Wisconsin Timeshare Foreclosure and Right to Cancel Laws
Learn about Wisconsin timeshare laws, including contract disclosures, the right to cancel, and foreclosure procedures and protections.
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If you are buying a timeshare in Wisconsin, it's important to learn about the laws that protect you, including the right to cancel a timeshare contract and a requirement that the timeshare developer provide you with a disclosure statement. But you still need to be careful when purchasing a timeshare, and you should understand that if you don't make your timeshare mortgage or assessments payments, you may lose your timeshare through foreclosure.
Read on to learn about a few of the important features of Wisconsin’s timeshare law.
Right to Cancel a Wisconsin Timeshare Purchase
In Wisconsin, you can cancel a timeshare contract:
- within five business days from the date you sign the contract (up until midnight on the fifth business day), or
- until five business days after you receive the timeshare disclosure statement (and all amendments and supplements to the statement), whichever is later (Wis. Stat. § 707.47(2)).
The right to cancel cannot be waived (Wis. Stat. § 707.47(4)).
How to Cancel a Wisconsin Timeshare Contract
You can cancel a Wisconsin timeshare contract by:
- personally delivering notice of the cancellation to the seller, or
- mailing the notice to the developer or to the agent that the developer has designated as the person to receive service of process. (Wis. Stat. § 707.47(5)).
If you mail the cancellation, notice is considered given on the date that it is postmarked (Wis. Stat. § 707.47(5)). (See Nolo’s article on how to cancel a timeshare contract for more information on how to rescind a timeshare purchase.)
Timeshare Contract Refunds
The timeshare developer must refund all payments you made within:
- 20 days after receipt of the notice of cancellation, or
- five days after it receives the funds from your cleared check, whichever is later (Wis. Stat. § 707.47(6)).
If you have used or occupied the timeshare property for more than 12 hours before cancellation, the developer may reduce the refund by a reasonable amount to cover your length of stay plus any cost for damages that are directly attributable to your use of the timeshare property (Wis. Stat. § 707.47(6)).
If a court finds that a timeshare contract is unconscionable, the court can choose not to enforce it or strike the unreasonable clauses out of the contract (Wis. Stat. §707.06).
Timeshare Disclosure Statement
Before a developer can offer a timeshare for sale, it must prepare a timeshare disclosure statement and provide this statement to prospective purchasers before transferring the timeshare and no later than the date of the purchase contract (Wis. Stat. § 707.41 (2) and § 707.47(1)).
The disclosure must contain the following information (among other things):
- a general description of the timeshare property and the timeshare units
- cancellation information
- copies of contracts or leases to be signed by the purchaser at closing
- the identity of the managing entity
- a current balance sheet and budget for the association, if there is an association
- a description of the nature and purposes of all charges, dues, maintenance fees, and other expenses that may be assessed, the current amounts assessed and the method and formula for changes
- any initial or special fee due from the purchaser at closing and a description of the purpose of, and method of calculating, the fee
- a description of any financing offered by the developer
- any restrictions on transfer of timeshares or portions of timeshares
- any current or expected fees or charges to be paid by timeshare owners for the use of any timeshare facilities, and
- all unusual and material circumstances, features, and characteristics of the project (Wis. Stat. § 707.41(4)).
Wisconsin 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.” For more information on timeshare assessment foreclosures, see Nolo’s article Can Timeshares Be Foreclosed for Nonpayment of Fees and Assessments?)
Residential foreclosures in Wisconsin are judicial. (Find out more about Wisconsin foreclosure laws and procedure). However, state law provides for the nonjudicial foreclosure of mortgages and assessment liens when it comes to timeshare properties (Wis. Stat. §707.28(3)). (To learn more about the difference between judicial and nonjudicial foreclosure, see Nolo’s article Will Your Foreclosure Take Place In or Out of Court?)
If the foreclosing entity pursues a nonjudicial foreclosure, it must inform the timeshare owner of:
- the default
- the amount owed
- the right to cure the default within 30 days from the date on which the notice was mailed
- that the right to a judicial foreclosure, and
- that if he or she does not timely cure the default or object to the nonjudicial foreclosure in writing, the foreclosing entity may proceed with a nonjudicial foreclosure (Wis. Stat. §707.28(3)(a)(2)).
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. (Learn more in Nolo’s article Deficiency Judgments: Will You Still Owe Money After the Foreclosure?)
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 Wisconsin, you are not subject to a deficiency judgment if the foreclosing entity uses a nonjudicial foreclosure process (Wis. Stat. §707.28(4)).
Finding Wisconsin’s Timeshare Laws
You can access the Wisconsin statutes by going to the State of Wisconsin Legislature’s webpage at http://legis.wisconsin.gov. Hover over “Wisconsin Law” and then click on “Statutes.” Then click on The Wisconsin Statutes & Annotations to find the Table of Contents. The relevant statutes are in Chapter 707 (Time-share ownership).