With the signing of House Bill 531 into law on October 6, 2021, North Carolina updated its laws covering timeshares. The revised North Carolina Timeshare Act provides consumers with several protections when it comes to timeshare transactions. For instance, in North Carolina, you get the right to cancel a timeshare deal within five calendar days after you sign the contract (or when you receive the public offering statement, which contains important information to consider before you buy a timeshare interest, and all other required documents). Also, should you decide to try to sell your timeshare, North Carolina law protects you against resale scams.
Even though North Carolina 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 North Carolina, you get the right to cancel the contract of sale until midnight of the fifth day after the later of the following events:
A timeshare purchaser can't waive the right of cancellation. Any oral or written declaration or instrument that purports to waive this right of cancellation is void. Also, if the contract of sale doesn't include a cancellation notice (see below), you can void the contract and you're entitled to 10% of the sales price, but not more than $3,000, in addition to any damages or other relief to which you're entitled. (N.C. Gen. Stat. § 93A-45.)
Your cancellation is considered given on the date postmarked if mailed, or when transmitted if delivered by electronic means, so long as the developer actually receives the notice. If given by means of a writing transmitted other than by mail, your notice of cancellation is considered given at the time of delivery at the place for receipt of notice that the developer provides. (N.C. Gen. Stat. § 93A-45.)
You can cancel a North Carolina timeshare deal without penalty, and the developer must refund your money within 20 days after you cancel or within five days after receiving cleared funds from you, whichever is later. (N.C. Gen. Stat. § 93A-45.)
Timeshare developers in North Carolina must give purchasers a copy of the sales contract and public offering statement. The contract must include certain information, including:
The developer must provide a copy of the public offering statement to you before you sign the contract. (N.C. Gen. Stat. § 93A-44.) The public offering statement must include information about acquiring the timeshare like:
In North Carolina, when you purchase a timeshare, the developer must put any money you pay in connection with the purchase into an escrow account with an independent escrow agent. (N.C. Gen. Stat. § 93A-45.) The point of the escrow requirement is to protect your right to a refund if you cancel the sales agreement during the cancellation period.
Timeshare owners often find it extremely difficult to sell their timeshares after buying them. So, scammers sometimes mislead timeshare owners into thinking that there's someone waiting in the wings to buy the timeshare. But the timeshare owner must pay hundreds or thousands of dollars in upfront fees. Once the fees are paid, the scam artists claim that they were simply offering advertising services for the upfront money paid, and no buyer ever materializes. Or the scammers disappear with the money.
North Carolina law regulates timeshare resale and exit company activities to protect timeshare owners. The state's timeshare law makes violations of its provisions unfair or deceptive acts or practices that North Carolina's Attorney General can enforce. For example, among other things, North Carolina law prohibits timeshare resellers from saying or implying that they have a person interested in buying or renting the timeshare resale interest without providing the name, address, and telephone number of the represented interested resale purchaser. (N.C. Gen. Stat. § 93A-67.)
North Carolina law also states that deeded timeshares are considered an interest in real estate and governed by state laws relating to real estate. (N.C. Gen. Stat. § 93A-42.) So, if you don't make your timeshare mortgage payments, the timeshare is subject to foreclosure, just like other types of real estate.
In addition, timeshare owners are ordinarily responsible for maintenance fees, special assessments, utilities, and taxes, collectively referred to as "assessments." In North Carolina, you might also face a foreclosure if you fall behind in the timeshare assessments. North Carolina foreclosures for delinquent assessments can be either judicial or nonjudicial. Or you could face a lawsuit for a money judgment. (N.C. Gen. Stat. § 93A-62(d)(1).)
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.