Amended proposal for a COUNCIL DIRECTIVE on the protection of purchasers in contracts relating to the purchase of a right to utilize one or several immovable properties on a time- share basis
Date: 1993-10-07
Institutions: European Commission
Subjects: acquisition of property, approximation of laws, consumer protection, contract, real property, time-sharing

Sip-

COMMISSION OF THE EUROPEAN COMMUNITIES 

COM(93) 487 final - SYN 419 

Brussels,  7  October  1993 

Amended proposal  for a 

COUNCIL DIRECTIVE 

on the protection of purchasers in contracts relating to the purchase of a right 
to utilize one or several  immovable properties on a time-share basis 

(presented by the Commission  pursuant to Article  149(3) of the 
EEC Treaty) 

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tWWKSffiSS 

ei^/ï^îSïïSs^s 

X 

EXPLANATORY  MEMORANDUM 

INTRODUCTION 

Following the opinions delivered by the European  Parliament1 and the Economic and Social 
Committee2 on the proposal  for a Council Directive concerning the protection of purchasers 
in  contracts  relating  to  the  utilisation  of  immovable  property  on  a  time-share  basis\  the 
Commission  is  asked  to  adopt  an  amended  proposal  m  that  it  envisages  keeping  certain 
features  and  possibly  making  certain  other  changes  to  its  initial  proposal  The  proposal, 
modified  in the light of the amendments  proposed  by the European  Parliament, the opinion 
of the Economic and Social Committee and the debates at Council  level, is presented  below 
in compliance  with  Article  149(3) of  the EEC  Treaty 

I. 

Grounds  for the proposal  in terms of  subsidiarity 

a) 

R. 

b) 

R 

c) 

R 

What  are  the  objectives  of  the  measure  envisaged  with  regard  to  the 
Community's  obligations? 

The creation of a foundation of common rules such as to ensure the legal and 
economic  security  of  the consumer  in  a domain  in which  he is the  weaker 
party;  the  elimination  of  inequalities  which  currently  hinder  the  smooth 
functioning  of the European  market  and freedom  of  movement. 

Does  the  envisaged  measure  concern  the  exclusive  competence  of  the 
Community  or a competence  that is shared  with the Member  States? 

A shared  competence. 

What  is the Community  dimension  of  the  problem0 

It lies in the transfrontier  nature of time-share  contracts, because most of the 
holders of time-share  rights exercise or  will exercise their rights in  Member 
States other than the one in which  they  are resident; it also lies in divergences 
in national  legislation, since only  four  Member  States have specific  laws - all 
of  which  are  different  and  incomplete 

PI'  171  252  and  IM  174  4  IS 

CMS  2(i(>/'H 

O.I  C  No  222.  2()  S l)2 

|>  S 

d) 

R 

e) 

R 

f) 

R 

g) 

What  is  the  most  effective  solution  when  the  Community's  instruments  are 
compaied  with  those  of  the  Member  States'' 

Whatever  approach  is  adopted  by  each  Member  State  in  this  domain,  there 
will  always  be  an  agreement  which  has  to  be  signed  by  the  parties  and  it  is 
on  this  agreement  that  Community  action  must  centre,  in  this  sense  it  is 
necessary  to  lay  down  minimum  information  which  the  consumer  must  have 
the 
prior  to  signature  and  a  time  limit,  after  signature,  during  which 
consumer  may  withdraw  from  the  contract  Given  the  transfrontier  nature  of 
time-share  contracts,  this  solution  can  only  be  realized  at  Community  level 

What  is the  concrete  added  value  of  the  envisaged  measure  and  what  would 
it  cost  to  do  nothing? 

The  measure  will  make  it  possible  to  overcome  problems  currently  facing 
consumers,  notably  as  regards  the  use  of  particularly  aggressive  sales 
techniques;  it  will  also  make  it  possible  to  control  a  major  industrial  sector 
where  firms  often  have  their  head  offices  in  a tax  paradise  and  enable  most 
of  the  Member  States  to  legislate  in this  domain,  because  they  are  awaiting 
a  Community  text  before  going  ahead  with  legislation. 
The  measure  will  also  promote  the  free  movement  of  products,  services, 
persons  and  capital,  quite  apart  from  the  various  procedures  involved  in 
timesharing. 
The  consequence  of  inaction  would  be  the  continuation  of  the  existing 
situation  with  its attendant  frauds  and  irregularities  in  a domain  of  growing 
importance  in  the  tourist  sector. 

What  instruments  are  at the  Community's  disposal? 

A  directive  or  a  recommendation 

Is  a  uniform  rule  necessary  or  is  it  enough  to  adopt  a  directive  setting  out 
general  objectives  to  be  implemented  by  the  Member  States0 

R 

A  directive  is  the  only  appropriate  instrument 

II 

Elements  of  the  initial  proposal  retained  in  the  amended  proposal 

The  two  fundamental  features  of  the  initial  proposal,  i e  the  vendor's  obligation  to 
provide  an  information  document  whose  content  constitutes  an  integral  part  of  the 
contract  and  the  provision  establishing  a  cooling-off  period  after  signature  of  the 
contract  during  which  the  purchaser  may  withdraw  from  the  contract,  are  retained 
The  criterion  as  to  the  language  to  be  used  is  the  same,  i e  a  language  which  the 
purchaser  declares  that  he  knows 
The  minimum  character  of  the  Directive  is also  retained  as  well  as  the  impossibility 
for  the  purchaser  to  waive  his rights  under  the  Directive  or  for  the  vendor  to  disclaim 
liability 

Finally, as regards the law applicable to the contract, the principle is upheld that the 
purchaser cannot be deprived of the protection accorded under the Directive through 
the choice of the law of a non-Member State, although the wording is simpler than 
in the initial proposal. 

III. 

The amendments 

1. 

The title 

The  title  was  changed  in  order to  improve  the  terminology  and to  cover  more 
exhaustively the characteristics of certain time-share arrangements which are widely 
used in certain Member States. 

2. 

The recitals 

Recitals 4, 5, 8 and 12 were adapted to the new title. 
Recital 9 was amended, in order to emphasise the fact that the Directive concerns 
only contractual aspects and in no way the law applicable to immovable property, 
which is exclusively the domain of the lex rei sitae. 
The amendments to recitals  12 and 13, and the new recitals  14, 15, 16 and 17, are 
explained together with the corresponding articles. 
The purpose of the new recital  18 is to point out that the entire text respects the 
principle of subsidiarity. 

3. 

The articles 

Article 2 : Definitions 

The  new  definition  of  time-share  contracts  takes  into  account  an  amendment 
proposed  by  the  European  Parliament  and  which  was  partly  accepted  by  the 
Commission, designed to cover certain characteristics of one of the most widespread 
time-share schemes used in several Member States. 
The definition of immovable property also takes into account the Parliament's desire 
that the Directive should apply not only to existing buildings but also to buildings 
that are to be constructed and which are to be used only for dwelling purposes; hence 
buildings intended for office or other use are outside the scope of the Directive. The 
examples given in the initial proposal have been deleted. 
In the definition of vendor, the term "owner" was replaced by that of "holder" which 
is more appropriate when referring to a right. 
As to the  definition  of  purchaser,  although  the  content  is the  same,  it  has been 
modified  in  order  to  improve  the  text  from  the  point  of  view  of  technical 
terminology. 

4" 

Article  .*  Obligations of  the  vendor 

The amendments are mainly due to the inclusion  of certain  changes proposed  by  the 
European  Parliament  Hence  paragraphs  (a)  and  (b)  take  into  account  Parliament's 
concern  as to  the  problems  which  may  arise  for  the  purchaser  as a result  of  failure 
to  comply  with  the  time  limits  stipulated  by  the  vendor  or  non-performance  of  the 
services  agreed  by  the  vendor 

The provisions in the initial proposal  concerning building and authorisation  rules  for 
occupying  an  immovable  property  have  been  removed  because  these questions  are 
more effectively  regulated  at national  level; they are merely  referred  to  incidentally 
in the  annex 
The  new  paragraphs  c)  and  d)  incorporate  certain  parliamentary  amendments 
concerning certain obligations whose fulfilment  by the vendor must be assured in the 
contract 

Article 4 

As requested by Parliament, the new text deals more directly with the question of the 
charges  incumbent  on  the  purchaser,  while  specifying  that the  charges  for  unsold 
rights must be imputed  to the vendor. 

Article  5 (and recital  12) 

The amendments to this article have the following  major implications. 

a) 

b) 

the information  document, already provided for in the initial proposal, must 
be  made  available  to  any  person  who  requests  it  rather  than just  to  any 
potential  purchaser.  It  should  be  noted  that  the  Annex  to  the  amended 
proposal  no  longer  refers  to the information  document but to the content of 
the time-share  contract;  however,  this  information  document  must  contain 
certain  items  listed  in  the  Annex. 

the information  contained  in this document  is an integral  part of the contract, 
this  principle  was  already  contained  in  a recital  of  the  initial  proposal,  but 
Parliament  wanted  it  to  be  included  in  the  binding  part  of  the  Directive 

Article  5(2)  rules  out  any  changes  to  the  information  contained  in  this 
document,  unless  these  changes  are  agreed  between  the  parties  or  are  the 
results of  circumstances  independent  of  the  vendor's  volition. 

c) 

all  advertising  must  indicate  not  only  the  possibility  o\'  obtaining  the 
information  document  but  also  where  it can  be had  from 

Article  6 (and  recital  1.Î)  Minimum  elements  of  the  contract 

As indicated  above, the  minimum  elements  which  the contract  must  contain  are set 
out  in  an  Annex  to  the  amended  proposal 

G 

Article  7 (and  new  recitals  14 and  16) 

The  first  paragraph  lays  down  a  single  cooling-off  period  as  requested  by  the 
Economic  and  Social  Committee  and  in the  light of the thinking of the  delegations 
at  the  meetings  of  the  Council  at  minister  level;  in  this  sense  the  Commission  has 
opted  for  a longer  deadline than  was envisaged  in the initial  proposals, i.e.  28 days, 
which  is also  the  deadline  requested  by  the  Economic  and  Social  Committee  The 
Commission  took  into  account  the  fact  that  in  certain  Member  States  legislation 
and/or  practice  require  conclusion  of  a preliminary  contract  which  may  be  legally 
binding  (for  example,  a  pre-contract)  or  certain  administrative  steps,  such  as 
engagement  of  a  notary  or  land  registration  procedures;  in  these  cases  the  period 
begins to  run  from  the  date of  signature  of  the preliminary  contract 

In the second  paragraph,  which  relates  to the  way  in which  the right to withdraw  is 
exercised,  the requirement  that  a registered  letter be sent has been  replaced  by  that 
of a written communication  sent in such a manner  that documentary  evidence of the 
fact  can be produced,  as requested  by  Parliament 

As to the third paragraph, this is a compromise amendment between the Commission 
and the Parliament; pursuant to this compromise the vendor may not require advance 
payments before expiry  of the cooling-off  period; however,  if the parties agree,  the 
purchaser  may  make  an  advance  payment  before  expiry  of  the  deadline  if  this 
agreement is given expressly  and if it does not exceed 5% of the sale price  including 
taxes; if the advance contains fees for managing the dossier, i.e. possible notary  and 
registration fees, other administrative fees, etc., these may not exceed  1% of the sale 
price, and in any  event  the vendor  must  provide  sufficient  security  that  he  will  be 
able to effect  reimbursement. 

As to the period within which the vendor  must  reimburse the purchaser  in the  event 
of  withdrawal,  he  is  granted  one  month  from  the  date  of  communication  of 
withdrawal. 

Article  8 (and  recital  17) 

This  is a new article  which  relates to  a subject  which  was not covered  in  the  initial 
proposal  and  which  was  included  in the  wake of  the Council  debates;  it  concerns a 
loan  contract  linked  to a contract  for  the purchase of a right  to utilise one or  several 
immovable  properties  on  a time-share  basis 

Here  the  purchaser  must  be  free  to  repudiate  the  loan  contract  if  he  decides  to 
exercise  his  right  of  withdrawal  as provided  for  in  Article 7 

Article  9 (and  recital  15) 

The  first  part  of  the  new  text  of  this  article  takes  up  an  amendment  by  Parliament 
which  merges  into  one  paragraph  the  two  paragraphs  which  this  article  had  in  the 
initial  proposal;  the  expression  "to  be  null  and  void"  is replaced  bv  a different  and 
more appropriate expression, so as to enable the Member  States to stipulate  possible 
penalties 

6> c O-

As to  the  second  paragraph,  it  replaces  Article  9 of  the  initial  proposal,  which  was 
judged  excessively  complicated  during  the  debates  within 
the  Council,  the 
Parliament  and  the  Economic  and  Social  Committee  However,  the  basic  principle 
was  retained,  i.e  that  the  protection  accorded  by  the  Directive  to  the  purchaser 
cannot  in any  way be lessened  by the choice of the law of a non-Member  State.  This 
isalso the wording chosen by the Council  in Directive  93/13/EEC concerning  unfair 
terms  in  consumer  contracts. 

Article  10,  11,  12 and  13 

The amendments  made to these articles are purely  formal  and  do not  introduce  any 
changes  of  substance  to the  initial  proposal 

? 

OPINION  OP  THE:  P A R L I A M E NT 

Amendment 
No 

Initial  proposal 

Accepted  by 
the. Commission 

Integrated 
(new numbering) 

Title 

Recital  No 3 

Recital  No  12 

Recital  No  14 a 

Title 

Article 1 

Article 2.1 

Article  2.2 

Article  2.3 

Article 2.4 

Article 3.1(a) 

Article 3.1(b) 

Article  3.1(c) 

Article 3.1(d) 

Article  3.2 

Article 4 

Article  5  1 

Article  5.2 

Article 6 

Article  7 I 

Article  7 2 

Article  7.3 

3 

4 

5 

6 

7 

48 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

51 

21 

22 

58 compromise 

Article  7.4 

(2) 

No 

No 

No 

No 

No 

No 

Partly 

Partly 

No 

No 

j 

Partly 

Partly 

Yes 

Partly 

No 

Yes 

Partly 

No 

No 

No 

Yes 

Partly 

Yes 

Article 2 

Article 2 

Article 3(a) and (b) 

Article 3(c) 

Annex, items e) and f) 

Article 3(d) 

Article 4 

Article  5  2 

Not  relevant 

Article  7 2 

Article  7 3 

* 

Amendment 
No 

Initial proposal 

Acceptedby 
the Commission 

Integrated 
(new  numbering) 

Article 9 

Article  9.2 

Amendments  concerning 
the  Annex  are  irrelevant 
because the new Annex no 
longer 
the 
refers 
information  document but 
to the time-share contract 

to 

24 

25 

26 

27 

28 

29 

30 

31 

32 

33 

49 

34 

35 

36 

37 

38 

39 

40 

41 

42 

43 

44 

Article  7b 

Article 8 

Article  9 

Article 9 

Article  10 

Article  11 

Article  12 

No 

Yes 

No 

Yes 

No 

No 

No 

Annex  (a) 

Partly 

Annex (b) 

Annex (c) 

Annex (c) 

Annex(d) 

Annex (e) 

Annex  (f) 

Annex  (g) 

Annex  (h) 

Annex (i)  (j) 

Yes 

Yes 

No 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

Annex  (I) 

Partly 

Annex  (m) 

Annex  (n) 

Annex(o) 

Annex(p) 

Yes 

No 

Yes 

Yes 

INITIAL  PROPOSAI. 

AMENDED  PROPOSAL 

Proposal for a Council Directive  concerning 
the  protection  of  purchasers  in  contracts 
relating  to  the  utilisation  of  immovable 
property  on  a time-share  basis 

Proposal for a Council Directive concerning 
the  protection  of  purchasers  in  contracts 
relating  to  the  purchase  of  a right  to  utilise 
one  or  several  immovable  properties  on  a 
time-share  basis 

THE  COUNCIL  OF  THE  EUROPEAN 
COMMUNITIES 

Having regard to the Treaty  establishing  the 
European Economic Community, and  more 
particularly  Article  100a thereof, 

Unchanged 

Having  regard  to  the  proposal  from  the 
Commission, 

\ 

cooperation  with 

In 
Parliament, 

the  Economic 

Having  regard 
Economic  and Social  Committee, 

the  opinion  of 

to 

the 

1. 

is 

to  complete 

to  adopt  measures 

Whereas one of the main aims of the 
Community 
the 
internal  market  by  31  December 
1992  at  the  latest;  whereas  it  is 
important 
to 
ensure  that  the  internal  market  is 
established  progressively;  whereas 
the  internal  market  comprises  an 
area  without  internal  frontiers 
in 
which  goods,  persons,  services  and 
capital  can  move  freely; 

to  complete 
it 
to  adopt  measures 

Whereas one of the main aims of the 
the 
Community 
is 
is 
internal  market;  whereas 
important 
to 
ensure  that  the  internal  market  is 
established  progressively;  whereas 
the  internal  market  comprises  an 
area  without  internal  frontiers  in 
which  goods,  persons,  services  and 
capital  can  move  freely. 

Whereas  the European  Parliament, 
in its resolution of  13 October 1988 
on the need to fill  the legal  gap in 
the  time-share  market'0,  called  on 
the  Commission 
to  submit  a 
proposal for a directive to harmonise 
national  legislation  on  time-shaire 
property ownership, whereas, in its 
resolution  of  11 June  1991  on  a 
Community  tourism  policy(2),  the 
European Parliament took the view 
that the Commission should present 
a general  time-share  directive  as a 
matter of urgency; 

Whereas, in the Community Action 
for  Tourism( 3 ), 
Plan 
the 
Commission's  guidelines  with  a 
view  to  improving  protection  for 
tourists  as  consumers 
include 
'drafting a proposal regarding cross-
border property  transactions (time 
sharing)'; 

Whereas  the  time-share  market  is 
very largely of a transfrontier nature 
by  the  reason  of  the  geographical 
location  of  supply  and  demand in 
most cases, and hence has an impact 
on  the  free  movement  of  persons, 
services and capital; 

Whereas,  although  most  of  the 
Member  States  have  as  yet  no 
specific  legislation  on  time-share 
contracts, others do, taking the view 
that the provisions of ordinary  law 
applicable to this type of transaction 
have failed to generate the requisite 
legal clarity or the appropriate level 
of protection for consumers; 

AO 

2. 

Unchanged 

Unchanged 

Whereas the purchase of  a right to 
utilise  one  or  several  immovable 
properties  on  a time-share  basis  is 
very largely of a transfrontier nature 
by  reason  of  the  geographical 
location  of  supply  and  demand  in 
most cases, and hence has an impact 
on  the  free  movement  of  persons, 
services and capital; 

Whereas,  although  most  of  the 
Member  States  have  as  yet  no 
specific  legislation on the purchase 
of  a right to  utilise  one  or several 
immovable  properties  on  a  time-
share  basis,  others  do,  taking  the 
view that the provisions of ordinary 
law  applicable  to  this  type  of 
transaction  have  failed  to  generate 
the  requisite  legal  clarity  or  the 
appropriate  level  of  protection  for 
consumers; 

(1) 
(2) 
(3) 

OJNoC290,  14.11.1988, p. 148 
Resolution A3-155/91, point 91 (Document PE 152.802, p. 54). 
COM(91)97final,p.20 

yV-A 

Unchanged 

7. 

Unchanged 

Whereas the application of the rules 
of  ordinary  law  in  some  Member 
States  and  of  specific  legislation, 
albeit with different  rules, in others 
creates  disparities  which  might 
hamper the orderly  development of 
this  sector  of  economic  activity; 
is  thus 
this  situation 
whereas 
prejudicial to the proper functioning 
of the internal market. 

Whereas  under  the  circumstances 
and with a view to ensuring a high 
level of protection for consumers, it 
is essential to make provisions for a 
basic  set  of  specific  rules  for  this 
type  of 
transaction,  applicable 
throughout the Community; 

Whereas the legal  concepts applied 
under  national  law  to  time-share 
arrangements  vary  considerably 
from  one Member State to another; 

8. 

:£# ;^I^Whereasit is nonetheless sufficient 
to  harmonise  the  rules  concerning 
time-share contractual transactions, 
the  law  applicable  in  each  case 
deriving exclusively from the lex rei 
sitae: 

Whereas the legal concepts applied 
under national  law to the purchase 
of  a right to  utilise  one  or several 
immovable  properties  on  a  time-
share basis vary considerably from 
one Member State to another; 

Whereas it is nonetheless sufficient 
to  harmonise  the  rules concerning 
the  contractual  aspects  of 
transactions relating to the purchase 
of  a right to  utilise  one or several 
immovable  properties  on  a  time-
share  basis,  the  law  applicable  to 
each  immovable  property  deriving 
exclusively  from the lex rei sitae, 

10.  Whereas, with a view to establishing 
effective  standards  for  protecting 
purchasers 
is 
necessary  to  stipulate  minimum 
obligations  which  vendors  must 
comply with vis-à-vis purchasers; 

in  this  filed, 

it 

10. 

Unchanged 

11.  Whereas  nothing  must  be  done  to 
affect the freedom of Member States 
to  establish  guarantees  under their 
own  legislation  in  respect  of  the 
Vendor's obligations. 

11.  Whereas  nothing  must  be  done  to 
affect the freedom of Member States 
to establish measures to ensure that 
the vendor fulfils  his obligations; 

A% 

12 

13 

Whereas it is necessary  to avoid  any 
misleading  or  incomplete  details  in 
information  concerned  specifically 
with  the  sale  of  rights  to  utilise  one 
or  several  immovable  properties  on 
a  time-share  basis;  where  as  such 
information  must  be  supplemented 
by  a document  which  must be  made 
available to any person who requests 
it;  whereas 
in  formation 
the 
contained 
therein  must  constitute 
part of the contract  for  the  purchase 
of  a  right  to  utilise  one  or  several 
immovable  properties  on  a  time-
share  basis; 

Whereas,  to  give  the  purchaser  the 
chance  to  realise  what  obligations 
and rights he has under the  contract, 
he  has  to  be  given  a period  during 
which  he  may  cancel  the  contract 
which  takes  account of the fact  that 
the  property  is  often  situated  in  a 
State  and  is  subject  to  legislation 
which  are  different  to  those  of  the 
purchaser; 

12.  Whereas it is necessary  to avoid  any 
misleading  or  incomplete  details  in 
information  concerned  specifically 
with  one  sale  of  time-share  rights, 
whereas  such  information  must  be 
supplemented  by a document  which 
the  purchaser  must 
formally 
acknowledge  receipt  of  at  the  time 
the  contract  is  signed,  whereas  this 
supplementary  document  must  be 
drawn  up  in  a  language  which  the 
purchaser  states he knows;  whereas 
the  items  of  information  contained 
therein  must  constitute  an  integral 
part of the time-share  contract; 

13.  Whereas,  to  give  the  purchaser  the 
chance  to  realise  what  obligations 
and  rights  he has under  the  contract 
he  has  to  be  given  the  right  to 
withdrawal  for  a period which  takes 
account of the fact that the  property 
is  often  situated  in  a  State  and  is 
subject 
to  legislation  which  are 
different  to  those  of  the  purchaser; 
whereas  it  is  necessary  to  make 
provision  for  the  purchaser  to  be 
informed  by writing of this cooling-
off  period; 

14.  Whereas, 

to  give 

in  order 

the 
systems 

the 
purchaser  a high  level  of  protection 
specific 
and 
in  view  of 
characteristics  of 
for 
utilising  immovable  properties  on  a 
time-share basis, the contract for  the 
purchase  of  a  right  to  utilise  one  or 
several  immovable  properties  on  a 
time-share  basis  should  contain 
certain  minimal  elements;  whereas 
this  contract  should  be  drawn  up  in 
the  purchaser 
language  which 
a 
declares  he  knows. 

14 

Whereas  the  protection  afforded  to 
the purchaser  must be supplemented 
in terms of private international  law, 
given  the  time-share  contracts  are 
very  often  transfrontier  in  nature; 

I 5 

Whereas  there  is  a  risk,  in  certain 
cases,  that  the  consumer  may  be 
deprived  of  the  protection  accorded 
by. this  Directive  by  specifying  the 
1 aw  of  a  non-Member  State  as  the 
the  .contract, 
to 
law  applicable 
consequently. 
whereas, 
ri  _is 
include  m_.  this 
to 
necessary. 

I s 

Whereas  nothing  must  be  done  to 
prevent  Member  States 
from 
maintaining  or  adopting  provisions 
which  give  the  purchaser  greater 
protection  in  connection  with  time-
share  contracts, 

•

*

*> 

Directive  provisions  designed 
avoid  this  risk, 

to 

risk  of 

cooling-off 

!(>  Whereas_the  requirement,  on  the 
Part;_pf  the  yendor,  that  advance 
payments  be  made  before  expiry  of 
the 
period  may 
constitute^ _ a 
financial 
insecurity forthe purchaser, whereas 
it  is necessary  to  eliminate  this  risk 
by  prohibiting  advance  payments 
before expiry of this period;  whereas 
this prohibition  does not prevent  the 
parties 
the 
payment  of  an  advance  before 
expiry  of  the  period;  whereas  it  is 
necessary,  in  order  to  secure  the 
maximum 
financial 
amount  of 
security  for  the  purchaser,  to  limit 
ensure 
such 
reimbursement  of  the  purchaser  in 
the  event  of  cancellation  of 
the 
contract; 

agreeing  on 

advances 

from 

and 

to 

17.  Whereas, 

in 

the 

e v e nt 

of 
cancellation  of  a  contract  for  the 
purchase of  a right to utilise  one or 
several  immovable  properties  on  a 
time-share  basis  whose  price 
is 
entirely  or partly  covered by  a loan 
the 
granted 
purchaser must also be free to cancel 
this loan  contract; 

the  purchaser, 

to 

18  Whereas,  finally,  the  aim  of  the 
present  Directive is the creation  of  a 
set  of  commun  rules  assuring  the 
legal  and  economic  security  of 
purchasers in an area where they  are 
i nasi tuation of inferiority  compared 
tQ other  interested  parties;  whereas 
the.pxesen^Djreçjiy_e  wi 1J allow  the 
bal an ce to be redressed  between  the 
interested  parties,  necessary  for  the 
smonth, functioning  of  the  market; 
whereas  the  differences  in  national 
1 egi si at;ioni  the  tern tori aj_  Ji rnjis^ of 
this  legislation., and  the  evidently 
transfrontier  nature  of  the  market 
mean  that  a high  level  of protection 
l*°.r.purchasers, is  only  possible  at 
Community. JeyeL  gjven  the  joint 

^ 

seems  necessary 

competence of the Community  with 
the  Member  States  in  this  area,  the 
protection  of  purchasers.  m___the 
conditions  laid  down  by  the  present 
at 
directive, 
Community  level in order to support 
and supplement  the policy  followed 
by  the  Member  States  at  national 
appropriate 
level;  whereas 
instrument  to  attain  the objective  is 
a  Directive;  whereas  th ^provisions 
of  this  present  Directive  are  hence 
coform  with 
the  principle  of 
subsidiarity. 

the 

AS 

INITIAL  PROPOSAL 

AMENDED  PROPOSAL 

HAS  ADOPTED  THIS  DIRECTIVE 

MAS  ADOPTED  THIS  DIRECTIVE: 

Article I 

Article I 

is 

this  Directive 
to 
The  purpose  of 
approximate 
laws,  regulations  and 
the 
administrative  provisions  of  the  Member 
States  in respect of contracts  relating  to  the 
utilisation of immovable property on a time-
share  basis. 

is 

this  Directive 
to 
The  purpose  of 
approximate 
laws,  regulations  and 
the 
administrative  provisions  of  the  Member 
States  in  respect of contracts  relating to  the 
purchase of  a right  to  utilise one or  several 
immovable properties on a time-share basis. 

Article 2 

Article 2 

For the purposes of this  Directive: 

For  the purposes of this Directive: 

'contract relating to the utilisation  of 
immovable property on a time-share 
basis',  hereinafter  referred  to  as 
'time-share  contract',  means  any 
contract by which a vendor transfers 
or  undertakes  to  transfer  to  a 
purchaser, on  payment  of  a  certain 
price,  a  real  property  right  or  amy 
other right relating to the utilisation 
of  immovable  property  at a certain 
time of the year, which  may  not  be 
less  than  one  week,  covering  a 
minimum of three years, 

"immovable  property"  means  any 
building  or  part  of  a  building  to 
contract 
which 
relates,  such  as  a  house, 
flat 
bungalow,  studio  flat,  etc., 

time-share 

the 

this  Directive  and 

"vendor"  means any  natural  or  legal 
person  who, in transactions  covered 
by 
in  his 
professional  capacity,  transfers  or 
undertakes to transfer  to a purchaser 
a  real  property  right  or  any  other 
right  relating  to  the  utilisation  of 
immovable  property,  where  he  is 
the  said 
the  owner  of 
himself 
property  to which  the right  refers  or 
is  authorised  by  the  owner  to  carry 
out  such  transaction, 

"contract relating to the purchase of 
a  right  to  utilise  one  or  several 
immovable  properties  on  a  time-
share  basis", hereinafter  referred  to 
as "time-share contract", means any 
contract by which a vendor transfers 
or  undertakes  to  transfer  to  a 
purchaser, on  payment of  a certain 
price,  a  right  having  either  the 
characteristics  of  an  obligation  or 
the characteristics of a real right, and 
accorded  for  a minimum  period  of 
three years, to utilise one or several 
immovable  properties  during  a 
determinable time of the year; 

"immovable  property"  means  any 
building or part of a building already 
built  or  to  be  built,  for  use  as  a 
dwelling, to which the right which is 
subject  of  the  time-share  contract 
relates; 

this  Directive  and 

"vendor"  means any natural  or  legal 
person  who, in transactions  covered 
by 
in  his 
professional  capacity,  transfers  or 
the_jight 
undertakes 
which  is  subject  of  the  time:share 
contract, where he himself  is holder 
of  this  right  or  has  been  authorised 
by  the  holder  to  proceed  with  this 
transfer; 

transfer 

to 

AG 

"purchaser"  means  any  natural 
person  who, in transactions  covered 
by 
as  a 
the  purposes 
consumer, 
which  may  be  regarded  as  being 
outside  his professional  capacity 

this  Directive, 
i.e.  for 

acts 

acting 

this  Directive 

"purchaser"  means  any  natural 
transactions 
person 
in 
covered  by 
for 
purposes  which  may  be regarded  as 
being  outside  his 
professional 
capacity  to  whom  the_right_which  is 
subject  of  the  time-share  contract  is 
transferred. 

Article 3 

Article 3 

Member  States  shall  make  provision  to 
ensure  that,  in  the  time-share  contract,  the 
vendor  guarantees,  more  particularly: 

Member States shall make provision in their 
legislation  to  ensure that, in  the time-share 
contract,  the  vendor  shall  ensure,  more 
particularly: 

a) 

b) 

c) 

a) 

b) 

c) 

that  the  immovable  property,  and 
any  connected  facilities,  has  been 
built or will be built according to the 
state  of  the  art  and  under  such 
conditions  as  to  obtain  from  the 
authorities  of  the  country  in  which 
the property is or will be situated the 
necessary  authorisation,  according 
to  the  national  law,  so  that  he  can 
effectively  occupy the property; 

the  transfer  to  the  purchaser,  on 
payment  of  the  price  stipulated  in 
the  time-share  contract,  of  the  real 
right  or  any  other  right  of  use  in 
respect of the property, exclusive  of 
all  charges  or  subject  only  to  such 
charges as are stipulated  in the time-
share  contract; 

that,  if  the  immovable  property  is 
still  to  be  built,  the  work  will  be 
performed within the envisaged time 
limits; 

that  adequate  guarantees  will  be 
provided to compensate for possible 
loss to the purchaser resulting  from 
delay, defective performance or non 
services 
performance  of 
incumbent on the vendor; 

the 

that the transfer to the purchaser, on 
payment  of  the  price  stipulated,  of 
the  right  which  is  subject  of  the 
time-share  contract shall  take place 
simultaneously 
shall  be 
exclusive  of  all  charges,  with  the 
exception of those enumerated in the 
time-share  contract,  conferring  on 
him the right to do as he wishes with 
the properties or shares  concerned 

and 

Deleted 

where  appropriate,  the  purchaser's 
right  to  use,  in  addition  to  such 
services 
common 
lighting, 
as 
cleaning, 
refuse  collection,  etc. 
special  facilities  such  as  swimming 
pools,  tennis  courts,  golf  courses, 
saunas,  etc  exciting  at  the  time  of 
signature  of  the  time-share  contract 
or 
the 
conditions  stipulated  in  the  time-
share contract or otherwise provided 
for  by  the  vendor. 

in  the  future,  subject 

to 

d) 

2. 

Al 

d) 

c o n c e r n i ng 
the 

the  purchaser's  right  to  be  involved 
any 
in 
the  process  of  making 
t he 
d e c i s i o ns 
administration  of 
time-share 
the  management  and 
scheme  and 
maintenance  of 
to 
the  property 
which  the  time-share  arrangement 
relates.  The  purchaser  may .delegate 
this  right  provided  this  is  done  in  a 
separate  document  and  subsequent 
to 
time-share 
contract,  such  delegation  of  powers 
may  be  revoked  at  any  time 

signature  of 

the 

Member  States shall  make  provision 
in  their  legislation  for  appropriate 
measures  to  ensure  that  the  vendor 
g i v es 
g u a r a n t e es 
concerning,  where  appropriate: 

a d e q u a te 

deleted 

correct  completion  of  the  property, 

deleted 

c o n c e r n i ng 

where  relevant,  the  purchaser's  right 
to  be  involved 
i.a.An_.aj)riropnate 
manner  in the process of making  any 
d e c i s i o ns 
t he 
management  and  maintenance  of  the 
immovable  property.  The  purchaser 
may 
of 
participation  provided  this is done  in 
a separate  document  and  subsequent 
to 
time-share 
contract;  such  delegation  of  powers 
may  be  revoked  at  any  time. 

signature  of 

d e l e g a te 

right 

t h is 

the 

deleted 

in 

of 

any 

advance 
reimbursement 
payment, 
the  event  of  non-
completion  of  the  property  or  in 
exercise  of  the  right  to  withdrawal 
within  the  meaning  of  the  Article  7, 
without  prejudice  to  the  terms  of 
Article  7(4). 

Article  4 

Article  4 

"Member  States  shall  make  provision 
in 
their legislation  for  the bases for  calculating 
the  breakdown  of  common  and  occupation-
linked  charges  between 
the  purchasers, 
corresponding  to  their  share  of  the  right  to 
the 
U.t'h.se  the ^property;  where  relevant, 
share  of  each  category  of  charges  to  which 
each  purchaser 
fixed 
separately.  Charges  for  unsold  rights  of 
utilisation  may  not  be  apportioned  down 
among  the  purchasers  who  have  already 
sjJi.!.!ed  an  undertaking  but  must  be  imputed 
to  the  vendor 

liable  shall  be 

is 

The  Member  States  shall  make  provision 
for: 

1 ) 

2) 

measures to establish  the  purchaser's 
rights  and  obligations  in  respect  of 
the management  and  maintenance  of 
the  property  to  which  the  time-share 
arrangement  relates,  such  measures 
shall  be  in  conformity  with  point 
(m)  of  the  Annex; 

for 
and 

the  breakdown  of 
the  bases 
common 
occupation-linked 
charges,  in  annual  terms,  in  which 
to 
the 
required 
participate,  such  bases  shall 
lay 
down  clearly  and  unequivocally,  and 

purchaser 

is 

vt8 

in  conformity  with  the  terms  of 
point  (j)  of  the  Annex,  the  share  of 
each  category  of  charges  to  which 
each  purchaser  is liable, in  the  light 
of  the  situation  and  category  of  the 
property  to  which  the  time-share 
arrangement  relates, and  the  period 
and duration of the time-share  right. 

Article 5 

Article 5 

any  potential 

Member States shall make provision 
for  measures  to  ensure  that 
the 
vendor is required to make  available 
to 
a 
document  providing  information  in 
an  unequivocal, 
and 
complete  form  on  at least the  items 
set out  in the  Annex. 

purchaser 

detailed 

The document shall be in a language 
which 
states  he 
knows. 

the  purchaser 

" 1 

2. 

Member States shall make provision 
in  their  legislation  for  measures  to 
ensure that the vendor  is required to 
make  available  an 
information 
to  any  person  who 
document 
requests  one.  This  document,  in 
addition to the general description of 
the  property 
to  which  the  right 
which  is  subject  of  the  time-share 
contract relates, must at least contain 
concise  and  precise  information  on 
the  items  indicated  in  points  a),  c). 
d).  f).  gV  and  k)  of  the  Annex  as 
well as particulars on how to  obtain 
additional  information. 

that 

Member States shall provide in their 
legislation 
information 
contained  in  the  document  referred 
to in paragraph  1 is an integral  part 
of the time-share  contact; 

the 

agreement 
express 
Except  by 
between 
the  only 
the  parties, 
changes  to  this  information  which 
are admissible are those which relate 
to circumstances  independent  of the 
vendor's  volition 
Changes  made  to  this  information 
must  be  communicated 
the 
purchaser  before  conclusion  of  the 
contract.  The  _.contract  must 
expressly  mention  these  changes. 

to 

relating 

to  j he 
Any  _ advertising 
in  question 
immovable  property 
shall 
the  possibility  of 
indicate 
obtaining  the  document  referred  to 
in  paragraphe].  as  well  as  where  it 
can  be had  from. 

Any  other  form  of  advertising  shall 
indicate  the possibility  of  obtaining 
the  document 

^9 

Article  6 

Article 6 

shall  make 
"Member  States 
provision  to  ensure  that  the  time-
share  contract,  which  must  be  in 
writing,  contains  at  least  the  items 
mentioned  in  the  annex. 

The document shall be in a language 
which 
states  he 
knows. 

the  purchaser 

Member  States  shall  make  provision  to 
ensure  that  the  time-share  contact,  which 
must  be  in  writing,  contains  at  least  the 
following  items: 

a) 

b) 

c) 

d) 

e) 

f) 

unequivocal 
and 
a  detailed 
description of the property  in respect 
of  which  the  time-share  right  is 
transferred  to  the  purchaser.  This 
description  must  be  in  conformity 
with  the  information  contained  in 
point  (a) of  the  Annex; 

the  precise  type  of  time-share  right 
which  is  being  transferred  to  the 
purchaser.  This  type  of  right  must 
feature  among  those  referred  to  in, 
point  (d) of the  Annex; 

the period and date, in words, within 
and  from  which  the  purchaser  may 
exercise  his  time-share  right,  such 
information  being 
in  conformity 
with  the  information  contained  in 
point (f)  of the  Annex, 

express reference  to the other  items 
indicated  in the  Annex; 

the  date,  in  words,  of  signature  of 
the  contract; 

the  p u r c h a s e r 's 
d e c l a r a t i on 
indicating  that  he  has  received  and 
understood the document referred  to 
in 
of 
Article  5(1)  in  accordance  with  the 
second  paragraph  thereof. 

subparagraph 

first 

the 

Article  7 

Article  7 

Member  States  shall  make  provision  for: 

Member  States  shall  provide: _jn 
legislation  that 

their 

I 

llw  vmini 

the  obligation  on 
In 
inform  the  purchaser,  in  writing,  at 
the  time  of  signature  of  contract, 
that  the  contract  will  take  effect 
unless 
the  purchaser  withdraws 
within  a period  of: 

the conduit  shall  become  definitive 
the.  purchaser,  has  not 
provided 
exercised  his.  right.„of__withdrawaI 
with a period of at  least  28 calendar 
days  from  the  date  of  signature  of 
the  contract  or,  in..ilie_ev.e_nt._of 

2. 

3. 

at  least  14  calendar  days 
from  the date of signature  of 
contract,  or 

at  least  28  calendar  days 
from  the date of signature of 
contract  where 
time-
share  right  can  be  exercised 
in  a  country  other 
than 
where  the  purchaser  has  his 
normal  residence, 

the 

the information  referred to in point 1 
to  be contained  in  the  contact  in  an 
unequivocal and clearly legible form 
and  at  least  in the  same point  as the 
rest  of  the  contract,  immediately 
preceding 
the 
parties to the  contract; 

the  signatures  of 

the right of withdrawal provided  for 
in  point  1  to  be  exercised  by  the 
purchaser  by  notifying  the  person 
whose  name  and  address  figure  in 
the  contract  for  the  purpose  .  As 
the 
regards 
deadline, 
for 
notification  to be sent, by  registered 
letter,  before  expiry  of  the  relevant 
deadline; 

compliance  with 
sufficient 

is 

it 

2. 

measures  designed  to: 

3. 

a) 

right 

lay  down  the  conditions  in 
which,  where  the  purchaser 
of 
the 
exercises 
withdrawal  provided  for  in 
point  1,  any  sums  which 
may  be  reimbursable  are 
calculated  so  as  to  ensure 
that reimbursement  does not 
entail 
unjustified 
enrichment  for  either  of  the 
parties  concerned; 

any 

b) 

establish 
reimbursement 

the  deadline 

for 

conclusion  of  ai  preliminary  but 
legal\y  binding  contract,  from  the 
date of  signature  of this  contract; 

With  a view to  exercising  this  right 
of  withdrawal,  the  purchaser  shall 
address a written  communication  to 
the person  whose name and  address 
are indicated  in the contract for  this 
purpose.  As  regards  compliance 
with the deadline, it is sufficient  for 
the  communication  to  be  sent  in 
such  a  manner  that  documentary 
evidence of the fact can be produced 
before  expiry  of the  deadline; 

The vendor may not require advance 
payments from  the purchaser  before 
expiry  of the  deadline  mentioned  în 
paragraph  1.  However,  the  parties 
may  agree  on  payment  of  an 
advance  i_.__.this agreement  is  given 
cxpjessjy  _md_if  the  advance  does 
not  exceed  5%  oi^  the  value  of  the 
•su!_Çvincluding  taxes,  to  the  extent 
th_at_ _such  an  advance  contain s 
expenses  for  managing  the  dossier, 
such  expenses  may  not  exceed  a 
maximum  of  1%  of  the  sale  price 
and must be mentioned sepaLately in 
the  contract  A s 
to  a  possible 
advance  payment,  the  vendor  must 

*1 

provide  adequate  guarantees  forjjs 
reimbursement.  If  the  purchaser^n 
due  form  and  within  jhe  agreed 
deadline,  exercises  his;.._ng!lL_p\ 
withdrawal,  the  advance  payment, 
where  relevant 
less  the  fees  for 
managing 
the  dossier,  shall  be 
reimbursed  within  a  month  at  the 
latest,  starting  from 
the  date  of 
communication  of  withdrawal-
Article 8 

"Member  States  shall  provide 
legislation  that: 

in 

their 

a) 

b) 

if  the  price  is  entirely  or  partly 
covered  by  a  loan  granted  by  the 
vendor  or. 

if  the  price  is  entirely  or  partly 
covered  by  a  loan  accorded  to  the 
purchaser  bv  a  third  party  on  the 
basis  of  an  agreement  concluded 
between  the  third  party  and  the 
vendor, the purchaser shall be free to 
withdraw  from  the  loan  contract  if 
he  chooses  to  exercise  his  right  of 
withdrawal providedforin Article 7; 
in  such  cases  the  purchaser  must 
cancel 
loan  contract  before 
expiry  of the deadline referred  to in 
paragraph  1  of  that  article.  The 
procedures for exercising the right to 
cancel  the  loan  contract  shall  be 
determined  by  the Member  States, 

the 

Article  8 

Article 9 

Member  States shall  make  provision  for: 

1 

2 

clause  under  which 

the 
any 
purchaser  renounces  his  right 
to 
benefits  under  this  Directive  to  be 
null  and  void; 

any  clause  under  which  the  vendor 
is  exonerated  from  liability  arising 
from  this  Directive  to  be  null  and 
void 

Member States shall provide in their 
legislation  that  clauses  under  which 
the  purchaser  renounces  his right  to 
benefits  under 
this  Directive  or 
under  which  the  vendor  disclaims 
liabilities arising from  this Directive 
shall  not  bind  the  purchaser  under 
the  conditions  laid  down  by  then 
national  laws 

Member  States 
the 
measures  neçessary_ to  ensure  that 
the  purchaser  shall  not  be  depnved 

shall 

take 

SIX 

of  the  protection  accorded  by  this 
Diieçtiye thrpugh choice of the law 
of  a  non-Member  State  as  the  law 
applicable to the contract-

Article 9 

deleted 

Member  States  shall  make  provision, 
notwithstanding  a choice  of the  law by the 
parties to the contract  or the application  of 
the objective criteria of international private 
law for determining  which  law shall  apply, 
for  the  purchaser  not  be  deprived  of  the 
protection  given him  by this Directive; 

a) 

if  the  property  to  which  the  time-
share in a Member State and 

i) 

ii) 

iii) 

in 

if conclusion  of the contract 
that 
was  preceded 
Member State by a specially 
drafted  proposal  or  by 
advertising,  and 
the 
purchaser  has  completed  in 
that same  Member  State the 
necessary 
legal  steps  for 
completion  of the contract; 

if 

or 

the  vendor  or  his 
if 
representative  received  the 
order  from  the  purchaser in 
that Member State; 

or 

if  the  purchaser  went  from 
that  Member  State  to  a 
foreign  country  and  signed 
the ti me-share contract th ere, 
on condition that the journey 
was organised by the vendor 
for  the  purpose  of  inducing 
the  purchaser  to  conclude 
such a contract. 

Article 10 

Article 10 

âb 

The Member States shall make provision in 
their  legislation  for  the  consequences  of 
non-observance  of  the  provisions  in  this 
Directive. 

The Member States shall make provision in 
their  legislation  for  the  consequences  of 
non-compliance with the provisions in this 
Directive. 

Article 11 

Article 11 

This  Directive  shall  not  prevent  Member 
States  from  adopting  or  maintaining 
provisions which are more favourable with 
regard  to  protecting  the  interests  of  the 
purchaser in the field  in question, without 
prejudice  to  their  obligations  under  the 
Treaty. 

Member  States  may  adopt or maintain, in 
the  domain  covered  by  this  Directive, 
stricter  provisions  which  are  compatible 
with the Treaty, in order to ensure a higher 
level of protection for the purchaser-

Article 12 

Article 12 

inform 

Members  States  shall  bring  into  force  the 
law,  regulations  and  administrative 
provisions  necessary  to  comply  with  this 
Directive by 31 December 1994. They shall 
immediately 
the  Commission 
thereof.  When Member States adopt these 
provisions, these shall contain a reference to 
this Directive  or shall  be accompanied by 
such  reference  at the time  of  their  official 
publication.  The  procedure 
for  such 
reference shall  be adopted by the Member 
States. 

Member States shall bring into force 
laws,  regulations  and 
the 
administrative provisions necessary 
to  comply  with  this  Directive  by 
31 December  1995.  They  shall 
immediately inform the Commission 
thereof. 

When  Member  States  adopt  these 
provisions,  these  shall  contain  a 
reference  to  this Directive  or shall 
be accompanied by such reference at 
the time of their official publication. 
The  procedure  for  such  reference 
shall  be  adopted  by  the  Member 
States. 

Member  States  shall  communicate 
to  the  Commission  the  text  of  the 
fundamental  provisions  of  internal 
law which they adopt in the domain 
covered by this Directive. 

Article 13 

Article 13 

This Directive is addressed to the Member 
States 

This Directive is addressed to the Member 
States 

^ </ 

ANNI'X 

IMTIAI^PROPOSAL 

AMKNDKD  PROPOSAL 

Minimum  list of items  to  be included in  the 
document  referred  to  in  Ailicles  5(1)  and 
6(d) 

Minimum  list of items  to  be included  in the 
contract  referred  to  in Article 6 

a) 

Identity  and  place  of  residence  of 
the parties, with  a precise  indication 
of  the  legal  status  of  the  vendor  at 
the 
the 
time  of  conclusion  of 
contract, as well  as. where  relevant, 
the identity and place of residence of 
the  owner  of 
immovable 
property. 

the 

b) 

The precise nature of the right which 
is subject  of the time-share  contract 

a) 

b) 

is  being  built  or 

A  description  of  the  immovable 
property  to  which  the  time-share 
rights  relate  or  will  relate,  giving 
details  of  geographical  situation, 
whether  the  property  has  already 
is 
been  built, 
planned  and  stating  that  it  has  been 
built or will be built according to the 
state  of  the  art  and  so  as  to  obtain 
from the authorities of the country in 
which  the  property  is  or  will  be 
situated the necessary  authorisation, 
under national legislation, so that the 
property  in question  can  effectively 
be  occupied. 

the 

The nature of the vendor's title to the 
land  on  which 
immovable 
property  is  or  will  be  located;  any 
charges  to  which  the  property  is 
subject  (e.g. mortgages  easements); 
whether the vendor has been granted 
the  requisite  permits  (e.g.  building, 
connection  to telephone,  electricity, 
water, gas, TV  services,  etc.). 

c) 

The  precise  legal  structure  of  the 
time-share  and  its  duration. 

c) 

When  the  property  to  which  the 
time-share  right  relates  is a  specific 
one,  a  precise  description  of  the 
property  and  its  location. 

d) 

the 

indication  of 

An 
time-share 
rights  offered  by  the  vendor  and 
the  number  of 
their  duration; 
under 
properties 
construction 
the 
furnishings  and  fittings  associated 
with  each  property 

or  planned; 

constructed, 

d) 

Whenever  the  immovable  property 
is under  constructjon 

1 ) 

2) 

3) 

the_^iate  of  completion  of 
the  construction 
estimated date of completion 
ofjhe  works, 
if  it  is a specific  immovable 
property,  the. nuniber  of  the 
building  permitjand  the  full 
the 
name,  and  address  of 

àHS. 

4) 

5) 

authorities  or  authorities 
responsible, 
the  state  of  completion  of 
common  services  rendering 
the 
immovable  property 
operational  (gas, electricity, 
water, telephone). 
the guarantees referred to in 
Article 3(b); 

the  common  services  (lighting, 
water, maintenance, waste removal) 
to  which  the  purchaser has or will 
have  access  and  the  applicable 
conditions; 

e) 

The  total  number  of  time-share 
rights  in each property. 

e) 

f) 

A  clear  and  precise  description  of 
the  fixed  and  variable  periods  of 
occupation, stating the arrangements 
for determining such periods. 

f) 

sport and leisure facilities to which 
the  purchaser  has  or  will  have 
access,  and,  where  relevant,  the 
applicable conditions; 

g) 

The  date  on  which  the  purchaser 
may occupy the property. 

g) 

a precise indication of the period or 
periods during which the right which 
is subject of the time-share contract 
may  be  exercised  and,  where 
relevant, the duration of the scheme 
that has  been  established;  the date 
from  which  the  purchaser  may 
exercise the right which is subject of 
the time-share contract; 

the total  price which the purchaser 
must pay to exercise the right which 
is subject of the time-share contract; 
this  shall  include  the  sum  which 
must  be  paid  by  the  purchaser  for 
utilisation  of  common  services and 
facilities,  the  basis  for  calculating 
the charges linked to occupation of 
the  immovable  property  by  the 
purchaser, mandatory legal charges 
(taxes,  dues)  and  additional 
a d m i n i s t r a t i ve 
c h a r g es 
(management, upkeep, repairs); 

h) 

Common  facilities  (e.g.  swimming 
pool,  sauna,  tennis  courts,  golf 
courses, etc.) and existing and future 
services  to  which  the  purchaser  is 
entitled, and the date on which such 
facilities  and services  may be used 
by the purchaser. 

h) 

i) 

clearly  and 

The  total  cost  for  the  purchaser, 
laying  down 
unequivocally the cost of the various 
time-share  rights  over  the  various 
periods  of  the  year,  where  a 
leasehold  arrangement  is involved, 
the rent must be specified. 

i) 

a  clause  mentioning 
the 
purchase  shall  not  involve  any 
outgoing, charge or obligation other 
than those stipulated in the contract; 

that 

. &, 

j ) 

The annual  cost  which  the purchaser 
is expected  to assume  for  use of  the 
common  facilities  and  services,  the 
annual  amount  of  charges  related  to 
occupation  of  the  property  by  the 
purchaser;  the  annual  statutory  and 
mandatory  charges  (e.g.  taxes,  fees, 
etc.)  and  the  annual  administrative 
(e.g.  management, 
overheads 
upkeep, 
their 
expected  development,  any  costs 
payable  by the purchaser  for  special 
services on  request 

repairs,  etc  )  and 

k) 

The  guarantee 
Article 3 

referred 

to 

in 

k) 

whether  or  not  the  purchaser  jnay 
participate, in  an  exchange  project 
and/or  resale  of  the  rightwhich  is 
subject ofthe  time-share contract, as 
well  as  possibIe  costs  if  the  vendor 
a 
should  organjse 
of 
system 
exchange 
resale;  where 
and/or 
relevant,  a  statement  to  the  effect 
that sale ofthe  right  which  is  subject 
ofthe  time-share  contract  cannot  be 
assured  at  a  fixed  price  or  within  a 
fixed  period; 

information  on the right to withdraw 
from  the contract,  precise indiçati.on 
of  the  nature  and  quantity  of  fees 
which  will  not  be  reimbursed  to  the 
purchaser  pursuant  to  Article  7(3), 
should  he  exercise  his  right 
to 
w i t h d r a w;  w h e re 
r e l e v a n t, 
information  on  the  possibility  of 
withdrawing  from  the  loan  contract 
linked  to  the  time-share  contract  in 
the  event  of  withdrawal  from  the 
latter; 

1) 

m) 

(n) 

1) 

date and place ofthe  signature of the 
contract  by  both  of  the  parties. 

Clear  and  unequivocal  details  of 
conditions,  limits  and  cost  of  time-
share  exchange  and  resale  services, 
where these services  exist;  if thy  do 
not  exist, this  must  be  indicated.  At 
any event, there must be a statement 
to  the  effect  that  the  sale  of  time-
share  rights  cannot  be  assured  at  a 
fixed  price of  within  a fixed  period. 

in 

of 

respect 

u p k e ep 

Measures  which  have  been  or  will 
the 
be 
taken 
and 
m a n a ge  m e n t, 
maintenance  of  the  property,  and 
any  measures  adopted  or 
to  be 
adopted  relating  to  the  purchaser's 
participation  in  the  administration 
and  management 

The  period  within  which 
the 
purchaser  can  exercise  his  right  to 
the  contract,  as 
witluliaw 
referred 
the 
ariangements  for  so  doing  and  the 
effect  of  withdrawn!!' 

in  Article  7, 

from 
to 

§Cf 

Revised  impact  assessment  form 

IMPACT  OF  THE  PROPOSAL  ON  BUSINESSES  WITH  SPECIAL  REFERENCE  TO  SMALL 
AND MEDIUM-SIZED ENTERPRISES. 

Title: 

Amended  proposal  for  a  Council  Directive  on  the 
protection  of  purchasers  in  contracts  relating  to  the 
purchase of  a right  to utilise one  or  several  immovable 
properties on a time-share basis. 

Reference  No: C0M(92) 220 final  - SYN 419. 

1 

Taking  account  of  the  principle  of  subsidiarity,  why  is 
Community  legislation  necessary  in this  area  and  what  are  its 
main aims? 

Contracts  relating  to  the  purchase  of  a  right  to utilise one 
or  several  immovable properties on a time-share  basis are of a 
distinctly  transfrontier  nature;  the  great  majority  of 
Community  citizens  who  hold  time-share  rights  have  their 
timeshares  in  a  Member  State  other  than  their  country  of 
residence.  Moreover,  only  four  of  the  Member  States  have 
specific  -  and  highly  divergent•-  legislation  on  timeshares. 
Community  purchasers  can  only  be  protected  by  Community 
legislation. 

The  main  aim  of  the  proposal  is  to  create  a  foundation  of 
common  rules  so  as  to  give  the  consumer  legal  and  economic 
security  in  a  domain  in  which  he  is  weaker  than  the  other 
parties concerned. 

The  impact  on business 

2 

Who will  be affected  by the proposal? 

Companies  selling  time-share  rights. This  is a  relatively  new 
sector  which  is  burgeoning  throughout  the  Community,  and 
mainly  consists of small  and medium-sized  enterprises, many of 
which  are  immune  from  any  supervision  in  the  Member  States 
where  they  sell  their  services  because  their  head offices  are 
often  located  in  tax  havens;  these  enterprises  offer  their 
services  in premises  located  at  seaside  and  mountain  tourist 
resorts  (such  as  ski  resorts,  the  Mediterranean  coast, 
Atlantic  islands). 

3 

What  measures will  businesses  have  to  take  to comply  with  the 
proposal? 

Before  signing  the  contract  they  will  have  to  provide  the 
purchaser  with  more  precise  and  detailed  information  on  the 
rights  they  are  offering,  and  they  will  also  have  to  give 
purchasers a cooling-off period  during which  they may withdraw 
from  the  contract  without  incurring  a  penalty.  This  cooling-

ZÇ 

off  period, which  in the amended  proposal  has been extended  to 
28  days, may  add  to  the  costs  of  firms  in  the  sector;  firms 
will  also  have  to take  into account  that,  during  the cooling-
off  period,  advance  payments  may  not  be  requested  unless  the 
purchasers  concur  and  that  such  payments may  not  exceed  5% of 
the sale pr ice. 

What  economic effects  is the proposal  likely  to have? 

on employment 
on  investment  and  the creation of new  businesses 
on  the competitive position of businesses 

The  instrument  should  have no particular effect  on  employment, 
while  the creation of  new businesses will  be eased  given  that 
increased  market  transparency  will  have  beneficial  effects on 
competition.  However,  there  may  be  a  negative  effect  on  cash 
flow,  mainly  because  of  the  extension  of  the  cooling-off 
period  and  the restrictions on advance payments. 

Does  the  proposal  contain  measures  to  take  account  of  the 
specific situation of small  and medium-sized  firms? 

Firms,  whatever  their  size,  have  nothing  to  fear  from  the 
proposal  provided  they  are  serious  and  honest.  The  aim  is to 
target  bogus  firms  which  conceal  their  activities  from  the 
authorities and practice what  amounts to unfair  competition to 
the  detriment  of  the  honest  firms  in  the  sector;  hence  the 
objective  is  to  put  at  end  where  possible  to  certain 
commercial  practices  which  may  Jeopardise  the  smooth 
functioning of the market. 

Consultation 

List  of  organisations  which  have  been  consulted  about  the 
proposal  and outline of their main views. 

European  Timeshare  Federation.  The  ETF  is  for  the  proposal, 
although  it would have preferred  a shorter  cooling-off  period. 
This  federation  of  timeshare  firms  hopes  that  the  Directive 
will  shake  out  the market  by  leading  to  the  disappearance  of 
firms  which  use  unfair  commercial  practices  (under  the  cover 
of anonymity) and which are responsible  for  the bad  reputation 
the sector  has at present. 

Consumers' Consultative Committee: very much  in favour. 

Standing  Committee  of  Notaries  in  the  EC:  for  the  proposal 
because  it will  increase  market  transparency  and  improve  the 
protection of purchasers. 

ISSN 0254-1475 

COM(93) 487 final 

DOCUMENTS 

EN 

10 

Catalogue number : CB-CO-93-520-EN-C 

ISBN 92-77-59724-0 

Office for Official Publications of the European Communities 
L-2985 Luxembourg