Ivan: 0:00

Hello and welcome again to The Bench Report. You're listening to Amy and Ivan. Today we're getting into something pretty tangled. The world of timeshares and long-term holiday products specifically for UK owners. Our aim is really to break down the key problems people run into, look at the legal side of things, and crucially point you towards where you might find some help. It can be, frankly, quite a challenging situation for many owners.

Amy: 0:26

It really can. And first off, it's important to get what timeshare actually covers under UK law. The timeshare regulations 2010 are quite broad. It isn't just owning a week in a specific apartment somewhere. It can also be these long-term holiday products, sometimes called holiday clubs. They promise discounts or benefits for more than a year. And the international aspect often catches people out. You might have a property in, say, Spain owned by a company registered somewhere else entirely, maybe managed from a third country. A lot of UK folks bought these abroad, often back in the 80s or 90s, perhaps without getting independent advice and stepped into this, well, this complicated setup.

Ivan: 1:06

Right, and one of the, The really big issues we hear about is this idea of the forever contract, these in perpetuity clauses. It sounds ominous.

Amy: 1:15

It is really. These are contracts with no specified end date. So the obligation to pay fees, the liabilities, they don't just stop when the owner passes away. They can actually be passed on to their heirs, their estate. Imagine trying to sort out probate and finding this ongoing financial commitment.

Ivan: 1:30

Gosh, that's quite something. A debt that literally outlives you.

Amy: 1:34

Exactly. And the Spanish Supreme Court rulings have been quite pivotal here. There was a key one in 2015. It basically said that for contracts signed after January 1999, these in perpetuity terms were illegal under Spanish law. They capped the maximum term at 50 years.

Ivan: 1:50

Ah, so that provided some limit, at least for newer contracts under Spanish law.

Amy: 1:54

Yes, for those specific cases. And another ruling found a contract void simply because the description of the property at Okay, so the contract

Ivan: 2:07

length Is a major headache. But there was also this issue around how some timeshares were sold, wasn't there? This idea of them being an investment.

Amy: 2:17

Absolutely. That often involves something called fractional ownership. Now, this is a type of timeshare, but it was frequently marketed as an asset backed deal. They'd suggest a payout when the underlying property was eventually sold. But crucially, owning this fraction didn't necessarily give you the right to stay in that particular property.

Ivan: 2:36

So more like owning a tiny share certificate than a home. Kind

Amy: 2:39

of, yes. And the complaints flooded in about really high-pressure sales tactics and, importantly, misrepresenting these as investments. Which, by the way, the timeshare regulations 2010 explicitly forbid. You can't market timeshares as investments. Plus, there were issues with lenders, big names like Barclays, Shawbrook, Hitachi, allegedly not doing proper affordability checks on the loans used to buy these.

Ivan: 3:02

So where did the financial ombudsman service, the FOS, fit into this picture? Did they manage to help people caught up in this?

Amy: 3:08

Yeah. Yes, the FOS played a pretty significant role. They investigated complaints, particularly against lenders linked to developers like Diamond Resorts and Club La Costa. They found what they termed an unfair credit relationship in many cases and actually ordered the loans to be unwound, effectively canceled.

Ivan: 3:25

That sounds like a major win for those consumers.

Amy: 3:28

It was a huge relief for many. However, it's important to note that while the high court later upheld the FOS's general approach, they were very clear that every case turns on its specific facts. So it didn't create an automatic right to compensation for everyone in a similar boat. It was very case by case.

Ivan: 3:45

Right. So helpful, but not a universal fix. Beyond these sort of landmark legal issues and mis-selling scandals, what about the everyday financial pains for timeshare owners?

Amy: 4:02

Well, rising fees are a massive one, especially for timeshares bought before the 2010 regulations came in. Owners can face these sort of spiraling annual maintenance fees. Often they're not transparently calculated and people end up paying huge sums for property they maybe don't even use anymore or perhaps can't travel to.

Ivan: 4:19

And selling them. I imagine that's not easy.

Amy: 4:21

Extremely difficult. That's another major problem. The resale market is, well, it's practically dead for most timeshares. Demand is incredibly low. On top of that, the costs involved in selling can be high, and sometimes the timeshare companies themselves create obstacles. They might insist you use their preferred resale agent, who might also charge hefty fees. If you can sell, it's often for, you know, maybe half what you paid, sometimes much, much less.

Ivan: 4:49

So it creates a situation where people feel trapped.

Amy: 4:52

Completely trapped. That leads to the exit barriers. Many contracts just don't have a clear way out. Or if there is a process, it's incredibly complicated, expensive or relies on finding a buyer in that non-existent market.

Ivan: 5:04

It sounds like a real financial drain with no easy escape road. Yeah. Given all this, what protections are actually in place for consumers in the UK now?

Amy: 5:11

OK, so the main framework is the timeshare regulations 2010. These were kept largely in place even after Brexit. They mandate things like providing clear pre-contract information, a compulsory 14 day cooling off period where you can cancel and crucially a ban on taking any payment during that cooling off window.

Ivan: 5:30

That cooling off period sounds vital.

Amy: 5:33

It is. Then you've also got the Consumer Rights Act 2015, which offers general protection against unfair terms in contracts. And looking forward, there's the digital Digital Markets Competition and Consumers Act 2024. That's due to come into force around April 2025. It's expected to really strengthen protections against misleading practices and gives the Competition and Markets Authority, the CMA, new powers to enforce rules directly and issue some potentially very large fines.

Ivan: 5:59

Up to 10% of global turnover, I read. That's significant.

Amy: 6:02

Very significant, yes. It signals a much tougher stance.

Ivan: 6:05

And is this getting traction in Parliament? Are politicians aware of these ongoing issues?

Amy: 6:10

It seems so. parliamentary questions raised just this past May, specifically mentioning these in perpetuity clauses. The government acknowledged the need to sort of balance the consumer's right to exit with the interests of the businesses and also committed to speeding up the handling of complaints at the FOS.

Ivan: 6:27

OK, so there's movement now for listeners who might be in this situation right now feeling stuck. Where should they go for reliable advice?

Amy: 6:35

Good question. For general and legal advice, citizens advice is always a really good starting point. They operate across the UK, Scotland, and Northern Ireland. There's also an independent body called URSC, the European Resort Owners Coalition. They're a timeshare association focused on owner support and advice across Europe. They could be very helpful.

Ivan: 6:55

Good resources to know. So reflecting on all this, these persistent problems with timeshares, what broader lesson perhaps stands out about making long-term financial commitments, especially when they cross international borders? Given the enduring challenges with timeshares, what lessons can we draw about the critical importance Remember, politics is everyone's business. Take care.