Timeshare Contracts: A Comprehensive Guide
IV. Timeshare Contracts for Tourist Use
(Formerly known as Timeshare)
Description
A timeshare contract grants the customer (tourist) the exclusive right to enjoy a housing unit for a specified period each year. This unit must be capable of independent use, have its own access to a public thoroughfare or common area, and be permanently furnished. Benefits of timeshare ownership include optimized investments and cost-effectiveness for buyers.
Legal Formulas for Timeshare
- Timeshare (Vacation): Acquisition of an undivided share of ownership of a Club-Trustee apartment.
- Right to Use Timeshare: Membership in a club grants permission to use the accommodation and ancillary services. The member places their title with a service company.
- Non-Corporate System: Entitlement is a personal matter, with subscription of shares matching the value or use of specific weeks in a particular apartment or property.
Subjects Involved in the Contractual Relationship
- Owner/Promoter: These may be the same or different entities.
- Marketer/Dealer: A person or legal entity professionally dedicated to marketing and selling timeshare contracts.
- Other Utilities: An essential element for the timeshare contract, required to meet specific legal requirements, such as not being registered in tax havens and having a domicile or branch in Spain. The contract must be signed in the presence of the property owner and appear in the timeshare regime’s articles of association.
- Exchange Company: This entity connects individuals involved in timeshare exchanges. It can be a company or individual residing in Spain and requires a participation certificate. It is jointly responsible with other subjects and aims to provide consumer coverage for the contract.
Registration
The building owner has certain obligations for the timeshare regime:
- The deed must contain a description of the property and buildings involved in the timeshare.
- Description of the accommodation units, including registration and property number.
- Within each unit, the duration of use (start and end dates) must be specified.
- Services provided with the timeshare must be outlined.
- Establishment of the system’s usage term (3 to 50 years from registration). The deed must also plan for the establishment of timeshare rights owners and emphasize the requirement for property insurance.
Obligations During Promotion
- Publish a Briefing Document: This document must include minimum content as per Art. 8 of the Act, including details about the property, costs, nature of the timeshare, right of withdrawal, ancillary services, termination of the system, and a binding offer.
- Notify of Additional Information Sources: Purchasers must be informed of additional information sources, such as office telephone numbers, notary details, and script locations.
- Prepare an Inventory Document: This document lists all elements related to the equipment of each accommodation unit.
Legal Regime of the Contract
- Must be in writing.
- Must identify contracting parties.
- Must specify the nature of the object of transmission.
- Must outline applicable rules and regulations.
- Must provide information on exchange terms (in at least three languages).
Acquirer Protection: Right of Withdrawal
The right of withdrawal allows opting out of the contractual relationship. The Act provides three opportunities:
- 1st Chance: 10 days after signing the contract.
- 2nd Chance: If legal requirements are not met, the buyer has three months to withdraw.
- 3rd Chance: If documents remain incomplete after three months, an additional 10 days may be granted.
Contract resolution is possible due to default by the counterparty (breach of contractual obligations). Annulment may be requested, but no advance payments can be made as long as the right of withdrawal exists. Resolution requires a contractual breach, such as non-payment of fees for at least one year.