Timeshare Compensation

In Europe alone, around 1.5 million European households are timeshare owners, more than a third of which are from the UK and Ireland, with the largest number of resorts in Spain.

Property, Real Estate and Fractional Ownerships have changed enormously in the last 20 years and in the last year alone, the Viking Group and Legal Exits has successfully assisted over 1000 multinational clients in relinquishing ownerships and claiming compensation.

The whole timeshare compensation process can be complicated and lengthy.

It is generally completed in two sections.

Firstly, it may or may not involve the relinquishment of the ownership which is a separate process. It is also very important to point out that not every owner is eligible to claim timeshare compensation and advice is crucial in knowing whether or not to proceed before any monies are paid for the service.

The information below is designed to provides a summary as to how the law has enabled claims to proceed and will give you a useful overview in order to assess whether a claim process and compensation may apply to you.

Legal Judgements and Rulings

The Spanish Regulation

Since the 1990’s the European Union has been concerned about complaints of abuse in ‘timeshare products’ and approved the European Directive 94/47/CE on 26 October 1994 to protect consumer rights.

This Directive was introduced into Spanish Law by the Spanish Parliament approving a first regulation on 15 December 1998.

However, time proved this regulation to be insufficient.

On 29 March 2012, following the European Directive 2008/122/CE, the Spanish Parliament validated the Real Decreto-Ley 8/2012, modifying the Timeshare Regulation. All EU Member States have subsequently incorporated the Directive into their national legislation.

This Directive covered timeshare, long-term holiday products, resale and exchange products and has set a dramatic precedent that has brought about major changes in the timeshare industry. The Timeshare Directive was designed to provide consumers with important protection against unwanted timeshare contracts and contracts for similar holiday products, which often involve significant financial risks for consumers.

In particular, it has extended consumer protection to additional holiday products such as, for example, timeshare contracts for a period of less than three years, timeshare resale contracts, timeshare exchange programmes and long-term holiday products.

First Ruling from the Spanish Supreme Court with reference to ‘Perpetuity’

On 15 January 2015 a ruling of the Spanish Supreme Court came into force as a result of the aforementioned regulations.

The Court ruled in favour of a Norwegian National who argued that the “perpetuity” clause of her timeshare contract with Anfi was illegal under EU law.

In this ground-breaking case against the Timeshare giants in Gran Canaria, the court ruled that the “perpetuity” clause violates Spanish law, in that a timeshare agreement signed after 5 January 1999 cannot exceed 50 years.

As a result, for the plaintiff, the whole contract became invalid and the court ordered Anfi to repay all costs as well as all of the interest incurred, all legal fees and double the amount that the client had paid for her down payment deposit.

This subsequently had a huge impact on timeshare owners who signed their contract after 5 January 1999 and opened up more opportunities for those owners hoping to escape the ties to their contracts.

Ruling from the Spanish Supreme Court regarding Cooling off period and the Provision of Information.

The Supreme Court Ruling has also endorsed that all contracts entered into in the past should have had a 14 day cooling off period, for the purchase of products valid across the whole of Europe.

This 14 day period would have allowed consumers to consider their purchase and ask questions about the products they have selected and withdraw from the contract if they wish to do so, with no penalties.

In addition sellers should have been prohibited from asking for any form of securing Deposit.

The Directive also stipulates that any timeshare sold since the beginning of 1999 by traders should provide detailed information to purchasers in good time before the purchaser commits to a contract.

Information must include the price to be paid, a detailed description of the purchase including the timeshare location and number, details of the apartment / unit / week (s)  and the exact period and length of stay to which the purchaser is entitled under the contract. This information must also be provided in the purchaser’s own language if he/she so wishes.

Finally before concluding any agreement the trader is obliged to draw the consumer’s attention to the existence of the ‘right of withdrawal,’ and the length of the withdrawal period and that It is illegal to have the customer sign a finance agreement during this period.

In Summary the main points of focus of the ruling are

  1. That there is a mandatory cooling-off period of 14 days from date of purchase/
  2. That customers must be informed of this cooling-off period.
  3. That no money can be accepted at the signing of the contract or within the 14 day cooling-off period.
  4. That all contracts must be in writing.
  5. That before signing a contract, certain information points must be made clear to the customer so that the customer is fully aware of all the conditions. Failure to do so shall render the contract null and void.
  6. The contract must be offered in the buyer’s language.
  7. That in the event of a cancelled agreement by the customer, for example during the cooling-off period, all other related financing agreement contracts are also cancelled.
  8. That the contract duration cannot last longer than 50 years.

Misrepresentation and Omissions

The Misrepresentation Act 1967, covers situations where a statement is made carelessly or without reasonable grounds in describing its authenticity.

Some of the most common mis-representations that have been seen relate to the declaration that, because timeshare is a quality product,…… that it can provide a huge return on an investment for the customer.

In addition, sellers have been known to guarantee that the timeshare market is easy to navigate and it will be simple to exchange or even sell your timeshare at a later date.

Though many companies have a high standard of training for their staff, many large organisations have suffered from the fact that some of their sales personnel took to presenting a product in such a way that the customer did not truly perceive the reality of what he or she was buying.

If at the time of purchase, your choice to proceed and secure a property depended on the trader’s announcements and the purchase is not what was guaranteed, then it is time to consider making a legitimate compensation claim with respect to mis-representation.

These are some of the most common statements and tactics that have been pointed out.

  1. Some customers were told that the special offer being proposed for purchase was only accessible until the end of that day and that prices would then go up.
  2. Customers were told that their timeshare or purchase is a financial investment that will increase in value.
  3. That maintenance costs will not increase.
  4. That the resort would buy back the property after a certain number of years.
  5. That they could easily sell their timeshare or purchase.
  6. That the product they were signing up for was not a timeshare or Holiday Ownership product but another product entirely.
  7. By not providing Information clearly – a vague and confusing presentation amounts to an omission and the agreements signed must not omit any material information that the average consumer needs that would allow them to make an informed transactional decision.
  8. The agreements cannot hide or provide unclear, unintelligible, ambiguous material, obscuring the intent of the commercial practice so that it is unclear.
  9. In addition customers have complained that with numerous other types of products such as Points or upgrades, they have realised that their property value is still not enough to book their desired holiday, does not offer them greater flexibility or make their property more valuable.
  10. Finally, many clients were sold their ownerships on the premise that their home resorts and facilities for which they pay fees would only be accessible by other members. Over the years many timeshare resorts have begun to rent their accommodation on online with hotel booking websites for non-timeshare owners and this loss of exclusivity has lead to much frustration and again misrepresentation at point of sale.

If any of the above information applies to you, then it has never been more important to get good advice and we encourage you to get as much information as possible from our complimentary, no obligation consultations.

Our team of in-house lawyers collaborate with a network of law firms, international lawyers, legal scholars and contract lawyers. All are experienced experts in timeshare related contracts worldwide.

Here at Legal Exits we are very proud to always provide you with honest, carefully considered advice in order for you to make the right decisions for you and your family.

Our professionalism allows us to offer a very high level of personalised service in every language, available to you every day of the week, by phone or mail.

From the moment you take our timeshare cancellation service, you will receive a reference number and a designated contact person to offer you full legal support in all relative areas of your ownership whether you wish to relinquish or file a legal claim.

Contact Us

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