Mississippi Timeshare Foreclosure and Right to Cancel Laws

Learn about Mississippi timeshare laws, including how to cancel a timeshare deal and under what circumstances 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 Mississippi, the cooling-off period is seven calendar days from the date you sign the contract or receive the public offering statement, whichever is later. Also, Mississippi provides consumers with several protections when it comes to timeshare transactions. The Mississippi Real Estate Commission governs timeshare transactions in Mississippi. It provides various protections for timeshare purchasers, including requiring an escrow account for timeshare transactions and prohibiting timeshare developers from using advertisements that are false or misleading, among other things.

Even though Mississippi 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 concerning the timeshare developer and the timeshare plan. If you buy a timeshare in Mississippi, the timeshare developer must provide a copy of the public offering statement to you before you sign the purchase contract. (Mississippi Real Estate Commission, Rule 8.4.)

The public offering statement must include, among other things, contact information for the developer, a description of the timeshare interests, the current annual budget, and a description of any financing the developer offers. (Mississippi Real Estate Commission, Rule 8.4.)

How Do I Cancel a Mississippi Timeshare?

Again, in Mississippi, you can cancel a timeshare purchase contract within the later of:

  • seven calendar days from the date you sign the contract, or
  • seven calendar days after you receive the public offering statement. (Mississippi Real Estate Commission, Rule 8.7).

The purchase contract must contain a statement about your right to cancel directly above the signature line, and this right can't be waived. Failure to include information about your right to cancel renders the contract void. (Mississippi Real Estate Commission, Rule 8.7.)

How to Cancel a Mississippi Timeshare Contract

You can cancel your timeshare purchase by sending written notice of your intent to cancel to the developer at the address provided in the contract. The notice is considered effective as of the date you send it. (Mississippi Real Estate Commission, Rule 8.7.)

Getting a Timeshare Refund

If you cancel the contract, the developer must refund all payments you made under the contract within 30 days after receiving your cancellation notice. (Mississippi Real Estate Commission, Rule 8.7.)

Other Protections for Timeshare Purchasers in Mississippi

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, Mississippi requires certain disclosures about timeshare exchange programs, that timeshare sellers use an escrow account in timeshare transactions, regulates timeshare ads, and requires specific disclosures if a seller offers a gift, prize, or vacation to try to get you to buy a timeshare.

Required Timeshare Exchange Program Disclosures

One of the common features of timesharing is the ability to exchange your timeshare week or other designated time for someone else's. In Mississippi, a developer that offers an exchange program among timeshare owners must give certain disclosures to program participants, including a description of the purchaser's contractual relationship with the exchange program, the fees for participating in the exchange program, and a description of the limitations or restrictions in the exchange program. (Mississippi Real Estate Commission, Rule 8.8.)

Escrow Account Required in Mississippi Timeshare Transactions

In most cases, the timeshare developer must put any money you pay in connection with a timeshare purchase in Mississippi into an escrow account. (Rule 8.9.) The funds must be released:

  • to you, if you cancel the contract or
  • to the developer, if the cancellation period expires. (Mississippi Real Estate Commission, Rule 8.9.)

Restrictions on Timeshare Advertisements

In Mississippi, timeshare advertisements may not:

  • misrepresent a fact or create a false or misleading impression regarding the timeshare plan
  • make a prediction that the price or value of the timeshare will increase, or
  • contain any contradictory statements. (Mississippi Real Estate Commission, Rule 8.11.)

Sellers Must Disclose When Prizes and Promotions Are Used to Sell Timeshares

Timeshare sellers are notorious for getting people to attend sales presentations by offering free gifts, prizes, or vacations. In Mississippi, a developer or other person using a promotional device to sell timeshares must clearly disclose that the promotional device is being used to sell timeshares. The developer also has to disclose the date, year, and method by which all prizes will be awarded. (Mississippi Real Estate Commission, Rule 8.11.)

Real Estate License Required

In Mississippi, any timeshare seller, other than the developer and its regular employees, must be a licensed real estate broker or real estate salesperson. (Mississippi Real Estate Commission, Rule 8.1.)

Timeshare Foreclosures in Mississippi

In Mississippi, 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." If you don't pay the assessments, the timeshare management entity can place a lien on the timeshare. In Mississippi, that entity may then foreclose an assessments lien in the same manner that a mortgage of real property is foreclosed. (Mississippi Real Estate Commission, Rule 8.13.)

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 down 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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