If you own timeshare in Spain, you may have been contacted by a company that is claiming that ‘all contracts in Spain are illegal’ and that you can get all your money back, and more, if you use their legal services.
Not surprisingly, it’s not nearly as simple as this and we wish to present the facts as we see them.
First, by way of background, Spain’s first timeshare law came into force on 5th January 1999. This was then replaced by a new timeshare law on 6th July 2012.
Timeshare clubs already operating in Spain when the law came into force in 1999 had to produce and file a ‘Deed of Adaptation’ with the Land Registry within a certain period of time and provided that they did so, any sales made prior to 5 January 1999 by those timeshare clubs were not impacted at all by the new legislation.
The understanding of the industry, as well as lawyers and the Land Registry was that provided the Deed of Adaptation was filed, the existing timeshare club could continue to operate (and timeshares in it could continue to be sold) in accordance with the schemes’ existing duration and for many years, perpetuity contracts were standard contracts in timeshare resorts.
In 2015, the Supreme Court chose a new interpretation of the law and deemed one contract void. This new interpretation is under review but for the time being it is being followed by the lower courts. In addition, you should note that this interpretation only applies to contracts that are governed by Spanish law and signed between 5th January 1999 and 6th July 2012.
You should, however, be aware that there are a lot of exaggerated and misleading advertisements on the Internet, TV and in newspapers about the rulings. Not all cases are won by the claimant and even when they are, claimants may receive far less than they were promised by the lawyers. The reality is that law firms are not telling their clients that the legal process is lengthy and time consuming. Nor are they telling them about the amount they are likely to recover or their future financial liabilities when taking their developer to court. Amongst other things:
- Claimants will have to pay their own legal fees – often upfront. If the claimant loses the case, the legal fees paid by them are irrecoverable and the Claimant will generally be ordered to pay the Developer’s legal costs.
If successful, the lawyer will often want a share of any monies recovered which can be as much as 30%
- Claimants will need to attend court hearings in Spain and will incur flight and accommodation costs
- Claimants’ costs may increase if proceedings are drawn out, decisions appealed etc
- If the Claimant wins, they may still be ordered to pay the developer a fair market price for the holidays they have taken in the resort over the years
Some of these so-called legal firms (although they may have “legal” or law” in their business name) are nothing of the sort, are not registered with the SRA (Solicitors Regulation Authority, the body that regulates solicitors in England and Wales), or the equivalent regulatory body in Spain and may not have properly qualified lawyers working for them at all. Some are linked to networks that have been the cause of numerous consumer complaints and breaches of consumer regulations and are under investigation by the authorities.
Whilst, the vast majority of owners are happy with their timeshare, some may wish to dispose of their timeshare but are then persuaded into signing up to legal action during a slick sales process.
What action should you take?
If a company approaches you and invites you to take your resort to court, we would advise the following:
- Contact your resort. If you are looking to dispose of your timeshare, you might be able to do so through the resort’s own exit programme, particularly if it’s a member of the industry trade body, RDO (Resort Development Organisation). There is no need to pay a fee to a claims company to do this.
- If you’re not sure about a company’s credentials, visit the EUROC Timeshare Support hub https://euroctimesharesupporthub.com/support-hub/
- Cold calling in itself is not illegal unless you have signed up to the Telephone Preference Service, but a company you do not know that calls you to offer you a service and already has details of your timeshare, has most probably obtained this information illegally. You should put the phone down on anyone who cold calls you and report it to your resort/developer. If you are registered with the TPS, you can also make a complaint via https://complaints.tpsonline.org.uk/consumer