Trout & Salmon – June 2009

A Brief History of Timeshare

By Andrew Graham-Stewart – published in Trout & Salmon (June 2009)

For the best part of a decade from the early 1980s it was practically impossible to open a Trout & Salmon without being bombarded by advertising material for timeshare fishings.  A plethora of schemes were launched offering salmon and sea-trout angling on rivers the length and breadth of Scotland.

Timeshare is, of course, based on a pretty simply property business model – that often the value of the parts is greater than that of the whole.  Thus sections of rivers (and in some cases whole rivers) were acquired by the entrepreneurs and then in due course sold off in rod-weeks either in perpetuity or for a fixed period of between 25 and 99 years.

Broadly speaking, the model worked because beats could be acquired in the 1980s for sums equating to between £5,000 and £10,000 per salmon caught (based on the five-year average), while individual rod weeks could be resold for considerably more – at times as much as £20,000 per salmon.  The cost of particular weeks related to the number of fish that a rod might expect to land on the basis of the recent average for the period in question.  Indeed, some controversial tactics were employed on some beats prior to the launch of schemes, thus locals were offered free fishing and encourage to use all methods to maximise catches to boost averages.

Potentially the profits were huge.  Jim Slater, founder of Salar Properties, made his first fishing purchase in 1985, half of Lower Redgorton on the Tay, for which he paid £500,000; two months later he timeshared it for £1,500,000.  In fact, he only managed to sell half of the weeks, which turned out to be something of an additional windfall.  Prime rods that had sold for about £16,000 leapt in price and at one point were worth £100,000.  He had retained many of these so overall this scheme turned out to be amazingly profitable and in due course he duplicated it elsewhere.  Soon after Jim Slater had acquired his half of Lower Redgorton, he had dinner with Lord Mansfield and offered him £1m for his half; very wisely, his lordship declined.

Given the profitability, the growth in the number of schemes being launced was exponential – so much so that concerns were raised that all of Scotland’s best rivers would soon be swallowed up in order to appease the voracious god of timeshare.  Of course, this did not happen – for two basic reasons; in the 1990s migratory fish numbers dwindled (including a significant slump in grilse abundance just prior to the millenium) and, critically, per fish values of beats sold on a traditional basis became almost as high as might be achieved on a timeshare basis.  The combination of a lack of confidence in the future of salmon runs and little opportunity for profit signalled the end of the boom.

But how have the numerous schemes spawned during the 1980s and 1990s actually fared?  For the most part the larger schemes on the big and medium-size rivers have been profitable in the short term and continue to provide secure and productive fishings for those who bought in.  The best schemes were set up and developed by individuals who took pride in creating structures in which they retain an interest as an angler/members.  Examples include Peter Whitfield’s syndication of the Brahan fishings on the Conon and Gordon Dawson of Prime Fishings’ portfolio of syndicates on the Dee, Spey, Ness and Doon.

Such schemes are well-resourced and well-managed.  Where there is occasional discontent among timeshare owners in these successful schemes, it generally reflects the shifting patterns of fish runs.  Thus, with the recent trend towards grilse not arriving in any numbers before August, those with, say, late June or July weeks (which were previously highly prolific) on prime summer grilse rivers are struggling to catch anything like the number they had become accustomed to.  Similarly, on the lower reaches of the Tay (where there are numerous timeshare schemes) the spring fishing has in some instances become almost worthless as spring runs have decreased and milder winters encourage the depleted run not to pause before they reach the middle or upper reaches.  In these circumstances owners are locked in (still incurring an annual maintenance charge) to their particular week, the value of which may be depreciating or, indeed, virtually unsaleable.  Disquiet, based on unrealistic expectations my be widespread; unlike tenants of regular beats, timeshare owners of poor fishing weeks do not have the option to move on – unless they can find a buyer.

That said, the great majority of members of the more successful schemes (which are properly managed and run democratically) tend to be more than satisfied with their investments.  Where catches have been sustained or have even increased, resales of weeks can command considerable premiums.  Thus some rod that cost £14,000 per week at Brahan on the Conon in 1985 have recently sold for up to £80,000.

With the benefit of hindsight attempts should never have been made to timeshare some beats and rivers; in the main they have been on medium-sized rivers (particularly single bank sections) and the smaller spate systems – often on the west coast where the impact of salmon farming has exacerbated matters and where some schemes have essentially collapsed.  Other schemes  (such as the Deveron and the Nith) were aborted; when launched, promoters of schemes almost always reserved the right to abort if take-up was not sufficient by a nominated date to make the timeshare in question viable.

Incidentally, one particular legal problem has affected many schemes across the board.  They had been set up on a pro-indiviso ownership basis with each title burdened by means of a Deed of Conditions which purported to restrict each owner’s share to a period of time along with all the other normal timeshare regulations.  These titles were orignally registered in the old Register of Sasines, which is purely a register for publication (in other words it makes no judgement as to the competence or validity of the Deeds registered in it).  The problem came to light when these titles were sold and presented for registration in the new Land Register, which affords protection to owners and accordingly it conducts its own title examination when titles are presented.  The keeper of the Land Register decided that ownership (including pro indiviso ownership) per se could not be restricted to a period of time.  He therefore refused to register these titles.  Inevitably, this caused quite a stir!

The pragmatic solution, pioneered by Robert Scott-Dempster, partner of Edinburgh solicitors Gillespie Macandrew LLP, was to go back to the original owner (the one who granted the pro indiviso titles) and with the consent of as many of the pro indiviso owners as could be found to convey the whole fishing title to a trustee (usually a bank).  The trust deed set out the basis on which title was held for the benefit of the timeshare proprietors and also regulated the basis on which the scheme operated.  Thereafter ‘ownership’ of a timeshare right was evidenced by the trustee’s register of owners and provision to timeshare holders of an ‘Ownership Certificate’.

It is worth noting that this problem of registration does not affect those schemes which adopted a more straightforward structure selling ‘Fishing certificates in perpetuity’ (with purchasers essentially becoming members of a club) with the title held on behalf of members by a suitable trustee.

The small print in how individual schemes were originally constituted has an enormous impact on their subsequent development and whether individual timeshare holders feel content with their lot.  One main drawback is that once the ship has left the port and the ownership shares or certificates are issued it is usually very hard to secure the necessary majority vote (up to 90 per cent in some cases) to effect significant changes to the scheme.

The River Eachaig in Argyll is a case in point.  Timeshared by Salar Properties in the 1980s, the company was later superseded as managers by the incumbent Bobby Teasdale, who remains the schemes only employee.  Criticially, there is no management committee of timeshare holders (widely acknowledged to be an essential part of any timeshare scheme), because apparently the constitution (drafted by Mr Teasdale’s solicitor) does not allow for one.  Some holders feel that as a consequence the scheme lacks the mechanism for proper accountability and they feel powerless to bring about change.  When I raised these concerns with Mr Teasdale, he said that if a formal approach was made to him he would undertake to put the matter of a possible management committe on the agenda for the next general meeting and give all members the opportunity to vote on it.

In summary, it is probably fair to say that the bigger schemes on non-spate rivers have, by and large, stood the test of time, whereas many of the others have struggled.  If anglers are catching fish, they will stay content and the arrangement will be made to work.  If not, there will be problems and at times acrimony.  Indeed, those buying into timeshares do need to be aware of potential pitfalls…caveat emptor (especially when what is on offer appears very cheap!).