Rhode Island Timeshare Foreclosure and Right to Cancel Laws
Learn about Rhode Island timeshare foreclosure laws, right to cancel laws, and other timeshare contract laws.
Rhode Island law provides timeshare purchasers with several important protections. For example, if you purchase a timeshare in Rhode Island, you can cancel the contract, but you’ll have to act quickly. In addition, Rhode Island law requires that developers provide certain disclosures to timeshare purchasers and a court can refuse to enforce the timeshare agreement if it finds the contract (or a certain clause in the contract) to be unconscionable. However, if 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 significant features of Rhode Island’s timeshare law.
Public Offering Statement
A public offering statement contains general information about the timeshare development and important matters that you should consider when acquiring a timeshare. In Rhode Island, the timeshare developer must provide you with the public offering statement (R.I. Gen. Laws § 34-41-4.03).
The public offering statement must disclose certain information about the timeshare to you, such as the name and address of the developer, the location of the timeshare property, any fees due from you at closing, and a description of any financing offered by the developer (R.I. Gen. Laws § 34-41-4.03).
Disclosures Regarding Timeshare Exchange Programs
One of the common features of timesharing is the ability to exchange your timeshare week (or other designated period of time) for someone else’s.
In Rhode Island, a developer that offers an exchange program among timeshare owners must give certain disclosures about the program, including a statement of whether membership or participation in the program is voluntary or mandatory and a statement about the fees charged for participating in the exchange program, among other things (R.I. Gen. Laws § 34-41-4.03).
Right to Cancel a Timeshare in Rhode Island
In Rhode Island, you have the right to cancel a timeshare contract until midnight of the fifth business day (excluding Saturdays, Sundays, and legal holidays) following whichever of the following occurs later:
- the date you sign the contract, or
- the day on which you receive the last of all documents required to be provided (R.I. Gen. Laws § 34-41-4.06).
The right of cancellation may not be waived and the closing cannot occur until the cancellation period has expired (R.I. Gen. Laws § 34-41-4.06).
If the developer attempts to obtain a waiver of your cancellation right from you, or to hold a closing prior to the expiration of the cancellation period, you may void (cancel) the contract for a period of one year (R.I. Gen. Laws § 34-41-4.06).
How to Cancel
To cancel the contract, you must provide the developer with a notice of cancellation. The notice is considered given:
- on the date postmarked (if mailed), or
- when transmitted from the place or origin (if telegraphed), so long as the notice is actually received by the developer or escrow agent (R.I. Gen. Laws § 34-41-4.06).
If you provide the cancellation notice in a way other than by mail or telegraph, the notice is considered given at the time it is delivered at the developer’s place of business (R.I. Gen. Laws § 34-41-4.06). (Get more tips on how to cancel a timeshare contract.)
If you decide to cancel, the funds must be returned to you (less any benefits you received) within:
- 20 days after the developer receives the cancellation notice, or
- five days after the developer receives funds from your cleared check, whichever is later (R.I. Gen. Laws § 34-41-4.06).
Even if the cancellation period has expired, you may be able to void the contract (or part of it) if the contract is unreasonable. Rhode Island law states that if a court finds that the timeshare contract or a clause within the contract was unconscionable at the time the contract was made, the court may:
- refuse to enforce the contract
- enforce the remainder of the contract without the unconscionable clause, or
- limit the application of any such unconscionable clause in order to avoid an unconscionable result (R.I. Gen. Laws § 34-41-1.05).
Rhode Island Timeshare Foreclosures
Often, timeshare purchasers take out a loan to finance the purchase of a timeshare. If you don't make your timeshare mortgage payments, you could lose your timeshare through a timeshare 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.” If you fail to keep up with the assessments, the timeshare managing entity is entitled to a lien on the timeshare and you will also likely face foreclosure (R.I. Gen. Laws § 34-41-3.11). (Find out more in Nolo’s article Can a Timeshare Be Foreclosed for Nonpayment of Fees or Assessments?)
How to Find Rhode Island’s Timeshare Laws
You can find the statutes governing Rhode Island timeshare transactions by going to the State of Rhode Island General Assembly’s webpage at www.rilin.state.ri.us. Click on “Legislation” and then “The State of Rhode Island General Laws.” The statutes that govern timeshares can be found in Title 34 (Property), Chapter 34-41 (Rhode Island Real Estate Time-Share Act).