The Broome Park estate initially included the large Mansion House, the smaller Elham House and surrounding grounds. The Mansion House and a significant proportion of the surrounding grounds, referred to as ‘the Park’ in the judgment – were redeveloped into a timeshare and leisure complex. As a result of the early success of this redevelopment, Elham House and adjoining land were also redeveloped as timeshare properties known as Regency Villas. In 1981 the developer, through a series of transactions, transferred the freehold of Regency Villas to a trust operated by Barclays Bank, to be held for the benefit of the members of the Regency Villas Owners Club (RVOC). This transfer included a ‘facilities grant’ of rights including free use of the sporting and recreational facilities within the Park. The freehold was later transferred to a new owner, Regency Villas Title Ltd (RVTL).
The original transfer in 1981 also contained a covenant by the developer to maintain the sporting and recreational facilities within the wider park, although as a ‘positive’ covenant unsupported by a leasehold structure it did not bind the developer’s successors in title. Over time, as a result of a lack of investment, many of the facilities were closed even though a new indoor pool had been built in the Mansion House.
From about 1983 onwards until the end of 2011, RVOC made periodic voluntary payments on behalf of the Regency Villas timeshare owners to the owners of the Park towards the cost of maintaining the facilities. From 2012 onwards, individual timeshare owners were charged fees from time to time for the use of specific facilities, which they paid, notwithstanding the fact that it had been agreed they were entitled to the use of those facilities free of charge.
In 2015, the Mansion House was temporarily closed for refurbishment, before reopening as a hotel. RVTL, together with some members of the RVOC, initiated proceedings, claiming that they were entitled to use of all the sporting and recreational facilities at the site free of charge by virtue of an easement (the right to cross or otherwise use someone else’s land for a specified purpose). They also sought return of any sums paid by them or on their behalf by the RVOC since 2008 for the use of these facilities. The owners of the hotel denied that any such easement existed in relation to the facilities.
The Supreme Court, by a majority of four judges to one, has now confirmed that the grant to use the facilities was classed as an easement, upholding an earlier decision by the High Court. It partially overturned the Court of Appeal’s judgment in the case, which had found that the timeshare owners had no rights in relation to the facilities inside the Mansion House. The Supreme Court’s judgment included discussion of whether the leading case on easements, the Court of Appeal’s 1956 judgment in Re Ellenborough Park, covers the grant of recreational or sporting rights. The Supreme Court concluded that it did, provided that the four conditions set out in that judgment were met;
- There must be identifiable dominant and servient pieces of land
- The right must ‘accommodate’ or benefit the dominant land
- The dominant and servient land must be owned by different people
- The right must be sufficiently clear and certain as to be capable of forming the subject matter of a grant
The Supreme Court also restored the High Court judge’s decision requiring the owners of the Park to refund any payments made by the timeshare owners, or on their behalf by the RVOC, for use of the facilities since 2012. The High Court found that they were not entitled to a refund of the payments made between 2008 and 2011, as these payments had been made by agreement rather than under protest.
Cross confirmed that
“The decision is particularly helpful in the context of the recent trend for recreational or leisure facilities to be incorporated within a residential or mixed use development and the government’s desire to ban the sale of leasehold homes as, up until now, the leasehold structure had been the best way of ensuring that the grant of recreational and sporting rights was enforceable by successors in title,”
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