Tove Grimsbo has said that she is not holding her breath, and will believe she has been successful only when the money arrives in her account

A Norwegian lady, Tove Grimsbo, has recently been awarded more than an estimated €40,000 after what has been called a “ground-breaking” Spanish supreme court ruling that promises to shake many operators within the timeshare industry to their very core.

The highest civil court in Spain, it was announced this month, has upheld a Provincial High Court ruling ordering Anfi to refund all of the lady’s payments, plus interest and legal fees, after a case that has lasted more than 6 years.

When Mrs Grimsbo’s husband was persuaded by Gran Canaria’s Anfi Sales S.L. in 2001 to sign a contract for timeshare, paying a more-than-700€ deposit, there and then with their credit card, the courts have ruled that their right to a full “cooling off period” of 10 natural days was certainly breached. The law on this is strict, timeshare sellers cannot take a deposit within the first 10 days of any contract, in this case it seems they did.

Perhaps most significant of all however was that the contracts they signed, between 2000 & 2001, were “in perpetuity”, that is to say forever, for as long as they live and beyond. This was the clearest of all contraventions as it stands diametrically opposed to the Spanish law 42/1998 governing timeshare organisations, which clearly states that no timeshare contract signed after the beginning of 1999 is allowed to stand for more than 50 years.

Anfi has argued, since that time, that because their primary accommodations were built before the law came into force that this piece of timeshare consumer legislation did not directly apply to their product. They have, over the last 15 years, rested this claim for exemption almost solely on what is known as a ‘deed of adaptation’ Escritura Adaptación; a formal notarised document acknowledging the law in question and claiming to observe its contents correctly based on their interpretation of the rules it sets out.

This latest upholding of the original Las Palmas High Court ruling, that this type of contract is “Radically Null and Void” Nulidad Radical, could conceivably pave the way for many hundreds, if not thousands, of customers being able to legitimately claim that their contracts too are totally invalid.

Miguel Mendoza Martín, Lawyer

Top Playa del Inglés-based abogado (solicitor) Miguel Mendoza tells us “this type of deal stands in stark contrast to the direct intention of the 1998 law. This law was put in place specifically to protect consumers within the timeshare industry, and provides very clear guidelines as to what a seller can and cannot do, and the steps they must take to create a valid contract for timeshare.”

Often contracts of this nature leave clients with large instalments to pay for the purchase and an annual maintenance fee which, if not correctly described, might also breach Spanish contract law if it does not disclose the formula by which future fees are to be calculated.  This can mean that the sellers themselves might be free to charge any fee they deem necessary each year, throughout the term of the contract. Under Spanish law it must be specified within the contract how these fees will be calculated.

Miguel Rodríguez Cabello, the lawyer who brought the case to trial

Miguel Rodríguez Ceballos is an independent lawyer who cooperates with the Abogados de Extranjería Madrid. He is a native of the small fishing-cum-tourist town of Arguineguín, which overlooks the prestigious Anfi del mar resort on the south of Gran Canaria. “It was my mother who taught me how to know right from wrong, and to never take a cent that was not rightfully mine.” he says proudly when asked why he became a ‘town lawyer’ as he describes it.

Rodríguez represented Mrs Grimsbo in this case and says “contracts that do not correctly describe the expected payments, clearly leave open to question how the resort are to arrive at the fees that they want to charge, this could be a breach of consumer protection. They would have to state in the contract just how any dues would be calculated. If the inflationary cost of living has gone up by 35% over the last decade, then how can any time share organisation justify an increase of more than 100% over the same time period? In my opinion” says Mr Rodriquez “they simply cannot”

One of the interesting parts of this particular case is that the monies being awarded to Mrs Grimsbo not only include a doubling of her original deposit, taken incorrectly, as is stipulated within the law for all such monies deemed to have been taken earlier than they should be, but it also includes the total purchase price paid out (plus interest), regardless of the fact that she and her husband had been using their designated weeks at Anfi prior to his death.

“The point here” says Miguel Mendoza “is that the law is very clear, and this is what has now been confirmed by the supreme court in this decision: if a seller fails to correctly follow all the steps necessary for a valid contract as set out by law, then it is as though the contract never existed at all”

Of course, according to Mr Mendoza, many sellers argue that if the client has paid a deposit, which they do not claim back, and then they start to use the product and do not make any official (ie written and recorded) complaints within the first 4 years of the original agreement, and then they continue to use the product; that it must be seen to have been accepted by the client.

On this point of law Mr Mendoza is not swayed. “Yes in theory that may seem reasonable, however we know from experience that once a deposit is taken, the client is far less likely to raise questions for fear of losing their deposit. Similarly once the ten days cooling-off period has been passed the client, under Spanish law, then has a theoretical time period in which they can call the contract into question, after which they are told that it must stand as it was written.”

“However, if it can be shown that the contract was not entered into correctly from the very beginning, with all the necessary information being properly understood by both parties, then it is as though no contract was ever signed, there can be no time limits, and the point here is that if there was no proper contract, then there cannot be an acceptance of any part of the agreement. Whether or not the service has been used, there is no purchase or payment agreement, and the monies should be returned.”

This foreseeably could have knock-on effects, too, for any financing agreements that were entered into on the basis of that contract.

“Bear in mind” says Rodríguez “that we did not reclaim the maintenance paid by the client, so they did not enjoy Anfi for free.”

Mrs Grimsbo first went to Miguel Rodríguez in Arguineguín after her husband had died, she was faced with mounting payments, that she felt were simply unfair. It was Mr Rodríguez who took a look at her situation to see if the law as it stands could support her position. Through his diligent research, and consultation with other members of the Abogados de Extranjería Madrid, he was able to discover that there were several inconsistencies with the manner in which the contract had been presented and enforced.

The group of independent lawyers who form the Abogados de Extranjería Madrid, with the backing of other players experienced in the industry, agreed that the law must have been designed in principle to protect not just consumers, but Spain’s very image as a place where fairness prevails, and was, in their opinion, being systematically thwarted through a general lack of understanding of the nuanced guidelines put in place to ensure that timeshare sellers do take proper responsibility for making clear the full implications of any agreement signed by their clients.

“No one is saying that timeshare is bad,” says Don Miguel Rodríguez “many timeshare products are really very good and in fact I often tell people that compared to some other islands and on the mainland, the timeshare operators are little angels; but what we are saying is that the Spanish legal system provides very stringent guidelines to protect consumers, directly based on a set of European laws, under the European Timeshare Directive, that have stood for more than 20 years.”

This legal framework was specifically designed to eradicate unfair and, in the case of a few rogue operations, even sometimes criminal practices.  There is no suggestion that this is the case with Anfi however.  In accordance with this supreme court ruling, it seems they simply misinterpreted the rules.

The fact remains that timeshare consumers, usually tourists who came here simply to enjoy a holiday, can find themselves paying huge amounts of money over long periods of time, for a decaying product with no resale value and with seemingly no recourse. Most do not speak the language, or may have been subjected to aggressive, high pressure selling techniques by unscrupulous, well trained teams who provided them with little understanding of what it was they were signing, or its long term implications.

That is why, as of 1999, any deposit taken in the first 10 days of a timeshare agreement, must be deemed illegal, as is any agreement for timeshare of more than 50 years in length.

The contract must state how any maintenance fees will be calculated. And timeshare must never be sold as an “investment” as it has been proven to have little or no resale value. In fact some owners of more than one time share agreement have been adversely treated by the courts as investors under the law, rather than as consumers.

TRIBUNAL SUPREMO DE ESPAÑA CC3.0 By-Sa Cberbell

Spain is striving to be a modern 21st century European state, with considered and detailed laws based on harmony and unity across the continent of which it is part. The days when doing business here could be seen as that of the “wild west” are pretty much gone, and what now remains is a growing infrastructure that looks towards a brighter future than those hazy hopeful days of its early democracy or the darker time before.

This can be seen in action when a supreme court ruling of this nature comes about, a case of jurisprudence, testing the validity and understanding of a point in law, which would usually be heard by up to 5 of the 10 top judges in Spain, however in this particular case all 10 of the highest members of Madrid´s judiciary sat to consider these points of law, and they decided unanimously, in what is known as an unprejudiced ruling, that the protection of the consumer from unfair practices is paramount.

No business, not even the biggest, most well run or best known timeshare organisation in the Canary Islands, is above these laws designed and intended to enforce fair practice and satisfactory settlements in favour of the consumer over simple commercial interests.

Can Anfi appeal?  Our advice is that it would be highly unlikely.  To do so they would need to make this ruling a constitutional matter or take the case to the European court in Strasbourg, neither of which is seen as being very probable.  Though they may ask for specific clarifications, right now most seem to agree, this subject has been clearly and finally decided by the highest authority in the Kingdom. All courts below them must now follow this ruling as their guide.

21st century Spain has given us a real glimpse of quite how far it has come, and how far it is willing to go to protect its consumers and tourists from sharp practice and flagrant disregard for the rights of consumers and their quality of life.

When asked quite how many people they thought this judgement might affect, the lawyers keep their cards close to their chests:

“It could be anything from a thousand to ten thousand here on Gran Canaria, maybe several times that.
In Spain altogether? It could be hundreds of thousands.”