Timeshare Foreclosure Information by State
How To Protect and Prepare Yourself Against Timeshare Foreclosures In Every State
Timeshare foreclosures are much more common than other property foreclosures for the simple reason that late payments of HOA fees is enough to begin the process. The consequences of a timeshare foreclosure will affect your credit rating and ability to borrow money in the future.
In order to protect yourself against foreclosure and its negative effects on your financial record you will want to understand the two distinct types of foreclosure that occur in nearly every state. While there are some minor differences in foreclosures from state to state they do follow similar processes.
This article will outline the two primary types of foreclosures, an emphasis on amended Florida timeshare foreclosure law, and what you can do to protect yourself from foreclosure in the unfortunate event that this affects you directly.
Judicial and Nonjudicial Timeshare Foreclosures
The distinction between judicial and nonjudicial timeshare foreclosure is straightforward. Judicial foreclosures go through the court system, while non judicial foreclosures do not. The latter of the two moves much faster and can often be executed very quickly, which is actually a good thing for you the owner.
By law in every state you will be notified in writing of an impending foreclosure. It is important at this time to determine whether the foreclosure is judicial or not. If it is nonjudicial you will need to act quickly.
When you receive a notice of foreclosure be sure to read the document thoroughly to determine if it is judicial or not. Either way, it is best to retain a lawyer if possible. Timeshare foreclosures can be based simply on missed maintenance fees rather than on missing mortgage payments.
While many states provide protection for homeowners struggling financially, the same rules will not generally apply to timeshares as these loans are rarely issued by a major financial institution.
The majority of all timeshare foreclosures are nonjudicial and will move very quickly, which means you the owner need to be on your toes. If at all possible pay any overdue maintenance and late fees and avoid the procedure to protect your credit score.
Prevention Is The Best Protection
It may seem obvious, however the best way to deal with timeshare foreclosure is to not deal with it at all. This means keeping up with HOA fees every month to avoid high interest rates on late payments. Even if you purchase your timeshare in cash and own it outright, if you are even a few months late on maintenance fees your timeshare may be subject to foreclosure.
After purchasing a timeshare you will have a seven day grace period where you can receive a full refund. If you have been duped into purchasing a timeshare it is worth acting quickly to get your refund early. If however this grace period has passed, make sure you keep up with payments even if you plan on giving your timeshare away.
Associations do have a right to foreclose if your dues are late, even in states such as California which have more owner protection laws than their eastern counterpart Florida.
Florida and The Trustee Foreclosure Act: Delinquency Payments
The most concerning issue presenting timeshare foreclosure is that there is very little to no profit available in the resale of a timeshare. This means that even when the property is repossessed typically there is more money owning because of the accumulation of unpaid HOA fees.
Even if the timeshare is lost completely, the owner will still be left with a delinquent account, meaning that they still owe money for maintenance fees and applicable interest.
As twenty-five percent of all timeshare ownership occurs in Florida, this state has slightly more elaborate legislation surrounding this type of property. The Trustee Foreclosure Act was created to protect owners who could no longer afford their timeshare. Typically it took eighteen months to foreclose a property, during which time maintenance fees and the associated high interest rates continued to accrue so even after the loss of property the owner was left in serious debt.
The Trustee Foreclosure Act allows for properties to be repossessed after just ninety days. This avoids a year and a half of unpaid maintenance fees that the owner will be stuck with even after they lose their property. With this additional protection most owners will be able to avoid delinquency, and simply move on from the era of their timeshare ownership.
Resources For Legal Protection For Timeshare Foreclosure Cases:
If you are facing timeshare foreclosure know that you do not have to do it alone. NOLO provides a list of attorneys that specialize in timeshare foreclosure in nearly every area of the United States and they will help answer initial questions free of charge on their live chat.
Additionally, remember that the best protection against timeshare foreclosure is prevention, so do the best you can to stay up to date on all HOA fees at all times. This is crucial because even if you lose your timeshare in foreclosure you may still be saddled with the debt of delinquency.
Below you will find links to resources that can help you move through the foreclosure process easily and quickly:
