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Saturday, 9 October 2010

Timeshares and holiday clubs

Many people own timeshares and enjoy using them, but before you buy one you should understand your rights. There are also differences between timeshares, which have additional consumer protection, and holiday clubs which do not.

What is a timeshare?

Timeshare means buying the right to spend a set amount of time in:

  •  a specific holiday property
  •  a group of identified properties

 You are entitled to do this every year for at least three years.

What is a holiday or vacation club?

These give you a club’s ‘promise’ of good value holidays for a set period - sometimes a lifetime. The schemes often look like timeshares, but membership of the club is not linked to any particular property. Therefore the club is unlikely to be able to fulfil its promises over the long term of the contract.

Holiday clubs are not covered by timeshare law, so there are no automatic cancellation rights if you change your mind.

Bogus holiday clubs exploit this with high-pressure sales techniques, such as long presentations, to get customers to sign a binding contract.

Your timeshare consumer rights

If you buy a timeshare in the European Economic Area (EEA), you are covered by the Timeshare Directive. In the UK the Timeshare Act 1992 and the Timeshare Regulations 1997 put the directive into practice.

EEA countries are Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Republic of Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, the Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain (including the Canaries and Balearics), Sweden, UK.

The rights include:

  • a 10 day ‘cooling off’ period so you can cancel the contract without penalty, this increases to 14 days for UK timeshare sales
  • sellers cannot ask for or take a deposit during the cooling off period
  • the right to a brochure and written contract setting out basic information about the timeshare property in your language
  • sellers must provide written notice of the right to cancel the contract and a cancellation form

What is not covered by timeshare law

Be aware that the following are not covered:

  • holiday or vacation clubs
  • timeshare resale services - see below.
  • consumer to consumer timeshare sales - the second-hand value of most timeshares is far less then the price when new
  • timeshare in floating vessels, such as house boats and pleasure boats.
  • timeshare lasting for less than three years

Before you commit yourself to buy

Don’t part with any money. Timeshare sellers cannot ask for or take deposits during the cooling off period. You should get everything in writing and make sure you read and understand it all.

Check whether the company is a member of a reputable trade association with a code of practice, for example the Resort Development Organisation (RDO).

Don’t be rushed into signing anything. If you are unhappy, walk away.

Timeshare resales

Timeshare resale companies approach timeshare owners and offer them a marketing service for an up front fee. These companies often say they have  buyers waiting who will buy at high prices. However, once the fees are paid sales rarely take place. Where they do, it is often at a selling price that barely covers your costs.

You should seek legal advice before committing to selling your timeshare rights to, or with, the help of any company. You can contact the Citizens Advice Bureau or a solicitor. Also, you could ask for advice from the Association of Timeshare owners.

Holiday prizes

Beware of scratch cards and telephone calls that tell you that you have won a prize of a free holiday. The holiday prize may be used to get you to attend a timeshare or holiday club presentation.

Where to get more help

If you have any problems with a timeshare and you are in the UK, first contact Consumer Direct who will report the problem to your local trading standards office responsible for enforcing the timeshare law. If you are abroad at the time you will need to contact that country’s trading standards department.

The Association of Timeshare Owners (TATOC) offers independent information and advice to timeshare owners and consumers.

Legal advice

If you need to take legal advice you can contact Consumer Direct, the Citizens Advice Bureau or a solicitor.

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