Montana Timeshare Foreclosure and Right to Cancel Laws

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 Montana, the cooling-off period is seven days after you get the public offering statement or sign the timeshare purchase agreement, whichever is later.

Also, Montana law provides consumers with some protection for timeshare purchasers. For instance, state law requires timeshare sellers to be licensed and prohibits timeshare sellers from making false or misleading statements to get you to buy a timeshare.

But 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. (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 addition, timeshare owners typically must 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.

How Do I Cancel a Montana Timeshare?

Again, in Montana, you can cancel a timeshare contract within seven days from the later of:

• receiving the public offering statement or
• signing the timeshare purchase agreement. (Mont. Code Ann. § 37-53-304.)

The right to cancel isn't waivable. (Mont. Code Ann. § 37-53-304.) So, if a timeshare seller asks you to waive your right to cancel, that's illegal.

Steps to Cancel a Timeshare Deal in Montana

To cancel your timeshare purchase, you must give written notice of the cancellation to the developer or the developer's agent either by:

• certified mail, or
• personal delivery. (Mont. Code Ann. § 37-53-304.)

Other Protections for Timeshare Purchasers in Montana

Timeshare salespeople are known for using hard-sell tactics and misrepresentations to get you to make a quick decision about buying a timeshare. Montana law protects timeshare buyers by requiring timeshare sellers to have a license and prohibiting false and misleading statements.

Sales License Required

In Montana, any salesperson involved in the sale or offering of a timeshare must be licensed as a timeshare salesperson and, in most cases, must be affiliated with at least one registered timeshare project. (Mont. Code Ann. § 37-53-301.)

False and Misleading Statements are Illegal

Montana law makes certain practices associated with an offer, sale, or lease of a timeshare interest illegal, such as:

• making any false or misleading statement of a material fact or omitting a material fact
• employing any device, scheme, or artifice to defraud, and
• engaging in any act, practice, or course of business that operates or would operate as a fraud or deceit upon any person. (Mont. Code Ann. § 37-53-307.)

Timeshare Foreclosures in Montana

In Montana, if you take out a loan to purchase an interest in a deeded timeshare and fail to make your mortgage payments, the lender (again, 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 called "assessments." In Montana, 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 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, 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. Contact a foreclosure attorney if you're facing a timeshare foreclosure and have questions about the process or your options.