Nevada Timeshare Foreclosure and Right to Cancel Laws

If you buy a timeshare and regret it, most states have "cooling-off" laws. These laws let you get out of a timeshare contract if you act quickly, usually within three to ten days. In Nevada, the cooling-off period is five calendar days after the date you executed (signed) the contract.

Also, Nevada law provides consumers with several protections when it comes to timeshare transactions. For instance, the timeshare developer can't deceive you when making the sale and must disclose specific information to you by providing a copy of its public offering statement.

Even though Nevada law provides quite a few protections for timeshare purchasers, you still need to be cautious when buying a timeshare, and you should understand that if you take out a mortgage loan to buy a deeded timeshare and stop making the payments, the lender, usually the resort developer, will probably foreclose.

In addition, timeshare owners typically must pay annual maintenance fees and special assessments. If, as an owner, you don't pay the fees and assessments, you might face a lawsuit for a money judgment or a foreclosure of your timeshare. (With a right-to-use timeshare, people generally sign a contract and agree to make monthly payments. While a developer may foreclose a deeded timeshare, a right-to-use timeshare is typically repossessed, which is a different legal process than a foreclosure.)

Your Right to Cancel a Nevada Timeshare

In Nevada, you may cancel, by written notice, a contract of sale for a timeshare purchase up until midnight of the fifth calendar day following the date you signed the contract. The contract of sale must include a statement about your right to cancel the deal. (Nev. Rev. Stat. § 119A.410(1)).

How to Cancel a Timeshare Contract in Nevada

The written notice of cancellation may be:

• delivered personally to the developer
• sent by certified mail, return receipt requested to the business address of the developer, or
• sent by express, priority, or recognized overnight delivery service, with proof of service to the business address of the developer. (Nev. Rev. Stat. § 119A.410(3)).

You may cancel the purchase of a timeshare without penalty or obligation and are legally entitled to the return of all money and other considerations that you've given toward the purchase. If you cancel, the developer must return all payments within 20 days after receipt of the notice of cancellation. (Nev. Rev. Stat. § 119A.410(4)).

You Can't Waive the Right of Cancellation

If the developer attempts to get you to waive your cancellation rights, you may void the contract. (Nev. Rev. Stat. § 119A.410(2)).

Other Protections for Timeshare Purchasers Under Nevada Law

Timeshare salespeople are known for using hard-sell tactics and misrepresentations to get you to make a snap decision about buying a timeshare. Nevada law protects you in timeshare sale transactions, like by prohibiting deceptive practices, requiring the developer to give you a copy of the public offering statement, and setting certain requirements for timeshare resellers.

Deceptive Timeshare Sales Practices Are Prohibited

Nevada law prohibits timeshare developers or salespeople from engaging in unfair or deceptive acts in a timeshare transaction, including:

• misrepresenting or failing to disclose any material fact concerning a timeshare
• including a provision in a timeshare agreement that purports to waive any right or benefit provided for purchasers in the timeshare agreement
• receiving any money or other valuable consideration from a prospective purchaser before the purchaser has received a public offering statement
• misrepresenting the amount of time or period of time the unit will be available to a purchaser
• misrepresenting the size, nature, extent, qualities, or characteristics of the unit
• misrepresenting the conditions under which a purchaser may exchange occupancy rights to a unit in one location for occupancy rights to a unit in another location
• failing to disclose initially that any promised entertainment, food, or other inducements are being offered to solicit the sale of a timeshare
• conducting or participating in any type of lottery or contest, or offering prizes or gifts to induce or encourage a person to visit a project, attend a meeting at which a timeshare will be discussed, attend a presentation or purchase a timeshare without prior approval by the Nevada Real Estate Division
• failing to disclose initially to a prospective purchaser any agreement between the project broker or sales agent and the developer that results in a sharing of sales proceeds in excess of a minimum sales price for a timeshare, and
• various other unfair or deceptive acts or practices. (Nev. Rev. Stat. § 119A.710).

You Must Get a Copy of the Public Offering Statement

The timeshare developer must provide each prospective purchaser with a copy of the developer's public offering statement, which must contain a copy of the developer's permit to sell timeshares. (Nev. Rev. Stat. § 119A.400(1)).

The timeshare broker or sales agent must:

• review the public offering statement with each prospective purchaser before the purchaser signs the contract, and
• get a signed receipt from the purchaser indicating the receipt of a copy of the public offering statement. (Nev. Rev. Stat. § 119A.400(2)).

Nevada Timeshare Resale Protection Laws

Timeshare owners often find it extremely difficult to sell their timeshares; there's virtually no after-market for them. So, some scam artists falsely tell timeshare owners that they have ready and willing buyers for timeshares—but 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, or the buyer never materializes. Nevada law provides some protection to shield consumers from this type of resale scam.

Resellers Must Be Licensed

In Nevada, a person who, on behalf of an owner (other than a developer), wishes to list, advertise or promote for resale, or solicit prospective purchasers of timeshares that were previously sold (if they are selling more than 12 units) must:

• be licensed as a real estate broker
• register as a timeshare resale broker with the Nevada Real Estate Division, and
• pay any applicable fees. (Nev. Rev. Stat. § 119A.4771).

If You Pay Upfront Fees, They Must Go Into an Escrow Account

A timeshare resale broker who charges or collects an advance fee must place 80% of the fee into a trust account. If the broker closes escrow on the timeshare resale, the broker is deemed to have earned the advance fee. But if the listing of the timeshare expires before the broker closes escrow on the timeshare resale, the broker must return the money held in the trust account to the owner of the timeshare within ten days after the listing's expiration date. (Nev. Rev. Stat. § 119A.4779).

A Written Contract Is Required

A timeshare resale agreement must be in writing and contain the following disclosures:

• whether any person other than the purchaser may use the timeshare during the period before the timeshare is resold
• whether any person other than the purchaser may rent the use of the timeshare during the period before the timeshare is resold
• the name of any person who will receive any rents or profits generated from the use of the timeshare during the period before the timeshare is resold
• a detailed description of any relationship between the person who resells the timeshare and any other person who receives any benefit from the use of the timeshare, and
• information about the right to cancel. (Nev. Rev. Stat. § 119A.4777).

Timeshare Foreclosure Procedures

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 could 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.")

In Nevada, timeshare foreclosures are typically nonjudicial, which means the foreclosure takes place without court supervision.

Ways to Avoid a Timeshare Foreclosure

A few of the various options to avoid a timeshare foreclosure include:

• selling the timeshare
• donating the timeshare to a charity (not all charities will take a timeshare, but some might, and you'll have to get current on payments first)
• negotiating with the resort to reduce the amount you owe
• arranging a repayment plan, or
• working out a deal to give the timeshare back to the resort (called a "deed in lieu of foreclosure" or "deedback").

Talk to a Lawyer

If you want more information about timeshare laws in your state or need assistance canceling a timeshare, consider talking to a real estate attorney. Contact a foreclosure attorney if you're facing a timeshare foreclosure and have questions about the process or your options.