Getting out Advice by Costa-luz-Lawyers

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Spanish Law on Timeshare. Getting out?

All contracts trading rights to use one or more real estate in Spain during a specific or specifiable period along the year are under this law whatever place and date of contracting.

Time share rights are those which give to the holder the facultiesfor use and enjoyment of an independent dwelling, withexclusive character, for a specific period of time within the year. It includes the necessary furniture for this use and the complementary services. It is regulated in Spain by a Law dated 1998 and have been extended by a 2012 Law.

The Spanish regulation considers time-share as a type of seasonal rental. The holder of time-share rights does not acquire ownership rights but the right to use the property for a specific period of time. The duration of these rights is not indefinite; the developers of these type of complexes needs to specify the period for the enjoyment of these rights which will always need to be between 3-50 years. Ownership remains being the developers.

Because ownership resides with the developer´s, they can sell ownership rights always with the limitations derived from the existence of other person´s use and enjoyment rights on the sold unit, which will remain for the contracted period.

Provision 1.4 of Law 42/1998 prohibited the denomination of those rights as “multi-ownership” or any other way containing the word “ownership” “ owner” or “property”.

For this reason, any contract signed in Spain contained the word “ownership or property” (propiedad) is null and void and you have rights to the refund of money paid plus legal interests.

In Spain, the denomination that was finally chosen, as most appropriate, descriptive and loyal to Law is “derecho de aprovechamiento por turno”, which means “right to use and enjoyment in shifts”

Publicity or promotion of these type of developments can never either contain the word “propiedad”(property or ownership)

The timeshare scheme can only be formed on a building, property or set of them which are architecturally individual or separated. All independent units included in it, with the exception of premises, should be subject to the scheme. The building needs to have, at least 10 units.

The same building can be subject at times to a different tourist operation, provided that the rights of timeshareaccommodations fall on concrete and specific periods andunits.

The annual use/enjoyment period can never be less than 7 continuous days. In every case, within the same scheme, shiftsshould all have the same length. The units will also be reservedfor repairs, cleaning or other common purposes for a period oftime which shall not be inferior to seven days for each unitsubject to the regime.

Cooling off period is of 14 days. No advanced payment,constitution of guarantee, reservation of money in account ordebt acknowledgement in favor of the trader or third party canbe made before the end of the withdrawal period.

All the pre-contractual info and advertising needs to beprovided in advance and through a standard form as perregulations.

Contract needs to be in written and in both consumer and trader language if this last operates in Spain.

Main legal characteristics of time share rights in Spain are:-

It is a limited ownership right (enjoyment): two or more different peoplehold rights on same property: the owner and the holder/s of enjoymentrights.

It is immediate, as, in shifts, it gives to its holder a direct enjoyment of theproperty.

-It has entrance in the Land Registry which gives to its holder a complete legal safety within the Spanish legal system. Obviously time share rights need to be transmitted by Notary deeds for its entrance into the Land Registry.

-It can be transmitted to others either in life or by death. They are part of the property trade.

Together with desisting from or cancelling the time share contract, possibilities that are subject to a shorter deadline, there is the possibility, initially sine die (without deadline) to apply for the nullity of the contract.

In what cases?

– When timeshare rights are transmitted disregarding the imperative Law which regulates them.

– When the transmission of time share rights are made before the scheme is actually constituted

– When there is a lack of veracity on information provided to the buyer.

The action for the refund of amounts linked to the nullity has a 15 years deadline.

There is numerous precedents in Spanish Courts for the nullity and refund of money if you were sold under the term ” propiedad” (property)

The important issue of adaptation

From January 1999 any pre-existing timeshare regime needs to adapt to this Law. If this has not happened, any holder of timeshare rights will be able to request a Judge to compel the developer to do so.

Adaptation will always require a Notary deed and proper registration in the

Land Registry.

Adaptation will respect the nature of rights which were transmitted by virtue of the old private contract. If ownership was transmitted, this is what it willhave to be registered after approval of simple majority of Community ofowners.

All old contracts will have a time limit of 50 years unless parties have agreed otherwise or parties mutually or freely agree in the adaptation deed on a different definitive or non-definitive period.

If the owner of the development does not comply with the obligation of adapting the regime to this new regulation, the holder of timeshare rights will have rights to cancel the contract with effective devolution of amounts and compensation of damages.

2 recent Court decisions on Timeshare and associated bank loans

Asturias Appeal Court, January 2014

A recent Court Decision by Asturias Appeal Court establishes the nullity of the timeshare contract, applying provision 1261 of the Spanish Civil Code and request not just the Timeshare company but the related Bank ( jointly and severally) to refund the consumer all amounts paid plus legal interests plus legal costs. Under the theory of linked contracts.

Asturias Appeal Court estimates that the Bank acted as exclusive entity for the financing of the product and therefore both contracts are linked and both affected by the nullity vice.

Madrid Appeal Court, February 2014

Madrid Appeal Court estimates the appeal filed by the purchasers of timeshare rights and cancel both the contract and the associated personal loan under the theory on linking contracts.

There is a very relevant breach of contract by the seller as the buyer was never informed on his rights of withdrawal and unilateral cancellation of the contract.

Costa-luz-Lawyers

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For more information regarding this article or assistance in any other timeshare related issues please contact the TCA on 01908 881058 or email: info@TimeshareConsumerAssociation.org.uk