As you are all aware, the MRL resolutions apply to a number of resorts, in different countries.
Many of the resorts comprise properties that are situated in Spain.
It is insufficient for the Committee to rely on a paragraph in the constitution in support of the resolutions. This is a complex area, as was explained in our previous advice.
We are dealing here with a dual system. On one hand we have properties that are situated, and subject to Spanish law. On the other hand we have Club’s with constitutions which have, on the main, nominated scots law as the governing law.
The Property (The Resorts)
We have done some research, and it is our understanding that under Spanish Law there is no equivalent of Trust Law hence timeshare weeks are known as intermittent real rights. In other words each week creates a legal interest in the property.
Interestingly under Spanish Law:
“Ownership is the right to enjoy and dispose of a thing, with no limitations other than those established by law. The owner has a right of action for recovery against the holder and possessor of the thing.” Article 348 of the Spanish Civil Code.
In other words, under Spanish law ownership is defined as an absolute and exclusive right of enjoyment, including a power of free use. Fundamentally the change under the constitution is depriving you all of the free use and enjoyment of your property.
Also, article 397 of the Civil code:
“No co-owner can make alterations to the communal property without the consent of the other co-owners even in the case of such alterations being advantageous for everyone.”
It is correct that under Spanish Law majority rule wins the day when it comes down to questions arising from, say, maintenance of communal property – see article 399 of the Civil Code. This is not the same however as saying that the majority can interfere with the minority’s actual use of the property.
We also refer to Article 399 of the Spanish Civil Code:
“Every co-owner shall have full ownership rights to his or her part, as well as to its rent and profits, including the right to sell, transfer or mortgage it, and also the right to assign its use and enjoyment to a third party…”
The resolutions therefore purport to interfere with fundamental property rights in Spain. We are all struggling to understand how the Club could ever pass a resolution that would prevent a timeshare owner turning up at the Resort and occupying their designated week. The property on the ground is dealt with by property laws in Spain, and for the reasons set out such a resolution would interfere with those rights.
The Club
Your club has one predominant object. To secure the use of fixed weeks for the benefit of its members.
There is case authority in England that strongly suggested that the predominant object of a Club cannot be changed with unanimity amongst the members.
We refer to the case of Doyle v. White City Stadium Limited (1935). Whilst the facts are different, you will note the paragraphs that we have highlighted where the Judge make the point that you cannot alter the predominant purpose of the club.
In the case of Thelluson v. Valentia (Viscount)(1907) the Court confirmed that a principal object of a club could not be altered even by unanimous vote! Please note that this is an obiter authority as on the facts of that case the proposed amendment to the Objects did not involve a removal or alteration of a principal object of the Club. In this case, however the objects clause was far wider than the clause that we can see as part of timeshare schemes where the principal object of the Club’s is to secure an interest in specific property, for specific periods of the year. There is an underlying trust that shares the same objects as each timeshare club. Furthermore, the consumers in the case of these timeshare, relied on these objects before purchasing timeshare weeks in perpetuity.
This would appear to be the position in English law. I suspect the position is very similar under the law in the Scotland.
For more information regarding this article or assistance in any other timeshare related issues please contact the TCA on 01908 881058 or email: info@TimeshareConsumerAssociation.org.uk