Af­ter two years, the Feb­ru­ary 23 dead­line for EU Mem­ber States to adopt the new EU Time­share Di­rec­tive is just a week away. Spe­cial thanks goes out to Stephany Mad­sen at ARDA who helped us con­firm some de­tails re­gard­ing im­ple­men­ta­tion sched­ules.

Hit and Miss Dead­line Com­pli­ance

The sig­nif­i­cant con­sumer states, Ger­many, France and the UK, have al­ready adopted ver­sions of the Time­share Di­rec­tive as part of their na­tional law. Fin­land, Slo­va­kia and Swe­den are also ex­pected to meet the im­ple­men­ta­tion dead­line. Not sur­pris­ingly, EU Mem­bers States Greece, Hun­gary, Ire­land, Por­tu­gal and Spain are not ex­pected to im­ple­ment the Time­share Di­rec­tive by the dead­line as their gov­ern­ments have been pre­oc­cu­pied with other more press­ing con­cerns. This vari­ance in com­pli­ance is not un­usual as pre­vi­ous di­rec­tives have been passed into na­tional law with some de­lay.

Pur­pose of the EU Time­share Di­rec­tive

The first EU Time­share Di­rec­tive, adopted in 1994, of­fered con­sumers ba­sic rights to clear in­for­ma­tion, a 10-day “cool­ing off” pe­riod dur­ing which the buyer may can­cel the con­tract with­out penalty, and a ban on de­posits dur­ing the “cool­ing off” pe­riod. The new Time­share Di­rec­tive aims to strengthen these pro­tec­tions and to tackle per­ceived loop­holes in the cur­rent leg­isla­tive frame­work. Per­haps most im­por­tantly, the new Time­share Di­rec­tive ex­tends the scope of the cur­rent rules to cover new prod­ucts which have emerged in the mar­ket­place like dis­count hol­i­day clubs (i.e., travel clubs) and non-real es­tate based prod­ucts (e.g., time­share-like hol­i­days on cruise boats, canal boats and car­a­vans). The new Time­share Di­rec­tive also cov­ers time­share re­sales and ex­change providers, re­quir­ing these com­pa­nies to pro­vide com­pre­hen­sive in­for­ma­tion about their prod­uct of­fer­ings and lim­it­ing ad­vance pay­ments.

Har­mo­niza­tion of Es­sen­tials

It is im­por­tant to note that al­though the Time­share Di­rec­tive has been adopted by the Eu­ro­pean Union, each Mem­ber State must im­ple­ment the Time­share Di­rect ob­jec­tives within the frame­work of their re­spec­tive na­tional laws. That stated, un­like the 1994 Time­share Di­rec­tive, the new Time­share Di­rec­tive is a max­i­mum har­mo­niza­tion Di­rec­tive, mean­ing that EU Mem­ber States are ob­lig­ated to im­ple­ment it in na­tional law in a way that does not ex­ceed or fall be­low the Di­rec­tive’s re­quire­ments. In other words, EU Mem­ber States are not per­mit­ted to cre­ate na­tional leg­is­la­tion di­verg­ing from the re­quire­ments of the 2008 Time­share Di­rec­tive. These re­quire­ments in­clude:

  • A 14-day “cool­ing off” pe­riod dur­ing which the buyer can can­cel the con­tract with­out penalty. Note that, with re­spect to long-term hol­i­day prod­ucts, there is an ad­di­tional 14-day right to with­draw af­ter each in­stall­ment pay­ment be­comes due.  
  • An ab­solute ban on the seller tak­ing de­posits dur­ing the “cool­ing off” pe­riod.  
  • Manda­tory use of a stan­dard­ized form of both pre-con­trac­tual in­for­ma­tion and time­share con­tracts set­ting out ba­sic in­for­ma­tion about the time­share prop­erty in the buyer’s cho­sen lan­guage.