GLOSSARY OF NEW HOLIDAY PRODUCTS AND THE MIXED USE AND ENJOYMENT OF TOURIST RESORTS
(Francisco Javier Lizarza)
A
Affiliated Rersort

A resort which by entering into the appropriate contracts has joined one of the international exchange chains. 

In the Interval International network the resorts are categorised as “affiliated resort”, “select resort” and “premier resort”, the latter being the one of highest category.

In the RCI network the resorts are categorised as "stansdard resort", "Hospitality Award", "Silver Crown" and "Gold Crown"depending on their quality. 

Application period

Time period during which an exchange company affiliate can apply for such an exchange.

ARDA

ARDA (American Resort Development Association) is the trade association of the United States of America for this economic Sector. See http://www.arda.org/arda/home.aspx

 

BC
Ban of deposits

During the fourteen-day withdrawal period, no payments or advanced payments may be made or any monies whatsoever handed over by the consumer to the trader in any respect and by any means whatsoever which shall or may be binding  upon the consumer in respect of contracts for rotational enjoyment, long-term holiday products, resale or exchange.

Biennial (system or occupation periods)

Annual periods of occupation of the units in a rotational enjoyment or timeshare system which need not always be enjoyed every year but also in alternate years, normally every two years (even or odd years). As opposed to the United States, these are not yet very common in Europe. While there are doubts as to whether such occupation periods are admissible under the Rotational Enjoyment Rights System of the Spanish Timeshare Act LAT 42/1998, they are expressly admitted by the new LAT 4/2012.

Bogus bonus week

One of the positive consequences arising from the application of the EU countries’ legislation after implementing 1994’s Timeshare Directive and from the foundation of the only trade organization of this Sector called OTE (currently RDO) was the obligatory self-exclusion from the Sector of operators acting outside the law or in breach of the codes of conduct of the said trade organisation. Such an exclusion, however, has not prevented the few albeit very active fraudulent operators from eluding the limits of the legal regulations on rotational enjoyment by creating other products outside the scope of the aforesaid Regulation, such as the Bogus Bonus Weeks, and often contravening the Data Protection Act and thus engaging in unfair competition with the operators of the Sector.- RDO has reported such operators and furnished the Police with documentation on them, which has given rise to legal proceedings against them.- See “Enforcement Project”.

Bonus week

Bonus occupation weeks given by exchange companies to new members as a way of promoting and building customer loyalty.

Bottom up

Member of the sales team in charge of verifying the contractual documents of the sale and who is authorised to enter into the contracts for sale, affiliation and remaining ancillary or complementary products on behalf of the marketers.

Botton line price

Minimum selling price.

Branded residences

New real estate and/or tourist investment format, with or without occupation periods, which is similar to “private residences” and allows the owners thereof to enjoy select high-end services provided by a highly prestigious branded company or hotel chain. Access is thus gained to a very high level of service, with uniformed porters, security service and routine cleaning and maintenance of the residence to ensure its optimum condition. They include top quality amenities and services which vary depending on the product but always remain at the top of the range. We consider that they do not necessarily have to be considered tourist accommodation and that they could be established as a non-tourist multi ownership community in Spain and as a non-tourist rotational enjoyment community in Catalonia.

Branding Please see  "Timeshare Branding"
Bulk banking

Number of weeks which a company or trader lodges with the exchange company to be used for promotional purposes or to be transferred to future affiliates of the network.

Cession points

The term “cession points” refers to points whose acquisition involves, as consideration to the transferor, the assignment by the purchaser of a right of rotational enjoyment owned by the purchaser which is then incorporated into the assets of the points system (points club) in addition to a sum of money.

 See “points system”.

 

Check-in day

The first day of the occupation period to which a DAT holder is entitled is called “check-in day” and, at least where the occupation periods are weekly periods, they are normally a Friday, Saturday or Sunday. In tourist destinations, the day generally chosen by the promoter for the occupation periods to begin is usually the day with a highest amount of flights arriving in the destination where the resort is located.

Check-out day

Day on which the occupation period inherent in a DAT ends. The exact check-out date on these days is normally contractually or statutorily established several hours before the exact termination of the occupation period so that the unit can be prepared and ready for the next occupant.

Closer

Member of the sales team whose role is “closing” all the terms and conditions of the contract of sale to the consumer, which includes the economic conditions (price, form of payment, etc) and remaining conditions of the product including the legal requirements in respect of consumer protection. 

Club

In the Anglo Saxon jurisdictions, as far as timeshare goes, a club is created as a non incorporated entity whose Spanish equivalent may be an entity which is not registered with any public registry of entities. It does not have a legal personality but it is capable of having rights and obligations. It ultimately involves an association contract intended to allow the “ordinary” members of the club to use and occupy a predetermined or determinable accommodation unit during an annual period, which is also predetermined or determinable by application of objective rules, whereby they are also entitled to enjoy such ancillary services as may be established in its own rules. The founder members may as promoters of the club admit as many new members as available occupation rights there are, i.e. as many new members as accommodation units are subject to the club and annual periods created in respect thereof.

The most usual type of club is the club-trustee. (See “club-trustee”).

Club Comitee

In the traditional club-trustee system, the Club is governed by the General Meeting of Members which, in turn, appoints a Club Committee (Management Board).- It usually consists of two original members, i.e. the promoter of the Club (founder member) and the service providing company, and a higher number of members elected only by the ordinary members (namely the users or holders of the rights of occupation).

 (See “club-trustee”)

Club member

See “membership” and “club-trustee”.

Club-Trustee

The club-trustee or club-trustee system, which is the most common system in Spain and in Europe, is a legal system subject to the law of an Anglo Saxon territory which combines (i) the Club as a corporate entity without a legal personality of its own (see “Club”) but capable of having rights and obligations, and (ii) the concept of “trust”, which is typical of Anglo Saxon legislations.  

The legal structure we could consider “traditional” and most widespread in this system is based on three foundational documents: (i) The Club Constitution and Articles of Association, (ii) the Management Agreement, and (iii) the Deed of Trust.

I.- By virtue of the “Club Constitution”, one or more traders decide to formally establish a Club for the purpose of allowing its members to enjoy an accommodation unit on a rotational basis and, in order to regulate such a rotational enjoyment of the unit, they establish a set of “Articles of Association” or rules containing all the rights of the members (mainly the right to occupy the unit during a certain period, to decide on the budget based on which the annual maintenance fees are determined and to participate in the governing bodies of the Club). 

II.- At the same time, the traders-promoters of the Club (called founder members) enter into a Management Agreement on behalf of the Club with a specialised service-providing company, and into 

 III.- a third contract called Deed of Trust. The parties to the contract are the Club itself (represented by its founder members) and the trustee company (the trustee), which is basically entrusted with:

      1.- The formal establishment of a non-trading company whose capital is formally and effectively owned by the trustee, which is also its director, in accordance with law and with the Deed of Trust. Such a company is normally called owning company.

      2.- The acquisition, by any title admitted in Law, of real properties which will be used as accommodation units for the Club Members.

      The founder members in this case provide the new company with the necessary funds for such an acquisition and, as consideration, receive as may Club affiliation rights as apartments and occupation periods in each such apartment there are. 

     3.- By virtue of the Deed of Trust, the trustee agrees and undertakes to hold title to the apartments so that these shall at all times serve the purpose for which they were acquired and shall therefore remain in compliance with the rules and Articles of Association of the Club, the founder members being therefore unable to dispose of the units. 

      The trustee, as owner and actual administrator of the capital in the company which owns the units, may under no circumstance – even where consent is given by the majority of the Club members, whether founder or ordinary – dispose of the properties held by the owning company in any way which is contrary to or prevents the right of an ordinary member to use the unit during the occupation period assigned to them every year of the system’s lifetime. Disposal of the unit by the promoter (founder member) is thus prevented and a

more effective and practical protection of the right acquired by the consumer is achieved.

 A Club membership or affiliation involves the right to use an accommodation unit during an annual period and the trust is established as a means of effectively protecting the consumers against the promoter of the Club, the service providing company and third parties. The need for an effective form of consumer protection had been voiced even before the issuance of the 1994 Directive and, given such a protection, it became a defining element of the intent to acquire such rights.

There are now simpler structures for the organic operation of a club, but the participation of the trustee to play the aforesaid role remains in them as an essential element of the system.

See “trustee” and “Club”.

Club-trustee system

See “club-trustee”.

Code of Conduct

RDO (formerly OTE) adopted a deontological code which its members had to observe mainly in regard to good marketing practices. Directive 2008/122/EC and, therefore, the national legislations into which its precepts have been incorporated, contemplate such codes with the obligation to inform the consumers where the trader has adhered to any of them.

RDO’s own  Code of Ethics points out that:  The objective of this Code of Conduct (“the Code”) is to support the RDO Members in both promoting, and in operating in, the Resort Development Industry. The Code is founded on the understanding that business and consumers are commercially interdependent in the Resort Development Industry.- Secondly, this Code aims to ensure that consumers that have purchased products and services of companies operating in the Resort Development Industry can fully enjoy their contracted products and services.- Accordingly, Members will seek in all their business dealings to hold a fair balance between the legitimate interests of both parties, and to ensure a high degree of satisfaction for consumers.- The Code is designed to complement and reinforce all applicable laws as well as to establish RDO and industry “best practice” standards.

Cold caller list

The website of the Spanish consumer association called MINDTIMESHARE (http://www.mindtimeshare) publishes on a monthly basis a “cold caller list”, which is a list of websites used by operators suspected of breaching the consumer protection rules and even engaging in fraudulent practices, to the detriment of those operators who act in compliance with the Law, sometimes using lists with personal data from an illicit or unreliable source. See "Mindtimeshare".

Collection of management fees.

One of the administrative services offered by the trustees to the promoters and service providing companies or management companies involves taking care of collecting the annual fees payable by the club members for the services provided to them. This is particularly useful for the promoters or service providing companies in Spanish resorts where most of the members live in other countries and, essentially, do not speak Spanish. 

Condo-Hotel Condotel

While important precedents of what we now call “condo-hotels” have existed in Spain for over 45 years (1968) – specifically “Hotel Meliá Castilla de Madrid” and “Cadena Euroteles” – the growth of this form of tourist operation of buildings arises from its extensive and successful development in the United States. In fact, the commercial name “condo-hotel” is an acronym formed by the words “condominium” and “hotel” used in the United States.

By way of a very concise explanation, the operation of a building as a condo-hotel entails that each titleholder acquires direct or indirect ownership (in a familiar and very general sense) of an apartment, room or accommodation unit in a building as well as the entitlement to use it during a certain period each year and to receive a rent during the rest of the year – insofar as such a unit is part of the communal operation – in exchange for its being used by third parties. 

Thus, there are three main legal concepts involved: 1.- In a building where there is a ‘horizontal division’, each one of the various properties which constitute accommodation units belongs to its owner, who is entitled to use it during a certain period each year (i.e. one month), and during the rest of the year it is rented out or let to third parties, a rent being thereby obtained which can be fixed, variable or variable with a minimum fee. In order for the whole to be commonly operated, a community of owners is set up which, on the one hand, has the characteristics of an ordinary community of homeowners and, on the other hand, those of a functional or specific-purpose community as it is aimed at the joint operation of the units and to obtaining a rent for the temporary assignment for valuable consideration thereof during the whole year or during the whole year except the period reserved by the owner for personal use. 2.- The second formula which is normally used where there is no ‘horizontal division’ of the building is the functional or specific-purpose community, whereby each ‘investor’ is vested with ownership of a specific part of the whole building and the associated right to use a specific part of the building, which is identified as an accommodation unit (room, apartment, etc). The ‘investor’ shall assign the use of the unit assigned to them (except for a short period reserved for their personal use) to the functional community of owners of the one, non-horizontally divided property as a whole. 3.- And the third formula is similar to that used at certain golf courses where the ‘investor’ purchases a share in a civil partnership or trading company which entitles them to a share in the profit obtained from operating it in the applicable proportion, without prejudice to the possibility of occupying an accommodation unit during a certain period. The most popular and commonly used formula is the first one.

It has been sometimes attempted to use these systems (particularly the first one) to avoid, in contravention of law, the mandatory use for tourism purposes of buildings erected on land so classified (which is in principle cheaper) in order to use it as ‘residential housing”. As a result, different rules concerning town planning and tourism have been included in the regional legislations (many of which were not very appropriately introduced insofar as they encroach upon the State’s legislative competence) to try to prevent such an irregular use. Examples of this are the regional legislations of Madrid, the Canaries, Andalusia and the Balearics, which demand that the exclusive tourist use of the building be somehow noted or registered at the Land Registry.

When we talk about condo-hotels, we are in fact talking about a very common practice in tourist accommodation resorts where a distinction must be made between the owner of the resort on the one hand and the ‘operator’ of the resort on the other, who do not necessarily have to be (and now in the majority of cases are not) the same party. The resort can owned by one or several persons and the sole operating company must be one only company which is registered with the Tourism Registry to such end. Whether or not the resort is ‘horizontally divided’, all the owners must ‘fully’ assign the operation of each and every unit, for the hole period of use, to the sole operating company, who shall pay them a previously agreed rent in exchange for such an assignment.

Consumer

Name given by exchange companies to the resorts which fail to comply with the terms and conditions of the contract and are suspended both for in terms of affiliations of new members and in terms of exchange services.

Converter

Promotional gift given out to the persons attending a product presentation

Cooling off period

Common English name given to the period during which the right to free withdrawal from a timeshare contract can be exercised. "Periodo de reflexión" is also the vulgar translation into Spanish of "cooling off period".  See “Right of withdrawal”. Per

 

DE
DAT (DATs in plural)

Spanish Acronym of Derecho de Aprovechamiento por Turno (Right of Rotational Enjoyment).

DAT Holders Community

The Spanish Timeshare Act LAT 4/2012 provides that the Bylaws of an in-rem or personal leasehold rights scheme of rotational enjoyment of tourist property shall envisage the creation of a community of holders of DATs (Rights of Rotational Enjoyment, for its Spanish initials) and lays down a set of minimum requirements concerning the majority required to modify the established scheme and to pass any other resolutions, as well as the allocation of one vote per DAT.- Otherwise, the scheme is governed by its own bylaws and, only on an ancillary and a subsidiary basis, by the provisions of the Spanish ‘Horizontal Property Act’ which governs the ‘operation of Communities of Property Owners’. The purpose and objective of such “communities of DAT holders”, therefore, must be the modification of the established scheme in agreement with the promoter of the scheme, the collective defence of their rights and any other duties attributed to them by the bylaws which are not specifically assigned to the promoter of the scheme.

Deed of Adaptation (DoA)

The Spanish Timeshare Act LAT 42/1998 imposed the obligation for all the pre-existing systems or schemes as at the date of its enactment to be adapted to it by the execution of a “deed of adaptation” in one of the following ways: (i) Adaptation for merely publicising purposes at the Land Registry which, therefore, does not involve any change in the legal nature of the rights previously created, (ii) transformation of the pre-existing rights into in-rem or leasehold rights in accordance with the said Act, and (iii) a combination of the two types of adaptation by virtue of which the rights already marketed would only be publicised and those not yet marketed would become DATs.

Similar to this deed is what we could currently denominate “publicising deed".

Deed of Dissafection

This term is an English adaptation of the Spanish “Escritura de Desafección” (something like ‘Deed of Release’) in respect of apartments subject (“afectos”) to a pre-existing rotational use scheme  adapted to the Spanish Timeshare Act LAT 42/1998. See “Escritura de desafectación

Deed of Dissafection (DoD)

By the deed of adaptation, properties were noted in the Land Registry as subject to the pre-existing scheme and, by the “deed of disaffection”, certain units of the pre-existing scheme were excluded by virtue of a decision made by the governing bodies of the pre-existing scheme in accordance with its own rules, such a “disaffection” (the Spanish word desafectación means release or exclusion) being thus noted in the Land Registry.

Deed of trust

Sometimes also translated into Spanish as “contrato de fiducia”, this is another one of the constitution documents  of a club-trustee system (See “club-trustee”).

Deposit period

Time period during which a member can deposit their week with the exchange system.

Disclosure document

The repealed Act 42/1998 obligated the timeshare trader to furnish a leaflet called “disclosure document” which had the status of a binding offer and had to meet the minimum requirements envisaged by the said Act.- The new Act 4/2012 has replaced it with the “standard pre-contractual information  form for rotational enjoyment contracts”.- See “standard pre-contractual information form”.

Discount club

The term “Discount Club” refers to a “long-term holiday product” which, as defined by Directive 2008/122/EC and by the Spanish Timeshare Act 4/2012, is a contract of more than one year in duration whereby the consumer acquires, for

valuable consideration, essentially the right to obtain discounts or other advantages in respect of their accommodation unit, whether alone or in combination with travels or other services.  It is therefore a “discounts” programme similar to those offered in other areas of general trade whose main feature is that it refers to the temporary occupation of a unit in a tourist establishment, without prejudice to other ancillary advantages being offered (discounts on transport, restaurants, etc).  The European trade association RDO regarded this product as foreign to the Timeshare Sector, mainly because it had become a refuge for some unscrupulous operators wishing to find a way around the timeshare legislation then in force and the rules of RDO’s Code of Conduct and who went as far as to request that it be excluded from the new Directive and regulated separately. The main problem posed by these products was that they involved an undertaking by the trader, who received the total price upon executing the sale, there being no “inventory” of long-term property to guarantee the  features and advantages of the product , which could result in a future failure to honour the contract to a full extent. This was addressed by the Directive by establishing the obligation to provide pre-contractual information, the prohibition of making advanced payments, the right of withdrawal and the indispensable obligation to stagger payments in respect of the agreed price (See “long-term holiday products”). Where this contractual modality is used in accordance with the provisions of the Spanish Timeshare Act 4/2012, it currently constitutes a lawful way of marketing a new holiday product.

Directive 2008/122/EC and the Spanish LAT 4/2012 exclude loyalty and discount programmes of hotel chains from their regularisation so, for these purposes, they can be considered “long-term holiday products”.

DoA

It stands for “Deed of Adaptation”, which is the English translation of the “deed whereby a pre-existing scheme is adapted to the Spanish Timeshare Act LAT 42/1998”. See “Deed of Adaptation”. 

Durable médium

It is defined in Directive 122/2008/EC and, consequently, in the different legislations of the EU countries, as “any instrument which enables the consumer or the trader to store information addressed personally to him in a way which is accessible for future reference for a period of time adequate for the purposes of the information and which allows the unchanged reproduction of the information stored”.   

The new legislations resulting from the said Directive allow the use of durable media (CD, DVD, memory stick, etc) to store the contracts and other documents regulated by such a regulation for the marketing of rights of rotational enjoyment, long-term holiday products, resale and exchange as an alternative to paper or “paper medium”.

Enforcement Project

This is one of the most important action programmes of the European association of the Sector (See “RDO”) and it consists of detecting, and gathering information on, fraudulent operators and practices in order to prevent them, including the reporting of such fraudulent operators and practices to public bodies.

Exchange affiliation fee

The exchange contract usually contemplates two kinds of considerations to be received by the company providing the exchange service to those affiliated to the exchange network managed by the said company: (i) the periodic network affiliation fee, and (ii) the exchange fee as such.

In exchange for the affiliation fee paid by the consumer or user, the service provider grants them the right of access to the exchange network, which entails other advantages defined in the rules of use of the network, i.e. connection to the network’s computer services, receipt of publications, catalogues, special offers of additional rights of occupation, travel discounts or participation in leisure programmes on favourable conditions.- The affiliation fees are normally paid during the first few years (normally one to three) by the marketer of the Rights of Rotational Enjoyment and, in the successive periods of validity of the exchange contract (not necessarily every year), by the rotational enjoyment right holder-affiliate.- See also “exchange fee”

Exchange contract

It is defined in Directive 122/2088/EC and, therefore, in the various legislations of the EU countries, as a contract by virtue of which a consumer affiliates, for valuable consideration, to an exchange system which allows them to enjoy an accommodation unit or other services in exchange for granting to other persons a temporary enjoyment of the benefits inherent in the rights arising from the consumer’s contract for rotational enjoyment of property for tourist use.

The legal nature of this right is that of a personal (binding) right which allows the persons contracting for it (the affiliates to the exchange network) to carry out such an exchange through a reservations programme which is subject to its own rules and depends on the number of affiliated resorts (which varies from one year to another), the number of members or holders who voluntarily assign their right on a temporary basis and the competing reservations among them all (based on the rules of operation of the exchange system). The duty of the company managing this exchange network – which is fundamentally a computerised system – is to use all necessary material and human resources to maintain in operation the computer system which makes the exchange possible, subject to the tourist availability rule. 

For the purposes of the exchange, the occupation rights must be “equivalent” according to the classification by previously established parameters contained in the valuation rules of the Network, which basically depends on the type of unit, category of the resort of which the unit is a part, season of use (see “seasons”) and quantity and quality of the additional services offered in the resort. Exchange does not only refer to the possibility of exchanging the right of occupying a unit for the occupation of an equivalent unit, but also to the possibility of obtaining other “services” in exchange for the right in accordance with the valuation rules.

Two USA companies, Resort Condominium International and Interval International, cover virtually 90% of this service worldwide. See “RCI” and “INTERVAL”.

Exchange fee

The exchange fee as such must be paid by any affiliate who effectively or successfully carries out an exchange so, if the exchange is unsuccessful, they will not normally have to pay anything to the exchange network.- See also “exchange affiliation fee”

Exchange Network

An Exchange network means either a company providing exchange services or the whole set (industry) of material means (such as offices, computer system…) and immaterial means (such as the affiliated resorts, affiliated members or owners, commercial reputation, goodwill, etc).  

FG
Fixed period (turno fijo)

See “fixed period”.

Fixed period or week

The occupation periods of a unit, and the unit themselves, can either be previously determined in the rules of the scheme – in which case they are known as fixed periods – or be determinable by objective rules from among those which are part of the same season – in which case they are known as flexible or floating periods.

Fixed unit

The accommodation unit to which the right of rotational enjoyment or timeshare relates can be predetermined, i.e. a specific accommodation unit in a specific building (fixed unit), or it can be determined from among the various units of the same type by application of objective rules, in which case it is commonly known as a fixed or floating unit.

Flexible period (Periodo flexible)

See “flexible period”.

Flexible unit

Both under the personal leasehold right system of the Spanish Timeshare Act LAT 4/2012 and under the personal right systems subject to non-Spanish law, the accommodation units to which the right relates can be determined from among those of the same type by application of objective rules as they all meet certain general characteristics. These are commonly known as flexible or floating units and they are currently the preferred option over fixed units.

Floating period

See “flexible period”.

Floating period or week

See “flexible period”.

Floating unit

See flexible unit.

Fly buy

Charter flight plus accommodation organised by a trader or “generator” at very cheap prices and enjoyed by persons recruited in their country of origin to travel to the destination resort, where they can enjoy the unit and facilities during several days with the only obligation to attend a presentation of the products intended to be marketed and a guided tour of the resort.

FNTC (First National Trustee Company Limited)

The trustee (see “trustee”) is an essential element of the club-trustee system, First National Trustee Company Limited and First National Trustee Company (U.K.) Ltd being the largest and most widely established in the Sector. / www.fntc.com .

Follow up

After-sales service of client attention and follow up (quality programme).

Founder Member

The promoters of the timeshare or rotational enjoyment scheme in a club-trustee system are called Founder Members of the Club. The founder members initially hold title to all the timeshare rights and, as promoters, they also have other rights or authorities such as increasing the number of club affiliation rights or club members by purchasing or making available to the Club new units or by “repossessing”, or in some cases terminating the sale of, a member’s right, particularly where an ordinary member fails to pay the annual fees due for the provision of the services enjoyed by the member (management fees).

See also “repossession”.

Fractional System

The fractional system in Spain is, from a legal point of view, a timeshare or rotational enjoyment scheme whose main characteristic is that the occupation periods are much longer than the traditional week (30, 60, 90 days) and, to such end, it is a commercial requirement for the units to have superior features such as bigger surface area and to be individualised and differentiated from the rooms or smaller apartments, as well as better or more comprehensive services (e.g. a bigger kitchen, etc).

In Spain, at least if the fractional system is established as a system of rights of rotational enjoyment of real property for tourist use in accordance with Title III of the Spanish Timeshare Act 4/2012, a fractional scheme may not be linked to an undivided share of ownership or marketed as ownership.

Outside Spain, this is marketed as fractional ownership and it can therefore entail both a right of occupation and ownership of a share in the accommodation unit or a compensation right for the realisation of the unit upon the termination of the scheme.

See “fractional ownership”.

Fractional ownership

The systems known as fractional ownership are  becoming increasingly popular as a combination of a timeshare or rotational enjoyment right and an ownership right, both of them referred to a “fraction” or longer occupation period and a “fraction” or undivided share of ownership in the property to which the rotational occupation relates. Such properties are normally big or top quality apartments, villas or large residences, not always intended for tourist use, albeit with services not necessarily typical of the hotel industry.

In describing the fractional system in the last preceding section, reference was made to the prohibition laid down by Section 23.4 of the Spanish Timehare Act LAT 4/2012 of linking the right in rem of rotational enjoyment to an undivided share of ownership. However, such a precept relates to a “right in rem of rotational enjoyment” and extends to its alternative formulation as a personal leasehold right. Paragraph 8 of the same Section, however, indicates that the remaining contractual modalities of constitution of a right of a personal or an associative nature shall be subject to Title I of this Act (therefore not to Title II, which contains such a prohibition).

Obviously, the specific and “spontaneously” created multi-ownership community does not fall within the scope and, therefore, the prohibition of the aforesaid Section 23.4, although considering the exclusivity of the “lex rei sitae” (law of the place where the property is situated) with regard to in-rem and leasehold rights, the doubt arises as to whether it is possible to constitute such multi-ownership (see “multi-ownership”) not in a spontaneous manner but for commercialisation purposes, whether as fractionals, private residences or branded residences.  The essential element in answering this question may be to determine whether the properties are part of a tourist establishment or intended to be used for tourist activities (or should be so intended by Law), not so much because of the town planning status of the properties but because of the service provided which, if it is (or should be) a service specific of a tourist establishment or accommodation unit, may be affected by such a prohibition.

General Members Meeting of the Club (GMM)

See in Spanish "Asamblea General de Socios del Club"

Guest certificate.

Document issued by Interval International or by RCI at the request of its members for a holiday period owned by the latter to be used by a third party.

HI
Hostess.

Member of the sales team who welcomes the prospective clients attending the resort or the sales room.

Inside Public Contact

A synonym of “in house” or “in house sale” (see).

Internal exchange

Operation executed by an owner of a week in a timeshare resort to occupy a week in the same resort but on a different date.

Inventory

Within the trade practice in this Sector, one of the meanings of this word is that of all the DATs which a specific promoter or marketer holds and then transfers as a whole, by virtue of an agency contract, to another marketer for the said  DATs to be sold to the final consumers.

JK
LM
LAT

Ley de Aprovechamiento por Turno (Spanish for Rotational Enjoyment Act or Timeshare Act

LAT 4/2012

Spanish Act 4/2012 of the 6th July on contracts for rotational enjoyment of property for tourist use, purchase of long-term holiday products, resale and exchange whereby Royal Decree-Law 16/2012 was repealed.

LAT 42/1998

Spanish Act 42/1998 of the 15th December on Rotational Enjoyment of Real Property for Tourist Use and Taxation Rules, repealed by Royal Decree-Law 8/2012 of the 16th March on contracts for rotational enjoyment of property for tourist use, purchase of long-term holiday products, resale and exchange

Leads

Registration or inventory of new qualified clients “generated” by programmes or companies carrying out this activity by reference from other clients, telemarketing, etc. See “Leads generator”.

Leads Generator

Independent company or department of the promoter or marketing company which generates ‘leads’ or commercial opportunities, i.e. obtains lists of prospective clients based on the profile targeted by the promoter or marketer, to which end it uses means such as telemarketing, advertising, campaigns to attract specific sectors of the public, etc. See “leads”.  

Line Manager

Manager of a marketing team in charge of a “sales line” (see “sales line”).

Liner

Member of the marketing or sales team who encourages prospective clients to buy by describing the advantages of the product.

Lock off

See "Lock off y Lock-out".

Lock off y Lock-out.

In Europe, lock-off refers to an accommodation unit which is one only unit from a legal point of view but which physically consists of two units connected through an interior access (door) and can be used by the DAT holder or their friends and family independently as if there were two separate units.  Lock-out, on the other hand, refers to two accommodation units interiorly connected which can be used as a single unit. In both cases, they are normally treated in exchange programmes as two separate units for the purposes of exchange conversion. In the first case, particularly for exchange purposes, the first modality is normally called “divisible unit”.

Lock out

See "Lock off y Lock-out".

Lock-off

See “Lock-off  & Lock Out”.

Long-term holiday product

It is a contract with a duration of more than one year by virtue of which a consumer acquires, for valuable consideration, essentially the right to obtain discounts or other advantages with regard to their accommodation unit, whether alone or in combination with travels or other services.

Managament fees.

An essential element which is inherent in the rotational enjoyment of an accommodation unit  is the provision of services to the holders of the rights, the unit and the resort (reception, electricity, laundry, utilities, replacement, local taxes, etc).

The annual contribution payable by the member for the provision of such services is known as “service provision fee or management fee” and will be updated on a yearly basis by application of an official index or in any other form envisaged by the rules of the scheme, which may not be at the discretion of any one of the parties.

Management agreement

“Contrato de Mantenimiento” is a common Spanish mistranslation of the Management Agreement, which is one of the three constitutive documents of the Club in the club-trustee system (see “club-trustee). Its equivalent in Spanish Law is the ‘contract for provision of services’ to the holders of Rights of Rotational Enjoyment.

Management services

The constitution documents have to include a list of the services to be provided to the members or holders of rights and to the units to which the rotational enjoyment relates, areas of communal use and any services inherent in the right acquired by them. 

According to the Spanish Timeshare Act LAT 4/2012, such services shall be provided by the promoter of the scheme (whether or not it is also the owner of the resort) either directly or by subcontracting it out to a third party or assigning the service-providing right as a whole to a third party. Where the owner and/or promoter assumes the provision of the services, the DAT holders shall pay to the latter such annual fees as shall be previously determined by the rules of the scheme irrespective of whether the services are actually provided by the owner and/or promoter directly or through a third party hired to such end and which will receive the remuneration agreed upon with the promoter irrespective of whether or not the latter is paid the annual fee by the DAT holders. Where the promoter does not directly assume the provision of the service but assigns it to a third party, such a third party becomes the holder of the right and therefore receives no remuneration from the owner and/or promoter but acquires the right to collect the annual fee directly from the DAT holders for the provision of such services. See “Services” and “Management Agreement”.

Manifiesto

In Central America, this refers to a summary of the activities of the sales team during one day with a list of the things to do by each sales team member, etc.

Marketer

A company engaging in the marketing of rotational enjoyment rights, whether on its own behalf or employed by a third party. The marketer is often the promoter of the timeshare system and markets its own product through its sales team; other times, the promoter hires a external marketing company to do so and there are also companies which purchase rotational enjoyment rights from the promoters or other marketers (see “inventory”) in order to market them directly to the consumers.- The rules concerning the publicity and sale or marketing of such timeshare products contained in the Spanish Timeshare Act 4/2012 and equivalent EU legislations are binding upon all of them

Membership certificate.

The “membership certificate” is the individual title to the right of rotational enjoyment of this scheme and is a necessary requirement for it to be exercised and transferred (titulo traditio).

The right of rotational enjoyment in the “club-trustee” system takes the form of an affiliation right or the purchase of a club membership. The right is transferred with full effect by virtue of the contract of transfer of the Right of Rotational Enjoyment between the owner of the right (initially the promoter or founder member of the club) and the consumer, which must meet the requirements laid down by the legal regulations which incorporate the precepts of Directive 2008/122/EC. The membership certificate is issued with the first transfer from the founder member to the consumer as a consequence of such a contract and is transferable in the event of future transfers.

Membresía (Membership)

Synonym of affiliation as member to a timeshare club. The English word membership is used in the club-trustee system which, particularly in Spanish America (including the USA territories where there is a large number of Spanish speakers), has been translated as “membresía”.

MINDTIMESHARE

A very active Spanish consumer association operating through the website http://mindtimeshare.me/ which often reports fraudulent operators, differentiating them from those acting in accordance with good trade practices. See also "Cold caller list".

Mixed Use Resort.

Tourist resorts combining several kinds (“uses”) of unit or other ancillary activities, be it hotel, apartment-hotel, rotational enjoyment, fractional, congress centre, etc.

Multilocation club

A club where the rotational enjoyment rights relate to determinable (floating) units not only in one resort but in several timeshare resorts owned or managed by the same promoter.- The resorts which form part of this system may be located in the same country or in several countries.

Multiownerhip

Whenever the origin of timeshare is discussed, reference is almost always made to a hotel in Switzerland where an advertisement caused a great impact: “Don’t rent a hotel room, buy it!”.- If the development of timeshare became stronger with the club-trustee system, in which the holders of rights were also inappropriately referred to as “owners”, its counterpart in Spanish Law did involve actual ownership albeit of undivided shares of a property, as the multiownership system strictly refers to a functional or single-purpose “community of owners” in which each owner acquires an undivided share of the property, whose use and occupation by the co-owners during the period allocated to them in accordance with their purchase title (normally one week) is regulated by its own bylaws.

The Spanish Timeshare Act 42/1998 prohibited the creation of new “multiownership” schemes as from its bringing into force but it did recognise the pre-existing schemes if they were adapted to the said Law for merely publicising purposes and the said adaptation was registered with the Land Registry, albeit preserving its own legal nature.

The club-trustee systems and those existing before the enactment of the said LAT 42/1998 continue to be a majority given the limited introduction of the new right in rem of rotational enjoyment. 

All such systems continue to be generally and inappropriately called “multiownership” on the media (even on the website of the Council of Ministers).

NO
No Q.

Person whose profile and characteristics render them non-qualified as a potential purchaser of the marketed product.- See “Q”, “Qualified” and “Qualified couple

Occupation (rights)

See "Ocupation rights"

Occupations rigths

Whatever legal system of rotational enjoyment is chosen, it ultimately involves the occupation of a tourist accommodation unit during an annual period which entails the right to receive certain ancillary services. For this reason, these kinds of rights have been generally called “occupation rights” in the context of rotational enjoyment.

Off site (sales)

Marketing of the products outside the resort where the units to which the rights of rotational enjoyment relate are located. This is done in spaces normally called sales rooms which are usually situated in large towns. Where these products are marketed by hotel companies, the off-site sales rooms are normally found in hotels which are part of the same chain.  

On site (sales)

Marketing of the products where this is carried out in the resort where the units to which the rights of rotational enjoyment relate are located.

OPC

It stands for “off property contact”. It refers to the persons hired by a marketer whose job is to recruit persons in public places for them to visit, at no cost, the sales rooms and/or facilities of a resort in which a product presentation is to take place, whereupon the role of the OPC finishes. It experienced a boom in the eighties and the nineties and was responsible for the initial bad image of the Sector. The aggressive tactics have been eradicated and it continues to exist at present albeit to a much lesser extent. This activity has been regulated by certain municipal ordinances in Spain.

Options

The term “options” can have various meanings in the holiday industry which will only depend on the meaning conferred by the specific document in which the said term is contained.

Among the best known or most widely accepted meanings is that of “points” in the “points system”, which ultimately refers to the conversion value of a specific right which results in an entitlement to use a unit during a certain occupation period or to obtain other advantages. See “points system”.

A second meaning is that of the conversion value of a right of occupation of a unit during the relevant occupation period for the purposes of exchange thereof in an internal exchange system of the same promoter or trading group.

Organization for Timeshare in Europe

Known by its initials  OTE, it is the foundational name of the European trade association for the Sector currently called RESORT DEVELOPMENT ORGANIZATION (RDO). See “RDO”.

OTE

See “ Organisation for Timeshare in Europe” and “RDO”.

Owning company

Company which in the club-trustee system holds title to the properties to which the DATs of this scheme relate. Such companies are usually limited by guarantee and/or non-trading companies, i.e. companies whose purpose and object does not involve trade but holding formal ownership of the properties for the benefit and in the interest of the holders of DATs (club members). See “club-trustee”.

PQ
Packs

They originally appeared after the coming into force of the Spanish Timeshare Act LAT 42/1998 which set the minimum duration of rotational enjoyment schemes at less than three years. The subject of these packs was a contract for occupation of an accommodation unit during a predetermined annual period which had a duration of up to three years, and they were used as test products as they related to rotational enjoyment establishments and resorts. The price of such packs was in line with their shorter duration but allowed the consumer to use the unit during the said period and, if they were satisfied, to purchase a longer right of rotational enjoyment.  However, some operators who had moved away from the timeshare Sector attempted to use this system in contravention of law by imposing mandatory extensions on the consumer (which was repeatedly reported by RDO) until Directive 2008/122/EC and the subsequent national legislations regulated this by, on the one hand, prohibiting such extensions on DATs and, on the other hand, establishing the requirements to be met by long-term holiday products, including a staggered payments schedule. Some operators continue to use them at present with a duration of less than one year and, where they involve a longer period (always fairly short for commercial reasons), as long-term

Points

See “points system”

Points system

This is one of the formulas of highest flexibilisation of a rotational enjoyment scheme where the units, the resort they are a part of and the occupation periods are determinable (flexible) by objective rules. 

The “points” – in some cases called “options” or “credits” – are merely a measurement of the value of the rights which the holder of such points has in order for them to be converted each year into the right to occupy a unit during a specific occupation period.

Therefore, there is not a specific definition of this system, although it was certainly a subject of discussion during the adoption process of Directive 2008/122/EC, which in any case considered it to be included in the definition of timeshare or rotational enjoyment (see “rotational enjoyment”).

The Judgement of the Court of Justice of the EU dated 16/12/2012 in Case C-270/09 does not contain a legal definition thereof as it was intended to determine the place and date of accrual of VAT on this kind of rights, but the analysis of the pre-trial issues does contain (although it refers to a specific albeit very significant promotion in this industry) a brief explanation of the points system (called “options” in this case), although it differentiates between the so-called “pure points” and “cession points” (see).- In the system analysed by the Judgement, which involved the foundation of a Club, i.e. an entity without a legal personality of its own which is governed by a set of Articles of Association and whose main objective is to <<guarantee the members’ right to book an accommodation unit for their holidays and other ancillary advantages during specific periods each year>>, a club membership is acquired by the acquisition of points from the promoter of the system (pure points) or by depositing with the trustee of the Club, for the benefit of the Club, rights of rotational enjoyment previously owned by them in respect of fixed weeks (cession points).-  The rotational enjoyment weeks which the Club has available for use by its members will be assigned a certain value which will depend on their location, quality, type of unit and occupation season. Every year, the members

receive a specific number of points based on the rights acquired by them which they can exchange for the right to use a specific accommodation unit during a certain period of time of their own choice, with the limitation of the points they have and the weeks available. The expression “right to points”, therefore, refers to the members’ right to receive a certain number of points every year so that they can exercise their right to use an accommodation unit during that year.

In the system to which the aforesaid Judgement refers, the status of member of the “points club” is acquired: (i) by entering into a contract for the purchase of such points (in which case they are called “pure points”), or (ii) by the acquirer’s cession, by way of a barter, of a right of rotational enjoyment they previously owned, whether in the same resort or in another, which is thus integrated into the trust property of the Club. Additionally, such a purchase contract includes a small monetary consideration to complete the value of the points acquired (in this case they are called “cession points”). 

This  way, the rights ceded by the new member on a barter basis which are integrated into the points club are made available to the remaining members, who will thus be able to exchange their points to occupy the unit to which the ceded rights refer during the weeks to which the said rights of enjoyment relate.

In addition to the “mixed system” analysed in the above Judgement, there are other formulations or variations of such points systems which are either: (i) a system involving cession points only where a specific right of rotational enjoyment is acquired by the consumer, who continues to hold title to it although the inherent right of occupation is necessarily integrated into the system, with a point conversion value so that the owner thereof can use the unit/occupation period or other advantages in accordance with the corresponding value; or (ii) a pure points system, i.e. no specific right of rotational enjoyment is linked to the purchase but only the direct power to use the property or rights offered within the system. 

Precontractual standard information form

All the EU legislations which have implemented the precepts of Directive 2008/122/EC include as a separate schedule a standard withdrawal form which it is required by Law to furnish to the consumer who buys a DAT, long-term holiday product, resale or exchange product.

Such a form can be used by the consumer to withdraw from such contracts, without prejudice to doing so in any other form admitted in Law.- Failure to provide the standard withdrawal form entails a number of serious consequences to the trader.

Preferred Residences

Preferred Residences is a strategic alliance between Interval International (see “Invernal International”), as global exchange services provider, and the Preferred Hotel Group for development of a worldwide “collection” of hotels and resorts characterised by its high quality standards. Preferred Residences is a resort affiliation programme for the operation of fractionals and private residences (see “fractional” and “private residences”) under a luxury brand aimed at high-end consumers. Its website is www.preferredresidences.com.

Private residences

Time Share Scheme scheme which, similarly to the “branded residences”, is

characterised by a an annual occupation period of at least four weeks and relates to an accommodation unit with a large surface area, high quality standards (mansions, etc) and very personalised services which sometimes entail the participation of specific employees to attend to its occupants.

 See “branded residences”, “The Registry Collection” or “Preferred Residences” and “Fractional Ownership”.

Propiedad Fraccional

Véase “fractional ownserhip”

Prospecto

Name given in Central America to a prospective client.

Publication of the timeshare scheme

The Spanish Timeshare Act LAT 4/2012 provides that binding or merely contractual schemes of rotational enjoyment established in respect of real property located in Spain but subject to non-Spanish law may if so chosen be given public status by incorporation into a public deed and subsequent registration of such a deed with the Land Registry. The content of such a publication is essentially similar to the deed of public adaptation envisaged by the repealed LAT 42/1998.- This is one of RDO’s suggestions which was incorporated into the current Act.

Pure points

“Pure points” refers to the points acquired from the promoter-trader or from any other holder of such points within a “points system”, the main consideration being a certain amount of money as opposed to what happens with“cession points”.

See “points system”.

 

Q.

Letter used to designate a prospective qualified client or qualified couple. See “qualified” and “qualified couple”.

Qualified

Person who meets the right profile and characteristics to be interested in the marketed product.

Qualified couple.

A profile of prospective clients who may be interested in purchasing the product is prepared as part of the sales strategy. Thus, it is normally considered that the profile of a client potentially interested in buying a right of rotational enjoyment is that of a young or middle-aged “couple”, preferably with children, with a purchasing power in line with the category and price of the product, in a destination typically chosen by their fellow countrymen, etc. Where the products relate to theme resorts or destinations (golf, nudist, etc), the profile will be adapted accordingly.

RS
RDO

Until the year 1998 there existed timeshare trade associations on a national level, such as the Spanish A.N.E.T.C. , and even on a regional level. However, given that the operators, the timeshare products and the clients themselves are in almost every transaction of various nationalities, the traders in this Sector soon started to group together at an European level and this initially gave rise to an European federation of national associations called European Timeshare Federation (ETF). It was then felt by the traders in this sector that an increased level of integration was necessary and they eventually founded the Organisation for Timeshare in Europe (O.T.E.), which is not a federation of associations but a sole trade association at an European level with unified actions, projects, budgets and central governing bodies. The appearance of new holiday products (fractionals, condo-hotels, private residences, etc) led OTE to pass a resolution in General Meeting to change its name to Resort Development Organisation (RDO) – adopting the USA trade association called American Resort Development Association (ARDA) as a model – and to accommodate the new products and operators. RDO has a Code of Conduct that its affiliates must observe, whether they are promoters, marketers, trustees, exchange companies or professionals providing their services in the Sector. RDO, through its Legislative Committee, has acted as interlocutor to the EU Authorities in the process which gave rise to Directive 2008/122/EC and to the national authorities of the EU countries which have incorporated its provisions into their national legislation. One of the most successful programmes, which has been carried out in Spain for a number of years as this is the country with the most resorts and the largest number of clients in the Sector, is called Enforcement

Project and it involves compiling information on fraudulent operators and taking the required steps for the applicable legislation to be enforced, including the institution of court proceedings. Its website is www.rdo.org.

RDO Spain (ANETC)

The National Association of Timeshare Traders (A.N.E.T.C. for its initials in Spanish) is also the Spanish Chapter of the European Trade Association for this Sector.- See “RDO” and “Resort Development Organisation”.

Contact: mrodriguez@rdo.org.

Referred The holders of rotational enjoyment rights who are happy with the product they own usually recommend it to their friends and acquaintances and ‘refer’ them to the trader, who will normally offer them promotional or more advantageous conditions
Rentals Please see "Timshare Rentals"
Repossesion

Process for termination of a contract in the club-trustee system of rotational enjoyment which is not due to reiterated failure to pay the club affiliation price but to failure to pay the annual fee (maintenance fee) accrued as a result of the services provided to the resort and to the DAT holders (club members). This right of rotational enjoyment subject to Anglo Saxon law is configured as a clubaffiliation or membership and, therefore, failure to comply with such a primary obligation as a member may result in an effective termination of membership if so agreed by the governing body of the Club and, consequently, in a forfeit of the rights inherent in such a membership (right of rotational enjoyment). The members whose affiliation is thus terminated and who are not in agreement may take action through the courts.

The Spanish Timeshare Act LAT 42/1998 and the current LAT 4/2012 provide for a similar process called “power to terminate the contract” (which is not the same as the implicit or explicit “condition subsequent”) by virtue of which the contract of transfer of DATs may be terminated on the grounds of non-payment of the annual maintenance fee. This is therefore different from the termination of a contract in the event of non-payment of the transfer price (condition subsequent).

Resale (contract)

A contract by virtue o which a trader, for valuable consideration, assists a consumer in the purchase or sale of rights of rotational enjoyment of property for tourist use or a long-term holiday product.

The above definition of resale is contained in Directive 2008/122/EC which, insofar as referred to this industry, assumes the p

As happened with what after the issuance of the aforesaid Directive was called “long-term holiday products”, fraudulent or unscrupulous operators who had moved away from the marketing of timeshare as a result of its being specifically regulated, also started to carry out resale operations which, with a view to circumventing the rules of the timeshare sector, did not meet such strict marketing criteria or the criteria of RDO’s Code of Conduct.

The new European legislations resulting from the implementation of the Directive have established – even where the seller is a private individual but is receiving professional advice from these operators – similar requirements to those of marketing timeshare with regard to this activity, i.e. pre-contractual information, right of withdrawal or prohibition of advanced payments.

articipation or at least the assistance of a trader who provides these services for valuable consideration. 

 

Resort

A tourist resort with different types of accommodation units (hotel rooms, apartments, villas) and with various large facilities for use and enjoyment by the users. 

Resort Development Organization

See RDO.

Right of withdrawal

 The 1994 Timeshare Directive established the right freely to withdraw from a timeshare contract (and ancillary contracts) which could be exercised within ten days of entering into the contract. The EU countries reflected this right in their respective national legislations (Act 42/1998 in Spain) with the exception of the UK, which increased the withdrawal period to fourteen days. 

This conventional right was commonly known as “cooling-off period” or “reflection period” before the right of withdrawal was regulated.

The current Directive 2008/12/CE and the Spanish Timeshare Act LAT 4/2012 do not define such a right of withdrawal but they do demand that it be included in the contracts for sale of rotational enjoyment rights, long-term holiday products, resale and exchange where the purchaser is a consumer. Even if the contract has been freely entered into with no pressure on the consumer and all the requirements demanded by law for it to be valid have been met, the consumer can freely withdraw from the same within fourteen calendar days of its execution, or of the day next following in the instances specified by law, without needing to give any reasons for such a withdrawal or having to bear any penalty or costs whatsoever as a result. Its fundamental characteristics, therefore, are: (i) Unilateral: it may only be exercised by the consumer. (ii) It must be duly notified to the trader. (iii) No reasons need to be given, and (iv) No economic consequences of any kind to the consumer.

Such a withdrawal can be notified to the trader in any form admitted by law and, particularly, using the “standard withdrawal form” which the trader must provide to the consumer upon the execution of the contract (see “standard withdrawal form”).

ROME I

See  "Roma I Regulation".

Rome I Regulation

The EC Regulation 593/2008 of the European Parliament and of the Council dated 17th June 2008 on the law applicable to contractual obligations (ROME I) allows the contracts of a merely binding nature to be submitted to a foreign law (of an EU country or otherwise) and, therefore, it allows the submission to such a foreign law of any personal or binding timeshare or rotational enjoyment scheme and any others regulated under Directive 2008/122/EC, as well as the contracts of transfer of the respective rights. Such a possibility to submit a personal rotational enjoyment scheme to non-Spanish Law according to the Rome I Regulation has been acknowledged by the Spanish Timeshare Act LAT 4/2012. 

All the EU countries adopted the Rome I Regulation except for the United Kingdom and Denmark, which are therefore not bound by it or subject to its application. Spain and the remaining EU countries are subject to it and, consequently, the submission of contractual obligations to any other legislation (that of an EU country including UK and Denmark or that of a non-EU country) is valid. However, the 1980 Rome Convention continues to be in force as far as UK and Denmark are concerned. 

The repealed LAT 42/1998 was intended to limit the establishment and marketing of rotational enjoyment schemes in Spain to those involving rights in rem of rotational enjoyment or, alternatively, personal-leasehold rights, as it was clear in both cases that the jurisdiction of the country in which the properties were located was the only applicable jurisdiction. However, prestigious treaty drafters objected that such an ‘exclusivity’ was contrary to the 1980 Rome Convention on contractual obligations. The enactment of the Rome I Regulation eliminated any doubt as to the validity of subjecting these products to non-Spanish law insofar as they are configured as personal rights.

Rotational enjoyment of immovable property for tourist use (legal system and contract)

The term “rotational enjoyment of immovable property for tourist use” was used in the Spanish Act 42/1998 (currently Act 4/2012) as a more appropriate term according to the Spanish legal tradition than the literal Spanish translation of timeshare (tiempo compartido). The Spanish Act 42/1998 aimed to do away with the personal “timeshare” right subject to British Law by predicating the exclusivity in Spain of the right in rem or personal leasehold right system.  Rotational enjoyment of immovable property in the current LAT 4/2012: Title II

of the current Spanish Timeshare Act specifically regulates the rotational enjoyment of “immovable property for tourist use” (to which the general rules of Title I are also applicable) and defines it as a limited in-rem or personal leasehold right. It also acknowledges the remaining schemes involving personal rights subject to non-Spanish Law, which have the mandatory obligation to comply with the general rules of the aforesaid Title I.

The formal constitution of such limited in-rem or personal leasehold rights schemes requires the execution of a public deed and registration with the Land Registry.

The transfer of a right of rotational enjoyment requires, where it involves an in-rem or personal leasehold right under the Spanish Timeshare Act, the prior constitution of the scheme by public deed, whereupon the owner and/or promoter of the property also becomes the owner of the rights of rotational enjoyment created in respect thereof, which he is therefore free to transfer. Registration of this scheme at the Land Registry is mandatory.

Where the contract relates to a right of rotational enjoyment of immovable property subject to non-Spanish Law (which has to be configured as a merely binding or contractual right), the domestic Law will have to be complied with and the prior constitution of a legal scheme (system) will not be a necessary requirement for the creation of the right which is intended to be transferred. In actuality, however, the most widespread timeshare system subject to Anglo Saxon Law, i.e. the Club-Trustee system, does require the prior formal constitution of the scheme, namely the constitution of a Club (See Club-Trustee).

Where the contract relates to a right of rotational enjoyment of immovable property subject to non-Spanish Law (which has to be configured as a merely binding or contractual right), the domestic Law will have to be complied with and the prior constitution of a legal scheme (system) will not be a necessary requirement for the creation of the right which is intended to be transferred. In actuality, however, the most widespread timeshare system subject to Anglo Saxon Law, i.e. the Club-Trustee system, does require the prior formal constitution of the scheme, namely the constitution of a Club (See Club-Trustee).

Rules of ocuppation

In the latest formulations of the club-trustee system, the Articles of Association of the Club the are replaced by the Rules of Occupation.

Sales line

Marketing is often organised by sales lines, i.e. marketing programmes are established based on the targeted client profile. Among the most frequent marketing lines are those based on nationality, common language or groups of people with a shared interest (golfers, skiers, etc). 

Sales Manager

Person who manages all the sales teams and sales lines and designs or develops the marketing strategies.

Sales Team

A sales team participates in the marketing of these products which is formed by various agents, each playing a specific role in the process, and directed by a team leader to attract prospective clients, explain the advantages and adaptation of the product to their needs, expectations and possibilities, verify the availability and characteristics of the product they may wish and the contractual or publicity details and, finally, close the sale by executing the contractual documents.

 See “OPC”,  “hostess”, “liner”, “bottom up” and “closer”.

Services

The services which in Spain have to be provided to the holders of DATs, the club members or the holders of rights of rotational enjoyment under any of the legal systems of operation of a resort and its units are not defined in the Spanish Timeshare Act 4/2012 or in the legal rules of the various legislations to which the chosen legal system is expressly submitted. The fundamental requirement established by the LAT 4/2012 and by the different EU legislations is that the services must be determined or specified in the rules and regulations of the system and in the contract of transfer of the right. Obviously, the LAT does not contain a thorough catalogue of services, but some of the services which are mandatory can be inferred from the various precepts of the said Act.

In Spain, on the other hand, both the LAT 4/2012, which is captioned “on rotational enjoyment of property for tourist use”, and the legal regulations of the Autonomous Communities, configure rotational enjoyment (whatever the legal system under which it is established) as a tourist operation or activity, so this activity falls within their jurisdiction. If the regulations of the applicable Autonomous Community consider rotational enjoyment a specific class or type of “tourist accommodation establishment” then they have to specify the minimum required services, but if such regulations consider rotational enjoyment a “sub-modality” or form of marketing a specific tourist accommodation unit (which is the case with Andalucía’s Tourism Act), then the services inherent in each type of establishment (hotel, apartment-hotel, tourist apartments, rural cottages) have to be provided.

As an example of the minimum required services we can mention reception water, electricity, cleaning, bed linen, bathroom and dining-room, use of communal facilities, etc.

Spacebank

An RCI trade mark meaning "computer space bank or system in which the weeks are deposited for subsequent use thereof through the exchange company".

Split weeks

Occupation periods consisting of seven non-consecutive days (e.g. 4 + 3 days). The “split periods” were prohibited by the Spanish Timeshare Act LAT 42/1998 but not by the new LAT 4/2012, which does allow non-consecutive occupation periods albeit such periods have to contain at least seven consecutive days. In the in-rem or personal leasehold right system, therefore, there are no “split weeks” but there can be “split occupation periods”. 

 

Standard withdrawal form

All the EU legislations which have implemented the precepts of Directive 2008/122/EC include as a separate schedule a standard withdrawal form which it is required by Law to furnish to the consumer who buys a DAT, long-term holiday product, resale or exchange product.

Such a form can be used by the consumer to withdraw from such contracts, without prejudice to doing so in any other form admitted in Law.- Failure to provide the standard withdrawal form entails a number of serious consequences to the trader.

Stroker

Persons attending promotional presentations of the products to be marketed who, knowing the reason of the presentation, only attend with a view to obtaining a gift. See “converter”.

Survey Sheet

Survey sheet or form.

Suspended Resort

Name given by exchange companies to the resorts which fail to comply with the terms and conditions of the contract and are suspended both for in terms of affiliations of new members and in terms of exchange services.

TU
T0, T1, T2, T3 & T4

One of the criteria for classification of the accommodation units to which the rights of occupation relate is the number of rooms they have. T0 refers to studio apartments, T1 refers to one-bedroom apartments, T2 refers to two-bedroom apartments and so forth.

TATOC

Asociación británica de consumidores de tiempo compartido, que en su propia página www.tatoc.uk  señala que el motivo de su existencia es la salvaguardia y mejora de las experiencias de las vacaciones en tiempo compartido para los usuarios y ser la voz de los propietarios (entiéndase de derechos del tiempo compartido). Dirección de  correo  electrónico: info@timeshareassociation.org.

Temination of contracts

Article 11 of the Spanish version of Directive 2008/122/EC provides that the exercise of the right of withdrawal from a DAT or long-term holiday product contract entails the automatic rescission of the ancillary contracts thereto. This is also expressed in similar terms in the standard pre-contractual information forms to the respective contracts for these products (Part 3) by demanding the specific inclusion of information on the modalities and the consequences of ‘rescission’ of the ancillary contracts. In the opinion of the author of this glossary, the use of the Spanish term ‘rescisión’ is inappropriate as it does not refer to the rescission contemplated under Spanish Law (articles 1290 et seq of the Civil Code) but results from an incorrect translation of the English version of the said Directive into Spanish, which was drafted and discussed in English before being adopted. The term “automatically terminated” is certainly used in article 11 of the said English version.- The same term is similarly used in the schedules which contain the standard pre-contractual information forms, where this section is entitled “information on termination of the contract”.- The translation of “termination of contract” in the EU documents corresponds to the legal concept of French Law “rescission”, which correspond to the Spanish concepts nullity, nullability and termination as a result of breach. The idea that the term “rescisión” is an incorrect translation in the Spanish version of the Directive is supported by the more correct terminology used in Section 15 of the Spanish Timeshare Act LAT 4/2012 (which corresponds to the said article 11 of the Directive), in which it is stated that the exercise of the right of withdrawal entails that the ancillary contracts “shall automatically be without effect”. Rather inconsistently, however, the schedules to the Spanish Act which contain the pre-contractual information forms continue to use the term “rescisión” which, we believe, should actually be construed as an automatic loss of effect of the ancillary contracts. See “ancillary contracts”.

The Registry Collection

A special, privileged programme of the exchange network Resort Condominium International (see “RCI”) which offers accommodation in high-end properties such as private residences, branded residences, mansions, etc with services of an appropriate quality which sometimes include private concierge, international golf trips, tickets to major events, cruises, last-minute reservations and reservation changes, etc. In conclusion, the properties are normally large and luxurious with exclusive services to match the high quality of the product.- Its website is www.theregistrycollection.com.

Time Share (legal system & sales contract).

The “rotational enjoyment of property for tourist use” is defined in Directive 122/2008/EC and, therefore, in the domestic legislations of the EU countries as “a contract with a duration of more than one year by virtue of which a consumer acquires, for valuable consideration, the right to occupy one or several accommodation units for overnight stay during more than one occupation period”. Therefore, the general term “rotational enjoyment” includes all property capable of being occupied for accommodation purposes, whether immovable property or otherwise (caravans, ships-cruises, etc).

This term has been chosen by the EU translators as the equivalent to the word “timeshare” used in the English version which, as a working document, gave rise to the said Directive.

The term “rotational enjoyment” comes from the Spanish Timeshare Act LAT 42/1998, in this case referring only to immovable property.

Title I of the Spanish Timeshare Act LAT 4/2012 contains the rules which are applicable in Spain to all rights of rotational enjoyment whether these relate to immovable property or otherwise (e.g. caravans, boats, etc), and such rules mainly refer to advertising, pre-contractual information, right of withdrawal, prohibition of advanced payments, ancillary contracts and rules of international private law. 

Title II of LAT 4/2012 exclusively regulates the rotational enjoyment of of immovable property for tourist use.- See “rotational enjoyment of immovable property for tourist use”.

Timeshare

See “rotational enjoyment”.

 

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Timeshare Developer or Promote

Trader who formally establishes a rotational enjoyment scheme for the marketing thereof. The developer is sometimes also the owner of the resort. If not, the developer must have the legal right to establish the scheme in respect of the resort and, where the said scheme involves rights in rem or personal leasehold rights, it must be registered with the Land Registry.- See “trader”.

Timeshare Branding

A prestigious, well known brand is currently one of the most important factors to marketing success, and this obviously applies to the holiday accommodation industry.- Large companies have, through their respective brands, made this one of their main selling arguments. Small companies, however, with a lower economic capacity, can hardly compete by themselves in this sector, which may be the most representative of a globalised industry.  A reaction to that is the “branding” concept, i.e. the creation of a common brand with widespread media exposure which comprises several companies of the sector, whether on such companies’ own initiative or as a result of the establishment of a brand by one only company whose business is precisely to allow others to use the common brand according to specific rules and for valuable consideration to its owner.

Timeshare owner

Outdated denomination which used to refer to any person holding title to a right of rotational enjoyment whatever the legal system on which the said right was based.

Timeshare Rentals

In the periods during which the units operated under a timeshare or “rotational enjoyment” system are “unoccupied”, the units are often rented out by their owner to third parties (tourists) and the holders of rights of occupation can thus obtain an extra income.

The legal nature of this kind of “rentals” in Spain may be subject to debate both on a practical and on a theoretical level, but the issue is not without importance as, if we are talking about a “seasonal rental of a dwelling house”, we may find that the lessor has the obligation to demand that the renter pay a deposit amounting to two months’ rent (despite the rental period being one week), which does not happen in the case of occupation of a tourist unit.

The Urban Lease Act 1994 (amended on 04/06/13) does not regard as a lease “the temporary assignment of use of a dwelling house in its entirety, furnished and equipped for immediate use, marketed or promoted through tourism channels and rented out with a view to making a profit, where the house is subject to a specific system arising out of the regulations of its own sector”.

 The difference is that in a, let us call it, “ordinary rental”, the building the subject of the lease is a dwelling house, be it intended for use as permanent or as temporary living accommodation, whereas two essential elements must be present  in the occupation of a tourist accommodation unit: (i) the accommodation unit itself, whether from an architectonic point of view it is a room, an apartment or a singular dwelling house; and (ii) the service inherent in tourist accommodation units, such as reception, cleaning, etc., all of which must also be situated in a “tourist accommodation resort” and managed by one only operating company; both of them (the resort and the company) being registered with the relevant tourism registry as guarantee that they both meet he requirements of the sector’s tourism regulations

Timeshare system

The legal scheme of rotational enjoyment is also known as rotational enjoyment or timeshare “system”. 

 

Tour

Visit to the facilities of a resort by the prospective clients, guided by a member of the sales team who shows them the accommodation units and other facilities and at the same time explains how the system works and its advantages.

Trading company (entrepreneur)

For legal purposes, a timeshare trader means a physical or legal person acting for purposes related to their economic activity, business or profession or any person acting for or on behalf of such a trader.

 This means that a company or trading company does not necessarily have to be considered a trader for the purposes of the LAT 4/2012 – at least in Spain – as those acting for “purposes unrelated to their economic activity, business, occupation or profession shall be considered a ‘consumer’ despite being a legal person”.

 In practical terms, the contract of sale of these rights has to meet all the legal requirements laid down by LAT 4/2012 (and, therefore, by Directive 2008/122/EC) such as the prohibition of advanced payments, pre-contractual information, withdrawal period, etc, where the purchaser is a physical or legal person acting for purposes unrelated to their economic activity but such requirements do not need to be observed where the purchaser is a physical or legal person acting for purposes related to their economic activity (hence they are considered traders).

Trial

A trial product which is similar to, or the same as, a pack.- See “Packs”.

Trustee

In the club-trustee system, the participation of the trustee, who is hired by the club by virtue of the Deed of Trust, is essential. 

In Anglo-Saxon based legislations,  the trustee is an individual or company which receives or acquires, on behalf of third parties, certain property of which the trustee becomes the actual titleholder in order to administer or dispose of it in accordance with the deed of trust but for the benefit of the beneficiaries previously appointed or yet to be appointed according to the rules of such an agreement. The Trustee (normally a company), as any other company, has its own property which is subject to the risks of its own business, but it also has certain other property which it only holds in the best interests of such beneficiaries and which is therefore not incorporated into the personal property of the company-trustee or subject to the risks of the trustee’s business. Should the trustee go into bankruptcy or the company be liquidated as a result thereof or for any other reason, the property in trust or separate property shall be placed under the control of another trustee company which will from then on dispose of and administer the said property on behalf of the beneficiaries.

While it is an institution of Anglo Saxon origin, the trustee is not unknown in most European countries as it was the subject of the Hague Convention of the 1st July 1985 which came into force on the 1st January 1992, which was not ratified by Spain but was ratified by most European countries.

See "club-trustee" and "FNTC".

Trustee (fudiciario)

See “trustee”.

Up

A couple being a prospective client.

Up-grade

Agreement between a marketer and the holder of a right of rotational enjoyment whereby the former barters the latter’s right for another right of a higher quality or with better services and, therefore, a higher value, the difference in value being compensated by payment of a certain amount of money.

Use or occupation seasons

Initially, the exchange companies classified weeks or occupation periods by season in order for them to be exchanged for others of the same season. Pedro Planas, in his Practical Guide to Timeshare, writes about the “colour code” used by exchange companies to indicate the season – and, in principle, the exchange value and level of market demand – in a simple and easy manner. Both RCI and Interval International use red to mark the high season. RCI uses white for the medium season while Interval uses yellow. The low season is blue with RCI and green with Interval.

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Vacation Clubs

The most widespread definition of “vacation club” makes it a synonym of timeshare or rotational enjoyment resort or system.

Another meaning, albeit very rare and limited to America, is that of a points club or system. 

Villa

Accommodation unit operated on a timeshare, rotational enjoyment or fractional basis being a detached or semi-detached, single-family or multi-family dwelling, which is integrated into a tourist resort.

Week

Colloquial name given to an occupation period where it consists of seven consecutive days.

Welcome week

Week which the exchange company grants to its affiliates at a low cost at yhe moment of their affiliation.

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