Timeshare, Long-term Holiday Products, Resale and Timeshare Exchange
NEW REGULATIONS COME INTO FORCE ON 23 FEBRUARY 2011
The new Timeshare, Holiday Products, Resale and Exchange Contracts Regulations 2010 (SI 2010/2960) Legislation website) replace the previous timeshare legislation (the Timeshare Act 1992 (Legislation website) as amended by the Timeshare Regulation 1997 (Legislation website)).
The new regulations implement in the UK European Directive 2008/122/EC. See the link to the Europa website for a summary of the Directive: Timeshare and long-term holiday products.
The new regulations cover the marketing and sale of four types of contract:
- Timeshare, defined as a contract lasting more than one year under which the consumer buys the right to use any overnight accommodation for more than one period of occupation. In addition to stays in apartments or rooms this also includes, for example, timeshare in boats and caravans.
- Long-term Holiday Products (also often known as “Holiday Clubs”), defined as a contract lasting more than one year under which the main effect is that the consumer buys the right to obtain discounts or other benefits in respect of accommodation.
- Resale, defined as a contract where the trader undertakes to assist the consumer in selling the consumer’s timeshare or long-term holiday product contract to a third party, or to assist the consumer to buy these contract from a third party.
- Exchange, defined as a contract between a trader and a consumer where the consumer becomes a member of a timeshare exchange system. A timeshare exchange system is a system that allows a consumer to access overnight accommodation or other services in exchange for giving other persons access to the benefits of the consumer’s timeshare.
The regulations provide useful safeguards for consumers when buying any of the above contracts from a UK based company or any company selling in the UK. These include:
- a 14 day cooling off period during which the buyer can withdraw from the contract;
- the seller may not ask for or accept any payment from the consumer, or ask them to pay a third party, during the cooling off period;
- key information about the products and contracts in the consumer's preferred language on a standardised form, to be provided in good time before any contract is agreed. This information automatically becomes part of the contract;
- notice of the right to cancel the contract and a cancellation form also provided on the standardised form.
Some other key features:
- Payment for a long-term holiday product must be divided into equal annual instalments and the consumer has the right to terminate the contract as each instalment becomes due;
- Payment for a resale contract is not due until the sale of the consumer’s timeshare or long-term holiday product is completed, or the contract is terminated for other, agreed reasons;
- When any of the products covered by the regulations are advertised, the advertisement must make it clear how the key pre-contractual information can be obtained;
- An invitation to any sales or promotional event for any of the contracts covered must make the commercial purpose and nature of the event clear. All of the key pre-contractual information must be available to the consumer for the duration of the event;
- Marketing or selling a timeshare or a long-term holiday product as an investment is banned.
Guidance for Business
The Department has produced a guide for business to the requirements of the Timeshare, Holiday Products, Resale and Exchange Contracts Regulations 2010 (SI 2010/2960).
Not sure if the regulations apply to you? See the quick start guide.
Click here for the full guide.
Useful links
Advice for consumers is available at Directgov
OFT Bogus Holiday Club Scams leaflet
Resort Development Organisation
The Timeshare Association
Timeshare resale: a warning
We continue to receive reports about the activities of some timeshare resale companies who claim to have potential purchasers wishing to buy a consumer’s timeshare at lucrative prices but who seek up-front fees. From 23rd February 2011 anyone seeking up-front fees for this service will be acting illegally and should be avoided. Legitimate resale agents will abide by the law.
If in selling your timeshare you are offered a long-term holiday product (holiday club), the regulations apply to that purchase and you are entitled to expect that all of the provisions of the regulations will be met, including the division of payment to annual equal amounts mentioned above.
