What are timeshares?
Timeshares allow multiple individuals/parties to own and occupy a vacation property for a recurring and predetermined period of time. It confers an advantage to those who wish to benefit from repeated use of a familiar, high-standard vacation property (such as resorts and homes) without the costs associated with full ownership. It is distinct from traditional 'joint ownership' as a timeshare beneficiary enjoys exclusive ownership rights for a specific time period.
Timeshare Licensing & Registration
On 20 February 2025, Bahrain implemented Law No. 1/2025 on the Regulation of Timeshares (the "Timeshare Law"). Under the Timeshare Law, no property may be used for timeshare purposes without (i) obtaining a license from Bahrain Tourism & Exhibitions Authority ("BTEA") after submitting the required documents and particulars and (ii) annotating the property's register before the Survey and Land Registration Bureau ("SLRB"). A BTEA license may not be obtained without first procuring the required annotation by the SLRB.
Provided all documents and particulars have been properly submitted, the BTEA shall issue its decision granting a license within thirty days of a completed application.
Grievances
A timeshare applicant may file a grievance before the Minister of Tourism thirty days after the date of either an explicit or implicit denial of the timeshare application. An application shall be deemed implicitly denied following the expiry of thirty days from the BTEA application submission date without a response.
A grievance shall be considered and determined within thirty days, and the expiry of thirty days without a final determination shall be deemed an implicit dismissal. In this case, the applicant may file a challenge before the High Civil Court on the dismissal of the grievance.
Advertising Timeshares
The Timeshares Law tightly regulates advertising by only permitting licensed projects to be advertised, subject to the approval of BTEA. This is done primarily to reduce misleading advertising and fraud in the tourism industry. A Resolution is anticipated to further regulate the marketing of timeshares.
Timeshare Contracts
- Contract Registration – All timeshare contracts shall be registered before BTEA. The Ministry of Tourism shall issue a Resolution regulating the mechanism of registering said contracts, as well as what may or may not be included under timeshare contracts.
- Consumer Protection – The Timeshare Law under Article 15 confers a right of withdrawal within ten days of conclusion of the timeshare contract, unless the parties have stipulated a longer period. In such circumstances, the beneficiary shall recover the full deposit paid for the timeshare.
- Third Parties – The timeshare beneficiary is also entitled to allow third parties to benefit from the timeshare property for his/her designated time period under the contract, either with or without financial consideration, provided the timeshare beneficiary has fulfilled all financial obligations under the contract. Disposal of timeshare rights are also permissible, such as sale or mortgage.
Pursuant to Article 18, derogation from these legal rights is not permissible and therefore void under the timeshare contract.
Strict Penalties
The Timeshare Law prescribes a strict penalty of imprisonment up to one year and/or a fine between BHD1,000 and up to BHD50,000 to those who:
- Supply timeshare products without being licensed by BTEA.
- Manage a timeshare without being licensed by BTEA.
- Advertises a timeshare project in or out of Bahrain without being licensed by BTEA.
- Fail to register timeshare contracts and amendments thereto in the timeshare registry.
- Obtained a license from BTEA fraudulently.
Concluding remarks
Timeshares in Bahrain typify continuing efforts to enhance and broaden the Kingdom's tourism and hospitality sector and to situate it as a key component to Bahrain's economic growth strategy. These reforms will also encourage regional tourists from the GCC who may frequently visit Bahrain over holidays, and prefer to stay in high-quality, dependable vacation properties. More Resolutions are anticipated in the upcoming period to shed further light to legal requirements prescribed by BTEA.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
