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The EU Shared Ownership Directive

February 24, 2011

February 23, 2011 is the date when all member states were obliged to implement The EU Shared Ownership Directive. Though the UK has upheld legislation providing buyers of timeshare and fractionals with a mandatory 14-day cooling off period, only now has that regulation been applicable across Europe.

The EU timeshare directive will enhance consumer protection regarding timeshares and holiday products, preventing rogue traders from exploiting loopholes in the existing law.

In the UK, the Timeshare, holiday products, resale and exchange contracts regulations are being introduced from 23 February. Laws implementing the directive have already been introduced in France, while Sweden, Slovakia, Finland, Austria and Germany are expected to comply this month. A number of other countries have yet to announce the date the directive will become law.

EU member states are obliged to implement the directive, including a 14-day cooling off period with an absolute ban on processing payments during this time.

The move follows a 27% increase in complaints about timeshare and related products to the UK European Consumer Centre last year.

Paul Carter, managing director of timeshare group RCI in Europe, said: “[We] fully support the introduction of common rules across Europe and increased protection for the consumer.

“This will ensure the conditions for fair trading throughout the industry and potential purchasers will be safe in the knowledge that they are being offered similar levels of protection wherever and whatever shared ownership product they buy in Europe.”

However Amanda Diamond, assistant editor of Which? Travel, said: “In principle the new directive looks great, and is good news for anyone looking at investing in in a holiday club or timeshare. The outlawing of taking payment upfront for these products and the stronger regulation of resale services are particularly welcome.

“During a recent undercover investigation our researchers experienced high pressure sales techniques used by some timeshare reps to get unsuspecting holidaymakers to part with their money, and hopefully this new legislation will see an end to this.

“But, for this directive to work rigorous enforcement is needed. As each EU member state will be responsible for policing this in its own country, we may find that this enforcement is pretty hit and miss.”

New rules for traders in timeshare and holiday-club contracts (all UK)

Relevant to
Businesses that sell timeshare or other long-term holiday products such as holiday clubs, timeshare resale agents and timeshare exchange businesses

From 23 February 2011, new legislation will apply to the sale and marketing of the following contracts:

  • timeshare – a contract of more than one year’s duration giving the consumer the right to use accommodation for one or more overnight stays and for more than one period of occupation
  • long-term holiday product – a contract of more than one year’s duration giving the consumer primarily the right to obtain discounts or other benefits in respect of accommodation only, or accommodation with travel or other services
  • resale – a contract under which a trader assists a consumer to sell or buy a timeshare, or a long-term holiday product
  • exchange – a contract under which a consumer joins an exchange system, which gives them access to overnight accommodation or other services – in exchange for granting to other persons temporary access to the benefits of the rights deriving from that consumer’s timeshare contract

‘Overnight accommodation’ includes not only apartments, chalets, etc – but also boats, caravans, etc.

If you offer any of these types of contract, you will have to comply with new rules on:

  • advertising
  • providing information up-front and in a standardised form
  • the form and content of the contract
  • the language of the contract and pre-contractual information

Consumers will have the right to withdraw from:

  • any type of contract within 14 days
  • a long-term holiday product contract when payment of an annual instalment becomes due

In relation to payments:

  • there will be a ban on payment before the end of the 14-day cooling-off period
  • for long-term holiday products, payment by equal yearly instalment

Where consumers withdraw from the contract, related contracts – including credit agreements arranged through the timeshare or holiday product seller – are automatically cancelled.

Full title of regulation
Timeshare, Holiday Products, Resale and Exchange Contracts Regulations 2010 (SI 2010/2960)


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