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This article broadly looks at property time-share and the legislation regulating it. The problems and complaints by consumers trapped in the empty and misleading promises advertised to them by the time-share industry are also addressed. In part one, the article gives a broad outline of what the Property Time-Sharing Control Act entails and specific definitions that describe the various elements of the industry.

Part two will look at the National Consumer Commission Report of 2018 and its recommendations as well as the legal consequences of contracting into a time-share agreement and the recourse available to consumers who, because of misrepresentation want to cancel their agreements.

Property time-sharing became very popular in South Africa in the 1980s and later, the use of the point-system as an alternative to Time-Sharing schemes which offered fixed accommodation for a specific time during the year. The point-system gave members more flexibility in their choice of holiday accommodation. The need to create legislation to regulate the industry and protect the consumer arose and the legislature enacted the Property Time-Sharing Control Act in 1983. (“the Act”) [1]

The purpose of this Act was to regulate the alienation of time-sharing interest within a property time-sharing scheme by regulating the contents of advertising and formalities pertaining to the contracts.

What constitutes a “time-sharing interest”? It is the right (incorporeal) to/ or interest in the exclusive use or occupation of accommodation during a determined or determinable period(s) during any year.[2] The occupancy rights must be recurrent (yearly) to qualify as a time-sharing interest.

The definition of “accommodation” in the Act is wide enough to cover apartments, free-standing houses, caravans, tents and even private nature reserves, therefore buildings and land need not be of a permanent structure to qualify as accommodation. This definition does however not cover boats and yachts.

The definition of a “time-sharing scheme” in the Act refers to “any scheme or arrangement or undertaking in terms of which time-sharing interests are offered for alienation or are alienated and the use of such interest is regulated or controlled”. Alienation for the purpose of the Act refers to the selling of the Time-Shares.

The legal basis of the scheme can be in terms of sectional titles, share blocks, memberships or clubs. A scheme involving the alienation of time-shares and the management of their use, therefore, qualifies as a property time-share scheme irrespective of their size and legal basis.

The main objective of the Act was to maximise consumer protection in terms of disclosure requirements as to certain information when advertising a time-share interest.

Newer legislation in terms of the National Credit Act (“NCA”)[3] and the Consumer Protection Act (“CPA”)[4] has direct implications for the application of the Act and the time-share industry as a whole.

In 2018 the National Consumer Commission (“NCC) investigated the vacational ownership and time-industry after various consumer complaints were submitted to the Consumer Protection Tribunal. [5]

The majority of the complaints received and raised during the enquiry related to the inability to cancel these so-called “life-long” contracts with clubs, the forfeiture of points on a cancellation or transfer/reselling of the interest, unavailability of accommodation, misrepresentation of what is actually being sold during the sales presentations and escalating membership fees which was advertised as non-escalating fees to potential buyers.

The NCC made substantial recommendations on the matter, including the need for newer legislation that regulates the time-share industry in South Africa, in order to bring consumer protection in the timeshare/vacation ownership industry in South Africa on par with the rest of the world.

[1] Property Time-Sharing Control Act 75 of 1983

[2] supra

[3] National Credit Act 34 of 2005

[4] Consumer Protection Act 68 of 2008

[5] report on the inquiry commissioned in terms of section 88(3) of the consumer protection act, act 68 of 2008 into the Vacational ownership/ timeshare industry.
https://www.thencc.gov.za/content/report-inquiry-commissioned-terms-section-883-consumer-protection-act-act-68-2008-vacational.

 

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.

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Jan Fourie

Director |  Attorney, Notary & Conveyancer | BA. LLB

Jan graduated in 1974 with a five-year BA LLB degree from the University of Stellenbosch, whereafter he was admitted as an advocate and prosecuted as such in the Cape Town and Wynberg Courts. In 1974, he joined Swemmer & Levin as the Candidate Attorney of Mr Levin (founding member) and was admitted as an attorney on 7 April 1976, as a conveyancer on 11 January 1978, and as a Notary on 19 December 1984. Since 1974, he has served in various committees, including the West Coast Chamber of Commerce, the Vredenburg School Committee, and the Malgas Lions Club. 

Furthermore, Jan was the author of the first bilingual law book, The New Debt Collecting Procedures (Die Nuwe Skuldinvorderingsprosedures), which was used by all the Magistrate Courts throughout South Africa. With the founding of the Small Claims Court in Vredenburg, Jan served as one of the first Commissioners. He is currently based at Swemmer & Levin’s Vredenburg office and has been with our firm for more than 47 years.

Pieter Smit

Director | Attorney & Conveyancer | BA. LLB

Pieter obtained his BA Law degree from Stellenbosch University in 1995 and his LLB degree from the North-West University in Potchefstroom in 1998. He served his articles at Marais Muller Attorneys from 1998 to 1999 and was admitted as an attorney in 2000 and as a conveyancer in 2002. Pieter is the founder of PP Smit Attorneys, which opened its doors in 2004. He also became a director of Swemmer & Levin in 2006. Pieter loves the outdoors and participating in all forms of sport, including tennis, golf, fishing, spearfishing, scuba diving, and hiking. 

Johann Maree

Director | Attorney | BA. LLB

Johann matriculated at Oudtshoorn High School and attended Stellenbosch University, where he obtained his BA Law and LLB degrees. Following his studies, he worked for three years as State Prosecutor at the Magistrate’s Court in Cape Town. Johann completed his legal training with the State Attorney in Pretoria and then moved to his hometown, Oudtshoorn, where he worked as a lawyer for a year. In 1983, he finally moved to Vredenburg and joined Swemmer & Levin, where he is still practising as a director. When he is not in the office, Johann enjoys cycling and in his earlier days, he used to be a long-distance junkie.

Richard Phillips

Director | Attorney | Bcom & BProc

After matriculating at Paarl Boys’ High School, Richard completed his BCom and BProc degrees at the University of Port Elizabeth. He served his articles with Van Wyk Fouchee in Paarl and quickly developed an affinity for litigation. Richard has always had a deep love for the ocean and when he was presented with an opportunity to join Swemmer & Levin on the West Coast, he agreed without hesitation and has been with our firm since 1997. Richard specialises in general litigation and divorces. When he is not in the office or with his family, he tries to spend as much time as possible in or on the water.

Jandré Smith

Director | Attorney | LLB

Jandré grew up and matriculated in the small Klein Karoo town of Oudtshoorn. He furthered his studies at the North-West University in Potchefstroom, obtaining his LLB degree during 2015. He completed his articles at Swemmer & Levin in 2017 and was subsequently appointed as a professional assistant. In 2020, Jandré was promoted to the position of director at the firm, where he practises in the Litigation department at our Langebaan office. When not practising law, Jandré is an avid sports fan. He has a passion for nature and enjoys camping, trail running, and mountain biking with his family.

Andre van der Walt

Director | Attorney | LLB

Andre graduated in 2015 with an LLB degree from the University of Pretoria. He later went on to obtain his NQF 7 Certificate in the Administration of Deceased Estates from the University of South Africa, which allowed him to further his career in deceased estates and the drafting of wills and trusts. Andre served his articles at Barnard & Patel Attorneys under the supervision of Mr YAS Patel. After being admitted as an attorney in 2016, he continued working at Barnard & Patel Attorneys as a professional assistant in the deceased estates department.

Andre joined Van Rensburg Attorneys in 2019 and was head of the deceased estates department until 2021. He then received the opportunity to move to the West Coast, where he joined Swemmer & Levin Attorneys. Andre loves travelling and enjoys the beauty that our country has to offer with his friends, family, and loved ones.

Harmann Potgieter

Attorney | LLB

Harmann graduated in 2018 with an LLB degree from the North-West University’s Potchefstroom Campus. He went on to study and grow in various fields, including doing a course on the Consumer Protection Act and a course at the University of South Africa where he obtained his NQF 7 Certificate in the Administration of Deceased Estates.

Harmann completed his articles of clerkship at Swemmer & Levin under the supervision of Mr Richard Phillips. After being admitted as an attorney in 2020, Harmann continued with Swemmer & Levin as a professional assistant in the deceased estates department as well as the litigation department. He loves to study, possesses a deep curiosity about the world, and is dedicated to giving back to the community.

Carla Cloete

Attorney, Conveyancer & Notary | LLB

Carla obtained her LLB at the North West University, Potchefstroom Campus in 2015. She completed her articles in 2017 with Brits Dreyer Inc in Bellville. She is an admitted Attorney, Notary and Conveyancer. After her articles she relocated to Kimberley where she worked as a professional assistant in the Conveyancing department of Van de Wall Inc. Coming back to her Western Cape roots, she now joins the Swemmer & Levin team as a professional assistant.