If you have purchased or are thinking of purchasing a timeshare in Texas or are facing a timeshare foreclosure in Texas, it’s important to learn the answers to the following questions:
- How do I cancel a timeshare purchase in Texas?
- What disclosures are required in a Texas timeshare purchase?
- Are there any laws to protect consumers in timeshare transactions?
- If I stop making payments, what is the most common type of timeshare foreclosure procedure in Texas(judicial or nonjudicial)?
Read on to find out some of the most important features of Texas timeshare law.
(Be sure to check out Nolo’s Buying or Selling a Timeshare and Timeshare Foreclosures topic areas where you can find information about selling or donating your timeshare, timeshare foreclosures, options to avoid a timeshare foreclosure, and consequences of a timeshare foreclosure.)
Right to Cancel a Timeshare in Texas
In Texas, you have the right to cancel a timeshare contract so long as you do it before the sixth day after the date:
- you sign and receive a copy of the purchase contract, or
- receive the required timeshare disclosure statement, whichever is later (Tex. Prop. Code Ann. § 221.041).
The right to cancel cannot be waived. A contract containing a waiver of this right is voidable by the purchaser (Tex. Prop. Code Ann. § 221.041).
How to cancel the contract. To cancel the purchase contract, you may:
- hand-deliver notice of cancellation to the developer
- mail notice by prepaid United States mail to the developer or to the developer's agent for service of process, or
- overnight notice by common carrier delivery service to the developer or the developer's agent for service of process (Tex. Prop. Code Ann. § 221.042).
If you decide to cancel the contract, the developer must refund all payments you made before the cancellation:
- on or before the 30th day after the date on which the developer receives a timely notice of cancellation, or
- on or before the fifth day after the date the developer receives good funds from the purchaser, whichever is later (Tex. Prop. Code Ann. § 221.042).
(Learn more about cancelling a timeshare purchase in Nolo’s article How Do I Cancel a Timeshare Contract?)
Timeshare Disclosure Statement
The developer must provide a timeshare disclosure statement to you before you sign the timeshare agreement. The timeshare developer must also get you to sign an acknowledgement that you received the timeshare disclosure statement. (Tex. Prop. Code Ann. § 221.032).
The timeshare disclosure statement must include (among other things):
- the type of timeshare plan offered
- a description of the duration and operation of the timeshare plan
- a description of the existing or proposed accommodations
- a description of any existing or proposed amenities of the timeshare plan
- a description of the method by which you will be able to schedule your use of the timeshare
- a description of the method and timing for performing maintenance of the timeshare property
- the projected common expense liability, and
- copies of the declaration, bylaws, and articles of incorporation.
Deceptive Practices Are Prohibited
Texas law prohibits timeshare developers or salespeople from engaging in deceptive trade practices. The following acts, among others, constitute deceptive practices under the law:
- Failing to disclose important information concerning a timeshare interest.
- Making false or misleading statements of fact concerning the characteristics of accommodations or amenities available to a consumer.
- Predicting specific or immediate increases in the value of a timeshare interest without a reasonable basis for such predictions.
- Making false or misleading statements of fact concerning the duration that accommodations or amenities will be available to a consumer.
- Making false or misleading statements of fact concerning the conditions under which a purchaser of a timeshare interest may exchange the right to occupy a unit for the right to occupy a unit in the same or another timeshare property (Tex. Prop. Code Ann. § 221.071).
Timeshare Foreclosure Procedure
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 Texas, the foreclosure can be either judicial (meaning through the court system) or nonjudicial (which means the lender does not have to go through state court to get one).
Learn more about the Texas foreclosure process.
(To learn more about the difference between judicial and nonjudicial foreclosure, and the procedures for each, visit Nolo's Judicial v. Nonjudicial Foreclosure page.)
Texas Timeshare Laws
The laws that govern Texas timeshares are found in Chapter 221 (the “Texas Timeshare Act”) of the Texas Property Code. You can access the Texas statutes by going to www.statutes.legis.state.tx.us and selecting “Property Code” and “Chapter 221” from the drop-down menu and then clicking on “Go.”
(For general articles on foreclosure in Texas, visit our Texas Foreclosure Law Center.)