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Timeshare Consumers Association

"Timeshare" & "Long Term Holiday Products"  Directive

A Summary

Link to the latest amendments  -  19 May  2008

On June 7th 2007 the European Commission published a  proposed new law to regulate the sale of timeshare and holiday club  membership.  This Directive will eventually replace the existing Timeshare Directive.

Full details of the  proposed Directive are at  http://ec.europa.eu/consumers/cons_int/safe_shop/timeshare/index_en.htm
The proposed directive achieves three objectives established by the  European Commission :-
NOTE:- (Art x) refers to the Article number in the proposed Directive.
1.    Definitions:-


(Art 2a  )   "Timeshare" is  a contract lasting for more than one year where the consumer purchases rights of use of accommodation for more than one period of use.

(Art 2b) "Long Term Holiday Product" is a contract  lasting for more than one year where the consumer purchases rights to discount and other benefits for holiday accommodation, travel etc..

(Art 2c) "Resale" is defined as an agreement whereby a trader helps a consumer to  buy or sell a timeshare or a long term holiday product.

(Art 2d) "Exchange" is  an agreement for a consumer to join a scheme to enable them to modify the place and/or time of  use of a timeshare period.

(Art 2 (2))  The "one year" is calculated to include any tacit extension included within the original purchase agreement.
 

2.    Disclosure


(Art 3) The trader must provide, in writing, to the purchaser a number of key items of information

In addition to the full details of the parties to the agreement and  date and place of signing of the agreement:-

3.    The Contract
(Art 8 (2)) The Directive applies to any agreement relating to the use of property situated within the EU or to any agreement signed within the EU

(Art 4  (1))  The contract must be in one of the languages of the Community, chosen by the consumer

(Art 4 (3))  Before signing the contract the trader must explicitly tell the consumer about the cooling off period.and the absolute ban on the taking of a deposit.
 

4.    Right to Cancel


(Art 5 (1)) Traders must provide a 14 calendar day cooling off period

(Art 5 (2)  & Art 5 (3)) If the information required in Annex I or Annex II is not provided in writing then the cooling off period starts from the date the consumer receives the relevant information.  If the information is not received with three months then the cooling off period is three months and 14 days

(Art 5 (4)) A written cancellation posted within the cooling off period suffices.

(Art 5 (5) & Art 5 (6))  A consumer who cancels will not be liable for any costs unless a national laws allows such costs, which must be clearly expressed in the purchase agreement.
 

5.    Ban on deposits


(Art 6 (1)) Any payment by the consumer  for for any purpose  is banned during the cooling off period including when the cooling off period is extended .  There is also a total ban on any payment being made to a resale trader until the sale is completed.
 

6.    Other matters:-


(Art 1 (2)) During implementation into national laws Member States may provide more stringent terms to ensure a higher level of consumer protection in respect of:-

(Art 7 (1)) Any related agreements (loans, exchange company membership, etc.)  automatically terminate following a proper cancellation of the purchase agreement.

(Art 9) Sanctions for breaches of the law are left to individual countries..

(Art 12)  No date is - yet -  given for the implementation of the Directive into national laws.

(Art 13) This proposed Directive should be reviewed not later than five years after implementation into national laws.

(Art 14)  The existing Timeshare Directive (94/47/EEC) will be repealed

 

Update 19 May 2008

The original draft Timeshare Directive proposed by the European Commission has been updated following a public hearing and a number of debates in the IMCO committee of the European Parliament which today approved the final draft . This draft is expected to go before the full Parliament in July to be ratified.
The following changes have been made to the original draft proposed by the Commission:-

1.  The cooling off period will be 21 days.

2. The ban on the taking of any money or security etc. during the cooling of period is reinforced. The ban continues to apply if certain information from the check list is not provided by the trader.

3. The list of information to be disclosed on the check list is simplified to that considered material to a purchasing decision but now include:-

a. Details of annual fees and how consumers are able to influence the fees.
b. Exact details of discounts etc. (for holiday clubs)
4. The definition of timeshare' is marginally changed to "Any purchase of rights to use moveable or immovable property on a recurrent basis in isolation or together with travel and other services for a period of one year or greater. But not so as to affect the purchase of multi-annual reservations of hotel rooms etc."

6. The law will apply to the purchase of properties located within the EU or when the purchase is made within the EU. The timeshare law would still apply even if the law of the contract is outside the EU

7.    Payments for membership of Long Term Holiday Products (holiday clubs) will be phased over the years of membership with the members right to cancel, and stop making payments, at the end of each phase period.

8.    The ban on a resale broker taking any money from a timeshare owner is re-inforced,

A proposal to make the new law a "regulation" from Brussels  was dropped as were plans to have a licensing system for traders,
 

May 2008