Illinois Timeshare Foreclosure and Right to Cancel Laws
Learn about Illinois timeshare foreclosure laws, right to cancel laws, and other timeshare contract laws.
If you purchase a timeshare in Illinois and then change your mind, state law provides you with a right to cancel the contract, but you’ll have to act fast. 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. Read on to learn more about the most important features of Illinois’ timeshare law.
Right to Cancel a Timeshare Purchase in Illinois
In Illinois, you can cancel a timeshare contract within five calendar days after you:
- sign the contract, or
- receive a copy of the public offering statement, whichever occurs later (765 Ill. Comp. Stat. 101/10-10).
Timeshare Public Offering Statement
The public offering statement contains very detailed information about the timeshare project and important matters you should consider when buying a timeshare interest. It must include the following information (among other things):
- the name of the developer and the principal address of the developer
- a description of the type of timeshare interests being offered
- a general description of the existing and proposed accommodations and amenities of the timeshare plan (including their type and number, personal property furnishing the accommodation, any use restrictions, and any required fees for use)
- a description of any accommodations and amenities that are committed to be built
- the current annual budget, if available, or the projected annual budget for the timeshare plan
- any initial or special fee due from the purchaser at closing, together with a description of the purpose and method of calculating the fee, and
- any current or expected fees or charges to be paid by timeshare purchasers for the use of any amenities related to the timeshare property (765 Ill. Comp. Stat. 101/5-25).
How to Cancel an Illinois Timeshare Contract
You can cancel an Illinois timeshare contract by:
- personally delivering notice of the cancellation to the other party, or
- mailing the notice by certified mail, return receipt requested, to the other party at an address specified in the purchase contract (765 Ill. Comp. Stat. 101/10-10).
Your cancellation notice is considered on time if you mail it before midnight on the fifth calendar day (765 Ill. Comp. Stat. 101/10-10). (See Nolo’s article on how to cancel a timeshare contract for more information on how to rescind a timeshare purchase.)
If you cancel, the developer must give you a refund (less the amount of any benefits you actually received) within 20 calendar days after:
- receiving the notice of cancellation, or
- receiving funds from your cleared check, whichever is later (765 Ill. Comp. Stat. 101/10-10).
Illinois Timeshare Sales and Resale Laws
Timeshare salespeople are known for using hard-sell tactics and misrepresentations to get you to make a snap decision about buying a timeshare.
Timeshare resellers can be even more unscrupulous. Owners often find it extremely difficult to sell their timeshares since there is virtually no after-market for them. As a result, scam artists have popped up who falsely tell a timeshare owner that there is a ready and willing buyer for the timeshare -- but that the timeshare owner must pay hundreds or thousands of dollars in upfront fees to process the transaction. After the timeshare owner pays the fees, the scammer often disappears.
Illinois law provides protections to shield consumers from deceptive sales practices and resale scams.
Real Estate License Required
Any timeshare sales agent or resale agent must have a real estate license (765 ILCS 101/10-20).
Fraud and Misrepresentation is Illegal
Illinois law prohibits timeshare sellers and resellers from:
- misrepresenting a material fact to get you to buy a timeshare
- predicting specific or immediate increases in the value of a timeshare
- materially misrepresenting the qualities or characteristics of the accommodations or the available amenities
- misrepresenting the length of time the accommodations or amenities will be available, or
- misrepresenting the conditions under which you can exchange your timeshare for another (765 ILCS 101/10-25(a)).
Consumer Protections Regarding Promotions
Timeshare sellers are notorious for getting people to attend sales presentations by offering free gifts, prizes, or vacations. Illinois law requires a developer or other person using a promotion to sell timeshares to clearly disclose all of the following:
- that the purpose of the promotion is to sell timeshare interests
- that any person whose name or address is obtained during the promotion may be solicited to purchase a timeshare interest
- the name of each developer or other person trying to sell a timeshare interest through the promotion (and the name of each person paying for the promotion)
- the complete rules of the promotion
- the method of awarding prizes, gifts, vacations, discount vacations, or other benefits under the promotion
- a complete and fully detailed description of the promotion (including the approximate retail value of all prizes, gifts, or benefits under the promotion)
- the quantity of each prize, gift, or benefit to be given away; and
- the date by which each prize, gift, or benefit will be awarded or conferred (765 ILCS 101/10-25(b)).
The developer or salesperson must give you the disclosure (in writing or electronically) at least once either a reasonable time period before the scheduled sales presentation or before you pay any nonrefundable money in regard to the promotion (765 ILCS 101/10-25(d)).
Illinois Timeshare Foreclosures
If you take out a loan to purchase an interest in a deeded timeshare and fail to make your timeshare mortgage payments or keep up with the assessments, you will likely face foreclosure. (In addition to monthly mortgage payments, timeshare owners are ordinarily responsible for maintenance fees, special assessments, utilities, and taxes, collectively referred to as “assessments.” Find out more in Nolo’s article Can a Timeshare Be Foreclosed for Nonpayment of Fees or Assessments?)
In Illinois, residential foreclosures are judicial, but state law provides for the nonjudicial foreclosure of mortgages and assessment liens when it comes to timeshare properties (765 ILCS 101/10-50). (To learn more about the differences and similarities between judicial and nonjudicial foreclosures, see Nolo's Chart: Judicial v. Nonjudicial Foreclosures.)
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.
In Illinois, you are not subject to a deficiency judgment after a timeshare foreclosure if the foreclosure is nonjudicial (765 ILCS 101/10-50(h)). (To learn more about deficiency judgments, see Nolo’s article Deficiency Judgments: Will You Still Owe Money After the Foreclosure?)
How to Locate Illinois’ Timeshare Law
You can find Illinois’ statutes by going to the Illinois General Assembly’s webpage at www.ilga.gov. Click on “Illinois Compiled Statutes.” The relevant statutes are in Chapter 765 (Property). Go to 765 ILCS 101 to find the Real Estate Timeshare Act of 1999.