Timeshare in the Canaries and the small print buyers miss

The methods may vary, but the outcome is always much the same. Whether openly advertised as a timeshare scheme or marketed as a ‚membership‘, timeshare holidays always boil down to the same thing. Whether it’s worth it for you depends on your individual circumstances. We answer the most important questions on the subject.

What is timeshare in the Canary Islands?

Timeshare involves purchasing the right to use a property for a limited period. It is therefore often referred to as a ‚holiday residence right‘. In the hotel and tourism sector, this usually involves the right to use a property in a holiday resort or hotel complex.

This right of residence is granted for a fixed term – usually between one and 99 years, though sometimes for an indefinite period. A one-off fee is usually payable at the start of the contract. Depending on the model, there may also be ongoing costs, such as for maintenance.

Such properties are usually let fully furnished. This means that guests can arrive at their holiday destination and start enjoying their relaxing break straight away.

What are the advantages of timeshare?

In theory, timeshare offers various advantages: for instance, the price is only a fraction of what a property would cost if purchased outright. Furthermore, the costs of maintenance and management are shared amongst all participants. There is also no risk of a property intended for letting standing empty. Nor is there the need to search for tenants, which often takes up a great deal of time. The same applies to checking whether the property has been returned in good condition by an external tenant. This is because, as a rule, only co-owners stay in a timeshare property.

What are the disadvantages of timeshare?

In most cases, the right to use the property must be paid for years in advance. If a provider goes bankrupt or the customer’s circumstances change – for example, if travelling to the destination becomes difficult due to a chronic illness – the money is often lost or can only be recovered with great difficulty, according to criticism from consumer protection organisations.

Furthermore, the contracts are often unclear, as several companies may be involved. Whilst the advertising claim is often that customers become co-owners, on closer inspection this is frequently not the case at all.

Timeshare example in the video

Who is timeshare suitable for?

A holiday home scheme makes particular sense if you know for certain that your holiday – or, for example, your winter stay – will regularly take place in the same location. Such a model might also suit people who are reluctant to embrace new surroundings and prefer to stay in a place they already know well.

What’s more, timeshare can be a good option for anyone who also lives in their home town on a temporary basis. This means you avoid the double burden of paying rent or property maintenance costs in both your home town and at your second home at the same time.

Does timeshare offer financial benefits?

Consumer organisations warn of financial risks. When it comes to holiday home rights, it is essential to work out the costs based on the guaranteed weeks. This is because, according to consumer protection groups, package holidays with the same number of weeks are often cheaper. Furthermore, the resulting price per square metre of the guaranteed property should be calculated and factored into the decision.

Is timeshare a good investment?

This is often exactly what is claimed in adverts or sales pitches. Consumer advice organisations believe that, in most cases, timeshare is not a sound financial investment. This is because reselling holiday usage rights is often impossible, or only possible with difficulty or at additional financial cost. Furthermore, unplanned costs may arise from maintenance. Individual users have no control over these matters; they are obliged to pay whenever the majority of owners or the company deems a measure necessary.

Am I protected when it comes to timeshare?

Package holidays offer many advantages, as German law applies. For example, insolvency insurance protects you against losing the holiday price in the event of bankruptcy. Prices may also be reduced if defects are found whilst on holiday.

With timeshare, there are no such travel rights. The customer’s rights are usually set out in articles of association or similar contractual documents. These also contain clauses stating that customers may lose their entitlement under certain circumstances. For example, it is often not immediately clear who the point of contact is in the event of construction defects.

Can I cancel timeshare contracts?

Timeshare contracts with a term of more than one year can be cancelled within 14 days. In many countries, there are clear rules governing this right of cancellation. In Germany, for example, it is prohibited to demand or accept a deposit before the expiry of this period.

Part-time residential rights contracts, for example, are governed by Sections 481 to 487 of the German Civil Code (BGB). Under these provisions, customers are protected against the pitfalls of timeshare. However, there are no guarantees against unscrupulous sellers – particularly not if the contract was concluded under foreign law.

What should you bear in mind with timeshare?

As with so many investments, the following applies: if a seller is putting pressure on you, they are very likely not a reputable seller. Do not be lured by ‚limited-time offers‘ or ‚personalised discounts‘.

Nor should you be tempted by the prospect of a return on investment. If you’re thinking of getting into timeshare, base your calculations purely on your holidays, not on any potential financial gains.

The seller or contractual partner must inform you of your exact rights in relation to the property, themselves, the company, all costs and many other matters. If they do not do so in detail, you should exercise a degree of healthy scepticism.

Not only should the contract be drawn up in your national language, but you should also include a clause insisting on the laws of your country. This will enable you, for example, to circumvent legislation relating to shell companies in tax havens where the providers are registered.

If you wish to exercise your right to cancel the contract, you must always do so by registered post and within the specified time limit. Never rely on providers to offer voluntary concessions.

Do not make any immediate down payments for your timeshare, or, if you have already done so, request a refund from your bank.

If anything seems a bit odd to you, if in doubt, consult a solicitor or a consumer advice centre. Many people are put off by the costs associated with legal advice. In the long run, however, these may turn out to be lower than the costs of falling for a potential advertising trap.

Timeshare: An example from Tenerife

1,500 timeshare customers in Tenerife are likely to lose a lot of money