As we have written on a number of occasions the EU Timeshare Directive 2008/122/EC which replaced Directive 1994/47/EC is a robust piece of timeshare consumer protection legislation now adopted into all member states statute law. According to EU statistics the economic significance of the timeshare sector is demonstrated by the fact that roughly 1.5 million European households are timeshare owners, with more than one third coming from the UK and Ireland, the highest number of resorts being located in Spain.
The terms of the law seem pretty straightforward, under the Directive, adopted on 14 January 2009, developers must provide detailed information to consumers in good time, before the consumer is bound by any contract, including the price to be paid, a description of the product and the exact period and length of stay that the consumer is entitled to under the contract. This information should be provided in the consumer’s own language if they so choose. Also one of the most poignant inclusions was the 14 day cooling off period, during which, no monies must pass hands.
Where our confusion comes from is the requirement for the “exact period and length of stay that the consumer is entitled to under the contract”. Let us explain why.
The points conundrum
Over the years the basic form that timeshare represented has all but disappeared. Very few developers still retail fixed or floating week contracts, now the selling of points based contracts is pretty much universal. Now under the EU Directive it’s easy to see that the fixed week product satisfies the requirements of the Directive, however do points contracts?
Given that all points based contracts neither offer exact periods nor lengths of stay that the consumer is entitled to, here is the conundrum, are we to assume that all points base contracts are in contravention of the Directive? As a points owner, whilst the points you purchased will be effectively attached to a “home” resort, nowhere in your contract will there be a specification of exactly the period of use or how many days/weeks of use. Back to the old style fixed week system it was easy to see when you could use your timeshare as you would be allocated a week number. Below is a chart showing the dates of occupancy, right up to 2030. We have cut short at week 20, but you get the idea:
From this we can see that if you own week 20, then your allotted time this year is from May 17 to May 24, easy. Question, how can points replicate this? If they don’t, and they don’t, then surely if the timeshare is owned and purchased anywhere within the EU and is points based, then it’s in contravention of the Directive.
The fallout
Whilst the EU Directive stops short of specifying minimum and maximum terms of timeshare ownership contracts, both cooling off and specified times of use and duration are included. As we pointed out earlier, according to EU statistics, the highest numbers of timeshare resorts are located in Spain.
Apart from all the Directive terms being adopted by Spain, their statute law has gone a step further. Rolled into the Directive is the inclusion of Spanish law 42/98 which did stipulate that the maximum term for a timeshare contract should be no longer than 50 years. When the EU Directive was adopted into statute law, law 4/12 was decreed replacing 42/98 but including all its salient points. In effect, Spanish law reinforced the already robust EU Directive.
At TCA we have seen many court judgements from Spanish courts challenging the old style “perpetuity clause” all of which broke the 50 year rule. Apart from that, most points based judgements also brought into the illegality not only the term but also due to lack of property and/or use information. According to law 4/12, the property, i.e. apartment number and location plus exact terms and dates of use must be included, of course, points based contracts make no such mention.
TCA comment
Taking Spain aside, would it not be realistic to say that because of the requirement of the Directive regards exact period and length of stay that the consumer is entitled to applies to all member states. All EU member states have now adopted the Directive so the answer must be yes.
If any part of the Directive is contravened by points based contracts then it must be assumed that a legal challenge can be mounted, no matter which member state the contract is issued in. TCA don’t profess to be lawyers or even legal experts but we can read and understand English. The English we refer to is taken directly from an EU press release surrounding the implementation of the Directive.
If you believe we have failed to understand plain English, please let us know. If on the other hand you agree with our interpretation and own a points based timeshare, maybe you should investigate where you stand legally. If other member states act like Spain then illegal contracts may be ruled null and void, this normally results in a full return of purchase costs.
Most points based owners will have bumped into availability issues on more than one occasion. Now if their contract stated exact period and length of stay, this may not happen. With the Directive stopping short of specified location or resort, getting where you want may still present problems but if you knew you purchased week 20 then at least in 2024 you would know that your 7 day holiday will begin on May 17th….. Somewhere.
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