Timeshare and other long-term holiday contracts in the EU
Affected by Brexit?
Buying a traditional timeshare - the right to spend more than one period of time in the course of more than one year in a given property or properties - can be quite a minefield. The same is true of joining a long-term holiday scheme, such as a discount holiday club, which gives the right to discounts on accommodation or related benefits, sometimes in combination with travel or other services, for more than one year.
Both conventional timeshares and the various long-term holiday schemes which have emerged over the years can involve a substantial long-term or permanent financial commitment. They also entail additional recurring costs (e.g. taxes, maintenance and insurance).
Contractual terms - your rights
The most recent EU rules, give you protection against unscrupulous traders when signing contracts for timeshares or long-term holiday schemes. These rules apply to contracts concluded as of 23 February 2011 (or later in some EU countries).
The rules also protect you when signing:
- resale contracts (you pay a professional to help you sell or buy a timeshare or holiday club membership)
- exchange contracts (you pay to join a scheme allowing you to use accommodation or other services, while also allowing others to make temporary use of your own timeshare).
Your rights extend to different types of timeshare property including:
- cruise boats
- canal boats
What you should know before buying
Before you decide to go ahead, be aware of your rights which include:
- Being informed in full of the terms of the agreement before you sign. You must be given the details in writing in your own language (if it is an official EU language).
- A cooling-off period of 14 calendar days during which you can decide to withdraw from the contract without giving any reason. If you do not receive the standard withdrawal form required by the EU rules, this cooling-off period is extended to 1 year and 14 calendar days.
- An extension of the cooling-off period to 3 months and 14 calendar days if you do not receive full information about the product you are buying.
- The seller can never ask you to make an advance payment or a deposit during the cooling-off period.
- When buying holiday club membership, payment must be made in equal instalments at yearly intervals.
- You also have the right to terminate the holiday club contract, without incurring any penalty, from the second instalment onwards. Once you receive the request for the next payment, you have 14 calendar days to give notice of termination to the trader.
- If you have also signed a linked exchange contract, this is also automatically terminated - at no cost to you - if you withdraw from the timeshare contract.
- If, under a resale contract, you have employed a professional to help you sell your timeshare or holiday club membership, this professional cannot take any payment from you until your timeshare has been sold or the resale contract is otherwise terminated.
If your contract is a timeshare or long-term holiday scheme contract, you are covered by these rules even if the seller claims that they are not applicable.
Unfair commercial practices and potentially unfair contractual terms
Other things to be aware of include:
- unlawful misleading sales techniques such as the "winning scratch card" ploy: you win a prize and are taken to collect it to a timeshare sales event where you are pressed into signing a contract
- suspicious timeshare resale offers, especially where you are persuaded to buy another property with the promise of selling the existing one: in these cases you could end up with 2 timeshare properties that you neither want or need!
- suspicious offers from people claiming to be lawyers in another EU country to represent you, for a fee, in that country's courts, in your dispute with the seller
- suspicious offers from people pretending to be able to "reclaim", for a fee, your payments to the timeshare seller
- your timeshare seller (resort) may not unduly limit your right to privately sell, rent out or exchange your timeshare rights; or restrict your access to services; or raise maintenance payments without justification. If he does so based on the standard terms of your contract, these terms may be breaking the Unfair Contract Terms rules and therefore may not be binding on you.
- consider the long-term, or even everlasting, effect of committing to a timeshare. Think carefully whether you will still want/be able to use it in some 10 or 20 years. Will your children, who may inherit your timeshare and be obliged to keep up the maintenance payments, want to use it?
For advice on problems in the country where you live contact your national consumer organisation, in case of a dispute with a seller in another EU country, contact the European Consumer Centre Network (ECC-Net) to find out about your rights and the protection you are entitled to.
You can also try to settle your dispute out-of-court using an alternative dispute resolution procedure. If you bought your timeshare or long-term holiday contract online, you can also submit your complaint online via the ODR platform.
Timeshare contract cancellation: citizen vs trader
Patrick from Ireland signed a timeshare contract with a provider in Malta in 2013. The trader did not give him the standard withdrawal form or inform him that no advance payments or deposits could be accepted during the cooling-off period.
He paid a deposit of EUR 1 260 and set up a direct debit charge of EUR 122.50 per month for 2 years.
To book a holiday in one of the trader's properties, he needed a special code number from the trader, but despite repeated requests this was never supplied.
One year on, he was still unable to book any holidays so he chose to withdraw from the contract, relying on the rules extending the withdrawal period to 1 year and 14 calendar days. By this stage he had paid EUR 2 730.
The trader would not accept the withdrawal or refund Patrick's money.
Having sought advice from ECC Ireland, Patrick took legal action through the European Small Claims procedure, and the court ruled in his favour. Yet the trader still did not pay up. Following intervention by ECC Malta, Patrick finally got his money back.