Mexico's Ministry of the Economy has established new information requirements and regulations for providers of timeshare services. Failure to comply with such rules can result in substantial fines and affect the enforceability of timeshare purchase agreements.
The new requirements and regulations are outlined in an Official Mexican Norm, known as a "NOM," which is effective 60 days after the date it was published, May 17, 2010.
This NOM, titled "NOM-029-SCFI-2010, Commercial Practices, Information Requirements for the Rendering of Timeshare Service," does the following:
- Broadens the definition of timeshare service "provider" to make timeshare regulations applicable to any person or entity that periodically offers, provides, and/or sells timeshare services. The previous timeshare NOM applied only to timeshare service providers.
- Recognizes the privacy rights of timeshare consumers, prohibiting the use, sale, or assignment of their information for marketing purposes without their written consent.
- Establishes less onerous requirements for terminating a timeshare plan.
- Lessens the burden of guarantees shouldered by providers regarding the performance of obligations under timeshare purchase agreements. (The "guaranties" section and the "guaranty of alternate use" provisions of the previous NOM are not included in the new NOM.)
- Prohibits providers from using raffles, gifts, prizes, and lodging certificates to offer their services without specifying, in clear and unambiguous terms, the purpose of the corresponding offer.
The new NOM also establishes procedural, content, and registration requirements for all timeshare sale and presale agreements, in addition to those in Mexico's Consumer Protection Act and other applicable regulations (e.g., Mexico's Truth in Lending Act, which may be applied in certain timeshare-financed transactions). Noncompliance with such rules may result in financial penalties of $50 to $200,000 and partial or total unenforceability of the corresponding timeshare purchase agreements against the consumer, among others.