Is There a Turning Point with the New Timeshare Directive?

On the 22nd of October 2008 the European Parliament adopted a new Directive for the protection of consumers in respect of certain aspects of the timeshare industry and how it is sold. The new legislation will focus on several areas that inform and protect consumers and will give them more confidence when investing in timeshare in the future.

The initial benefits of Timeshare ownership seem to have been lost in a fog of misrepresentation. The loopholes and omissions in the 1994 Timeshare Directive quickly became apparent and were subsequesntly exploited by unscrupulous companies working around the detail and content of the Directive.

The major problems facing the timeshare industry and its consumers were the lack of comprehensive pre-contractual information, so consumers could not make an informed choice. The new contracts will have to contain information covering the purchaser’s rights to cancel the contract at any time during their ownership and the legal and financial consequences of doing so.

This will avoid cases like the one that happened to Mrs Brown. Her husband passed away and she tried to dispose of their timeshare only to find the contract they had signed wouldn’t allow her to do so. Furthermore she was forced to keep paying the annual maintenance fees which were increasing year on year. Unfortunate and unfair as it may seem, timeshare owners are often trapped in their ownership till the end of their days.

The new rules will also require companies to provide a detailed disclosure statement describing all features, amenities, and rules of operation of the timeshare, including an explanation of the consequences of non payment of annual fees. In the past, timeshares were repossessed in the event of non payment, whereas nowadays the defaulting client is more likely to be taken to court to enforce these payments.

The nightmare of annually increasing management fees would be prevented and timeshare owners could just relinquish their “right of use” without fear of harassment and threats over unpaid management fees.

The new directive will also clamp down on the up-front fees being charged by alleged resale companies. Fees for selling a vendor’s timeshare will now only be payable on the completion of the sale. Hopefully this will put an end to the fraudulent activity of the resale predators and allow people to genuinely dispose of their timeshare.

Could this new regulation be a way to get back to the real significance of Timeshare? Then perhaps people could start enjoying the “luxury lifestyle at affordable prices” concept once more as they do in the USA.

Historically the enforcement of legislation in protecting timeshare consumers has been very poor; however the Directive is not to become law across Europe until the 23rd of February 2011, although some Member States may have it in place before this (The UK expects it to be passed into law by June 2010).

Perhaps this time the legislation will be successful and will help to polish the tarnished reputation of the European timeshare industry.