Over the past few months, Inside Timeshare has received many enquiries regarding claims and legal action against timeshare companies. As we know there are now many firms contacting timeshare owners informing them they have a claim against their timeshare company. Most are not even law firms, but companies setup to get on the bandwagon of claims since the Spanish Supreme Court strengthened the laws.
From the enquiries received, it would appear that everyone has a claim, unfortunately that is not the case, although the purchase may have been in Spain, unless it can be proved that there is a link to a Spanish entity i.e. an SL or SA company, there may not be a viable case.
For example, one reader contacted Inside Timeshare about a Marriott purchase in Mallorca, the company who contacted them was adamant there was a claim and they could take Marriott to court. This reader contacted Inside Timeshare as they were suspicious that what they were being told was not correct, how could they know there was a claim just by the conversation on the telephone?
This reader sent copies of their documents, unfortunately for them there was no viable claim, all the documentation and payments went via Marriotts Florida headquarters. There was no Spanish link, so no Spanish court would have accepted the case. The contract even though purchased in Spain was essentially a US contract, so it was not covered by Spanish law.
We have even had enquiries from readers who have purchased in the UK, being told they have a valid claim. With many of these they have been told they can do this on a no win no fee basis, then are told they must first pay for the contract to be cancelled. The no win no fee is the enticer, the claim is unlikely to ever be paid out.
Spain has the strongest laws regarding timeshare in Europe, by comparison the UK laws are weak and favour the timeshare companies, it is a fact that the EU has issued directives on the sale of timeshare, but these are not law, they are directives pure and simple. It is down to the individual state to place the basic guidelines into domestic law.
The basic criteria for a valid claim against a timeshare contract in Spain is one or a combination of the following:
- The purchase must have been made in Spain after 5 January 1999;
- The contract is over the permitted 50 year duration, i.e no end date known as perpetuity;
- Contains floating weeks or points systems which also includes fractional and “investments”;
- Any payments made within the 14 day cooling off period, this is extended to 90 if other infractions such as any of the above are present.
These have been reinforced by the Supreme Court and all lower courts must now follow suite, they have no choice. These are civil cases and it is all down to contracts. Other laws may also be invoked, this is usually done on a case by case basis when the lawyers are preparing the case. They may include Civil Consumer Law and Mercantile Law.
The Supreme Court has also recently ruled that in the case of any payment made during the cooling off period (which includes the 90 day extension) this must be paid back double.
What would be the claim?
- Double the deposits paid within the 14 day cooling off period, the balance only if paid after, this is the minimum claim amount. If paid within the cooling off period then double that as well. (All double if 90 day invoked), this is the maximum claim amount.
- Added to the claim will also be the return of legal fees (this is at the judges discretion), but also legal interest is paid from the time the case is presented to court.
- Maintenance fees may be added to the claim, but again it is the judges discretion if he awards the return.
Obviously, to enable a case to be brought, a competent and genuine lawyer is required, they also should be registered to practice in Spain and have knowledge and experience in this field.
Legal fees are also required to be paid for the work and case to be carried out, these fees are broken down as follows:
- Translations of all documents into Spanish, interpreters if the client is required to attend court;
- Lawyers fees, for the preparation of the case and representation in court;
- Procurator fees, (barrister), they work alongside the lawyer and is responsible for filing the case, submitting and retrieving documents at court;
- Court fees and taxes.
- Notary fees for Power of Attorney, if signing in Spain this is included. If the POA is signed in the UK then that must be paid separately by the client.
The fees are calculated on the minimum claim amount, which is the purchase price, they are a one time fee, so if the case has to go to an appeal court, no further fees are requested. This system enables the client to know the cost of bringing a case in advance, unlike most systems in the UK where the legal bill for a civil case is not known until the conclusion.
They do not operate a no win no fee system, in fact even in the UK, no win no fee is not what it seems. This system usually involves a litigation funder who pays the legal bills for the case to be brought. You could say they are gambling on the case, if successful, they will take around 40% of the compensation awarded. If you lose, you could be liable for the oppositions cost, which has happened in several timeshare cases in the UK High Courts. One aspect of these no win no fee offers is they do not advise you to take out a litigation liability insurance in case you lose.
As for the prospect of losing in the Spanish courts on these cases, as long as the correct law firm is employed, which has the experience in these cases and this field of law, that possibility is very remote. Plus the correct firm would not take on a case unless it fulfilled the relevant criteria and breached the laws.
If you would like further information Inside Timeshare would be happy to help, also if you would like to have your case checked as to whether you have a valid and viable claim Inside Timeshare can arrange that free of charge and without obligation.
The documents needed would be scanned copies of:
- Purchase agreements;
- Terms & conditions;
- Any finance agreements if these were provided by the sales staff at the point of sale.
If any finance was taken out and is still being paid, then if you do bring a case this still needs to be continued. Once a ruling and sentence on your case has been issued, then the finance company can be approached to have the contract cancelled and all interest returned. This can only be done at the conclusion of the case, the reason is once the court finds in favour of the client the contract is declared null and void on the grounds it is illegal, therefore, the loan agreement was used to finance an illegal product. A claim for interest may be possible if the loan has been cleared.
Once you know for certain that you have a valid and viable claim, Inside Timeshare can then make a recommendation for the best law firm for your case, they would then be able to go through costs and procedure.
Also if you do not have a case which can be taken through the Spanish courts, but have a finance agreement which you are now finding to be a problem, Inside Timeshare may be able to recommend a firm which specialises in this field.
If you have any questions regarding this article, please use our contact page and we will get back to you.