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 Hawaii, the cooling-off period is seven calendar days after the date you sign the contract or receive a timeshare disclosure statement. Also, Hawaii law provides consumers with several protections when it comes to timeshare transactions. For instance, timeshare salespeople can't use deceptive tactics to get you to buy a timeshare or offer a free gift without first telling you that they're offering it to try to sell you a timeshare. Sellers also have to disclose specific information to you in a timeshare disclosure statement.
Even though Hawaii law provides quite a few 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. Also, timeshare owners typically have to 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.)
In Hawaii, you can cancel a timeshare contract within seven calendar days after the later of when you:
The timeshare disclosure statement must contain the following information, among other things:
You can cancel a Hawaii timeshare contract by:
The notice is considered given on the date that you hand-deliver or mail the cancellation. (Haw. Rev. Stat. § 514E-8).
The timeshare contract can't contain a waiver of your right to cancel. (Haw. Rev. Stat. § 514E-11(7)).
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 purchasers, Hawaii law requires timeshare sellers to have a license, limits how sellers can use free gifts when trying to sell timeshares, requires sellers to use an escrow account in timeshare sales, and prohibits deceptive sales practices.
Timeshare sellers often use free items or complimentary recreational activities to get people to attend sales presentations. Hawaii has strict requirements and restrictions on the use of promotional devices, including entertainment, prizes, gifts, food, drinks, games, transportation, luaus, ocean recreational activities, land recreational activities, aerial recreational activities, tours, or other inducements in selling timeshares.
Oral notification is required. In Hawaii, timeshare salespeople can't offer a promotional device without first telling you that the device is being used or offered for the purpose of selling you a timeshare. (Haw. Rev. Stat. § 514E-11(2)).
Written disclosure is also required. If, in order to claim the prize, the prospective purchaser must attend and complete a sales presentation, the timeshare salesperson must provide the following information in writing:
It's also illegal for a timeshare salesperson to offer any tourist activity, like a helicopter tour or scuba diving trip, at less than the actual cost of the activity to induce you to purchase a timeshare plan or to attend a timeshare marketing event. (Haw. Rev. Stat. § 514E-11(13)).
Under Hawaii law, among other things, a salesperson may not misrepresent:
Timeshare sellers must also inform each purchaser orally, and in writing, at the time the purchaser signs the contract, of the seven-day right to cancel the contract to buy the timeshare. (Haw. Rev. Stat. § 514E-11.1).
In Hawaii, only licensed real estate brokers may complete timeshare sales. (Haw. Rev. Stat. § 514E-2.5).
The timeshare developer must put any money you pay in connection with a timeshare purchase into an escrow account. (Haw. Rev. Stat. § 514E-16).
It must release the funds:
In Hawaii, if you take out a loan to purchase an interest in a deeded timeshare and fail to make your mortgage payments, you will likely face a 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." In Hawaii, you might also face a foreclosure if you fall behind in the timeshare assessments. (Haw. Rev. Stat. § 514E-29).
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. If you're facing a timeshare foreclosure and have questions about the process or your options, contact a foreclosure attorney.