Spending one or more weeks per year in an exotic, European destination is an offer that many people would consider. If you are a seasoned traveler in the United States, or if you are tired of visiting the Caribbean or Mexico, the option to purchase a timeshare overseas may seem appealing, particularly if you have relatives living abroad.
Timeshare opportunities in Europe are not new, but there is an increasing number of dissatisfied North American owners who have purchased them. In Europe, the laws have changed within the past ten years to help prevent fraudulent sales practices, and to give buyers a longer opt-out period, to reconsider their timeshare contract.
How the European Commission Moved to Protect Consumers
The European Commission met in Brussels, on May 31, 2012 to pass legislation called the “Timeshare Directive”, based on Directive 2008/122/EC. The laws both apply to European residents and North American tourists, who may be compelled to enter a timeshare contract.
The new directive regulated the timeshare industry in the EU by:
Making it mandatory for sales teams to provide a detailed pre-contract debriefing to review all aspects of the timeshare contract before signing.
Making each country and laws regarding timeshares harmonized.
Contracts must be translated into the language of choice for the buyer.
Providing cancellation options for timeshare contracts less than three years after purchase.
Implementing a 14-day absolute rescindment for all European Union countries. Anyone purchasing a timeshare in Europe has 14 days to cancel the contract and receive a full refund. The consumer is not required to provide any reason for the request to void the contract.
Resorts may not request additional fees for cancellation of timeshare contracts within the rescindment period.
Making it illegal for timeshare sales teams, resale agents or other service providers to require an upfront deposit or advanced payment during the 14-day cooling off period.
New payment rules for long-term holiday products and contracts.
One of the interesting aspects of the EU regulations is that they specify it is illegal for a timeshare sales professional to refer to the contract as an “investment”. Since a timeshare property is never actually owned (lease of time only), and since financial institutions report timeshare ownership as a liability (expense) and not an asset that can be sold, it is illegal to present the opportunity as something that will make money over time.
Any other supplemental contracts that are related to the purchase of a timeshare become null and void, if the consumer has terminated the contract within the 14-day rescindment period. That includes bonus offers (or additional point benefits that are billed separately), or rental administration agreements (where assistance is provided to rent out unused vacation weeks). This legislation helps to reduce the influence of resellers on owners who are seeking assistance to cancel their timeshare obligation.
Timeshares in Europe can be a little more diverse, and canal boats, cruise ships or even luxury caravans or trailer communities are also subject to new legislation, that is designed to protect consumers from what is often an unscrupulous industry. For mobile types of timeshare vacation packages, shorter term contracts are now required, including tacit renewals for shorter lease periods.
We wanted to share this information on our blog to demonstrate how the European Union is moving to regulate the timeshare industry, and provide more assurances for consumers. For Americans, it is important to remember that a timeshare purchased in Europe is subject to the EU laws regarding rescindment, but that you still have options if you want out of your timeshare contract, providing you act quickly.