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TATOC Consumer Helpline Guide No. 32

SPANISH LAW 4/2012 AND 42/1998

The timeshare Directive 2008/122/EC was officially transposed into the Spanish national legal system on 16/03/2012 by means of a Royal Decree which was ratified by the law 4/2012 of 06/07/2012. This law substitutes the previous law 42/1998.

As it happened with law 42/1998, law 4/2012 does not only implement the Directive 2008/122/EC but also establishes new rules on taxation, timeshare systems and rights applicable in Spain.

In respect of timeshare systems and rights, while the previous law 42/1998 established the rules to create a timeshare legal system under Spanish law based on real rights of rotational use, and intended that this should have been the only applicable legal system in Spain, law 4/2012 recognises systems based on personal rights created under non-Spanish laws (i.e. Club Trustee systems) according to the EU Regulation Rome I.

This is an important development considering the complexity of the systems under Spanish law and the requirements of the industry.

According to law 4/2012, non-Spanish legal systems rules can be registered at the relevant Land Registries which might be advantageous not only for the security of the consumers but also for the traders who would be protected against possible claims based on the lack of information or publicity of the non-Spanish system.

The “adaptation” of pre-existing systems which was required by the previous law 42/1998 is not necessary according to the new law however pre-existing non Spanish systems can be given publicity at the relevant Land Registries.

According to law 42/1998 all pre-existing systems will have a maximum duration of 50 years (from 04/01/1998) unless they had a shorter duration, or in the adaptation deed to the Law 42/1998 it was declared that their duration was indefinite.

In respect of taxation rules, a reduced VAT rate is established for the rights of rotational use and a reduced transmission tax is applicable to the transfers between private individuals.

Law 42/1998 has imperative nature and consumers will not be able to waive the rights conferred on them. In case of multi-destination timeshare clubs, the law protection is applicable if any of the resorts is within the EU; in the case of a contract that is not directly related to an immovable property, the law protection is applicable if the developer carries out activities in an EU member State.

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