The “Tiempo Compartido” (Timeshare), misnamed as “Multiproperty”, involves the acquisition of a property between several buyers, who occupy this property, in shifts, during the course of the year.
A proportional amount to the duration of the occupation and the time of year you choose has to be disbursed . Furthermore, by paying a fee, you can enter an exchange system that allows you to redeem the stay in the apartment for another in a different country.
In Spain, at last, a national legislation was enacted to be applicable to timeshare, it was Law 42/98 of 15 December, on the Rights of Timeshare Real Estate and Tourist Use and Tax Regulations, which came into force on 7 January 1999. The standard is the result of the transposition of the EU Directive 94/47/EC of 26 October 1994, which until now was the only rule that could be invoked in case of conflict originated in Spanish territory.
This law was an important step in strengthening consumer protection in this area of the tourism situation so conflicted.
Among the most remarkable features of the “Spanish Timeshare Act 42/98” are:
- It applies to contracts signed from 7 January 1999 until 16 de march 2012, both inclusive.
- The legal cancellation period for Spanish contracts is 10 days.
- It applies in all Spanish land - including the Balearics and Canaries.
- The purchase of "points" from a points club is not included in the law.
- The law applies to rights of use for 3 years or more (up to a maximum of 50 years).
- Cancellation must be in writing and sent by the buyer not later than "Day 10" - a fax is an acceptable method of cancelling. The address for cancellation should be on the purchase contract.
- Any advance payment from the buyer during the cooling-off period is prohibited..
- The buyer is not required to pay any costs if he cancels within the cooling-off period.
- Any related finance agreement will be automatically cancelled (at no cost to the purchaser) if the buyer cancels within the cooling-off period.
- No mention of the words "ownership", nor “property” may be made in the contract.
- The purchase contract must be in the language of the buyer provide that language is a recognised European Union language.
- The buyer will have to pay VAT in addition to the purchase price.
- All owners must be registered - the cost of the notary (lawyer) and registration may be added to the purchase price.
- Buyers must be given a comprehensive list of information - failure to do this extends the cooling-off period by three months. See the list below for the required information.
Information that must be included in a timeshare purchase contract:
1. Date of contract and, data included in the deed regulating the use regime (date when the deed was executed, name of the notary, date registered in the Land Registry).
2. Nature of the rights that will be sold, and expiry date of the use in turn regime.
3. Description of the building, its location; description of the lodging (including registered data, and exact duration of the turn negotiated in the contract).
4. Where appropriate, it must be mentioned that either the construction of the real estate is already finished or that the real estate is still under construction. In the latter case, the current stage of construction, the completion deadline, building license, a quality statement of the materials used for construction, either the banker’s reference or the insurance as a guarantee of the end of the building site, and the buyer’s residence in order to communicate him or her the end of works, must be mentioned.
5. Complete price to be paid by the buyer, indicating the updating procedure (for the management fees) which, in general, will be made according to the retail price index. However the parties of the contract can arrange another updating method. Also, it must be mentioned the amount of taxes to be paid by the buyer along with an indication of the notary and registry expenses, where appropriate.
6. Information of rights of cancellation and unilateral solving
7. A statement that any payment in advance made by the buyer is forbidden during the cooling-off period or the right of unilateral solving.
8. The Community services and installations and conditions of use.
9. Possibility of participating in exchange services of periods of use.
10. Identity and place of residence, as well as registration in the Business Register of the owner or promoter; of the seller (indicating here the relationship between the owner and the seller at the moment the contract was signed) and of the buyer and of the third party in charge of the exchange service.
11. Duration of the use in turn regime, with a reference to the deed that regulates it.
12. Information on buyer’s rights in order to check the ownership and the charges of the real estate (the residence and the fax number of the relevant land registrar), in order to demand a deed and to register the buying of the right in the Land Registry.
13. Place and signature of the contract.
The buyer must receive a copy of the contract containing all the above information.
Obviously, as is clear from the above, the law on timeshares is complex, and can often be different depending on where and when the contract was signed.For this reason, it is always best to seek legal advice before signing a timeshare contract. Similarly, if you are trying to escape a timeshare contract, legal advice is also recommended.