Perpetuity – a simple dictionary definition: endless or indefinitely long duration or existence; eternity.
You remember when going to sales meetings to buy your timeshare, the nice man in the smart suit and tie told you that one big advantage about your new holiday ownership was the fact that it would be carried on to your estate after you passed away so your children and their children and so on would be able to benefit from the luxury holidays that you signed up to. You have to admit that makes the purchase appear to be a great investment into your family’s future. That was back in 1999 so fast forward…
It’s now 2020, the kids have grown up and fled the nest. They’ve told you that they don’t particularly want your timeshare, you may have personally discovered new ways to holiday and consequently find yourself not needing the timeshare any longer. “No problem” you think, a quick call to the resort to say “take it back free of charge” and presto! Problem gone. – If only it were that simple.
The staff at the resort remind you of the fact that you have a perpetual contract with them and that you are under a legal liability to pay your annual maintenance bill forever, failure to do so means you may well face legal action, oh and by the way…no we won’t take your timeshare back!
To many owners, perpetuity clauses have become a burden of immense proportions, owning a timeshare they no longer want, watching the maintenance bills go up every year and feeling trapped into something that they can’t get out of. What started as a dream is now a liability. Getting into a timeshare is easy. Getting out isn’t.
Legal turns illegal in Europe
The EU Directive 2008/122/EC which replaces an older Directive from 1994 (Directive 1994/47/EC), was created to provide significant protection for consumers against unwanted timeshare contracts and contracts on similar holiday products, which often bear considerable financial risks for consumers. Part of the legislation outlawed contracts with a term of greater than 50 years thus making perpetual contracts illegal.
Spain not only embraced this legislation but enacted their own laws. Spanish Law 42/1998 was created with the aim to protect purchasers of timeshare products. On January 15th 2015, a ruling of the Spanish Supreme Court had a significant impact on owners of Spanish timeshares. The Supreme Court ruled that all contracts signed after 5th January 1999 must have a duration period of less than 50 years, thus outlawing the practice of “perpetuity contracts” which had been prevalent since the 1980s.
In simple terms, if you have a Spanish timeshare where the contract included a perpetuity clause and you bought after 5th January 1999, you have an illegal contract that can be overturned and deemed null and void and you are entitled to financial compensation.
What about USA?
Although not so prevalent nowadays the perpetuity clause is alive and well in the States. Unfortunately, no such legislation as of that in Europe exists to protect either new or existing owners. Exiting a timeshare to get out of the perpetuity scenario is a complex issue but it can still be done. If you own in an American resort we strongly recommend that you take specialist advice, remember, resort owners and management companies thrive on your annual maintenance fees and they won’t let you go that easily!
And the UK?
Now that Brexit is underway, the Government will be sitting down and going through each individual European law and deciding whether they will be valuable to keep or amend as UK law or not. This means that consumers who bought their timeshare in the UK, in future may not be protected if the laws are to change. This is a situation we feel very strongly about and there will be news on this coming from us very soon.
Where do I go from here?
Take heart in the fact that it is very unlikely you will be stuck in a perpetual contract; specialist help is at hand.
With the experience we have gathered over the years we will be delighted to answer any questions this article raises and recommend either specialist exit companies or law firms who will be in a position to advise strategies for the removal of this burden.
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