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.