Texas Timeshare Foreclosure and Right to Cancel Laws

Learn about Texas timeshare laws, including contract disclosures, the right to cancel, and timeshare foreclosure procedures.

If you've purchased or are considering buying a timeshare in Texas—or are facing a timeshare foreclosure—it's important to learn the answers to the following questions:

  • How do I cancel a timeshare purchase in Texas?
  • What disclosures are required in a Texas timeshare purchase?
  • Are there any laws to protect consumers in timeshare transactions?
  • If I stop making payments, what is the foreclosure process in Texas (judicial or nonjudicial)?

Read on to find out some of the most important features of Texas timeshare law.

Right to Cancel a Timeshare Contract in Texas

In Texas, you have the right to cancel a timeshare contract so long as you do it before the sixth day after the date:

  • you sign and receive a copy of the purchase contract, or
  • receive the required timeshare disclosure statement, whichever is later. (Tex. Prop. Code Ann. § 221.041).

The right to cancel can't be waived. A contract containing a waiver of this right is voidable by the purchaser. (Tex. Prop. Code Ann. § 221.041).

How to Cancel the Contract

To cancel the purchase contract, you may:

  • hand deliver notice of cancellation to the developer
  • mail notice by prepaid United States mail to the developer or to the developer's agent for service of process, or
  • overnight notice by common carrier delivery service to the developer or the developer's agent for service of process. (Tex. Prop. Code Ann. § 221.042).

If you decide to cancel the contract, the developer must refund all payments you made before the cancellation:

  • on or before the 30th day after the date on which the developer receives a timely notice of cancellation, or
  • on or before the fifth day after the date the developer receives good funds from you, whichever is later. (Tex. Prop. Code Ann. § 221.042).

(To learn more about canceling a timeshare purchase, see How Do I Cancel a Timeshare Contract?)

Timeshare Disclosure Statement

The developer must provide a timeshare disclosure statement to you before you sign the timeshare agreement. The timeshare developer must also get you to sign an acknowledgement that you received the timeshare disclosure statement. (Tex. Prop. Code Ann. § 221.032).

The timeshare disclosure statement must include, among other things:

  • the type of timeshare plan offered
  • a description of the duration and operation of the timeshare plan
  • a description of the existing or proposed accommodations
  • a description of any existing or proposed amenities of the timeshare plan
  • a description of the method by which you will be able to schedule your use of the timeshare
  • a description of the method and timing for performing maintenance of the timeshare property
  • the projected common expense liability, and
  • copies of the declaration, bylaws, and articles of incorporation. (Tex. Prop. Code Ann. § 221.032).

    Deceptive Practices Are Prohibited

    Texas law prohibits timeshare developers or salespeople from engaging in deceptive trade practices. The following acts, among others, constitute deceptive practices under the law:

    • Failing to disclose important information concerning a timeshare interest.
    • Making false or misleading statements of fact concerning the characteristics of accommodations or amenities available to a consumer.
    • Predicting specific or immediate increases in the value of a timeshare interest without a reasonable basis for such predictions.
    • Making false or misleading statements of fact concerning the duration that accommodations or amenities will be available to a consumer.
    • Making false or misleading statements of fact concerning the conditions under which a purchaser of a timeshare interest may exchange the right to occupy a unit for the right to occupy a unit in the same or another timeshare property. (Tex. Prop. Code Ann. § 221.071).

    Timeshare Foreclosures

    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 will 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." To find out more, see Can a Timeshare Be Foreclosed for Nonpayment of Fees or Assessments?)

    In Texas, the foreclosure can be either judicial or nonjudicial.

    Talk to an Attorney

    If you have questions about timeshare laws in Texas or want to learn about foreclosure, consider talking to a real estate attorney or a foreclosure attorney.

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