The European Commission has recently decided that an EU law regulating the timeshare industry is due for an overhaul. The main aim behind the new proposal is to extend the current rules in order to regulate new products which have emerged on the market such as discount holiday clubs or timeshare-like holidays on cruise boats, canal boats or caravans.
Timeshare, in terms of the current EU law, is the right, over a three year period, to spend some time in a holiday property for a specified period of the year. The current EU timeshare directive, which dates back to 1994, protects consumers' interests in a number of ways. In particular, it gives buyers the right to information in a prospectus before signing a contract. It also seeks to prevent "pressure selling" by allowing for a cooling-off period of at least 10 days and prohibiting operators from taking deposits from buyers during the cooling-off period.
Since the adoption of the current law, there have been major developments in the marketplace. New products and contracts have been developed that fall outside the scope of the current EU legislation. This means that consumers who buy such products do not get the same rights or levels of protection. By way of example, the new products may allow the consumer to use different kinds of property such as cruise boats, caravans or canal boats or the contract may last for less than the three year period currently envisaged by the law. Furthermore, the resale and exchange of timeshare schemes are not covered by the existing rules. This essentially means that consumers dealing in such schemes and products cannot benefit from the current rules on cooling-off periods, deposits and consumer information as alluded to above.
The proposed law is intended to replace the 1994 law with a modern, simplified and coherent framework covering timeshare and long-term holiday products, as well as exchange and resale. The new rules would therefore cover contracts for timeshare on moveable property such as canal boats, caravans or cruise ships as well as long-term holiday products such as holiday discount clubs. The new law would also regulate the resale of timeshare products as well as the exchange of timeshare products. In the latter two cases, it specifically lays down additional information requirements in order to ensure that consumers get a realistic picture of the offer being made to them by timeshare agents and they do not end up being disappointed. The scope of the current rules would also be extended to cover contracts of less than three years.
The new rules are intended to ensure that consumers are equally well protected across the EU while at the same time boosting consumer confidence in the timeshare industry. The importance of this industry for the EU cannot be under-estimated when one considers that it yields a total economic output of &euro1;0.5 billion and creates around 40,000 jobs across the EU. It, therefore, comes as no surprise that the Commission has felt the necessity to remedy the defaults found in the current legislation in order to ensure a level playing field in the market across the EU.
• Dr Vella Cardona, M'Jur, LL.D. is a freelance consultant in EU, intellectual property and competition law. She is also a visiting lecturer at the University of Malta.
Timeshare, in terms of the current EU law, is the right, over a three year period, to spend some time in a holiday property for a specified period of the year. The current EU timeshare directive, which dates back to 1994, protects consumers' interests in a number of ways. In particular, it gives buyers the right to information in a prospectus before signing a contract. It also seeks to prevent "pressure selling" by allowing for a cooling-off period of at least 10 days and prohibiting operators from taking deposits from buyers during the cooling-off period.
Since the adoption of the current law, there have been major developments in the marketplace. New products and contracts have been developed that fall outside the scope of the current EU legislation. This means that consumers who buy such products do not get the same rights or levels of protection. By way of example, the new products may allow the consumer to use different kinds of property such as cruise boats, caravans or canal boats or the contract may last for less than the three year period currently envisaged by the law. Furthermore, the resale and exchange of timeshare schemes are not covered by the existing rules. This essentially means that consumers dealing in such schemes and products cannot benefit from the current rules on cooling-off periods, deposits and consumer information as alluded to above.
The proposed law is intended to replace the 1994 law with a modern, simplified and coherent framework covering timeshare and long-term holiday products, as well as exchange and resale. The new rules would therefore cover contracts for timeshare on moveable property such as canal boats, caravans or cruise ships as well as long-term holiday products such as holiday discount clubs. The new law would also regulate the resale of timeshare products as well as the exchange of timeshare products. In the latter two cases, it specifically lays down additional information requirements in order to ensure that consumers get a realistic picture of the offer being made to them by timeshare agents and they do not end up being disappointed. The scope of the current rules would also be extended to cover contracts of less than three years.
The new rules are intended to ensure that consumers are equally well protected across the EU while at the same time boosting consumer confidence in the timeshare industry. The importance of this industry for the EU cannot be under-estimated when one considers that it yields a total economic output of &euro1;0.5 billion and creates around 40,000 jobs across the EU. It, therefore, comes as no surprise that the Commission has felt the necessity to remedy the defaults found in the current legislation in order to ensure a level playing field in the market across the EU.
• Dr Vella Cardona, M'Jur, LL.D. is a freelance consultant in EU, intellectual property and competition law. She is also a visiting lecturer at the University of Malta.