Lead Forensics
Prettys Solicitors Ipswich


Supreme Court decision on 14 November 2018- Regency Villas Title Ltd and others v Diamond Resorts (Europe) Ltd and another 2018

This case involves a dispute in connection with the rights to use leisure and recreational facilities (including a swimming pool, gardens and golf course) that were granted in favour of a freehold timeshare complex within the grounds of a large country park estate near Canterbury.  The timeshare owners (members of Regency Villas Owners Club) claimed that the rights granted to them in 1981 to use the resort facilities were exercisable free of charge, even though there was no express obligation for anyone to contribute to their upkeep.

The resort owner continued to maintain, repair and replace the facilities from time to time as the facilities were part of the hotel and leisure facilities within the adjoining original mansion house.  The adjoining time share owners’ club had previously made voluntary contributions to their upkeep.  Eventually there was a dispute over the amount of contributions and the right to use the facilities free of charge, resulting in the freehold owner of the complex introducing charges for use of the faculties, which some of the time share owners paid, albeit under protest. The dispute grew.

In 2015 the High Court judge found that the rights granted in 1981 fell within the criteria required to constitute legal easements to use the facilities free of charge and that this included any new or replacement facilities provided after 1981.  However he also found that the previous voluntary payments were not recoverable.

The Court of Appeal upheld the majority of the claimed easements but found that the facilities that had been built after 1981 were not included.

Neither party was happy with the outcome, so the case went to the Supreme Court. The appeal presented an opportunity for the Supreme Court to consider the extent to which the right to the free use of sporting and recreational facilities provided in a country club environment may be conferred upon the owners and occupiers of an adjacent freehold timeshare complex and to carry out a review of the previous authority for the creation of easements established by Re Ellenborough Park [1956].

It was in the end a victory for the Regency Villa time share owners. By a majority the Supreme Court decision found that:

The dissenting judge however expressed some dissatisfaction over the lack of a clear maintenance regime for extensive leisure rights that involve high operational costs and stated that no-one suggests that this case is a suitable model for future time-share arrangements of this kind.

Although the extended class of easements is of general interest to property lawyers, the facts of this case can be distinguished in relation to the freehold structure used for the sale of the timeshare units, and the absence of any covenants for the upkeep of the facilities rights granted.

The moral of this case is that careful consideration should be given when buying property with the benefit of easements or selling property that is to remain subject to them.  In this case far greater thought should have been given to the legal structure of the timeshare sales to take into account the high cost of maintaining and operating the class of rights granted in perpetuity.

With the benefit of hindsight, the original freeholder owner of the complex probably should have considered a more traditional landlord and tenant structure for the timeshare development. If contributions to ongoing costs were intended to be made by all users of the facilities, then the adoption of service charge covenants under the timeshare arrangement to recover a fair share of ongoing operational costs would have addressed the issue.

If you are concerned about the extent of any easement rights affecting your land, whether as a benefit or as a burden, or in relation to maintenance changes for services provided for shared facilities on freehold residential developments please contact us for further guidance at commprop@prettys.co.uk

The above article is produced for general guidance and does not constitute specific legal advice.

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