A timeshare is the purchase of a right to occupy a lodging for a limited period at a certain time of year, for a period of at least a year.
The customer does not become an owner of shares in a building, but merely has the right, in exchange for payment, to stay at the lodging for a certain amount of time each year.
This formula notably applies to any sort of tourist accommodation, such as, say, a lodging in a caravan or on board a cruise ship. (For example: a customer purchases the right to stay in an apartment at a seaside resort in Spain for 2 weeks in July).
Certain related contracts are subject to the same rules as a timeshare. These include the following contracts:
- long-term holiday product contract: this type of contract, for a period of more than one year, grants the customer discounts on their accommodation or other benefits, in exchange for payment (for example: a vacation club that gives customers discounts on their room, or a club which gives the customer the right to use the spa of a neighbouring health club);
- resale contract: if a consumer wants to buy or sell the right to occupy the apartment or long-term holiday product, professionals often offer to help them with this sale or purchase, in exchange for payment;
- exchange contract: often a customer is entitled to trade, in exchange for payment of a certain amount, a lodging purchased under a timeshare agreement for another lodging in another holiday location, worldwide. In exchange, another tourist can then take advantage of the customer's lodging;
- ancillary contract: sometimes a consumer also purchases services in addition to the timeshare or long-term holiday products. If these services are provided by a professional or third party with whom the professional has a contractual arrangement, it is considered an ancillary contract.
For all these contracts, the rules protecting consumers are the same throughout all the countries of the European Union. Thus, a consumer who lives in the European Union has the same rights in the holiday country as in the country where they live.
Who is concerned
A consumer is any individual acting for purposes that do not fall within the realm of their professional activity.
This document only pertains to relations between a professional and a consumer, and not contracts entered between two professionals or between two consumers.
Within a reasonable period of time before entering a timeshare agreement, the consumer must receive the following information:
- identification of the professional, and the address of the professional's establishment;
- the essential features of the goods or service;
- the price of the goods or service, including all taxes or, when an exact price cannot be determined, the method for determining the price, to enable the consumer to check it;
- the terms of payment, delivery or performance;
- whether or not there is a right to cancel, etc.
This information must be provided free of charge, clearly and comprehensibly. The professional must provide the consumer with all information on paper, or on another durable medium. It should be written, at the consumer's discretion, in German, French or the language of the consumer's own country, provided it is an official language of the European Union. If the contract is entered into with a buyer domiciled in Luxembourg, the contract must also be drafted in either German or French.
If a timeshare agreement concerns a specific property, the consumer receives a certified translation of the contract into the language or into one of the languages of the country where the property is located, provided it is an official language of the European Union.
The professional must use standard forms containing the detailed information that the professional is required to give the consumer.
The professional is responsible for providing proof that the obligations set out in this article have been met.
Modification of pre-contractual information
In principle, this information cannot be changed subsequently. It is part of a contract which will be signed between the professional and the consumer.
Changes can only be made under two circumstances:
- the parties expressly agree to make one or more changes;
- in the event of abnormal outside circumstances, that are unforeseeable and beyond the professional's control, and could not have been predicted or avoided, even if the professional had taken all of the appropriate measures.
In all cases, the professional must inform the consumer – before the contract is signed – on paper or on another durable medium, of the corresponding changes. The contract, which will be signed later, must also expressly note the corresponding changes.
If the consumer attends a promotion or sales event (which is almost always the case), they are entitled to have this information at their disposal throughout the event.
If the professional sends or distributes invitations to promotional or sales events for their products, they must clearly put in the invitation that the goal is commercial and that it is a sales or promotional event.
Each piece of advertising must state that the information is available to the customer through the standard forms. The advertising must also indicate where the consumer can get those forms.
It is prohibited to promote or sell timeshare or long-term holiday products as though they were investments.
How to proceed
Information presented in the contract
The contract must contain the same information that the professional must give to the consumer before concluding the contract.
The contract must indicate the name, place of residence and signature of both the consumer and the professional. The contract must also mention the place where it is signed, as well as the date the contract was entered.
If, prior to entering the contract, the information that the professional gives the consumer has changed, the contract must expressly state the changes.
Necessary formalities and contract language
The contract must be drafted in as many original copies as there are parties. Therefore, there must be at least two originals. If there are not as many originals as there are parties, the contract is null and void (unless validated by a notary). The consumer must obtain a copy of the contract when the contract is entered.
The professional must provide the contract to the consumer on paper, or on another durable medium.
Language: the consumer has a choice between French, German or the language of their own EU country (provided this language is an official language of the EU). If the consumer lives in Luxembourg, the contract must, under all circumstances, also be in French or German. If the contract concerns an apartment or other specific piece of real estate, the professional must also provide the consumer with a certified translation of the contract in the language of the country where the building is located, provided it is an official language of the European Union.
Right of withdrawal
Certain clauses must be signed separately by the consumer.
These include the clauses which mention:
- that they are entitled to withdraw from the contract within a period of 14 calendar days; and
- that during these 14 days, they cannot be required to make any payment to the professional or to anyone else. (For example: consumer's payment of an instalment or signing of a guarantee, acknowledgement of debt, etc.).
The professional must provide a standard withdrawal form to consumers so that they may easily exercise their right of withdrawal. This form is published in Article R. 223-5 of the Consumer Code.
The consumer may withdraw from the contract (or any preliminary contract by which the consumer has already made a commitment to the professional) without having to provide justification, within a period of 14 calendar days from signing the contract or preliminary contract.
If the last day of the period is not a working day (all days except Sunday and public holidays), the term is extended to the next working day.
However, if the consumer does not receive the contract or preliminary contract, they may still withdraw during the 14 calendar days after it is received.
If the consumer does not receive the standard withdrawal form completed by the professional, at the time of signing the contract or preliminary contract, but within the year, counted from the signing of the contract or preliminary contract, they may still withdraw for 14 days after receiving the withdrawal form on paper or another durable medium.
If the professional does not provide this withdrawal form within a period of one year and 14 days, the consumer may ask the court to nullify the contract or preliminary contract.
If the consumer does not receive the information to which they are entitled before the contract is entered, including the standard information form, but within three months of committing to the contract or preliminary contract, they may still withdraw for 14 days after receiving the information and form on paper or on another durable medium.
If the consumer does not receive all of the information to which they are entitled, including the standard information form, they have three months and 14 days to withdraw from the contract or preliminary contract, as of the time of entering into the contract or preliminary contract, or as of when the consumer receives the contract or preliminary contract.
If the professional does not provide this information and information form within three months and 14 days, the consumer may ask the court the nullify the contract or preliminary contract.
the effect of withdrawal is that the contract is automatically terminated. Thus, the contract never existed.
Withdrawal from contract
The consumer must inform the professional in writing on paper or on another durable medium that they are withdrawing from the contract. It is sufficient to send the withdrawal before the end of the 14-day period (or three months and 14 days or one year and 14 days, depending on the case).
The consumer may use the standard form sent to them by the professional, but is not required to do so.
If the consumer withdraws from the timeshare or long-term holiday product contract, any exchange contract and any ancillary contract are likewise automatically terminated, at no cost to the consumer.
If the consumer withdraws from the timeshare agreement, the credit agreement is likewise automatically terminated, at no cost to the consumer. If a third party has provided credit because they have a contractual arrangement with the professional, this credit is likewise terminated if the consumer withdraws from the contract. The credit is terminated even if it only finances a portion of the price.
When consumers withdraw during the withdrawal period, they are not responsible for any costs whatsoever.
In fact, if, before the end of the withdrawal period, the professional has provided a service to the consumer, they cannot demand payment from them.
Moreover, the professional does not have the right to demand that the consumer:
- pay an instalment or other amount to the professional or to a third party; or
- sign a guarantee; or
- create a money pool in a bank account; or
- sign an acknowledgement of debt.
Means of appeal
In the event of an individual problem relating to the timeshare or other contracts described in these pages, the consumer may go to court to request that the contract be annulled or terminated. In particular, they may request annulment of the contract in the following cases:
- there are not as many original copies of the contract as there are parties (except notarised documents); or
- the professional fails to provide the consumer with the necessary information and information form within three months and 14 days; or
- they do not provide the standard withdrawal form within one year and 14 days.
The consumer can also contact various bodies:
- The Luxembourg Consumer Protection Association (Union Luxembourgeoise des Consommateurs – ULC) will inform, advise and defend consumers in case of a problem for a Luxembourg national. The ULC also defends the collective interests of consumers and may ask the court to issue an injunction on certain actions of the professional.
- European Consumer Centre Luxembourg (Centre Européen des Consommateurs GIE Luxembourg – CEC): the CEC Luxembourg informs and advises consumers experiencing a problem with a professional located in another EU country.
In practice, when the collective interests of consumers are at stake, either one of the consumer protection entities noted above or the Ministry of the Economy (Ministère de l'Economie) will then assess the possibility and applicability of taking action against the professional by summary procedure.
The professional may be sentenced to pay a fine, ranging from EUR 251 to EUR 25,000 in cases where the relevant legislative stipulations have been violated.