Tennessee Timeshare Foreclosure and Right to Cancel Laws

Learn about Tennessee timeshare foreclosure laws, right to cancel laws, and other timeshare contract laws.

Tennessee has extensive legislation covering timeshare transactions. For example, if you purchase a timeshare in Tennessee and then want to back out of the deal, state law provides you with a right to cancel the contract. Also, the timeshare developer must disclose certain information to you before or at the time you purchase the timeshare and cannot use false or misleading advertisements to entice you to buy a timeshare. But you still need to be cautious when purchasing a timeshare, and you should understand that if you don't make your timeshare mortgage or assessments payments, you may lose your timeshare through foreclosure.

If you are thinking of buying a timeshare in Tennessee, you should be aware of the various protections that state law provides and learn how to protect yourself in the transaction. Read on to find out some of the most important features of Tennessee timeshare law.

Public Offering Statement

A public offering statement contains general information about the timeshare development. In a Tennessee timeshare sale, the timeshare developer must provide the purchaser with a copy of the public offering statement before transferring the timeshare and no later than the date of the sales contract (Tenn. Code Ann. § 66-32-114(a)).

The public offering statement must disclose important information about the timeshare, such as the developer's name and principal address, a general description of the timeshare units, any financing offered by the developer, and information about how to cancel the contract (Tenn. Code Ann. § 66-32-112).

Your Right to Cancel a Timeshare Contract in Tennessee

In Tennessee, a timeshare contract is voidable up until you receive the public offering statement. The contract can also be cancelled within:

  • ten days from the date you signed the contract, if you made an on-site inspection of the timeshare project prior to signing the contract, or
  • 15 days after you sign the contract, if you did not make an on-site inspection of the timeshare project before you signed the contract (Tenn. Code Ann. § 66-32-114(a)).

The right to cancel cannot be waived (Tenn. Code Ann. § 66-32-114(c)).

How to Cancel the Contract

To cancel the timeshare purchase, you may:

  • hand deliver written notice to the developer, or
  • mail your cancellation notice by prepaid United States mail, postmarked anytime within the cancellation period (Tenn. Code Ann. § 66-32-114(c)). (Get more information about cancelling a timeshare purchase in Nolo’s article How Do I Cancel a Timeshare Contract?)


If you cancel, the seller cannot charge a penalty and must refund all of the money you paid within 30 days after receiving your notice of cancellation (Tenn. Code Ann. § 66-32-114(a)).

Escrow Account Required in Tennessee Timeshare Transactions

In Tennessee, when you purchase a timeshare, the timeshare developer must put any money you pay in connection with the purchase into an escrow account (Tenn. Code Ann. § 66-32-113).

The funds will be released:

  • to you, if you cancel the contract
  • to the developer, if you default in performing an obligation under the purchase contract, or
  • to the developer, after the cancellation period expires (Tenn. Code Ann. § 66-32-113).

The purpose of the escrow requirement is to protect your right to a refund if you cancel the sales agreement during the cancellation period.

False and Misleading Advertisements are Prohibited

Tennessee law prohibits timeshare salespersons from using false or misleading statements in advertising timeshare sales (Tenn. Code Ann. § 66-32-131). For example, timeshare sellers cannot utilize an advertisement that contains a statement regarding the profit potential of the timeshare (unless the statement is not false or misleading), make a prediction that the timeshare will increase in value, or misrepresent the characteristics of the timeshare, among other things (Tenn. Code Ann. § 66-32-132).

Timeshare Sellers Cannot Mislead You About Gifts and Prizes

Sometimes, timeshare sellers offer gifts or prizes to potential buyers to get them to attend a sales presentation. Tennessee law regulates prize and gift promotional offers in several ways. For example, timeshare sellers cannot lead you to believe that you are (or could be) the winner of a prize or gift, if you have not won or are not eligible to win. Also, timeshare sellers are prohibited from leading you to believe that you have been "selected" or are part of a special group receiving a timeshare offer, if this is not true (Tenn. Code Ann. § 66-32-133).

Tennessee Timeshare Resale Protection Laws

Timeshare owners can find it extremely difficult to sell their timeshares since there is virtually no after-market for them. As a result, scam artists have popped up who will falsely tell a timeshare owner that there is a ready and willing buyer for the timeshare -- 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.

Tennessee law provides some protections to shield consumers from this type of resale scam. For example, a timeshare resale agreement must be in writing and the reseller is prohibited from accepting an advance fee (Tenn. Code Ann. § 66-32-137).

Timeshare Foreclosures in Tennessee

Often, timeshare purchasers take out a loan to finance the purchase of a timeshare. If you don't make your timeshare mortgage payments, you could lose your timeshare through a Tennessee foreclosure. (Learn more in Nolo’s article Timeshare Foreclosures.)

In addition to monthly mortgage payments, timeshare owners are ordinarily responsible for maintenance fees, special assessments, utilities, and taxes, collectively referred to as “assessments.” If you fail to keep up with the assessments, you will also likely face foreclosure. (Find out more in Nolo’s article Can a Timeshare Be Foreclosed for Nonpayment of Fees or Assessments?)

Tennessee Timeshare Laws

To find the Tennessee statutes that address timeshare transactions, go to www.lexisnexis.com/hottopics/tncode. The relevant statutes can be found in Title 66 (Property), Chapter 32 (Time-Share Programs and Vacation Clubs), Part 1 (Time-Share Act of 1981).

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