Timeshare Mis Selling: The Three Main Factors

Many of the people who approach us for assistance have in some way been mis sold by a timeshare company and its representatives.  There are many examples of crooked sales practice – from promising non-existent luxuries such as onsite golf courses or health spas, to exaggerating the efficiency and scope of the exchange systems – and these are all valid reasons to put forward a claim of mis selling in order to exit your timeshare contract.  However, there are three key factors that crop up time and time again and are usually rock solid, legal reasons for being able to extricate yourself from a burdensome timeshare agreement.

In order to protect consumers, the European Parliament created a directive that clearly laid out what was allowed when selling timeshare products throughout the continent.  This directive not only protects the rights of people purchasing timeshare but also ensures that they are totally aware of what they are getting into and lays out the content and information that must be disclosed to the customer before they sign any contract.

If a company mis sells a timeshare product by violating the directive’s code, as ruled by the Supreme Spanish Court in 2015, the agreement can be considered null and void.  The three main factors involved are as follows:

Perpetuity Contracts

When a timeshare rep covered this aspect of the contract – basically a clause that ties you and your family into the contract for ever – they would often put a positive spin on things suggesting that it was a great legacy for future generations who would be able to enjoy wonderful holidays forever.  The reality however is that when you pass away your children end up with an unwanted long term holiday product and the financial burden of ever increasing maintenance fees.  In order to deal with this unfair practice the directive addresses the issue of contract duration in Article 3:

“The duration of the system shall be between three to fifty years from the date of registration of the legal system or the date of the registration of the building as finished.

Therefore if the building was built before 1998, the 50 years will start in 1998 and if the building was built after 1998, the 50 years will commence when the construction has been registered as finished”.

In short this clause is saying that contracts that are in perpetuity are illegal and give the customer the legal basis on which to terminate the contract and in some cases claim for compensation.

Floating Weeks

In order to have more inventory to sell some timeshare companies began to offer their customers a floating week system.  Rather than sell a specific week in a specific apartment they offered an entitlement to stay at a resort.  This type of arrangement often led to very limited availability meaning owners were unable to holiday at the times or in the places they required.  The directive dealt with this problem in Article 9 saying:

“Express reference to the real personal nature of the right transferred. What have you bought, which date, what money has to be paid”.

Essentially what this section means is that the floating week system is actually illegal because the contract does not clearly identify the weeks and apartments that you are purchasing.  When you buy a timeshare the paperwork must specify exactly the week and unit that you intend to buy.  If it doesn’t then the agreement is null and void and in some cases you may be able to claim a full refund.

Advance Payments

The way in which timeshare was often sold was with a high pressure presentation culminating in a deal on the day.  Many companies would push customers into making a purchase there and then and would take a sizable deposit from them, often many thousands of pounds.  This deposit was non-refundable meaning that people had no choice other than to complete the deal or face losing their money.  To combat this shady practice the directive prohibits advance payments in Article 11 stating:

“Any Advance payments made by the buyer to the seller before the deadline for exercising the option to withdraw, or whilst the buyer retains the power to terminate the contract as cited in the previous article, are prohibited”.

Basically this clause means that if you were coerced into handing over any money on the day of purchase or at any time during the 14 day cooling off period then you have a case for exiting the contract and possibly the grounds for a compensation claim.

As with all timeshare contractual disputes the legal nuances require the engagement of an experienced professional.  If you have been affected by any of the issues in this article then get in touch with the Timeshare Help Centre for a free, impartial consultation.