Timeshare is the right to spend a period of time (for example one or several weeks) in holiday property at indicated dates during a year or couple of years. Such holidays are very popular in many Member States of the European Union.
The European Commission’s Directorate General for Health and Consumer Protection in its website has described a typical situation in which one consumer has signed a contract regarding timeshare:
Mr. and Mrs. Bain were on their first holiday in Spain when they were approached in the street, given a scratch card and told that they had won a free holiday. They were delighted! “But then we were bundled into a taxi and taken to a hotel miles out of town for a three-hour hard sales pitch. I am not very healthy and can’t sit for long. I was just so desperate to leave. In the end, we were asked to sign a lot of paperwork and pay €1 000 as the first instalment for trying a timeshare property”.
Companies that offer to obtain timeshare have acted in Europe already since 1960, even though several countries, like Portugal, Great Britain and France have introduced in their rights norms, that govern such kind of purchases, however in the European Union level such laws were lacking, thus sellers could act rather freely. On 26 October 1994 there was adopted the Directive 94/47/EC of the European Parliament and the Council on the protection of purchasers in respect of certain aspects of contracts relating to the purchase of the right to use immovable properties on a timeshare basis. The Directive provided for the following protection: right of the purchaser to information in prospectus before the contract is signed; tried to prevent sales with pressure, determining at least 10 days period of notice of termination (right to withdraw from the purchase); prohibition to the companies to accept from purchasers advance payments before the end of the period of notice of termination.
However since adoption of the Directive in 1994 a lot of changes have happened in the labour market. There are new products and contracts which are not covered by the scope of the legislation. Therefore the consumers, who are buying those, do not have the same rights or protection level. For instance new products may allow the consumers to use different types of property (for example cruise ships, trailers or channel boats) or a contract may be valid for less than 3 years.
Recognising the problems which the purchasers face on 14 January 2009 the European Commission adopted a new Directive 2008/122/EC on the protection of consumers in respect of certain aspects of timeshare, long-term holiday product, resale and exchange contracts. New Directive aims to fill the „gaps” of the previous Directive, replacing them with clear, up-to-date and simple provisions. New provisions will improve consumer protection, expanding the scope of existing provisions, as well as including new products that have appeared in the market, for example holiday clubs. The new Directive includes also resale and exchange contracts. The new provisions will ensure that each and every consumer in the whole territory of the European Union is equally protected. Directive 2008/122/EC repeals the previous Directive 94/47/EC. The new Directive came into force on 23 February 2009; the Member States shall implement it in their national laws till 23 February 2011.
Directive 2008/122/EC of the European Parliament and of the Council provides the following protection of a consumer:
- Before the consumer is bound by any contract or offer, the trader shall provide the consumer, in a clear and comprehensible manner, with accurate information about the trader himself, the product to be obtained, term, price, amount of the service, is it possible to join an exchange scheme, has the trader signed a code of conduct. Such information shall be drawn up in the language of the Member State in which the consumer is resident.
- The contract shall be in writing, on paper or on another durable medium.
- Before the conclusion of the contract, the trader shall explicitly draw the consumer’s attention to the existence of the right of withdrawal, and the ban on advance payments during the withdrawal period. The consumer is given a period of 14 calendar days to withdraw from the timeshare contract, without giving any reason. This period shall be calculated from the day of the conclusion of the contract. Where the consumer intends to exercise the right of withdrawal the consumer shall, before the expiry of the withdrawal period, notify the trader on paper of the decision to withdraw.
- Any advance payment, provision of guarantees, reservation of money on accounts, explicit acknowledgement of debt or any other consideration to the trader or to any third party by the consumer before the end of the withdrawal period shall be prohibited.