Spanish Timeshare Claims: A KwikChex Guide to Legal Protection and Compensation

A comprehensive guide to Spanish timeshare claims, including eligibility requirements, the legal framework, and the process of making a claim, as well as cautionary advice against fraudulent companies.

Overview of Spanish Timeshare Claims

A Spanish Supreme Court ruling in 2015 had a profound impact on timeshare claims in Spain, as it confirmed that ‘in-perpetuity’ contracts between 1999 and 2012 were unlawful.

This ruling was a watershed moment for timeshare owners, as it enabled them to cancel timeshare contracts if certain conditions existed. For instance, failure to comply with the legal requirements can result in the contract being declared null and void, with owners eligible to receive a refund of the money spent on the purchase of their timeshare. This ruling principally addressed the issue of perpetuity (without an end date) – and contracts that were in excess of 50 years.

Law 42/1998 and the European directive have played a crucial role in creating a robust legal framework to address timeshare disputes. The implementation of these laws has provided avenues for individuals who have been subjected to unfair timeshare contracts to seek justice

For instance, the European directive relating to timeshare ownership was overhauled with the adoption of the Timeshare, Long-Term Holiday Product, Resale and Exchange Contracts Directive 2008/122/EC, which has been instrumental in safeguarding the rights of timeshare purchasers and ensuring that they are not unfairly bound by exploitative agreements. Therefore, the combined impact of the Spanish Supreme Court ruling and the legal provisions underscores the evolving landscape of Spanish timeshare claims.

Claim Eligibility and Implications of the Supreme Court Ruling

When considering potential timeshare claims in Spain, it is crucial to understand the specific requirements for eligibility. According to the Spanish law, the purchase date must be after 5th January 1999, the acquisition must have taken place within a Spanish territory, and there should be illegal clauses present in the timeshare contract. For instance, if an individual bought a timeshare in Marbella after January 5, 1999, and the contract contains unfair clauses such as a perpetuity clause, they may be eligible to make a claim under the Spanish Supreme Court ruling.

Potential Pitfalls of Spanish Timeshare Claims

Whilst there have been many successful decisions in favour of timeshare owners, with substantial compensation awards made, several factors should be taken into account when considering a Spanish timeshare claim.

Insolvency and liquidity problems

The number of claims being submitted to the Spanish courts has contributed to a number of insolvency situations, where the timeshare companies being claimed against have entered into administration and liquidation. The companies and claims that have been affected in this way include Club La Costa / CLC, Silverpoint and Anfi. This has resulted in many cases in claims not being paid, even when a ruling has been made in favour of the timeshare owners. Ascertaining the situation regarding the liquidity / potential insolvency of the businesses owners may be claiming against is crucial.

Jurisdiction issues for UK owners

Although the Spanish courts originally ruled that Spanish jurisdiction will apply if the timeshare resort is located in Spain – regardless of the location of the company selling the contract, recent rulings in the European Court of Justice declared that where a contract is written under UK law, and the company issuing the contract is UK registered – and the owner is a UK citizen, resident in the UK, claims should be brought before UK courts, not in Spain. This affects new claims, not ones already filed, in motion or where rulings have already been made. This is yet to be fully tested within the Spanish court system, but does mean there is serious potential for new claims brought before the Spanish courts that are based on the Supreme Court ruling to be rejected.

Potential amendments to Spanish laws

Lobbying of the Spanish Parliament by timeshare interest organisations has resulted in amendments being put before Spanish lawmakers, If these amendments are accepted as drafted, the outcome will be the ending of the types of claims brought on the basis of the Supreme Court’s ruling regarding Law 42/1998. The debate on the amendments is expected to take place in the first half of 2024, but this could change. If the amendments are passed, there will be a 6 month ‘sunset period’ – in other words, 6 months to file new claims in Spain.

Legal Framework and Consumer Protection Information

In addition to the Spanish Supreme Court ruling in 2015, the European directive, particularly the adoption of the Timeshare, Long-Term Holiday Product, Resale and Exchange Contracts Directive 2008/122/EC, has significantly impacted the legal framework and consumer protection in the Spanish timeshare industry. This directive, transposed by the Spanish parliament through Real Decreto-Ley 8/2012, serves as a comprehensive measure to safeguard consumers against unwanted timeshare contracts. It has been instrumental in establishing a 14-day cooling-off period, allowing consumers to thoroughly consider and withdraw from contracts without facing any repercussions.

Furthermore, the directive mandates that traders provide detailed information to buyers before they are bound by any timeshare contract. This includes transparent disclosure of all essential details related to the property, arrival and departure times, and financial obligations. By enforcing such requirements, the law aims to ensure that consumers are well-informed and protected from any potential misrepresentation or unfair practices in timeshare transactions. For instance, a Norwegian woman was awarded a full refund and interest for an illegal “in perpetuity” clause in her timeshare contract, highlighting the effectiveness of the legal framework in protecting consumer rights.

The comprehensive legal framework and consumer protection measures not only serve as a deterrent against unscrupulous timeshare practices but also provide a clear pathway for consumers to seek redress in the event of contractual violations. These initiatives underscore the commitment of the Spanish legal system to uphold consumer rights and promote fairness in the timeshare industry, thereby fostering trust and confidence among consumers.

The Safe Process of Making a Timeshare Claim in Spain – Avoiding Scams and ‘Hard-Sells’

When making a timeshare claim in Spain, it is crucial to understand the process and requirements involved.

Regrettably, many timeshare owners have already been left out of pocket by unscrupulous timeshare claims businesses. In many instances, there have been outright scams, where no valid work has been caried out at all after owners have paid thousands upfront. In other cases, the potential pitfalls mentioned above are not being diligently addresses, which is resulting in claims not being viable, and the legal fees paid being lost without a satisfactory resolution.

In order to avoid potential losses, timeshare owners should consider the following.

· Carry out a full check on any business offering to provide a Spanish claims service. It is not enough to accept the content on a company’s website or even put trust in online reviews, as both are easily manipulated. The Timeshare Business Check resource for checking legal and claims businesses can be useful in this regard – and if a business is not listed, enquiries can be made.

· Be particularly wary of unsolicited contact – cold calls, text messages and emails. In almost all cases, those making contact in this way are breaching data protection regulations and are not honest.

· Do not engage with people that are trying to ‘hard-sell’ you or are putting you under pressure to sign up quickly. Such tactics are used by salespeople on high commissions, who are focused on lining their own pockets rather than being qualified lawyers that will explain the processes, give you time to consider your options, and act in your interest.

· Beware of ‘consumer organisations’ and ‘advice centres’ that are attached to unregulated claims businesses. Check any such sources before allowing them to set up meetings and calls on behalf of the businesses they are actually working on behalf of.

· Insist on a written viability report – see advice even when the legal / claims business is regulated, and check on available complaints records, as some have had several upheld complaints against them.

Other information sources

Action Fraud UK

European Consumer Centres Network

ITOA – International Timeshare Owners Association