Much has been written by TCA on the subject of scam companies saying that you are not really out of your timeshare contract and may be liable for all the back years of maintenance fees owing. Firstly we will look at the two possible scenarios then take a look at the law.
The first scenario is that you contacted your developer and expressed a desire to terminate your ownership, whatever procedure or request for a fee followed, you carried out the termination in accordance with whatever rules were laid down, then you may be pretty well assured that you are out. This action will normally be accompanied by a letter of confirmation from the developer.
The second scenario is for those who simply stopped paying their annual maintenance on the assumption that this action would cancel ownership. This course is never recommended unless taken on instruction from a bona fide timeshare lawyer. On average, maintenance bills are relatively small taken independently, and as such don’t warrant aggressive action, however when a number of missed payments are added together, then action becomes financially viable. So just because you are not being chased, this doesn’t mean the debt has gone away.
Spanish law on debt
Needless to say law in any country is always complex and Spain is no different. Originally debt of this nature was covered by Article 1964 of the Spanish Civil Code, at this time a debt such as annual maintenance fees had a limitation period of 15 years. Law 42/15 enacted in 2015 cut the period from 15 years to 5 years, there was a transition period up until 2020, after that the five year rule applies. However, this transition period still gave lazy creditors a margin until 2020 to be able to claim 15 years; but the Supreme Court jumped into life, better late than never, by an order on June 3, 2020.
In a judgment numbered TS 242/2020 of June 3, the Supreme Court refers to debts prior to the entry into force of Law 42/2015, taking into account its transition period. Without going into too many technical issues, what the Court said is that there is no reason for the administrator or president of a Community of Owners to take more than 5 years to claim an evident and continuous debt. “Moreover, warnings were issued about the negligent nature of conduct in this regard. That is, the Supreme Court certifies, establishing jurisprudence that the prescription period for this type of debt is always, and should have been, 5 years.
FYI, Jurisprudence implies creating a body of law and methods for interpreting the law, studying the relationships between law and society, and predicting the effects of legal decisions. In other words, taking complex legislation and expressing the effect for ordinary or laypeople to understand.
TCA comment
The important point to take from this is that a maintenance fee debt remains a debt for five years so at any stage during that period an unwanted letter or court action could present itself. Albeit we have seen that a court in Spain would take a dim view of a creditor waiting till the 11th hour to present such action, the law as they say is the law.
What can we take from this; firstly, non payment of maintenance fees can have serious repercussions, at least for 5 years but more importantly, if you have had no bills or reminders from a timeshare developer for at least 5 years then the debt cannot be chased.
What else we can take from this is if you receive a cold call telling you that you could end up being charged for “all” the back years of maintenance, the 5 year rule applies. Once again, we would emphasise that if you went through the developer motions of exiting correctly, there will be no such demands. Forget the Diamond Hilton scenario or the Club la Costa Wyndham venture, if you’re out then you’re out.
As a final point, if you hit a brick wall when trying to exit direct with the developer and adopted the won’t pay route, we would advise that you take action to remedy the situation because if you aren’t over 5 years down the line, there may well be a still active debt. In a number of these latter cases specialist assistance may be required to extinguish the debt and terminate ownership, here TCA can advise.
Just because the debt may be in Spain but you live in the UK, it may still be chased. In a letter TCA had sight of concerning maintenance fee debt relating to a timeshare held with the Onagrup in Barcelona, the debt had been passed to a law firm in Barcelona who made it very clear that they had partner firms in the UK who would follow through with the debt, how true this is we don’t know, but wouldn’t advise putting it to the test.
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