Frequently Asked Questions

The Trustee (Hutchinson Asia) is a limited company registered in the UK. It was formed in 2013 to act as a bespoke trustee for the Karma Group, which had grown to such a size that it warranted a separate, stand-alone trustee, separating it from the other trusts operated by the Hutchinson Group. The first member of the Hutchinson Group was established in the year 1985 and has been in the forefront of the timeshare industry since that time, providing long term protection for the clients of the consumer orientated shared leisure developers using their services throughout the world.

Hutchinson Asia provides a structure which combines local property legislation with the benefits of United Kingdom trust law, thereby securing the timeshare members’ legal right to use the resort accommodation.  The reason why English Trust Law is used is that it has evolved over the centuries and provides a clear confirmation that all trust assets are held entirely separately from those owned directly by the trustee, so that the trust would survive the demise of the trustee and, even if such an unlikely event were to occur, the trust would not fail for lack of a Trustee and, pending the appointment of a replacement trustee, the UK state would adopt this role in the interim period. While the legal formalities vary from country to country in which the Karma Group resorts are situated, all members receive a secured legal right to use the accommodation for the duration of the membership, with the apartments at the resort ring fenced for the full period of their vacation ownership.  

As regards the resorts in trust in India, the original Title Deeds  of some of the major Karma Group Resorts are held under the control of the trustee, via a Memorandum of Deposit of Title Deeds. These are held by the trustee’s associate company and duly authorised representative in India, M/s Hutchinson & Co. (India) Pvt. Ltd., thereby securing the use of the resorts for the Karma Group Members.

The trustee safeguards the members’ interests by legally ring fencing the apartments at the resorts against the possibility of any of the parties involved getting into financial difficulties, however unlikely that may seem. This ensures that the benefits of the rights of occupation are exclusively reserved for members, throughout the period of their membership.  

Hutchinson and its nominees hold the legal rights to the apartments and villas at the resorts for which they are appointed, under a trust arrangement for the club members, via a mechanism as described in the previous questions. As such, the members’ legal rights of occupation at these resorts are secured against any third party claims that may be made against the Karma Group. This means that all members whose membership has been registered with Hutchinsons can be assured that their right of occupancy entitlement is legally secure.

The structure of the timeshare and fractional projects are somewhat different but the protection provided by the underlying trust structure remains essentially the same in that the trustee holds control over the properties concerned, in trust, for the members.  Further, under the Fractional Ownership projects the trustee is appointed to administer the sale of the apartments at the end of the project and to distribute the Net Sale Proceeds directly to the members, in accordance with the Rules. 

Under UK Trust Law, all assets held in trust are separately identified and legally separated from the trustee’s own assets. As such, in the event of the trustee getting into financial difficulties, the trust assets could never be used to pay its creditors but would be set aside by the liquidator and then transferred into the name of a successor trustee. This system is enshrined in English Law and has been tried and tested through the centuries. To summarise, the resorts held in trust for the benefit of the members would remain unaffected.

As mentioned above, in the event of the collapse/liquidation of the developer, the trustee holds control over the apartments held in trust and these could not be used to pay off the developer’s creditors. Needless to say, in such circumstances there would inevitably be some temporary disruption, but the trustee would co-operate in the identification and appointment of a new management company, if this was required and the resorts would then return to normal operations.  The trust assets will remain protected while the new management company will ensure the continuity in the operation of the resorts.

This varies on a year to year basis depending on the number of resorts for which the trustee acts, but safe to say that the cumulative value runs into hundreds, if not thousands of millions of dollars.

While Karma Group is the premier brand in Asia associated with Hutchinsons, other premier brands associated with us include vacations clubs of Anantara Hotels Resorts & Spas, Absolute Destinations, Hilton and Marriott. We have to avoid mentioning these in graphics as they require permissions for usage and further we could not authorize another associate to use the Karma Group branding by virtue of the Karma Group association with us.

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The Trustee does receive fees for carrying out its trust work, in safeguarding the legal rights to use of the timeshare purchasers. These are all paid by the Karma Group and not by the purchasers. Karma is the only major vacation ownership developer in the whole of India that offers this protection to timeshare purchasers, all at zero cost to the consumer. Furthermore, it should be emphasised that Hutchinsons are, and always have been, totally independent of the Karma Group and, whilst valuing the nearly 30 year relationship with Karma, its prime objective remains the protection of the members rights to use their holiday accommodation from the very first to the very last day of their membership as detailed in the Deed of Trust.  

The trustee produces regular reports comparing the number and type of timeshare members, with an analysis of the inventory it holds in trust. On the rare occasions where there is a shortfall in the trust inventory, the trustee does not issue any further membership certificates, until further apartments have been transferred into trust. Therefore, every club member who is in receipt of a membership certificate can rest assured that their timeshare purchase is properly backed by the appropriate number of apartments. 

If the trustee were to file for bankruptcy, none of the timeshare apartments it holds in trust could be used to pay its creditors as, under the applicable trust law, all trust assets are ring fenced and are specifically excluded from the assets of the trustee in such circumstances. In such a situation, and also in the event of the Karma Group no longer wanting to be affiliated with Hutchinsons, a replacement trustee would be appointed and the trust arrangements currently held by Hutchinsons would be transferred to that new trustee.  In the event of such an occurrence, Hutchinsons would firstly vet the proposed new trustee to ensure both their independence and that they possess sufficient expertise to be able to carry out this role. Hutchinsons would also co-operate in the smooth transfer of the trust properties to the new trustee.

A prospective resort developer would normally contact the trustees directly. The trustee then looks into the viability of the developer and the resort it intends to include in its timeshare project and, if all is in order, enters into a Deed of Trust with the developer. It should be emphasised that an affiliation with a trustee company is not a simple process, as there are many requirements/check-lists/due diligence etc imposed by the trustee company. Therefore it is only companies such as the Karma Group, which possess both significant credibility and a desire to protect their members, that are able to go down this route.  In the case of Karma and Hutchinsons relationship, these procedures were all carried out in the late 1990’s and have been developed and refined as Karma has grown to the huge organisation that it is today.

It is the sole responsibility of the developer to source and secure adequate insurance of the assets up to their full reinstatement value. On an annual basis, the trustee checks that the developer and/or the management company has the relevant insurance policies in place, although, not being an expert in property values, the responsibility to ensure that the sum insured is adequate, remains with the Karma Group. 

Yes.  The trustee shall issue a statement of account and covering letter post receipt of sales proceeds to each applicable member in respect of the sale of the residence and the entitlement to which the member is due. 

A significant majority of the apartments made available for sales are held in trust, but there are also a number of Karma resorts which are held under different arrangements, such as long and short term leases. The reasons for this is that, over time, new holiday destinations become popular and, occasionally, older destinations become less popular. In order to cater for these varying trends, a degree of flexibility is required to ensure that the holiday needs of members are provided for, not just this year, but for the full length of their vacation ownership. Occasionally, some of the apartments held in trust may be replaced by others of a similar or better type and standard to take account of such fluctuations in demand.

The trustee, being an overseas company, does not in itself, operate in India, where it is represented by its local associated company, Hutchinson & Co. (India) Pvt Ltd., which provides significant support and back-office services to the Karma Group.

The significant associated cost implications together with the independent nature of our duties as ‘Custodian Trustee’ precludes the trustee from being directly involved in the marketing, management and reservations of holiday resorts affiliated to us.

The trustee is not an insurance company in that an insurance company’s role is to compensate the insured in the event of an unfortunate occurrence taking place. In the case of a trustee, its aim is to put in place such measures as may be required to stop such an unfortunate occurrence taking place by ensuring that the members’ “legal rights to use” are legally protected for the period of the membership. Therefore, the major difference between an insurance company and a trustee is that the former aims to provide compensation for the occurrence of an unforeseen event whilst the latter puts in place preventative measures to avoid the unfortunate occurrence ever happening in the first place.