“Timeshare” Regulation in Dubai: An analyticalview considering the principles of cassation (Part 1).

The law no. (14) of 2020 concerning Timeshare Schemes in the Emirate of Dubai stipulates two types of contracts subject to its provisions: Timeshare, and Points contract. Timeshare was previously defined as per the said law.

A points contract is a contract under which a beneficiary buys points for a specific financial consideration and under which an establishment is obliged to enable that Beneficiary to use an accommodation Unit for the period specified in the contract or to use any other alternative accommodation Unit existing within or outside of the Emirate.

A timeshare scheme is a scheme under which a beneficiary is entitled to use an accommodation unit throughout a timeshare interval per the terms agreed upon in a Timeshare contract or to use his Points or exchange them for the right to use an accommodation unit throughout the period specified in a Points-based Contract.

The law restricted the scope of the timeshare contract to the usufruct. Also, it mentioned that the rights arising from the contract and all other rights in the Timeshare Interval about the relevant accommodation unit must be registered in the Real Property Register upon the lapse of the withdrawal period (10 days for the beneficiary only).

The Administrative Resolution No. (74) of 2023 also mentioned that an establishment must apply, through the electronic portal, for registration of the Timeshare Contract in the real property register and issuance of a contract registration certificate in the name of the beneficiary by the DLD or the DIFC.

The law itself stipulates a very important provision, which is that any disposition transferring or restricting the ownership of a Timeshare interval will be null and void unless it is registered in the real property register. Also, any agreement or provision, in a Timeshare contract or a Points-based contract, that would prejudice the beneficiary’s rights under the law and the resolutions issued in pursuance hereof, or that would exempt the establishment from its obligations under the contract, will be null and void.

The law also mentioned that a new register called “Activity Register” will be created in the DTCM in which the establishments authorised to conduct the activity; the accommodation units designated for use under Timeshare schemes; and the establishments authorised to market, publicise, and advertise Timeshare schemes will be recorded. The establishment that practices the activity of selling Timeshare intervals; or selling points, must be licensed, and authorized to practice the activity.

The law is keen to achieve the well-being of the beneficiaries as it stipulates that an establishment may not disturb the beneficiary’s enjoyment of the accommodation unit in any manner that limits the use of the same during his Timeshare interval and may not make any change to the accommodation unit that may preclude the beneficiary from using it or prejudice the use of the same for its intended purposes. This obligation of the establishment is not limited to its acts and the acts of its subordinates only, it extends to include any disturbance or damage caused by any person who receives any right related to the accommodation unit from the establishment.

Where such disturbance of enjoyment results in preventing the beneficiary from using the accommodation unit during his Timeshare interval per the Timeshare contract, the beneficiary may apply to the competent court for termination of the Timeshare contract or reduction of the financial consideration for the Timeshare interval, and compensation. Any agreement providing for the mitigation of, or exemption from, the non-disturbance obligation stipulated in this Article will be null and void where the establishment has fraudulently concealed the grounds for that obligation.