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 Nevada, the cooling-off period is five calendar days after the date you executed (signed) the contract. Also, Nevada law provides consumers with several protections when it comes to timeshare transactions. For instance, the timeshare developer can't deceive you when making the sale and must disclose specific information to you by providing a copy of its public offering statement.
Even though Nevada 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.)
In Nevada, you may cancel, by written notice, a contract of sale for a timeshare purchase up until midnight of the fifth calendar day following the date you signed the contract. The contract of sale must include a statement about your right to cancel the deal. (Nev. Rev. Stat. § 119A.410(1)).
The written notice of cancellation may be:
You may cancel the purchase of a timeshare without penalty or obligation and are legally entitled to the return of all money and other considerations that you've given toward the purchase. If you cancel, the developer must return all payments within 20 days after receipt of the notice of cancellation. (Nev. Rev. Stat. § 119A.410(4)).
If the developer attempts to get you to waive your cancellation rights, you may void the contract. (Nev. Rev. Stat. § 119A.410(2)).
Timeshare salespeople are known for using hard-sell tactics and misrepresentations to get you to make a snap decision about buying a timeshare. Nevada law protects you in timeshare sale transactions, like by prohibiting deceptive practices, requiring the developer to give you a copy of the public offering statement, and setting certain requirements for timeshare resellers.
Nevada law prohibits timeshare developers or salespeople from engaging in unfair or deceptive acts in a timeshare transaction, including:
The timeshare developer must provide each prospective purchaser with a copy of the developer's public offering statement, which must contain a copy of the developer's permit to sell timeshares. (Nev. Rev. Stat. § 119A.400(1)).
The timeshare broker or sales agent must:
Timeshare owners often find it extremely difficult to sell their timeshares; 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. Nevada law provides some protection to shield consumers from this type of resale scam.
In Nevada, a person who, on behalf of an owner (other than a developer), wishes to list, advertise or promote for resale, or solicit prospective purchasers of timeshares that were previously sold (if they are selling more than 12 units) must:
A timeshare resale broker who charges or collects an advance fee must place 80% of the fee into a trust account. If the broker closes escrow on the timeshare resale, the broker is deemed to have earned the advance fee. But if the listing of the timeshare expires before the broker closes escrow on the timeshare resale, the broker must return the money held in the trust account to the owner of the timeshare within ten days after the listing's expiration date. (Nev. Rev. Stat. § 119A.4779).
A timeshare resale agreement must be in writing and contain the following disclosures:
If you take out a loan to purchase an interest in a deeded timeshare and fail to make your timeshare mortgage payments or keep up with the assessments, you could face foreclosure. (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 Nevada, timeshare foreclosures are typically nonjudicial, which means the foreclosure takes place without court supervision.
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.