Minnesota Timeshare Foreclosure and Right to Cancel Laws

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

By , Attorney

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 Minnesota, the cooling-off period is five days after the date you receive a legible copy of the contract and the public offering statement (if applicable). Also, Minnesota law provides consumers with several protections when it comes to timeshare transactions. For instance, real estate brokers and salespersons can't make fraudulent or misleading statements or advertisements to get you to buy a timeshare.

Even though Minnesota law provides some 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.)

How Do I Cancel a Minnesota Timeshare?

In Minnesota, you can cancel the contract within five days after the date you receive a legible copy of:

  • the contract, and
  • the public offering statement, if the project consists of more than 100 potential sales. (Minn. Stat. § 83.28, Minn. Stat. § 83.23.)

The right to cancel can't be waived. (Minn. Stat. § 83.28.)

How to Cancel a Timeshare Contract in Minnesota

To cancel the purchase, you must mail written notice to the seller at the address stated in the contract. The notice of cancellation is considered effective as of the date you mail it. (Minn. Stat. § 83.28.) The notice doesn't have to be in any particular format. It must simply indicate that you intend to cancel the agreement.

If you cancel, the seller must refund all of the money you paid within 30 days after receiving your notice of cancellation. (Minn. Stat. § 83.28.)

Other Protections for Timeshare Purchasers in Minnesota

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 buyers, Minnesota law requires a timeshare seller to get a license and prohibits deceptive sales practices when offering timeshares for sale.

Also, timeshare owners often find it extremely difficult to sell their timeshares later on; there's virtually no after-market for them. So, some scam artists falsely tell timeshare owners that they have ready and willing buyers for timeshares—but the timeshare owner must pay hundreds or thousands of dollars in upfront fees to process the transaction. After the timeshare owner pays the fees, the scammer often disappears or the buyer never materializes. Minnesota law provides some protection to shield consumers from this type of resale scam by prohibiting timeshare resellers from taking an upfront payment for a timeshare resale.

Real Estate License Required

Timeshare brokers and salespeople in Minnesota must be licensed. (Minn. Stat. § 83.25.)

Minnesota Timeshare Sale Protection Laws

In Minnesota, real estate brokers and salespersons may not make fraudulent or misleading statements or advertisements to induce you to buy a timeshare. (Minn. Admin. Rule 2810.1200.)

Minnesota Timeshare Resale Protection Laws

Minnesota law prohibits timeshare resellers from accepting advance payment in connection with the resale of a timeshare interest. (Minn. Stat. § 83.44(d).)

Timeshare Foreclosures in Minnesota

In Minnesota, 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.

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 Minnesota, you might also face a foreclosure if you fall behind in the timeshare assessments.

Ways to Avoid a Timeshare Foreclosure

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

  • paying the full amount you owe
  • negotiating with the resort 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, and you'll have to get current on payments first)
  • 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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