Massachusetts Timeshare Foreclosure and Right to Cancel Laws

Learn about Massachusetts timeshare laws, including contract disclosures, how to cancel a timeshare deal, and why your timeshare might get foreclosed.

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.)

What Is a "Public Offering Statement"?

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).)

How Do I Cancel a Massachusetts Timeshare?

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:

  • hand-deliver written notice to the seller (or to the agent for service of process)
  • mail notice to the seller (or to the agent for service of process) by registered mail, return receipt requested
  • send a telegram, or
  • use a courier service with guaranteed next-day delivery. (Mass. Gen. Laws ch. 183B, § 41(b).)

The notice is effective on the date postmarked or when transmitted from the place of origin. (Mass. Gen. Laws ch. 183B, § 41(b).)

Getting a Timeshare Refund

If you cancel the contract, cancellation is without penalty, and any payments you made must be refunded:

  • immediately, if your check has not yet been deposited in the seller's bank account
  • within seven days after the seller receives notice of cancellation, if the check has been deposited (but not before the first business day following the date on which the funds are credited to the seller's account), or
  • immediately to your credit card account, if payment was made by credit card. (Mass. Gen. Laws ch. 183B, § 41(b)).

Other Protections for Timeshare Purchasers in Massachusetts

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.

What Happens to Unconscionable Timeshare Contracts in Massachusetts

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:

  • refuse to enforce the contract
  • enforce the remainder of the contract without the unconscionable clause, or
  • limit the application of any such unconscionable clause to avoid an unconscionable result. (Mass. Gen. Laws ch. 183B, § 5(a).)

To show that a contract is unconscionable, you may present evidence such as:

  • the commercial setting of the negotiations
  • whether one party knowingly took advantage of the other party's inability to reasonably protect their interests because of a physical or mental infirmity, illiteracy, or inability to understand the language of the agreement or similar factors
  • the effect and purpose of the contract or clause, and
  • if a sale, any gross disparity, at the time of contracting, between the amount charged for the timeshare and the timeshare's value compared to similar timeshares, but this comparison won't by itself render the contract unconscionable. (Mass. Gen. Laws ch. 183B, § 5(b).)

Timeshare Exchange Programs

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.)

Timeshare Foreclosures in Massachusetts

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.)

Timeshare Foreclosure Procedures in Massachusetts

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:

  • publishing a notice of sale in a public newspaper with a general circulation in the town or county where the timeshare is located not less than 30 days before the sale date, and
  • at least 30 days before the sale, sending a written notice of the time, date, and place of the auction by certified mail and by first-class mail to your last known address and to the last known address of all parties having a junior lien or other interest of record in the timeshare. (Mass. Gen. Laws ch. 183B, § 29A, Mass. Gen. Laws ch. 183B, § 29B.)

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.)

Ways to Avoid a Timeshare Foreclosure

A few of the various options to avoid a timeshare foreclosure include:

  • paying what you owe in full
  • negotiating with the developer to reduce the amount you owe
  • selling the timeshare
  • donating the timeshare to a charity (not all charities will take a timeshare, but some might)
  • 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. If you're facing a timeshare foreclosure and have questions about the process or your options, contact a foreclosure attorney.

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