Two and a half years ago we brought you the exclusive story of the Ground Breaking Supreme Court ruling in favour of a Norwegian client, Tove Grimsbo, represented by Arguineguín based lawyer Miguel Rodriguez Ceballos (left) working with the English speaking Canarian Legal Alliance (CLA).
Today it seems Spanish language daily La Provinicia have also picked up on the news with a follow up story, with CLA clients have enjoyed multiple successes in the courts, boasting more than 50 Supreme Court victories, since that first one in January 2015, and having changed the face of the Timeshare industry on Gran Canaria and throughout Spain… Moses Álvarez writes:
The Supreme Court (Tribunal Supremo – TS) has opened the door for thousands of foreigners who have signed timeshare contracts in the Canary Islands to denounce their agreements and seek justice. “Potentially there may be thousands of lawsuits,” said Javier Correa Guimerá, [self-styled “Timeshare Lawyer” and ex-colleague of Miguel Ceballos], as the TS has unified their doctrine on these shared regime contracts, under which a person enjoys a property, usually tourist accommodation, for a certain period of time each year, for example, the first half of September for a fortnight over the course of several years or decades. There are legal gaps in many of these agreements that attempt to circumvent the law using companies based in third countries, other than the origin of the person or the destination where the accommodation agreement is signed – many are based in tax havens that offer their services as “vacation clubs” – and this has led the High Courts to find reason to question how clients were affected at the time they decided to sign contracts, and to take the step of putting their cases in the hands of Spanish justice.
The TS last month issued a series of rulings that have further bolstered jurisprudence over controversial timeshare agreements, which led to the first major pronouncement by the Supreme Court in early 2015. Since then, there have been more than fifty Supreme Court rulings which, without exception, support plaintiffs and, in the final judgement, annul the contracts with these companies that exploit timeshare or order them to return amounts paid by the persons concerned for advance fees and other payments related to the agreements.
Javier Correa Guimerá explained to Spanish language daily La Provincia that, fundamentally, Supreme Court judges say there are two reasons to rule in favor of plaintiffs in these cases: contracts in perpetuity, for a duration with no clear end point, something that the law forbids, and a lack of information. In either case these are grounds to invalidate the contract, if these agreements were signed after 1998, as until that year there was no law in Spain to properly regulate the proliferation of timeshare, so agreements signed before then are untouchable.
In 1999 a European directive was implemented in Spain with which the Brussels authorities were trying to regulate the timeshare industry, which had experienced a real boom in the Archipelago, and in fact became a particular paradise for timeshare in Spain catering to the tens of thousands of foreigners seeking the sun, on the Islands. A second European Community timeshare directive was implemented in 2012; however, regulation has not prevented companies, mostly based in tax havens, from violating the law.
A clear example of this is the existence of contracts signed in perpetuity since 1999, when the regulations from that point clearly specified that the duration of such agreements can not exceed 50 years. This was apparently able to happen because companies interpreted the law at will, with legal advisors saying if they had already been issuing such contracts and were operating in this way before the change of regulations, then they could continue to do so.
A legal nonsense, using a so-called “Deed of Compliance” signed by a notary confirming that company understood the new regulations and would comply where necessary.
In essence these companies took the view that the law did not apply to them, just new operators who came into the business after the introduction of regulation.
Another controversial point revolves around uncertainty in the “object” of the contract, that is to say, a lack of clarity regarding the tourist accommodation itself; In other words: the absence of concrete data to clearly identify the property on which the person obtains the right of enjoyment. “The Supreme Court has said that the object has to be defined, including the burdens it has and so on,” stressed Correa Guimera, who warns that in many cases so-called “holiday clubs” are behind the deceptions in the timeshare industry.
“With a ‘holiday club’ they pretend that the law does not apply to them, but the Supreme Court has made it clear that the rules also cover everything that resembles [timeshare activity] and everything that looks like it is not regulated is equally bad,” said the lawyer.
The president of the Tourism and Security Committee of the Federation of Hotel and Tourism Entrepreneurs (FEHT) in the province of Las Palmas, Tom Smulders, described the practices carried out by these clubs as “pure and hard fraud”. Smulders adds that he recently participated in a meeting with representatives of the central Spanish government and consumer advocacy associations that addressed this problem in terms of “clear scam”. The representative of the FEHT delved into the matter detailing cases where tourists arrives in the Canaries convinced that they have rented a bungalow, or other accommodation, and then discovers that the individual with whom they had contact, in fact has no relation whatsoever with the establishment.
Smulders explained that the current Timeshare fraud is mainly in the resale of real estate, the situation has normalized since regulation has come into force. The businessman recalled that many of the current judicial conflicts stem from the “aggressiveness” with which Timeshare products were offered during the boom of the industry – the 1990s and the first of the 21st century.
“The period of reflection was not respected,” said Smulders, who acknowledges the good work done by consumer associations to warn of behaviors and offers that are far from normal.
Source: La Provincia – Interpreted by Timon .:.
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