The March 28, 2022 Federal Official Gazette published mandatory standard NOM-029-SE-2021, Business practices-Informational requirements for the provision of timeshare services (NOM 029), which supersedes the 2010 version. The new NOM 029 will go into effect on September 24, 2022.
NOM 029 governs the required standards for the sale and pre-sale of timeshare services, mandatory content and registration of timeshare agreements, requirements to be contained in timeshare regulations, certification procedures, and supervision for timeshare service providers, among other processes. Based on the new NOM 029, purchasers may sell, transfer, or assign their rights arising from a timeshare services agreement. Promotion and commercialization of international timeshare services is also permitted.
Providers are still required to register their adhering boilerplate agreements for sale or pre-sale of timeshares before the Federal Consumer Protection Agency (“PROFECO”). Prior registration with PROFECO of these agreements is required to sell or pre-sell timeshares. To properly obtain this registration, the text of the purchase agreements must comply with a large number of requirements outlined in NOM 029 and the Mexican Federal Consumer Protection Law. These include:
Purchase agreements must contain, among various other requirements: (i) the resort´s internal regulations, which shall comply with a number of provisions in favor of the customer; (ii) a clear description of the charges to be applied to the customer; and (iii) the procedure for clients to sell, transfer, or assign their rights and the calculation of the charges arising thereof. Agreement registration procedures in order to comply with NOM 029 are listed in the publication in the Official Gazette of the Federation. Developers can begin the registration process following the publication date of NOM 029 and before it goes into effect.
Some of the main new provisions of NOM 029 different from the 2010 version include the following:
* * *Foley has a robust hospitality and leisure, real estate, and regulatory interdisciplinary team in the U.S. and Mexico with deep understanding of the fractional ownership market, able to assist clients in the understanding and implementation of the needed steps to comply with the new NOM 029, including in the creation of timeshare regimes in Mexico, the drafting and review of Mexican timeshare agreements and regulations, registrations with PROFECO, and in obtaining new compliance certification procedures for service providers available under NOM 029.