Most timeshare owners have heard that the rules relating to both new timeshare purchase and existing ownership were the subject of an overhaul of European law some years ago. The Timeshare, Long-Term Holiday Product, Resale and Exchange Contracts Directive 2008/122/EC (the Directive) was adopted in March 2012. This Directive was designed to contribute to the important objectives of boosting consumer confidence in the timeshare industry and to eliminate the operations of rogue traders, which bring legitimate traders into disrepute and cause considerable problems for consumers.
As a “maximum harmonization” Directive, member States were obliged to implement its provisions in national law in a way that accurately reflects, does not exceed, or fall below the requirements in the areas it covers. Although the Directive offered substantial consumer protection not previously available, the Spanish were well ahead of the game and took it to a higher level.
TIMESHARE CLAIMS IN SPAIN – THE BACKGROUND
After an earlier EU Directive, Spain implemented Law 42/1998 which was enacted to protect purchasers of timeshare products. The law came into effect on the 5th January 1999. 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 be for a maximum duration of 50 years, thus outlawing the practice of “perpetuity contracts” which had been prevalent since the 1980s.
Encouraged by this ruling, more timeshare consumer challenges have been presented to the Supreme Court. It has since been confirmed that resorts are obliged to give clients a ‘cooling off period’ that is designed to give consumers adequate time to consider the purchase. It is illegal to accept any monies or have the client sign for any finance agreement during this period. The initial period of 10 days (Law 42/1998) was later extended to 14 days (Law 4/2012).
The law states that the timeshare contracts should state certain information, such as details of the apartment/unit/week(s) purchased together with the respective cadastral reference and failure to include that minimum contract content may result in the contract being declared null and void by the courts. In addition, the Supreme Court has interpreted the law and established a solid jurisprudence in that respect.
Failure to comply with the law requirements can end up with the contract being declared null and void with owners being eligible to receive a refund of money spent on the purchase of their timeshare plus interest and in some circumstances penalties. With the law now firmly on the side of the consumer, can you benefit?
HOW DOES THIS APPLY TO ME?
Firstly it would need to be established that you purchased your timeshare after 5thJanuary 1999. And obviously in a Spanish territory (Mainland, Canaries, Balearics). Furthermore, the purchase contract must have been issued by a Spanish registered company and must show one or more of the following now illegal clauses:
- Your contract length was more than 50 years or in perpetuity.
- You contracted a floating time or points backed timeshare.
- Your timeshare was not registered in the land registry.
- You were not provided with the exact details of the occupancy rights.
Reading contracts is not everyone’s forte so it is advisable to contact a competent Spanish lawyer for confirmation. Subject to a potential claim being established, you are as they say, good to go.
THE PROCESS
To reiterate, for timeshare claims in Spain, this is a legal process and will require presentation to Spanish courts. The lawyers will request all supporting evidence in order to compile and present the claim including but not exclusively the following:
- A copy of your timeshare contract, agreements and annexes signed with the Resort.
- Proof of all payments related to those agreements and annexes (loans included).
- Proof of payment of the instalments and/or maintenance fees and services.
Once all the evidence is collated, the lawyer will present this to court. The Spanish legal system is somewhat different to the UK. In the UK many court cases are won or lost on the law of “Precedent”, meaning that a century old court case may well be cited as evidence to assist the judge in making his decision. Spanish legal codes and laws are rooted in Roman law, as opposed to common law, which is based on precedent court rulings. In Spanish proceedings it is common that ‘the judge is bound by law and not by precedent’. So although many timeshare owners may have previously won their cases, the court will view evidence as if it is the first case ever presented because there will be little recourse to precedent.