VKI lawsuit: HG Vienna repeals 48 time-sharing clauses

The Association for Consumer Information (VKI) had sued Hapimag AG because of inadmissible clauses in the general terms and conditions of its timeshare contracts. Hapimag is a stock corporation based in Switzerland that provides holiday homes, apartments and hotels to its members.

The VKI objected to 48 provisions in the company's terms and conditions, reservation regulations, booking information and FAQs. The Vienna Commercial Court (HG Vienna) has now declared all 48 contested clauses to be inadmissible. The most important aspect of the judgment: Consumer law provisions apply despite the customer’s “shareholder status”. The verdict is not yet legally binding.

The judgment concerns so-called timeshare contracts (or “timesharing contracts”) from Hapimag. Such contracts are agreements that provide for a recurring, time-limited right to use an object - for example a holiday apartment or a holiday home - for a (total) fee. In order to use Hapimag's offer, consumers also had to buy “shares” in the company to which “residence points” were linked. In addition, a loan agreement was linked to the “acquisition and ownership of each share”. Customers who wanted to use Hapimag's offer were also turned into “shareholders”.

On this point, the HG Vienna states that although individual customers are formally to be viewed as “shareholders”, they are also to be classified as consumers. The legal relationship with Hapimag must therefore be assessed according to the standards of consumer protection law.

On the question of withdrawing from a timeshare contract, the HG Vienna pointed out that the Timeshare Act 2011 (TNG) was applicable. The TNG allows consumers to withdraw from a timeshare contract free of charge within 14 days of concluding a timeshare contract. In addition, clauses regulating the transfer of the “shares” and the buyback to the company were also judged to be inadmissible by the Vienna Higher Court. These provisions were non-transparent and, among other things, gave Hapimag arbitrary scope for assessment. The court also judged a five-year limitation period for “residence points” that could be used to “pay” for vacation to be inadmissible.

“The Vienna Commercial Court has made a very comprehensive and – from a consumer perspective – very pleasing judgment on timeshare contracts,” comments Dr. Joachim Kogelmann, responsible lawyer at VKI. “Above all, the judgment confirms the VKI’s assessment that consumer protection provisions cannot be undermined by complicated contract design or formal shareholder positions.”