Florida Timeshare Foreclosure and Right to Cancel Laws

If you've purchased or are thinking of buying a timeshare in Florida, it's important to learn the answers to the following questions:

• How do I cancel a timeshare in Florida?
• What disclosures are required in a timeshare purchase?
• What are the timeshare resale laws?
• If I stop making payments, what is the most common type of timeshare foreclosure procedure (judicial or nonjudicial)?
• Will I be liable for a deficiency judgment after a timeshare foreclosure?

Read on to find out some of the most important features of Florida timeshare law. (Be sure to check out Nolo's Timeshares FAQ for general information about timeshares.)

Right to Cancel a Timeshare in Florida

In Florida, if you buy a timeshare, you can cancel the timeshare contract up until midnight of the 10th calendar day following:

• the date you signed the contract, or
• the day on which you received the last of all required documents, whichever occurs later. (Fla. Stat. Ann. § 721.10 (1).)

This right of cancellation cannot be waived.

If you want to cancel the purchase contract, you must notify the seller in writing. If you do this, the timeshare company must refund to you the total amount of payments, reduced by the value of any benefits received, within:

• 20 days after it receives your notice of cancellation, or
• within five days after it receives the funds from your cleared check, whichever is later. (Fla. Stat. Ann. § 721.10 (3).)

(Learn more about cancelling a timeshare purchase in How Do I Cancel a Timeshare Contract?)

Public Offering Statement

In Florida, the developer must furnish each timeshare purchaser with a copy of the public offering statement. (Fla. Stat. Ann. § 721.07 (6)(a).)

The public offering statement is a very detailed history of the project that contains important matters to consider when buying a timeshare interest, including (among other things):

• a description of the timeshare plan
• the duration, in years, of the timeshare plan
• whether any interest in the underlying real property will be conveyed to the purchaser
• a description of the accommodations, and
• an explanation of how the timeshare developer apportioned common expenses and ownership of the common elements.

Florida Timeshare Resale Protection Laws

Owners often find it extremely difficult to sell their timeshare because there is virtually no after-market for timeshares. As a result, scam artists have popped up who mislead timeshare owners into thinking that they have someone waiting in the wings that wants to buy the timeshare. But there's a catch—the timeshare owner must pay hundreds or thousands of dollars in upfront fees. Once the fees are paid, the scam artists claim that they were simply offering advertising services for the upfront money paid and no buyer ever materializes.

Florida law provides the following protections to shield consumers from this type of resale scam.

• Timeshare resale advertisers are not allowed to claim that there is a buyer interested in the owner's timeshare without providing the potential buyer's name, address, and telephone number.
• Before collecting fees greater than $75 or engaging in any resale advertising activities, timeshare resale advertisers must obtain a written contract to provide services that is signed by the timeshare owner.
• Timeshare owners can cancel any signed contract with a timeshare resale advertiser within 10 days and, if cancelled, the timeshare resale advertiser must provide a full refund to the timeshare owner in 20 days (or within five days after receipt of funds from the cleared check, whichever is later).
• If a timeshare resale advertiser violates the law, it can be penalized up to $15,000 per violation. (Fla. Stat. Ann. § 721.205.)

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 Can a Timeshare Be Foreclosed for Nonpayment of Fees or Assessments?)

In Florida, residential foreclosures are judicial, but state law provides for the nonjudicial foreclosure of mortgages and assessment liens when it comes to timeshare properties. (Fla. Stat. Ann. § 721.855 and § 721.856.)

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.

Example. Say the total debt owed for a timeshare is $15,000, but the timeshare sells for $10,000 at the foreclosure sale. The deficiency is $5,000.

In some states, the lender may get a deficiency judgment (a personal judgment) against the borrower for the amount of the deficiency. Whether or not you'll face a deficiency judgment after a timeshare foreclosure depends on state law. In Florida, the lender can't get a deficiency judgment against you after a nonjudicial timeshare foreclosure if you don't object to the nonjudicial foreclosure process. (Fla. Stat. Ann. § 721.81(7) and § 721.855(5).)

Florida Timeshare Laws

Timeshares are regulated by statute. You can access the Florida statutes by going to www.leg.state.fl.us and clicking on "Florida Statutes." Then click on Title XL (Real and Personal Property) and then Chapter 721 (Vacation and Timeshare Plans). The statutes governing timeshares in Florida can be found in Part I, § 721.01 et seq.

(For articles on Florida consumer protection laws, visit our Florida Debt Management & Consumer Law Center.)

(For general articles on foreclosure in Florida, visit our Florida Foreclosure Law Center.)