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 within a few days, usually three to ten days. In South Carolina, the cooling-off period is five days. But if you don't cancel the purchase by the deadline and eventually stop making payments on your timeshare, you could lose the place to a foreclosure or repossession, depending on what kind of timeshare you own.
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 to their homeowners' association (HOA.) If, as an owner, you don't pay the fees and assessments, the HOA might sue you for money or foreclose 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 South Carolina, if you buy a timeshare, you can cancel the contract within five days from the later of:
South Carolina law also provides the right to cancel a timeshare contract if at any time the timeshare or facilities as described in the contract are no longer available and the resort is unable to provide you with comparable accommodations or facilities. (S.C. Code Ann. § 27-32-40).
The right of cancellation can't be waived.
If you want to cancel the purchase contract, you must notify the seller in writing by sending notice via certified mail, return receipt requested, or another verifiable means. The notice of cancellation is considered given on the date postmarked so long as the notice is actually received by the seller. (S.C. Code Ann. § 27-32-40).
If you give notice in writing and transmit it other than by mail, the notice is considered given at the time of delivery at the seller's address as identified on the contract. (S.C. Code Ann. § 27-32-40).
If you cancel and have not received benefits pursuant to the contract, the seller of the timeshare must refund your payment within 20 days after it receives your notice of cancellation. If you received benefits pursuant to the contract, the seller must refund your money, less the benefits received, within 30 days. (S.C. Code Ann. § 27-32-60).
A timeshare seller must provide to the prospective purchaser a written public offering statement regarding the purchaser's rights and obligations associated with the purchase of an interest in that vacation timesharing plan. The purchaser must receive the statement before signing a purchase contract and the statement must include, among other things:
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'll likely 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 South Carolina, residential foreclosures are judicial, but state law provides for the nonjudicial foreclosure of mortgages and assessment liens when it comes to timeshare properties. (S.C. Code Ann. § 27-32-325).
When a lender forecloses a mortgage, like a mortgage taken out to buy a timeshare, the borrower's total debt sometimes exceeds the foreclosure sale price. The difference between the sale price and the total debt is called a "deficiency."
In some states, the lender may get a deficiency judgment (a personal judgment) against the borrower for the deficiency amount. Whether you'll face a deficiency judgment after a timeshare foreclosure depends on state law.
In South Carolina, the borrower is not subject to a deficiency judgment after a nonjudicial timeshare foreclosure, even if the proceeds from the sale of the timeshare are insufficient to cover the debt. (S.C. Code Ann. § 27-32-320).
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.