If you’ve purchased or are considering buying a timeshare in Tennessee, it’s important to learn about timeshare laws in the state. Tennessee has extensive legislation covering timeshare transactions. For instance:
You also 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 could lose the property through a foreclosure.
Read on to find out some of the most important features of Tennessee timeshare law.
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, including the developer's name and principal address, a general description of the timeshare units, any financing offered by the developer, and information about canceling the contract. (Tenn. Code Ann. § 66-32-112).
In Tennessee, a timeshare contract is voidable up until you receive the public offering statement. The contract can also be canceled within:
The right to cancel can’t be waived. (Tenn. Code Ann. § 66-32-114(c)).
To cancel the timeshare purchase, you may:
If you cancel, the seller can’t charge a penalty and has to refund all of the money you paid within 30 days after receiving your notice of cancellation. (Tenn. Code Ann. § 66-32-114(a)).
In Tennessee, when you purchase a timeshare, the 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:
The purpose of the escrow requirement is to protect your right to a refund if you cancel the sales agreement during the cancellation period.
Tennessee law prohibits timeshare salespersons from using false or misleading statements in advertising timeshare sales. (Tenn. Code Ann. § 66-32-131).
So, for instance, a timeshare seller can’t make an advertisement that stating the profit potential of the timeshare (unless the statement isn’t 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).
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 instance:
Timeshare owners can find it extremely difficult to sell their timeshares because there’s virtually no after-market for them. As a result, scam artists sometimes falsely tell a timeshare owner that the company has 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, like requiring a timeshare resale agreement to be in writing and prohibiting the reseller from accepting an advance fee. (Tenn. Code Ann. § 66-32-137).
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 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.” If you fail to keep up with the assessments, you will also likely face foreclosure.
If you have questions about timeshare laws in Tennessee or want to learn about foreclosure, consider talking to a real estate attorney or a foreclosure attorney.