Arizona Timeshare Foreclosure and Right to Cancel Laws
Learn about Arizona timeshare laws, including contract disclosures, the right to cancel, and foreclosure procedures and protections.
- How do I cancel a timeshare purchase in Arizona?
- If I stop making payments on my Arizona timeshare, what is the most common type of timeshare foreclosure procedure (judicial or nonjudicial)?
- Will I face foreclosure if I don’t pay the assessments?
- Will I be liable for a deficiency judgment after the foreclosure?
Arizona’s laws covering timeshare transactions are found in its Timeshare Owners’ Association and Management Act. Read on to find out some of the most important features of Arizona timeshare law.
Right to Cancel a Timeshare Purchase in Arizona
In Arizona, you may cancel a timeshare purchase up until midnight of the seventh calendar day following the date you signed the purchase agreement. The purchase agreement must include a statement of the right to cancel (Ariz. Rev. Stat. § 32-2197.03(A)).
How to cancel. To cancel the contract, you must provide written notice to the seller. The cancellation notice should be sent to the seller's address, which must be included in the purchase agreement. The cancellation is effective on the date the cancellation is sent (Ariz. Rev. Stat. § 32-2197.03 (A)(3)). (Get more tips on how to cancel a timeshare contract.)
Mortgage (Deed of Trust) Foreclosures
If you take out a loan to purchase an interest in a deeded timeshare and fail to make your timeshare mortgage payments, you will likely face foreclosure.
In Arizona timeshare foreclosures are typically nonjudicial. This means the foreclosure takes place without court supervision and is handled by a trustee.
Delinquent Assessments Foreclosures
In addition to monthly mortgage payments, timeshare owners are ordinarily responsible for maintenance fees, special assessments, utilities, and taxes, collectively referred to as “assessments.”
In Arizona, a timeshare owners’ association may conduct a nonjudicial foreclosure for nonpayment of assessments if the timeshare owner has been delinquent in paying the assessments for a period of one year (Ariz. Rev. Stat. § 33-2211(A)). (However, a nonjudicial foreclosure is not permitted if the association's declaration expressly requires a judicial foreclosure.)
Notice of Delinquency
Before initiating a nonjudicial foreclosure for delinquent assessments, a timeshare association or other managing entity must prepare a notice of delinquency that identifies:
- the owner of the timeshare estate
- the nature and amount of the owner's current delinquency in payment of assessments
- the legal description of the owner's timeshare estate
- the name and address of the association or other managing entity, and
- the name and address of the trustee designated by the association or managing entity to conduct the trustee's sale (Ariz. Rev. Stat. § 33-2211(B)).
Recording, Mailing, and Posting Requirements
The association or managing entity must:
- record the notice of delinquency with the county recorder of the county in which the timeshare property is located
- mail a copy (by certified mail, return receipt requested) to the delinquent owner or owners, and
- post a summary of the notice of delinquency on an owners' bulletin board or other owner notice board provided by the association or other managing entity at the timeshare property (Ariz. Rev. Stat. § 33-2211(D)).
Right to Cure
The timeshare owner has 30 days to cure the delinquency. If the delinquency is not cured within 30 days, the association or managing entity can ask the trustee to proceed with a nonjudicial foreclosure (Ariz. Rev. Stat. § 33-2211(F)).
Right to Prevent a Trustee’s Sale
If you acquired a deeded timeshare estate before January 1, 2009, you can prevent a nonjudicial foreclosure by returning a form to the trustee and to the association or other managing entity within 30 days after the association or other managing entity sends you the notice of delinquency. (The form will be provided along with the notice.) The form must be signed and sent to the trustee and association or other managing entity by certified mail, return receipt requested (Ariz. Rev. Stat. § 33-2211(I)(1)).
If you submit the form, the nonjudicial foreclosure must stop, but the association or other managing entity can use other available remedies (such as filing a lawsuit) to collect the delinquent assessments (Ariz. Rev. Stat. § 33-2211(I)(3)).
Timeshare Deficiency Judgments
When a lender forecloses on a mortgage, the total debt owed by the borrowers to the lender can exceed the foreclosure sale price. The difference between the sale price and the total debt is called a deficiency.
Example. Say the total debt owed for a timeshare is $15,000, but it only sells for $10,000 at the foreclosure sale. The deficiency is $5,000.
Arizona does not permit a deficiency judgment after a nonjudicial timeshare foreclosure (Independent Mortgage v. Alaburda and Warner, 281 P.3d 1049 (2012)).
Arizona Timeshare Laws
The laws governing timeshares in Arizona are found in Chapter 20 of Title 33 of the Arizona Revised Statutes. The statutes governing nonjudicial foreclosure are located in Chapter 6.1 of the same title. To read the statutes, go to www.azleg.gov and click on “Arizona Revised Statutes.”