The timeshare points club/membership may fall within the definition of “long-term holiday product contracts” as suggested by the Local Government Regulation LGR and as contained in Regulation 8 of The Timeshare, Holiday Products, Resale and Exchange Contracts Regulations 2010 (hereafter “the 2010 Regulations”). Regulation 8 is in the following terms:
A “long-term holiday product contract” means a contract between a trader and a consumer—
- the main effect of which is that the consumer, for consideration, acquires the right to obtain discounts or other benefits in respect of accommodation, and
- which has a duration of more than one year, or contains a provision allowing for the contract to be renewed or extended so that it has a duration of more than one year, irrespective of whether the contract makes provision for the consumer to acquired other services.
Regulation 24 grants a right to terminate a long-term holiday product contract; “without incurring any penalty”. Under Regulation 24, timeshare consumers are only required give notice of a termination to the other party “no later than 14 days after any day on which [they] receive a request for payment of an instalment…”.
Many of our clients’ contracts appear to fall within the definition of Regulation 8. The following requirements, however, may need to be satisfied;
- The contract must give our client the right “to obtain discounts or other benefits” in respect of accommodation; that must be “the main effect” of the contract;
- The contract must last for more than a year – or be capable of lasting for more than a year.
- TESS Law clients who have acquired membership in such clubs must have acquired a holiday commitment with a duration in excess of one year.
It was represented and indeed advertised that the main effect of many of the timeshare agreements was to provide them with “the right to obtain discounts or other benefits in respect of accommodation”.
The word “benefit” is not defined within the 2010 Regulations. We should, therefore, give the word its normal meaning. A benefit is commonly understood, as an advantage or profit to be gained from something. Our clients who acquired the membership in a club with the intention to gain access to discounted holiday accommodation may be protected, as the main effect could have been satisfied and if not satisfied, the main effect of the contract is misrepresented. In both cases the membership is voidable.
The point system club agreement/memberships are, therefore, a long-term holiday product contract covered by Regulation 8 of the 2010 Regulations and therefore can be terminated under the provisions set out in Regulation 24 if a reasonable case is made.
Last modified: 3rd September 2020