – stressing the importance of flexibility and getting the right structure / models in place at the beginning and building on past experience of where others went wrong.
- Inspection visits to project and findings report.
- Shared leisure legal structures – models / options available, which structure best suits the project / product. We have specialist knowledge in three main areas:
- Timeshare / Vacation Club (weeks / points) / Mixed use developments / Multi-Destination Clubs.
- Fractional schemes.
- Other structures e.g. PRC; Hotel Investment Schemes; Real Estate Investment schemes.
- Trustee Services, the various options available, their advantages and disadvantages.
- Preparation of project / product feasibility reports with recommendations.
Services, strengths and advantages of the Trustee System Read More
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:
- Provide standard procedure manual.
- Set up database for recording clients' personal details, unit/week purchased, payment schedule, etc.
- Register all completed sales and resultant Holiday Ownerships notified to the Trustee.
- Prepare and issue new and replacement Holiday Certificates.
- Produce report of unit/weeks sold to the Developer at a frequency to be agreed.
- Maintain the Resort’s mailing list.
- Process Forms of Surrender and Request, and issue new Holiday Certificates.
- 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)
- 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.
- Receive and hold in escrow the initial deposit, where this is permissible by law, until the balance payment has been received.
- 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.
- 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
- 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.
- Flexibility
The Trustee System is flexible and can be adapted to almost any system in any country in an efficient and cost effective way.
- Evolution
The Vacation Ownership world is changing continuously and the Trustee System is ideally placed to cope with new ideas and new projects.
- 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.
- 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.
- 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.
- 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.
- 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.
- Upgrades
The Trustee System provides a cheap and efficient method of processing both new sales and upgrades.
- 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.