If you buy a timeshare and regret it, most states have a "cooling-off" law. These laws let you get out of a timeshare contract if you act quickly, usually within three to ten days. In Arkansas, the cooling-off period is five days after you sign the sale contract or until you get a copy of the public offering statement.
Also, the state provides some protections for timeshare purchasers. For instance, Arkansas law requires escrow accounts for timeshare transactions and prohibits timeshare sellers from making misleading or deceptive advertisements 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.
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.)
Again, in Arkansas, you can cancel a timeshare contract without penalty:
To cancel your timeshare purchase, you must:
All payments you made before canceling the deal must be refunded within a reasonable time after the developer receives your cancellation notice. (Ark. Code Ann. § 18-14-409(b).)
Timeshare salespeople are known for using hard-sell tactics and misrepresentations to get you to make a quick decision about buying a timeshare. Arkansas law protects timeshare buyers by requiring timeshare to use an escrow account, prohibiting false and misleading statements, and regulating the use of prizes and gifts in timeshare sales.
In most cases, the timeshare developer must put any money you pay in connection with a timeshare purchase into an escrow account. (Ark. Code Ann. § 18-14-407.)
It must release the funds:
The purpose of the escrow account requirement is to protect your right to a refund if you decide to cancel the agreement.
Arkansas law prohibits misleading or deceptive timeshare advertisements. (Ark. Code Ann. § 18-14-502, § 18-14-503.)
It's illegal for a timeshare seller to offer a prize or gift to induce someone to buy a timeshare without also disclosing in a clear and unequivocal way that you have to attend a sales presentation to get the prize or gift. The timeshare seller also has to provide information about the prize or gift, like the retail value. (Ark. Code Ann. § 18-14-504.)
In Arkansas, 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 Arkansas if you fall behind in the timeshare assessments.
A few of the various options to avoid a timeshare foreclosure include:
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.
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