Delaware 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 Delaware, the cooling-off period is five business days after the date you sign the contract.

Also, Delaware law provides consumers with several protections regarding timeshare transactions. For instance, a timeshare seller must provide you with a written statement that gives certain disclosures about the project before you sign the contract. Also, if the seller offers any item of value as an inducement to get you to attend a timeshare presentation, the seller must make certain discloses in writing.

Even though Delaware law provides some protections for timeshare purchasers, 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.)

How Do I Cancel a Delaware Timeshare?

In Delaware, the right to cancel a timeshare contract expires at midnight on the fifth business day following the date of its execution (when the contract was signed). (Del. Code Ann. Tit. 6, § 2824(a), § 2823(b)).

How to Cancel a Timeshare Contract in Delaware

To cancel the purchase, you must mail notice of your intent to cancel by certified mail to the timeshare seller at the address shown in the timeshare contract. The cancellation is considered effective upon mailing. (Del. Code Ann. Tit. 6, § 2824(c)).

If you cancel, the developer must refund your money within 15 days. (Del. Code Ann. Tit. 6, § 2824(d)).

Timeshare Sellers Can't Ask You to Waive Your Right to Cancel

The right to cancel can't be waived. Under Delaware law, it is illegal for a timeshare seller to try to get such a waiver from you. (Del. Code Ann. Tit. 6, § 2824(b)).

Other Protections for Timeshare Purchasers in Delaware

Timeshare salespeople are known for using hard-sell tactics and misrepresentations to get you to make a snap decision about buying a timeshare. To protect potential buyers, Delaware law requires a timeshare seller to provide a written disclosure if the seller offers a prize for attending a timeshare presentation, as well as a disclosure statement about the timeshare before you sign the contract if you decide to buy one.

State law also prohibits deceptive sales practices when offering a prize or gift in exchange for visiting a timeshare's facilities, attending a sales presentation, or contacting a salesperson.

Protections When Sellers Offer Prizes

Timeshare sellers often get people to attend sales presentations by offering free gifts or prizes. Under Delaware law, if the seller offers any item of value as an inducement to get you to visit a timeshare's facilities, attend a timeshare presentation, or contact a salesperson, the seller must disclose in writing specific information, including:

• a general statement that the advertising program is being conducted by a timeshare seller
• a statement about the odds of receiving each item offered
• the approximate retail value of each item offered
• the restrictions, qualifications, and other conditions that must be satisfied before the recipient is entitled to receive the item
• a statement that the seller reserves the right to provide a rain check or a substitute a similar item if these rights are reserved, and
• all other material rules, terms, and conditions of the offer or program. (Del. Code Ann. Tit. 6, § 2827).

Also, it's unlawful for any person offering a prize or gift in exchange for visiting a timeshare's facilities, attending a sales presentation, or contacting a salesperson to:

• misrepresent the size, quantity, identity, or quality of any prize, gift, money, or other item of value offered
• misrepresent in any manner the odds of receiving any particular gift, prize, amount of money, or other item of value.
• label any offer a "notice of termination" or "notice of cancellation," or
• materially misrepresent, in any manner, the offer or program. (Del. Code Ann. Tit. 6, § 2827).

If the seller violates the law, you can void the contract. (Del. Code Ann. Tit. 6, § 2827).

Seller's Disclosure Statement About the Timeshare Project

In Delaware, a timeshare seller must provide you with a written statement that gives certain disclosures about the project before you sign the contract and no later than the date shown on the contract. (Del. Code Ann. Tit. 6, § 2823).

The statement must include certain information, including:

• the name and principal business address of the seller
• the location of each of the timeshare accommodations that are available
• a brief description of the facilities at each timeshare accommodation that are currently available
• any initial or special fee due from the purchaser, along with a description of the purpose and method of calculating the fee
• a general description of any financing offered or available through the seller
• any fees or charges that purchasers are or may be required to pay for the use of the timeshare unit or any facilities
• any services the seller currently provides or expenses the seller pays that are expected to become the responsibility of the purchasers. including the projected liability
• a brief description of the ownership in or other right to use the timeshare unit which is to be transferred to each purchaser
• a description of any restraints on the transfer of the timeshare
• a statement describing any reciprocal program available to the purchaser, and
• information about the right to cancel. (Del. Code Ann. Tit. 6, § 2823).

Timeshare Foreclosures in Delaware

In Delaware, if you take out a loan to purchase an interest in a deeded timeshare and fail to make your mortgage payments, the lender (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 called "assessments." In Delaware, you might also face a foreclosure 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:

• 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)
• negotiating with the resort to reduce the amount you owe
• 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. Contact a foreclosure attorney if you're facing a timeshare foreclosure and have questions about the process or your options.