Alabama 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 Alabama, the cooling-off period is five days. Also, state law provides other protections for timeshare purchasers. For instance, Alabama law requires timeshare sellers to get a license. State law also prohibits sellers from making misleading statements or being deceptive when trying to get you to buy a timeshare.

But 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. Also, 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.)

How Long Do I Get to Cancel a Timeshare Contract in Alabama?

Again, you can cancel a timeshare purchase in Alabama within five days. If the fifth day is a Sunday, the deadline is extended to Monday as the fifth day. (In the case of a vacation time-sharing lease plan, you may also cancel the contract at any time if the accommodations or facilities are no longer available as provided in the contract.) (Ala. Code § 34-27-53.)

What Must Go In an Alabama Timeshare Contract

An Alabama timeshare purchase contract must contain specific information, including:

• the actual date the contract is signed by all parties
• the name and address of the seller
• the total purchase price, plus any additional charges
• a statement that "No purchaser should rely upon representations other than those included in the contract," and
• information about the right to cancel the contract. (Ala. Code § 34-27-53, § 34-27-59.)

Also, a timeshare seller must give each prospective timeshare purchaser a copy of the public offering statement. A "public offering statement" has detailed information about the timeshare project and important matters you should consider when buying a timeshare interest. (Ala. Code § 34-27-51.)

How to Cancel a Timeshare Deal in Alabama

To cancel the contract, you must send notice to the seller in writing by certified mail, return receipt requested. (Ala. Code § 34-27-53.) It's a violation of Alabama law for the seller to fail to honor a cancellation request. (Ala. Code § 34-27-54.)

Getting a Refund for an Alabama Timeshare

If you cancel before receiving any benefits under the contract, the developer must give you a refund within 20 days after receiving the notice of cancellation. If you received any benefits pursuant to the contract, the developer must give you the refund within 30 days, less the amount of any benefits you actually received. (Ala. Code § 34-27-55.)

Other Protections for Timeshare Purchasers in Alabama

Timeshare salespeople are known for using hard-sell tactics and misrepresentations to get you to make a quick decision about buying a timeshare. Alabama law protects timeshare buyers by requiring most timeshare sellers to have a license and prohibiting false statements and deceptive actions in timeshare sales.

Also, timeshare sellers sometimes offer gifts or prizes to get you to attend a sales presentation. Alabama law requires such sellers to make certain disclosures if using this kind of promotional device to sell timeshares.

License Required in Alabama Timeshare Transactions

Timeshare brokers and salespersons must be licensed in Alabama. (Ala. Code § 34-27-51.)

Misrepresentation and Fraud in Timeshare Sales Is Illegal

Alabama law prohibits timeshare sellers from using deceptive practices in timeshare sales, including:

• misrepresenting the amount of time the accommodations and facilities will be available to any purchaser
• misrepresenting or deceptively representing the location, size, nature, extent, qualities, characteristics, or services associated with the accommodations and facilities
• making any misleading or deceptive representations regarding the contents of the contract or the buyer's rights, privileges, or benefits under the contract
• failing to honor and comply with all provisions of the contract
• misrepresenting the buyer's right to cancel
• including language in the contract that purports to waive any right or benefit provided by law, such as the right to cancel, and
• doing any other act which constitutes fraud, misrepresentation, or failing to make a disclosure of a material fact. (Ala. Code § 34-27-60, § 34-27-56.)

Protections When Seller Uses Prizes and Gifts in Timeshare Sales

Timeshare sellers are notorious for getting people to attend sales presentations by offering free gifts, prizes, or vacations. Alabama law prohibits the use of any promotional device (such as sweepstakes, lodging certificates, gift awards, premiums, or discounts) without fully disclosing:

• that the promotional devices are being used for the purpose of selling timeshares
• the fair market value of each award or prize offered, and
• the approximate odds of receiving each award or prize offered. (Ala. Code § 34-27-60.)

Timeshare Foreclosures in Alabama

In Alabama, if you take out a loan to purchase an interest in a deeded timeshare and fail to make your mortgage payments, the lender (again, typically, the developer) might foreclose. In addition to monthly mortgage payments, timeshare owners are ordinarily responsible for maintenance fees, special assessments, utilities, and taxes, collectively referred to as "assessments." You might also face a foreclosure in Alabama if you fall behind in the timeshare assessments.

Ways to Avoid a Timeshare Foreclosure

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

• paying what you owe in full
• negotiating with the developer to reduce the amount you owe
• 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)
• 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. If you're facing a timeshare foreclosure and have questions about the process or your options, contact a foreclosure attorney.