The implementation of the new Timeshare Directive in several European countries from 23 February was seen as positive news across the industry, but RDO warns there is still work to do and compliance may bring new challenges for developers.
“Unfortunately some countries still have some way to go before definitive laws are in place, which creates uncertainty and makes it a more difficult process,” says Eugene Miskelly, Chairman of RDO’s Legislative Council.
The new regulations bring greater transparency with detailed disclosure requirements and new style paperwork, which means that compliance teams will need to spend more time with each sale. “This can be absorbed by companies with large compliance and contracts teams, but for smaller companies it may be a considerable additional burden,” says Miskelly.
Henry Bankes, Vice President of Legal Affairs for Wyndham Exchange & Rental, agrees there may be an extra administrative burden, but the legislation will help boost consumer confidence. “It ensures consumers are fully informed, sign a contract which is completely transparent and have a 14-day cooling off period to reconsider their purchase,” he says.
Bankes adds that the Directive is important because it covers products such as Long Term Holiday Clubs and Resales, which have been of concern. “Many of the issues that have contributed to the poor image of timeshare were associated to the sales tactics adopted by a small number of operators in these areas. The legislation, if rigorously enforced, will either drive these operators out of business or cause them to radically alter their mode of operations.”
According to Jose Miguel Echenagusia, vice president of legal services EMEAA for Interval International, having uniformity across the legislation of all EU states will have a positive impact on consumer satisfaction and benefit the future growth of the industry. “Timeshare is a product with a marked international component. Through the new harmonised legal framework, consumers have the opportunity of purchasing timeshare products with a high level of consumer protection.”
Fractional developments are covered for the first time in the new legislation. “Inevitably, this creates an association with timeshare that some developers fear may prove unattractive to their purchasers,” says Nick Turner, Vice President Europe for The Registry Collection and Fractional Ownership Developments. “However, consumers can rest assured they will benefit from stringent protection legislation,” he adds. “And only the most committed developers will go to the lengths of compliance which, in the longer term, should serve to retain the highest quality standards.”