Timeshares: common problems faced by UK owners

The Timeshare, Holiday Products, Resale and Exchange Contracts Regulations 2010 (SI 2010 No. 2960) (known as the “Timeshare Regulations”) came into force on 23 February 2011 and apply across the UK. The overriding aim of the Regulations is to enhance consumer confidence in the timeshare industry and eliminate the operations of rogue traders. The Regulations transposed into UK law EU Directive 2008/122/EC on the “protection of consumers in respect of certain aspects of timeshare, long-term holiday product, resale and exchange contracts” (replacing the previous 1994 Directive). The Directive was a response to the emergence of new holiday products and transactions.

The 2010 Regulations were subsequently amended by the Timeshare, Holiday Products, Resale and Exchange Contracts (Amendment etc) (EU Exit) Regulations 2018 (SI 2018 No. 1397). As far as possible, the amendments ensure that the protections available to UK consumers purchasing timeshares or related products remain the same following the UK’s departure from the EU.

The 2010 Timeshare Regulations (as amended) apply to the sale and marketing of the following types of contract:

• A timeshare contract – “a contract of a duration of more than one year under which a consumer, for consideration, acquires the right to use one or more overnight accommodation for more than one period of occupation”.
• A long-term holiday product (LTHP) contract – a contract of a duration of more than one year.
• A resale contract – a contract under which a trader, for consideration, assists a consumer to sell or buy a timeshare or a LTHP.
• An exchange contract – a contract under which a consumer, for consideration, joins an exchange system which allows that consumer 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.

The legal structure of timeshares varies from jurisdiction to jurisdiction. A further complication is that a timeshare might be located in one country, owned by a company based somewhere else, and managed from yet another country.

During the 1980s and 1990s, many timeshares were sold aggressively to British tourists who were on holiday and without access to independent legal advice. Some contracts were not written in English and included an obligation to pay expensive annual management and maintenance fees. Often timeshare agreements are made ‘in-perpetuity’ (i.e., as everlasting contracts). In effect, the contracts ‘lock’ the timeshare owner and – it now transpires – their children in for life.

Some owners would ideally like to sell their timeshare, but there may be little demand. Offloading unwanted timeshares and the problems surrounding the inheritance of them are concerns usually compounded by the need to pay yearly maintenance costs on the property. In some cases, this makes a big dent in the dwindling savings of elderly owners and is a worry looming for relatives who stand to inherit the timeshare.

The focus of this briefing paper is on the problems faced by some UK timeshare owners. It provides an overview of EU and UK regulation of timeshares and LTHPs. It also considers the exit problems associated with timeshares, focusing on “in-perpetuity” clauses. Finally, this paper suggests organisations that might be able to help timeshare owners.