Time-share France

Timeshare in France – the Law and options for terminating Timeshare in France

Timeshares are common legal practice in France due to the influx of foreign tourists every year, France being one of the world most popular tourist destinations.

However, understanding the basics of the French legal system is fundamental in order to discover more about French timeshares.

Even if two European directives (94/47 CE and 2008/122 CE) helped to harmonize the different legislations, the French timeshare system is quite different from the systems in other European countries and can seem hard to understand.

  1. The French timeshare system

The nature of timeshare is quite specific in France because it is linked to shareholding.

In order to acquire a timeshare in France the purchaser has to sign a stock purchase contract. These shares belong to a civil firm called in French “société d’attribution d’immeubles en jouissance a temps partagé” that means “firms allocating a flat to use time-sharing”.

By this contract, the consumer doesn’t own the property, but owns the right to use the property at times determined by the contract or the status of the firm. The flat cannot have a commercial purpose nor be a leisure space like a pool for example.

The contract has to be for a duration superior to one year.

The consumer is entitled to get information about the flat, in writing, such as :

–          Description of the property and location

–          Legal nature of the rights given by the contract

–          Duration of the contract

–          Services and installation that the consumer can use and their cost

–          Duration of the termination/ cooling-off rights : 14 days after signature of the contract

–          Information about terminating the contract

–          Ban of any advanced payment during cooling-off period

Rules about French timeshares are contained in the consumer code (“Code de la Consommation”). It means that the persons acquiring the rights to use the flat timesharing are consumers. Therefore, they are protected by European and French consumer law which is very protective of consumers.

For example, the contract has to be written in French if the flat is located in France. And it also has to be written in the language of the consumer if he is from another country in the European Union.

  1. Rights and obligations linked to a timeshare

With the timeshare contract, the consumer has the right to use the flat during the periods scheduled for the duration of the contract, that means the exact same week for example, every year for the time of the contract.

The consumer, who is also a shareholder, has the right to attend and vote at general annual meetings. He can exercise his voting right even by not being physically present to the meeting.

Nonetheless the consumer is subject to some obligations, in particular financial obligations.

The shareholders are liable of the firm’s losses depending on the number of shares they hold.

The shareholders have to accept and subscribe to funding appeals in order to improve, build and fix the real property.  These appeals are proportionate to the number of shares possessed by the consumer.

The shareholders have to pay for maintenance costs. The maintenance of the flat is one of the corporate object of this kind of firm.

  1. How to exit a French timeshare?

Firstly, there is a possibility to use the termination rights provided by the contract. This right can only be used during the 14 days after the signature of the contract. It can be invoked for any reason.

Then, there are several other possibilities to assist consumers for exiting the timeshare.

The first possibility is to obtain a prior approval to exit, from the other shareholders, during an annual general meeting. The difficulty of this possibility is that every shareholder has to agree on the agreement to discharge the consumer from the timeshare. Moreover, this discharge leads to an increasing of maintenance fee for the other shareholders, which means that they can be quite reluctant to give this approval.

The second possibility is to sell or to give the shares that the consumer possesses.  In order to realise this sale, the consumer has to get the approval of other shareholder depending of the firm’s status. Beyond this difficulty, selling timeshares currently is very hard, as many owners try to sell their timeshare, because they are too old to enjoy it or because maintenance fees are too expensive for them.

The third possibility is to exercise the right to exit. However, the conditions to exercise this right are fairly hard to reach. In this case, the firm will have to pay back the value of the social rights. This possibility has to be exerted in front of a judge.

French rules provide two possibilities:

–          Refusing shares acquired by a succession within a period of 2 years maximum after the transfer was made

–          Exiting the timeshare because it became impossible to use the flat (closing of the place) or by giving a reasonable ground (= “juste motif”) such as financial trouble or health problems

–          Depending on when the contract was signed, it may be possible to argue a termination applying consumer regulations

The fourth possibility is to wait for the dissolution of the firm.

SUMMARY

Even if French timeshares are a good way to facilitate holidays in the Alps or on the Cote d’Azur, consumers need to keep in mind that acquiring a timeshare is easy but leaving it is far more difficult.

Furthermore, the cost of the annual maintenance fees should be carefully considered before making a decision to buy a timeshare.

Charline Vuillermoz

 

About the author:

Charline is a French trainee attorney who specialises in business law and international law. During her last year of barrister school, she is spending 6 months on secondment with Athena Law in order to have a better understanding of English legal practice and Common Law.

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