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 Massachusetts, the cooling-off period is three business days after the date you receive the public offering statement, unless you receive the public offering statement more than three days before the date you sign the contract. Also, Massachusetts law provides consumers with several protections when it comes to timeshare transactions. For instance, a court can refuse to enforce a timeshare contract if it finds the agreement to be unconscionable.
Even though Massachusetts 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.)
A "public offering statement" contains general information about the timeshare development. In Massachusetts, the timeshare developer must provide the purchaser with a copy of the public offering statement before transferring the timeshare interest and no later than the date of the sales contract. (Mass. Gen. Laws ch. 183B, § 41(a).)
The public offering statement must disclose important information about the timeshare, such as the developer's name and address, a description of the timeshare property, the project's budget, and information about your right to cancel the contract, among other things. If a developer fails to provide a public offering statement to a purchaser at least five business days before delivering the deed, the purchaser is entitled, in addition to any other remedy, to recover from the developer an amount equal to 10% of the timeshare sales price. (Mass. Gen. Laws ch. 183B, § 38, Mass. Gen. Laws ch. 183B, § 41(c).)
Again, under Massachusetts law, you may cancel a timeshare contract within three business days after you get the public offering statement unless you receive the public offering statement more than three days before the date you sign the contract. If you get the public offering statement more than three business days before signing a contract, you can't cancel the contract for failure timely to receive the public offering statement. (Mass. Gen. Laws ch. 183B, § 38.)
To cancel the contract, you must:
The notice is effective on the date postmarked or when transmitted from the place of origin. (Mass. Gen. Laws ch. 183B, § 41(b).)
If you cancel the contract, cancellation is without penalty, and any payments you made must be refunded:
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 timeshare buyers, Massachusetts law permits a court to refuse to enforce the timeshare contract if it finds the agreement to be unconscionable. Also, a developer that offers an exchange program among timeshare owners must give certain disclosures to program participants.
Even if the cancellation period has expired, you might be able to void a timeshare contract, or part of it, if the contract or a clause in the agreement is unreasonable. Massachusetts law states that if a court finds that the timeshare contract (or a clause in the agreement) was unconscionable at the time the contract was made, the court may:
To show that a contract is unconscionable, you may present evidence such as:
One common feature of timesharing is the ability to exchange your timeshare week (or other designated time) for someone else's. In Massachusetts, a developer that offers an exchange program among timeshare owners must give certain disclosures to program participants.
For example, the developer must disclose whether participation in the exchange program is voluntary or mandatory, describe the terms and conditions of the contract with the exchange company, and give a statement indicating whether exchanges are arranged on the basis of available space and whether any guarantees of fulfilling specific requests for exchanges are applicable, among other things. (Mass. Gen. Laws ch. 183B, § 53.)
In Massachusetts, 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. (Mass. Gen. Laws ch. 183B, § 29A.)
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 Massachusetts, you might also face a foreclosure if you fall behind in the timeshare assessments. (Mass. Gen. Laws ch. 183B, § 29B.)
Upon a default, the foreclosing party must provide a written notice of default to you (the timeshare owner) at your last known address by certified and first-class mail and provide you with a reasonable opportunity to cure of not less than 90 days from when the letter was mailed. (Mass. Gen. Laws ch. 183B, § 29A, Mass. Gen. Laws ch. 183B, § 29B.)
If, after expiration of the 90-day period, you haven't cured the default and the foreclosing party has determined you're not entitled to protection under the federal Servicemembers Civil Relief Act, the foreclosing party may conduct a public auction sale after:
Your right of redemption is extinguished upon the sale of the timeshare. Within 30 days after the closing and deed delivery, the foreclosing party must mail you a notice detailing the results of the sale. (Mass. Gen. Laws ch. 183B, § 29A, Mass. Gen. Laws ch. 183B, § 29B.)
Instead of using the procedures described here, the developer could instead choose to foreclose judicially. (Mass. Gen. Laws ch. 183B, § 29A, Mass. Gen. Laws ch. 183B, § 29B.)
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.
Need a lawyer? Start here.