In the Canary Islands there are 14,000 timeshare properties, representing 58,874 beds, with an occupancy rate of 81.1%, generating 10,000 direct jobs

Europa Press – Las Palmas de Gran Canaria

The Ombudsman of the Autonomous Community of the Canary Islands, Jerónimo Saavedra, has expressed his concern about the situation of «legal uncertainty» between owners and the «serious breach» that can bring to the Tax Office the annulment of time sharing contracts.

This was pointed out in a statement as a result of several Supreme Court judgments of the past year in which they have declared void the rights acquired for an indefinite period for real property for tourist purposes timeshare, also known as time sharing mode.

Saavedra comes to meet a complaint lodged to the Ombudsman of the Autonomous Community of the Canary Islands on this matter, as well as several public consultations in this regard.

In those complaints is warned the situation of legal uncertainty, in addition to the possible economic and financial impacts, as well as tariffs impacts or other, that can arise to restore the taxes and expenses that might have been paid as a result of carrying those contracts out.

It is also notified the serious breach to the Tax Office that going back to the situation prior to granting the contracts could cause to the Tax Office, such as compensation for damages whose amount can be very high if declared void, says Saavedra.

The Ombudsman of the Autonomous Community of the Canary Islands maintains that it is a matter of «great significance» in the Canary Islands, given the relevance of this modality within the tourist sector on the islands. Of the 302 timeshare resorts that exist in Spain, 128 are in the Canaries. In the entire country there are about 715,000 holders, of which approximately 623,000 are foreigners.

This industry generates in Spain more than 18,300 direct jobs and a total economic impact (direct and indirect) of 2,800 million Euros, with an investment by purchasers of nearly 15,000 million Euros, almost 1.5% of GDP , funded mostly by foreigners who could take them back to their countries of origin.

In the Canary Islands there are 14,000 timeshare properties, representing 58,874 beds, with an occupancy rate of 81.1%, generating 10,000 direct jobs. The average expenditure per owner in 2013 was 45.2 Euros per day, at an average stay of 11.6 days and an average occupancy rate in the same annuity of 81.1%.

Every year 1.3 million tourists visit the Canaries in this modality, over 10% of the tourism received by the islands per year, according to the figures provided in 2014 by Resort Development Organization, in line with the National Association of Timeshare and Canarian Institute of Statistics.

Limitation of 50 years

The Ombudsman of the Autonomous Community of the Canary Islands points out that the Supreme Court judgments are based on an interpretation which denies that the pre existing resorts or regimes to the Law on real estate for tourist purposes timesharing right and the tax regulations “cannot be passed on indefinitely but with a 50 year time limitation”.

In the report of the Ombudsman of the Autonomous Community of the Canary Islands, after analyzing the legal text, he holds that the approach adopted by the Supreme Court does not adjusts entirely to the law, and understands that the legislator “sough to grant the acquired rights and provide security to the preexisting regimes, while strengthening the position of the consumer”.

At the same time it emphasizes that the law aims to strengthen the juridical legality and safety with the public notaries and land registrars, entrusting the former ones with formalizing the public deed, ensuring its disclosure by accessing the Land Register.

Jerónimo Saavedra explained that after this Law, many public notaries and land registrars granted and registered adaptation deeds to the aforementioned legal requirement, of pre existing regimes to it, stating that the weeks or specific period each year, to be sold in the future would be indefinitely.

Further adds that also public notaries authorized contracts regarding timesharing accommodation rights, which were configured with an indefinite time character or without a term, i.e. beyond the scenario of 50 years.

This is why, the Ombudsman of the Autonomous Community of the Canary Islands, has issued a resolution requesting the Registries and Public Notaries CEOs to decide as to whether in the light of the existing legislation such operations may be carried out as indefinite or must be done with the maximum time limit of 50 years.

Jeronimo Saavedra concludes by asking «what would be left of the legal security deposited in these two groups of very high legal professionals if we find judgments that decree the nullity of contracts in which they have intervened or that have been reflected in the appropriate Land Registry”.

LIZARZA ABOGADOS