Florida 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 within a few days, usually within three to ten days. In Florida, the cooling-off period is ten days.

But if you don't cancel the purchase by the deadline and eventually stop making payments on your timeshare, you could lose the place to a foreclosure or repossession, depending on what kind of timeshare you own. 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 have to pay annual maintenance fees and special assessments to their homeowners' association (HOA.) If, as an owner, you don't pay the fees and assessments, the HOA might sue you for money or foreclose 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.)

Should you decide to try to sell your timeshare, Florida law protects you against resale scams.

Right to Cancel a Timeshare in Florida

If you buy a Florida 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. Under Florida law, this right of cancellation can't be waived. (Fla. Stat. Ann. § 721.10(1)).

To cancel the purchase contract, you must notify the seller in writing. Then, the timeshare company must refund you the total amount of payments, reduced by the value of any benefits received, within:

• twenty 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)).

Be Sure to Get a Copy of the 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)).

A "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 timeshares. So, scammers sometimes mislead timeshare owners into thinking that their company has someone waiting in the wings 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. Or the scammers disappear with the money.

Florida law provides the following protections to shield consumers from this type of resale scam. For example, under Florida law:

• Timeshare resale advertisers aren't allowed to claim that a buyer or renter is 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, which must be signed by the timeshare owner.
• Timeshare owners can cancel any signed contract with a timeshare resale advertiser within ten days and, if canceled, 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 Procedures in Florida

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 might face a foreclosure.

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

Timeshare Deficiency Judgments

When a lender forecloses a mortgage, like a mortgage taken out to buy a timeshare, the borrower's total debt sometimes exceeds the foreclosure sale price. The difference between the sale price and the total debt is called a "deficiency."

In some states, the lender may get a deficiency judgment (a personal judgment) against the borrower for the deficiency amount. Whether you'll face a deficiency judgment after a timeshare foreclosure depends on state law.

In Florida, if you don't object to the foreclosure process, the lender can't get a deficiency judgment against you after a nonjudicial timeshare foreclosure. (Fla. Stat. Ann. § 721.81(7) and § 721.855(5)).

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.