Many of the articles published on AIT revolve around the many legal aspects of timeshare which are so diverse the consumer is at a distinct disadvantage and very vulnerable to scams. Today we take a brief look at the problem faced by purchasers of timeshare and which laws apply to them in the event of any dispute which may need to be resolved using legal means.
For most people, the purchase of a timeshare is made when on holiday or as our US friends like to say, vacation, in Europe this may be another country, for the US primarily another state. So whose laws apply, are they the same everywhere, are we more protected in one place or another?
All questions that we as consumers never even consider, regardless of what we purchase until that point in time when it matters and we need a legal remedy.
When timeshare first emerged, it was a new concept, there were really no laws or regulations on the product, apart from what may have been covered by consumer protection laws. Basically, it was a free for all, no rules, regulations or laws specific to timeshare existed and as the industry developed so did the laws. Not always in favour of the consumer.
Europe unlike the US is a continent of different and identifiable countries with long independent histories, each has its own distinctive culture, language and traditions. They have their own legal systems and laws, these may differ considerably from country to country, just as they do in the US from State to State. There was no unification of laws regarding timeshare sales or how the industry is regulated in respect of consumer protection, it was a lottery.
Originally Europe was a coming together of countries for economic purposes, free trade and movement of goods, it was an answer to the post-war recovery of Europe, over time this developed into what we see today, the European Union.
Timeshare first became a focus for the EU during the 1980s and early 1990s, timeshare at that time was really taking off, and sales were through the roof as they say, with the focus on new developments being around Spain and Portugal.
Being new democracies and members of the EU, building their economies was paramount and this was seized upon by what we now know as the rogue developers. With plans for the resorts along with all the financial benefits, they moved in to sway local authorities for planning permissions and licenses. Once obtained, the sales began, sales known as off-plan, or as it would turn out for many, just a hole in the ground. For others, their problems would not surface for many years.
In order to protect consumers from the differing laws and regulate a product that is sold across borders with the main developers also being based in other countries, the EU began to develop what we now know as the EU Directives on Timeshare, with the first being in 1994. This set out to standardise how timeshare is sold in order to protect consumers and also allow businesses to flourish, across all the member states.
Directives were to be entered into each member state’s own laws, with the provision that each member is able to strengthen them if necessary, Spain was one of the first. Their law, known as Ley 42/98, was passed towards the end of 1998 and came into full effect on 5th January 1999. They are probably the toughest laws on timeshare in Europe, and to be honest, that is down to the practices of the industry itself.
We all know the outcome of this law being enforced, the malpractices of the developers have become public knowledge through the numerous court cases they are losing. A law that began as a directive from the EU, giving consumers the same protection no matter which country they purchased, has certainly put the cat amongst the pigeons. Spain endorsed this directive and added more protection which has had a very serious effect on the many sales companies involved.
From the articles submitted by our US friends, what was happening in Europe seems to be the case in the US as well, each state has their own laws with no real National or as our US friends would say Federal regulations to unify timeshare consumer protection.
Consumers purchasing timeshare may not have the same level of protection as they would in their own state, a fact that was prevalent in Europe, so it is most definitely a “legal lottery”.
A prime example is obviously the right to cancel after the signing of the contract without penalty. This varies from state to state, in some it is three days, others it may be up to 10 days. Do you know which one applied to you before the presentation?
Europe unified this with 10 days and subsequently increased that to 14 days, they also banned the taking of any payment even by a third party within that period, even increasing this period to 30 days if certain documentation is not provided. Hiding a CD with vital information in a welcome pack is not tolerated, the full story on this by Benn Dover, a Westgate Timeshare Hostage, was published in February and is found on the link below.
Unifying regulations does not have to be draconian, a balance between the consumer’s rights and those of the business must be balanced. Consumers have the right to protection from rogue practices and businesses, the genuine also need to be able to conduct their business freely but also consider their legal obligations. Self-regulation does not work, you pay to be a member of this type of body, so that leaves regulation to the individual states, a mish-mash of different regulations, no wonder the consumer is so confused.
In the end, it is down to the developers and their sales tactics to change, if you don’t want regulation, then clean up your act. The EU Directives on Timeshare are on the whole a good balance and a good place to start, Spain added more into their own laws due to the rife fraudulent activity in this sector. Unfortunately, even the big boys ignored the new laws for many years and are now paying a heavy price.
The following link is to the EU website that gives all the basic consumer information on timeshare, it also has links to full EU Directives on Timeshare, Unfair Commercial Practices and Unfair Terms in Consumer Contracts. They also have links on how Brexit affects UK citizens and their rights when purchasing in the EU. Consumer awareness and protection information are in one place for all to see and no matter what border you cross, they remain the same.
If you have any comments or would like further information please get in touch using either comments or the contact page.
The article today was written in a bit of a rush, the intended article had to be pulled due to a change in sub judice rules, so apologies if it is not as flowing as usual. I was also hampered by Baby Dog, who wanted attention.