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Timeshares

Published Tuesday, June 4, 2019

This Commons briefing paper provides an overview of EU and UK regulation of timeshares and other long-term holiday products.

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The Timeshare, Holiday Products, Resale and Exchange Contracts Regulations 2010 (the ‘Timeshare Regulations’) came into force on 23 February 2011 and apply across the UK. The Regulations transpose 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.” The ultimate aim of the Regulations is to enhance consumer confidence in the UK timeshare industry and eliminate the operations of rogue traders.

In brief, the Timeshare Regulations 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;
  • 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; and
  • 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.

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 appears – 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.

This Commons briefing paper provides an overview of EU and UK regulation of timeshares and LTHPs. It also considers the exit problems associated with timeshares, focusing in particular on ‘in-perpetuity’ clauses. Finally, this paper suggests organisations that might be able to help timeshare owners.

 

 

 

 

 

 

 

 

 

 

Commons Briefing papers SN05925

Author: Lorraine Conway

Topic: Consumers

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