Oregon Timeshare Foreclosure and Right to Cancel Laws

Learn about Oregon’s 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 Oregon, the cooling-off period is usually five calendar days from the date you sign the first written offer or contract to purchase the timeshare. Also, Oregon law provides protections to people in timeshare transactions. For instance, state law prohibits timeshare sellers from making false statements when trying to sell you a timeshare.

Even though Oregon 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.)

How Long Do I Get to Cancel a Timeshare Contract in Oregon?

Again, in Oregon, you may usually cancel the contract within five calendar days from the date you sign the first written offer or contract to purchase. (Or. Rev. Stat. § 94.836(1).)

But if the developer doesn't provide an address to you for cancellation purposes, the cancellation period doesn't begin until the developer gives you the address. (Or. Rev. Stat. § 94.836(2).)

How to Cancel a Timeshare Transaction in Oregon

To cancel, you must give written notice to the developer at the developer's address. (Or. Rev. Stat. § 94.836(2).) The notice of cancellation doesn't need to be in a particular format. The notice is sufficient if it indicates your intention to cancel the contract. (Or. Rev. Stat. § 94.836(3).)

If you give you notice of cancellation by mail, you must send it by certified mail, return receipt requested. The cancellation is effective on the date that the notice is deposited with the United States Postal Service, properly addressed and postage prepaid. (Or. Rev. Stat. § 94.836(4).)

Can I Waive the Right to Cancel a Timeshare Deal in Oregon?

A timeshare purchaser can't waive the right to cancel. (Or. Rev. Stat. § 94.836(6).)

Getting a Timeshare Contract Refund in Oregon

Upon receipt of a timely notice of cancellation, the timeshare developer must immediately return your payment. But if you made the payment by check, the developer isn't required to return the payment until the check is paid. (Or. Rev. Stat. § 94.836(5).)

Other Protections for Timeshare Purchasers in Oregon

Timeshare salespeople are known for using hard-sell tactics and misrepresentations to get you to make a snap decision about buying a timeshare. Oregon law provides protections to shield consumers from deceptive practices in timeshare transactions.

False Practices Prohibited in Oregon Timeshare Transactions

Oregon law makes it unlawful for a timeshare developer or salesperson to do any of the following when selling timeshares:

  • employ any device, scheme, or artifice to defraud
  • make any untrue statement of a material fact
  • fail to state a material fact necessary to make a statement clear
  • publish false or misleading statements in any prospectus, circular, advertisement, document, pamphlet, leaflet or other literature, or to leave out a statement that then makes the document misleading
  • issue an advertisement or written document without naming the person responsible for publishing it, or
  • make any statement or publish any advertisement that the timeshare plan has been approved or endorsed by the Oregon Real Estate Commissioner unless the statement is made together with a public report issued by the commissioner (see below). (Or. Rev. Stat. § 94.940.)

Escrow Account Required in Timeshare Purchases

A timeshare developer must put any money you pay in connection with a timeshare purchase into an escrow account with an escrow agent. (Or. Rev. Stat. § 94.873(1).) It will release the funds:

  • if you cancel the agreement
  • if you or the developer defaults in performing an obligation under the sales agreement
  • if you or the developer properly terminate a sales agreement, or
  • after escrow closes for the sale of the timeshare. (Or. Rev. Stat. § 94.873(3).)

The purpose of the escrow account is to protect your right to a refund.

Be Sure to Review a Timeshare's Public Report

In Oregon, the Real Estate Commissioner may examine a timeshare plan to be offered for sale and make a public report of the findings. The timeshare developer must give a copy of the public report to the prospective purchaser before signing the contract. (Or. Rev. Stat. § 94.829.)

If you're thinking about buying a timeshare, be sure to carefully examine the public report before the five-day cancellation period ends.

Timeshare Advertising Regulations in Oregon

Oregon law prohibits a timeshare developer, or its agent or an employee, from putting false or misleading statements, pictures, or sketches in advertisements, radio broadcasts, or telecasts. (Or. Rev. Stat. § 94.945.)

Timeshare Foreclosures in Oregon

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 referred to as "assessments." You might also face a foreclosure (or a lawsuit for a money judgment) if you fall behind in the timeshare assessments. (Or. Rev. Stat. § 94.856.)

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 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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