Timeshare property rights grant the right to spend a specific period (e.g., one or more weeks) in a vacation property on designated dates over several years. These types of vacations are very popular in many European Union countries.

Example of a Common Scenario in Timeshare Contracts:

“The Beinu couple had just arrived in Spain when they were approached on the street and invited to participate in a scratch lottery, where they supposedly won a free vacation. They were thrilled! However, they were then put into a taxi and driven to a hotel, which took three hours. Once there, they were subjected to persistent sales pressure. I have health issues and cannot sit for long periods—I just wanted to get away. In the end, they made us sign a pile of papers and pay a €1,000 deposit as the first payment for a trial period in the timeshare property.”

Companies offering timeshare property rights have been operating in Europe since the 1960s. While some countries, such as Portugal, the UK, and France, had national regulations governing such purchases, there was no EU-wide regulation. This allowed sellers to operate with considerable freedom.

On October 26, 1994, the European Parliament and Council adopted Directive 94/47/EC on consumer protection in contracts related to acquiring rights to use immovable properties on a timeshare basis.

This directive introduced several consumer protections:

  • The right to receive a prospectus with all necessary information before signing the contract;
  • A minimum 10-day withdrawal period to prevent aggressive sales tactics (the right to cancel the purchase);
  • A ban on accepting deposits from buyers during the withdrawal period.

The Need for New Regulations

Since the 1994 directive, the market has evolved significantly. New products and contracts have emerged that were not covered by the existing legal framework. Consumers purchasing these newer products did not receive the same level of rights or protection. For example, newer timeshare products allow consumers to use different types of properties (e.g., cruise ships, trailers, or canal boats) or involve contracts lasting less than three years.

Recognizing the challenges faced by buyers, on January 14, 2009, the European Commission adopted Directive 2008/122/EC on consumer protection in relation to timeshare rights, long-term holiday products, resale, and exchange contracts. This directive aimed to close the loopholes in previous legislation by introducing clear, modern, and simple rules. The directive covers products such as holiday clubs, resale contracts, and exchange contracts.

Consumer Protections Under Directive 2008/122/EC:

  • Pre-contractual Information: Before any contract becomes binding, the trader must provide clear and accurate details regarding their identity, the product being acquired, duration, price, service scope, potential participation in exchange schemes, and whether they adhere to a code of conduct. This information must be presented in the language of the consumer’s country of residence.
  • Written Contracts: Contracts must be in written form, on paper or another durable medium.
  • Withdrawal Rights: The trader must inform the consumer of their right to withdraw from the contract and the prohibition on advance payments during this period. Consumers have 14 calendar days to cancel the contract without providing a reason. The withdrawal period starts from the date of contract signing. If the consumer decides to exercise this right, they must inform the trader in writing before the withdrawal period expires.
  • Advance Payment Ban: Any form of advance payment, financial guarantees, money reservations in consumer accounts, clear acknowledgment of debt, or any other form of compensation to the trader or any third party is strictly prohibited during the withdrawal period.

This directive ensures greater transparency and protection for consumers entering into timeshare agreements within the EU.