The Spanish government has introduced significant amendments to legislation governing timesharing contracts, creating a sense of urgency for those wishing to challenge such agreements.
On January 3rd, the Boletín Oficial del Estado (BOE) published an official document outlining a series of reforms aimed at improving the efficiency of the public justice system.
Among these reforms is an update to the provisions of Law 4/2012, dated 6th July, which regulates contracts for the use of tourist properties under timesharing arrangements, as well as long-term holiday products (such as points or holiday packages), resale agreements, and exchange schemes.
One of the most significant changes is the addition of a second supplementary provision, which sets out the time limits for filing claims seeking to invalidate certain timesharing contracts.
This provision is broken down into four key points:
1. A Five-Year Limitation Period:
Claims challenging the validity of contracts signed since 5th January 1999, where such contracts were established under legal regimes preceding Law 42/1998 (dated 15th December), must now be brought within five years from the effective date of the new provision. This rule applies specifically when claims are based on breaches of mandatory provisions contained in Law 42/1998.
2. Applicability to “Floating” or Indeterminate Rights:
The five-year limitation also extends to claims targeting the invalidity of contracts that involve the sale or marketing of “floating” or indeterminate time-sharing rights, as defined under Law 42/1998.
3. Compensation for Buyers:
If a contract is declared invalid, the purchaser is entitled to a refund of the purchase price paid. Additionally, they may claim compensation for damages, provided these exceed the costs associated with any use of the rights or services enjoyed under the contract. Such costs are to be calculated based on the market value of the usage.
4. Validation of Contracts Beyond the Deadline:
Contracts that are not challenged within the prescribed period will be deemed validated. Once validated, these contracts will be governed by the terms registered in the Land Registry or stipulated in their constitutive documents.
The inclusion of this provision underlines the government’s efforts to bring clarity and resolution to long-standing disputes in the timeshare industry. The five-year deadline is expected to streamline the process for challenging contracts, while also providing legal certainty for stakeholders.
With these changes now in force, individuals and organisations affected by time-sharing agreements are urged to act promptly if they intend to file claims. After the deadline, the contracts will be treated as legally binding and will operate under the established terms.
