House of Commons Library Research Briefing on Timeshare

Just recently a very interesting Research Briefing was published by the House of Commons Library, entitled “Timeshares: common problems faced by UK owners”, by Lorraine Conway. Now considering the varying subjects these researches will cover, this is actually a very good report, Lorraine has certainly done her research.

Her briefing begins with a summary of timeshare and the legislation regulating timeshare sales, resales and exchange contracts. It is then divided into:

  • Introduction
  • EU Regulation of timeshare and LTHPs
  • UK regulation of timeshare and LTHPs
  • Common problems with timeshare ownership
  • Consumer detriment
  • Parliamentary Questions
  • Where to go for help

The introduction explains briefly the definition of timeshare and LTHPs (Long Term Holiday Products) 

“For the purposes of the Timeshare Regulations 2010, the term “timeshare” means any consumer product that enables the purchaser to use one or more places of overnight accommodation for more than one occupational period under a contract that lasts for more than one year. The product does not have to be called a timeshare to come within this statutory definition.”

The last sentence is interesting as the Spanish Supreme Court made a ruling on this point regarding “Fractional Ownership”, we believe it was a Club la Costa case. In this ruling the court clearly recognised that the product sold even though no mention of timeshare appeared in the contract, it was timeshare and was covered by the relevant timeshare laws. The contract was declared illegal and therefore null & void.

The next paragraph includes the LTHPs, which are also known as holiday clubs, one well-known club is a Finnish-based company Holiday Club Resorts Ltd. Timeshare may not be mentioned but everyone knows it is timeshare. This section also covers those club memberships that offered discounted prices, most of these have already fallen by the wayside.

Using the model for timeshare as published by the Competition & Markets Authority (CMA) in 2014, she covers the basics of how timeshare works, or rather is supposed to work. This also included the “forming of an owners’ committee”, unfortunately, we all know too well these committees are stacked in favour of the developer or management company.

This is especially true for floating weeks and points owners, and in some cases resorts that have remained a fixed week. All unsold or returned weeks plus maintenance weeks are the responsibility of the developer or management company and they have the vote on every single week, whereas an owner who has two weeks only gets one vote. For the floating weeks and points systems, all the weeks are under the control of the management company that holds all those votes, members are given a vote as a courtesy.

The last section of the introduction again uses the CMA report, which lays out the profile of owners, where they own and the average age. It explains the In-Perpetuity Clause, which is illegal in Spain, contracts are limited to a maximum of 50 years and are not the responsibility of any heirs.

The last two paragraphs cover the Timeshare market and Management fees, firstly it is clearly pointed out that the difficulty in “exiting” from the timeshare “provides an opportunity for resale scams”. That is a little out of date, it is the “exit & claims” scams that are most prolific now.

Management fees, again the CMA report explains the problems of the increasing fees and the fact that at some point owners may be unable to afford them. They fall into arrears and find themselves being hounded and threatened with County Court action. One developer renowned for doing this is MacDonald Hotels & Resorts, which has a history of threatening and actually taking elderly and sick members to court, even to the point of taking their children to court when the parents have passed away.

All this is covered in further detail later in the full briefing (links at the end), the next section covers legislation with explanations of EU timeshare regulations and UK timeshare regulations, including the Consumer Rights Act 2015 & Consumer Protection Regulations 2008. There is also a brief explanation of the impact of Brexit on timeshare owners.

The briefing ends with Where to go for help, this is where AIT and owners have a big problem, The two organisations mentioned are not high on our list of recommendations. Firstly, Citizens Advice will more than likely refer people to the RDO (Resorts Development Organisation), which is funded by the developers and works in their interest and not the consumer. They will not interfere or mediate in any dispute between a member and their resort.

Then we have EUROC, the successor to the totally discredited TATOC or The Association of Timeshare Owners Committees. TATOC was funded by the industry, it backed MacDonald Hotels & Resorts when they converted all fixed week owners to a points-based membership, against the wishes of the owners themselves.

EUROC or European Resort Owners Coalition is a mirror image of ARDA-ROC, American Resort Development Association Resort Owners Coalition, it is funded by the industry and also from ARDA. We just wonder whose side they will be on.

As we said at the start, Lorraine has done a good job, especially if she had no prior knowledge of the subject, but there is a lot more involved that none of these reports covers. There are the problems of how it is sold, the lies that are associated with the sale, the brokering of loans by the very same sales staff and in many cases to carry out fraudulent sales. Silverpoint in Tenerife, Azure in Malta and not to forget the John “Goldfinger” Palmer timeshare fraud during the 1990s also in Tenerife. These are just a few of the frauds which began at the original points of sale continuing to the present-day scams on “exits & claims”, it is a minefield, to say the least.

The full report can be downloaded from the link below or the attached PDF

Attached PDF

SN05925 Timeshare Briefing

Link to CMA Report 2014.

Although we completed our Military Consumer Month with Report 6, the story does not end there, AIT will continue to highlight the negative impact unscrupulous timeshare sales and the associated loans have not just on Serving Military and Veterans but on all consumers. Our Military stories have certainly hit a raw nerve with many readers, it is probably because most decent people will appreciate what Serving means, the personal sacrifices and those of their families and the constant uncertainty of what tomorrow will bring.

It is clear, from what we have published so far, that the “Sales Agents” have no morals or any semblance of decent human behaviour, and as for their employers, their “SILENCE” speaks volumes.

We hope you had a good weekend, for many it was one of toil with the many fires raging around Europe and elsewhere, so from AIT a very big thank you to all the firefighters out there putting their lives on the line. As for Baby Dog, he commandeered not just one corner, but the whole sofa for the weekend.



1 comment

  1. Benn Dover

    Timeshare perpetuity needs to become illegal in the U.S. and 100% agree that the industries’ “silence” speaks volumes.

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