Directive 2008/122/EC on the protection of consumers in respect of certain aspects of timeshare, long-term holiday product, resale and exchange contracts establishes new rules in order to enhance consumer protection, as well as its scope is extended to include new products, namely ‘timeshare like products’ which have emerged in the market. For instance the new Directive regulates holiday discount clubs as well as resale and exchange. Furthermore, being a full harmonization directive, these new rules ensure that consumers are equally protected across the EU.
What is considered a ‘Timeshare Contract’
A ‘timeshare contract’ is defined as “a contract of a duration of more than one year under which a consumer, for consideration, acquires the right to use one or more overnight accommodation for more than one period of occupation.”
Obligation of Information by Trader
This Directive contains as one of its main elements the requirement of information. It provides detailed rules on pre-contractual information. It is stipulated in the Directive that in good time before the consumer is bound by any contract or offer, the trader shall provide the consumer, in a clear and comprehensible manner, with accurate and sufficient information in the case of a timeshare contract, a long‑term holiday product contract, a resale contract and an exchange contract. This information shall be provided, free of charge, by the trader on paper or on another durable medium which is easily accessible to the consumer, by means of the standard information forms as provided in the Annexes to the Directive. Furthermore, there is the obligation on the part of the trader to ensure that at the choice of the consumer, the information is drawn up in the language or one of the languages of the Member State in which the consumer is resident or a national. This requirement is subject to the condition of the language being an official language of the EU Member States.
It must be ensured that the consumer is given a period of 14 calendar days to withdraw from the contract without giving any reason. This right of withdrawal is not limited only to timeshare agreements but applies also in the case of long-term holiday product, resale or exchange contract. The withdrawal period is calculated from the date of the signing of the contract or other preliminary agreement or from the day when the consumer receives such contract or agreement, if such date is later than the date of the signing of the agreement.
The effect of exercising the right of withdrawal is that the consumer terminates the obligation of the parties to perform the contract. Where the consumer decides to exercise the right of withdrawal, the consumer shall neither bear any cost nor be liable for any value corresponding to the service which may have been performed before withdrawal.
Directive 2008/122/EC also bans advance payments on timeshare, long-term holiday product and exchange contracts before the end of the withdrawal period. For long-term holiday product contracts, payment shall be made according to a staggered payment schedule. Any payment of the price specified in the contract otherwise than in accordance with the staggered payment schedule is prohibited. In the case of long-term holiday product contract, the right of withdrawal may be exercised by the consumer by giving notice to the trader within 14 calendar days of receiving the request for payment.
The Directive also contains provisions regarding the applicability of the Directive in the case of international cases. It is stipulated that consumers may not waive the rights conferred upon them by this Directive, where the law applicable to the contract is the law of a Member State. The Directive also provides that where the applicable law is that of a third country, consumers shall not be deprived of the rights contained in this Directive if any of the immovable property concerned is situated within the territory of a Member State. Furthermore, this Directive is also applicable in cases where a contract is not directly related to immovable property but the trader pursues commercial or professional activities in a Member State or, by any means, directs such activities to a Member State and the contract falls within the scope of such activities.