Hawaii Timeshare Foreclosure and Right to Cancel Laws
Learn about Hawaii timeshare laws, including contract disclosures, the right to cancel, and foreclosure procedures and protections.
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If you purchase a timeshare in Hawaii and then get cold feet, Hawaii law provides you with a right to cancel the contract, but you’ll have to act promptly. If the time allotted to cancel the purchase has expired and you don't make your timeshare mortgage or assessments payments, you may lose your timeshare through foreclosure.
Keep reading to learn about a few of the important features of Hawaii’s timeshare law.
Right to Cancel a Hawaii Timeshare Purchase
In Hawaii, you can cancel a timeshare contract within seven calendar days after you:
- sign the contract, or
- receive the timeshare disclosure statement, whichever occurs later (Haw. Rev. Stat. § 514E-8).
Hawaii Timeshare Disclosure Statement
The timeshare disclosure statement must contain the following information (among other things):
- the name and address of the developer and of the timeshare units
- a description of the timeshare units (including the developer's schedule for completion of all buildings, units, and amenities and dates of availability)
- any restraints on the transfer of your timeshare interest in the timeshare units or plan
- whether the timeshare plan is a timeshare ownership plan or a timeshare use plan, along with a description of the rights and responsibilities under the plan
- a statement that there is a seven-calendar-day cancellation period
- notice of any pending or anticipated suits that are material to the timeshare units or plan
- your total financial obligation (including the initial price and any additional charges), and
- an estimate of the dues, maintenance fees, real property taxes, and similar periodic expenses, and
- the method or formula by which they are derived and apportioned (Haw. Rev. Stat. § 514E-9).
How to Cancel a Hawaii Timeshare Contract
You can cancel a Hawaii timeshare contract by:
- personally delivering notice of the cancellation to the other party, or
- mailing the notice to the other party at an address specified in the purchase contract (Haw. Rev. Stat. § 514E-8).
Notice is considered given on the date that you mail or hand-deliver the cancellation (Haw. Rev. Stat. § 514E-8). (See Nolo’s article on how to cancel a timeshare contract for more information on how to rescind a timeshare purchase.)
The contract cannot contain a waiver of your right to cancel (Haw. Rev. Stat. § 514E-11(7)).
Consumer Protections Regarding Promotional Devices
Timeshare sellers are notorious for getting people to attend sales presentations by offering free gifts or awards. Hawaii has strict requirements and content restrictions on the use of promotional devices (including entertainment, prizes, gifts, food, drinks, games, transportation, luaus, ocean recreational activities, land recreational activities, aerial recreational activities, tours, or other inducements) in selling timeshares.
Verbal disclosure required. In Hawaii, timeshare salespeople cannot offer a promotional device without first telling you that the device is being used or offered for the purpose of selling you a timeshare (Haw. Rev. Stat. § 514E-11(2)).
Written disclosure required. A timeshare salesperson must also provide the following information in writing at the time he or she tells you about the prize:
- a full description of the exact prize or gift (including its cash value)
- all material terms and conditions attached to the prize or gift
- a statement that you must attend and complete a sales presentation, and
- an identification of the timeshare project to be offered for sale, including type of ownership and price ranges of the timeshare interests in that project (Haw. Rev. Stat. § 514E-11(3)).
It is also illegal for a timeshare salesperson to offer any tourist activity (for example, a helicopter tour or scuba diving trip) at less than the actual cost of the activity to induce you to purchase a timeshare plan or to attend a timeshare marketing event (Haw. Rev. Stat. § 514E-11(13)).
Deceptive Practices are Prohibited in Timeshare Transactions
Additionally, under Hawaii law, a salesperson may not misrepresent:
- any material fact concerning the timeshare plan or timeshare unit
- that a timeshare interest is an investment (including the value of the interest at resale)
- the amount of time or period of time the timeshare unit will be available
- the location or locations of the offered timeshare unit
- the size, nature, extent, qualities, or characteristics of the offered timeshare units, or
- the nature or extent of any services related to the timeshare unit (Haw. Rev. Stat. § 514E-11(4), (5) and (Haw. Rev. Stat. § 514E-11.1).
Real Estate License Required
In Hawaii, only licensed real estate brokers may complete timeshare sales (Haw. Rev. Stat. § 514E-2.5).
Escrow Account Required in Timeshare Purchases
The timeshare developer must put any money you pay in connection with a timeshare purchase into an escrow account (Haw. Rev. Stat. § 514E-16).
It must release the funds:
- if you cancel the agreement
- if you or the developer defaults in performing an obligation under the sales agreement, or
- after escrow closes for the sale of the timeshare (Haw. Rev. Stat. § 514E-17).
Hawaii Timeshare Foreclosures
In Hawaii, if you take out a loan to purchase an interest in a deeded timeshare and fail to make your mortgage payments, you will likely face foreclosure. Find out more about Hawaii 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 Hawaii, you will also likely face foreclosure if you fall behind in the timeshare assessments (Haw. Rev. Stat. § 514E-29.) For more information on timeshare assessment foreclosures, see Nolo’s article Can Timeshares Be Foreclosed for Nonpayment of Fees and Assessments?
Finding Hawaii’s Timeshare Laws
You can find Hawaii’s statutes by going to the Hawaii State Legislature’s webpage at www.capitol.hawaii.gov. Click on “Table of Contents” in the Hawaii Revised Statutes box. The relevant statutes are in Title 28 (Property), Chapter 514E (Time Sharing Plans).