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Timesharing/holiday clubs



A foreign holiday on a sandy and sunny beach is very often the expense which an average consumer may not afford. But dreams are human domain, therefore we all dream of alternative for expensive holidays, which would be to the same extent pleasant and luxurious. Timesharing is very often called a magic solution for all these consumers who may not afford holidays in a luxurious resort. One stresses that due to timesharing even at low budget, one may experience "heavenly" leisure (and not only once!).

The dreams of consumers are not left unnoticed by organisers of timesharing. 'Wonderful holidays until the end of life' - in this way usually sounds the promise made by timesharing companies. Yes, it may be truth,... but the conclusion of timesharing agreement is a decision requiring a deep thinking.

What is timesharing?

Timesharing stands for purchasing by the consumer a right to use the housing building or premise, in an indicated time, each year and obliging to pay lump sum remuneration for entrepreneur.

Timesharing products, i.e. buildings/apartments are mainly located in Spain, on Canary Islands and in Portugal.
In practice, it may look in the following way - after concluding so-called timesharing agreement, a consumer may spend holidays in a two-room apartment no. 100 in a resort of the melody name in Maspalomas (Gran Canaria), in each 18th calendar week for 30 years.

Why timesharing may turn out to be something we will regret?

Despite the fact that the timesharing agreements are praised by organisers as modern, cheap and flexible way of spending holidays, timesharing may hide many traps lurking for inexperienced consumer.

For example, consumers very often agree to pay a very high price zfor entering the timesharing system. Then, they are left for the favour and disfavour of an entrepreneur.

Timesharing, from its own definition, is a long-term agreement, i.e. requiring a very precise thinking and calculation of even the pettiest costs. What will we do in the event that after a couple of years the building in which we have an apartment, will be neglected or very difficult to access due to reduction of airline connections with a certain place...

From the data gathered from European Consumer Centres Net (ECC net) we can infer that, as a rule,everything starts in an innocent way...

The relaxed consumers are "recruited" during holidays spent in pleasant places when their vigilance is reduced. Timesharing organisers mislead consumers by beguiling them with great prizes for participation in (of course) free presentation of their products. The invitations for such type of meetings are given out in hotels, even already at the airports. Usually consumers come back from such a holiday not only in good mood but also with the share in a real estate in sunny Spain.

Unfortunately, a good mood may end soon...

Another case of 'recruiting' consumers (more often practised in Poland) are presentations organised by representatives of timesharing companies. Such presentations are organised in exclusive hotels, often by foreigners (a person who knows Polish signs agreements only with consumers). Consumers are beguiled with the promise of the cheapest on the market and most comfortable holidays of their life. Such events are combined with consumption and contests.

Do all the timesharing organisers want to cheat on us?

In the timesharing organisation there are involved various entrepreneurs, also the ones who base their activity on experience, reputation and legal provisions. Only such entrepreneurs may save us unnecessary stress.

Still other ones are so-called organisers of holiday clubs (we will comment on them in the further text).

Unfortunately, in many cases we deal with cheaters charging fees (which are never returned) from very often unaware consumers.

YOUR RIGHTS

Within the latest years the timesharing agreements has been gaining not weakening popularity, mainly because they provide the purchaser with a repeated right to use a specific tourist object in the periods following after each other and without incurring significant costs related to the purchase of such an object.

Timesharing structure allows for making the costs of holidays independent upon the possible changes of prices of organised tourist trips. Additionally, it gives a consumer a certainty as for the possibility to use a specific object in a certain time.

Timesharing constitutes one of the main areas of interest of European Consumer Law due to many reasons. Especially, the attention is focused on numerous abuses and infringements of interests of purchasers of timesharing shares - consumers. Timesharing is a relatively new structure - therefore the solutions adopted here are not very often known for an average participant of the trade. A reason of many controversies became the lack of unified and clear legal structure of timesharing. It causes reference to various (sometimes contradictory and difficult to agree on) legal solutions e.g. from the scope of law of real property, contract law. Additionally, timesharing agreements are very often extensive which causes difficulties in learning the wording of the above. The timesharing organisers also don't shun from using contractual standards the provisions of which are not individually agreed with contracting parties.

The source of European Consumer Law of the significant meaning for timesharing is Directive 94/47 of October 26th, 1994 on the protection of purchasers in relation to some aspects of agreements concerning the acquisition of rights to use the real estate in an indicated time (O.J. L 280 of October 29th, 1994) However, the consumer's rights and entrepreneur's duties on the domestic level are regulated by Act of July 13th, 2000 on the protection of purchasers of the rights to use the housing building or premise in an indicated time each year and on change of Acts; Civil Code, Code of Misdemeanours and Act on perpetual registers and mortgage (Journal of Acts no. 74, item 855 amended).

minimum harmonisation, i.e. member states may, for the protection of consumer, adopt more rigorous provisions than it is provided by the directive.

Characteristic features of the directive are the following:
Developed information duty on the side of the professional,
The consumer's right to waive the agreement without giving the reason, within 10 calendar days from signing the agreement by the party (if a purchaser uses the right to waive the agreement, it is not demanded from him to cover any costs)
Timesharing agreement is concluded for at least three years.

More detailed information on timesharing may be found at web site:
http://www.europa.eu.int/scadplus/leg/en/lvb/l32016.htm.

All the European documents, including consumer directives, may be found at web site of E.U legal actsEurolex.

Who is covered by protection?

Pursuant to directive provisions, 'purchaser' (of shares in real estate) stands for each physical person who acquires such a right (or for the benefit of whom there is established a right) for the purposes remaining without the relation with his professional activity.

The Act defines protection rules of purchaser, who on the basis of the agreement, concluded for at least three years, gains from the entrepreneur a right to use the housing building or premise in an indicated time each year and is obliged to pay for the entrepreneur lump sum remuneration. By saying “purchaser" we mean a physical person concluding an agreement outside the scope of operated business activity.

Professional's information duty - general information

A characteristic feature of consumer directives (as well as acts that implement them to the domestic law) is a developed information duty on the side of the professional. It is grounded by the fact that a consumer as a weaker and less experienced party of the agreement deserves a developed protection in a form of exhaustive information.

In the European Union a consumer is always entitled to know what and from whom and on which conditions he purchases.

Which information (and in which form) should a consumer receive?

An entrepreneur is obliged to deliver to each interested person a written prospectus before the contract conclusion.

The prospectus should contain at least:

  1. forename, surname and address of entrepreneur and when an entrepreneur is a legal person also his name (company), seat and address, indication of legal form of operated business activity and surnames of individuals authorised to its representation; if an entrepreneur is entered into a proper register, he is also obliged to give a number, under which he was entered,
  2. if an entrepreneur is not the owner of the housing building or premise - forename, surname and address of owner and when an owner is a legal person, his name (company), seat and address and legal ground for disposition by the entrepreneur with this housing building or premise,
  3. specifying the wording of the right to use the housing building or premise in an indicated time each year, together with indication if a purchaser may exchange them or transfer the right for the performance of the above and rules of the transfer of this right and costs related to the above,
  4. specifying the circumstances for the execution of right, which are mentioned in point 3, required by law of the country in which there is located the housing building or premise, with the indication if they were met and which of them still needs to be met,
  5. specifying the housing building or premise or indicating the way of marking them among real estates which are at the disposition of the entrepreneur if a prospectus or agreement specifies the housing building or premise - their detailed description and location, and in case of specifying the way of marking them - list of housing buildings or premises which are at entrepreneur's disposition,
  6. if a purchaser's right relates to the housing building or premise, which are designed or under construction - data related to:
    1. advancement state of construction works and state of infrastructure,
    2. deadline of construction completion,
    3. building license (building license number and indication of authority that issued the above together with address),
    4. devices allowing for proper utilisation of real estate,
    5. legal securing of the completion of construction works and return of receivable to the purchaser when the construction works are not completed, with the indication of conditions related to the execution of security,
  7. data related to the services concerning the utilisation of housing building of premise, especially its maintenance, thrash removal, water supply, electricity supply, gas supply and conditions of using these services,
  8. data related to the facilities destined for common utilisation, especially swimming pool, sauna and conditions of the use of these facilities,
  9. data related to the rules of administration of housing building or premise and incurring costs of its maintenance, repairs and renovations,
  10. data related to the amount of lump sum remuneration for the acquisition of right and base for calculation of other receivables, including charges concerning the utilisation of real estate, especially costs of management, taxes and local fees, costs of repairs and renovations,
  11. information on the purchaser's right to waive the agreement, with the instruction of the required written form of declaration of will, with indication of addressee of declaration of will on waiver, deadline in which one may use this right together with notification that the deadline for the waiver from agreement, which is mentioned in art. 6 section 1-3, is kept if a purchaser before the lapse of the above sends onto the indicated address, a declaration of will on waiver from agreement,
  12. information on costs which, in case of incurring them by the entrepreneur due to conclusion and waiver from the agreement, will be subject to the return by the purchaser in case of his using the right to waive this agreement,
  13. information on the way of obtaining additional data related to suggested agreement.

In which language should the prospectus be drawn up?

The prospectus should be drawn up pursuant to the will of the interested person, in official language of the country in which the person has a domicile or the country of which he/she is a citizen.

If a purchaser lives in Poland, the prospectus should be drawn up at least in Polish.

Why learning the prospectus is so important?

On the moment of signing the agreement, the prospectus becomes its integral part. Additionally, in case of contradiction of the wording of agreement with the prospectus, the parties (with petty exceptions) are bound by the prospectus.

Can the information given in the prospectus be changed?

An entrepreneur may, before agreement conclusion, change the information contained in the prospectus if the changes are the aftermath of the circumstance on which he had no influence. However, the changes must be presented to the purchaser in writing still before agreement conclusion.

Stage of agreement conclusion

One should remember that the agreement on utilisation of tourist object, in an indicated time, is the base for relation binding entrepreneur with consumer.

The agreement should contain:

  • Purchaser's forename, surname and place of living;
  • Indication of time each year in which the purchaser may use the housing building or premise or way of its indication;
  • Marking the housing building or premise which the purchaser may use or indication of the way of its marking;
  • Specifying time for which the agreement was concluded;
  • Stating that the execution of the purchased right is not related to costs, burdens or obligations other than the ones stated in the agreement;
  • Specifying the place and date of agreement signing by each party.

Can one give up the already concluded timesharing agreement?

A consumer is entitled to waive a timesharing agreement.

It is expressed in the fact that a purchaser may waive the agreement without giving reason within 10 days of the delivery of agreement document to him.

It is conducted by submission, for the entrepreneur, of a written declaration of will on waiver.

In case of using the right of waiver, the agreement is regarded as not concluded and consumer is not held liable towards the entrepreneur.

Holiday clubs

Holiday clubs tempt potential customers with low prices and promises of wonderful holidays. In theory, members of such clubs are provided with the best conditions and return of costs in case of withdrawal of such a program.

Membership in the club authorises the consumer to stay on specified days in the apartment of holiday club. The agreements do not specify a certain specific apartment to which one is entitled. They neither specify its location. The representatives of timesharing companies stress such a "loose" solution as an advantage (flexibility). However, nobody says about the fact that a consumer is not protected by rights stated in the directive.

Example - agreement is concluded for 2 years and 11 months.

Notice!
Membership in the Holiday club is not in the same way protected as timesharing.

What does timesharing look like in practice?

  1. Consumers (usually tourists staying on holidays) are recruited by representatives of companies dealing with timesharing. Unfortunately, such companies usually use unfair practices in order to gain consumers, i.e. prepare presentations joined with the purchase of shares (prizes for participation in presentation), make promises of participation in unbuilt real estate. Additionally, the consumers are tempted with a promise of low prices. They are requested to make money deposits which are not returned.
  2. Consumers often sign agreements without learning their wording, i.e. they don't read the provisions properly, they don't use the advice of specialised lawyer, they however believe the word assurances of the representatives of timesharing companies.
  3. Consumers often don't calculate the real costs which they will have to incur.
  4. Timesharing companies, in order to omit E.U provisions (Directive 94/47), conclude with consumers agreements for a period shorter than 3 years.
  5. From experience of ECC net there results that timesharing companies on the whole are hard to identify - e.g. there are difficulties in establishment of seat which is not registered, is not given in agreement or after the agreement conclusion was changed.
  6. Timesharing companies are also interested in amicable settlement of consumer disputes.

WHAT IS WORTH REMEMBERING

  1. Never take decision rashly, think twice!
  2. Be assertive! Don't be afraid to refuse a person who is trying to convince you in the street, home or hotel that his offer is 'the most advantageous and apartment in sunny Spain is the cheapest form of spending holidays'.
  3. Promises and prices may be tempting...but only in paper.
  4. Before signing the agreement, try to get as much information as possible about the product or service. Ask an organiser of timesharing whether you may take the agreement (and all accompanying documents) in order to read and think calmly. If he has nothing to hide, he will have nothing against doing that.
  5. Don't be tricked into promotions, which depend a significant decrease of price upon the immediate decision (they very often have the form of - 'Today Only').
  6. Compare offers - remember: purchase of share in apartment in Spain is not doing shopping in supermarket.
  7. Don't sign any documents under pressure of time or individuals.
  8. Demand efficient information from an entrepreneur.
  9. Demand explanations and ask about all provisions which seem to be unclear.
  10. Think whether you like monotony - you may spend the same week, in the same place, for many years. Of course, you may join the system in which the participants exchange their shares (e.g. RCI) - however it is connected with additional costs. You have no guarantee that you will spend your holiday where you want.
  11. If in a certain year you have no time or willingness or still worse if you are sick, anyway you have to pay remuneration for your participation.
  12. Think calmly if the organised trips are more reasonable, cheaper and more flexible solution.
  13. Watch out unfair clauses in the agreement, e.g.
    • banning waiver of agreement
    • imposing a duty to pay compensation
    • imposing a duty to pay an exorbitant contractual indemnity
    • stating competent courts remote from the place of consumer's domicile
    • stating the costs unclearly
  14. Remember that you may waive the agreement within 10 days, without incurring costs and giving explanations.

NICE HOLIDAYS WISHES EUROPEAN CONSUMER CENTRE!!!

 

  
 
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