If you are buying a timeshare in Wisconsin, it's important to learn about the laws that protect you, including the right to cancel a timeshare contract and a requirement that the timeshare developer provide you with a disclosure statement. But you still need to be careful 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.
Read on to learn about a few of the important features of Wisconsin's timeshare law.
In Wisconsin, you can cancel a timeshare contract:
The right to cancel cannot be waived (Wis. Stat. § 707.47(4)).
You can cancel a Wisconsin timeshare contract by:
If you mail the cancellation, notice is considered given on the date that it is postmarked (Wis. Stat. § 707.47(5)). (See Nolo's article on how to cancel a timeshare contract for more information on how to rescind a timeshare purchase.)
The timeshare developer must refund all payments you made within:
If you have used or occupied the timeshare property for more than 12 hours before cancellation, the developer may reduce the refund by a reasonable amount to cover your length of stay plus any cost for damages that are directly attributable to your use of the timeshare property (Wis. Stat. § 707.47(6)).
If a court finds that a timeshare contract is unconscionable, the court can choose not to enforce it or strike the unreasonable clauses out of the contract (Wis. Stat. §707.06).
Before a developer can offer a timeshare for sale, it must prepare a timeshare disclosure statement and provide this statement to prospective purchasers before transferring the timeshare and no later than the date of the purchase contract (Wis. Stat. § 707.41 (2) and § 707.47(1)).
The disclosure must contain the following information (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 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." For more information on timeshare assessment foreclosures, see Nolo's article Can Timeshares Be Foreclosed for Nonpayment of Fees and Assessments?)
Residential foreclosures in Wisconsin are judicial. (Find out more about Wisconsin foreclosure laws and procedure). However, state law provides for the nonjudicial foreclosure of mortgages and assessment liens when it comes to timeshare properties (Wis. Stat. §707.28(3)). (To learn more about the difference between judicial and nonjudicial foreclosure, see Nolo's article Will Your Foreclosure Take Place In or Out of Court?)
If the foreclosing entity pursues a nonjudicial foreclosure, it must inform the timeshare owner of:
When a lender forecloses on a mortgage, the total debt owed by the borrowers to the lender can exceed the foreclosure sale price. The difference between the sale price and the total debt is called a deficiency. (Learn more in Nolo's article Deficiency Judgments: Will You Still Owe Money After the Foreclosure?)
Example. Say the total debt owed for a timeshare is $15,000, but it only sells for $10,000 at the foreclosure sale. The deficiency is $5,000.
In Wisconsin, you are not subject to a deficiency judgment if the foreclosing entity uses a nonjudicial foreclosure process (Wis. Stat. §707.28(4)).
You can access the Wisconsin statutes by going to the State of Wisconsin Legislature's webpage at http://legis.wisconsin.gov. Hover over "Wisconsin Law" and then click on "Statutes." Then click on The Wisconsin Statutes & Annotations to find the Table of Contents. The relevant statutes are in Chapter 707 (Time-share ownership).