By Zana Holley Dupee, Esq.
On May 28, 2010, Florida passed a new law allowing Timeshare Associations to foreclose on timeshares without using the court system. Thus, if you are late paying your maintenance fees and you ignore the letters that they are supposed to mail to you, you can actually completely lose your timeshare. No matter how much you paid for it!!! The Timeshare Association is allowed to sell your timeshare to a new buyer, and you will be out of luck.
In order to use this non-judicial foreclosure method, the Timeshare Association is required to mail you notice of their intent to file a lien. In addition, they are required to record a Claim of Lien in the public records in the county where the timeshare is located.
If you receive mail from your Timeshare Association or an attorney or title company, please open it and read it. If it is a bill for maintenance fees, please pay them. If it is a notice of intent to file a lien, you have a right to object to the Timeshare Association’s use of non-judicial foreclosure. In order to object, you must deliver a written objection to the Trustee that the Timeshare Association hired to complete the paperwork for the non-judicial foreclosure. This Trustee would be the attorney or title company who mailed you the notice.
Once the Trustee receives your objection, then the Timeshare Association is not allowed to use the non-judicial foreclosure method. They would have to file a regular foreclosure action in the courts to foreclose the lien on your timeshare before they could sell off your timeshare to a third party.
If a Trustee has been hired to do a non-judicial foreclosure of your timeshare unit and sell it to a new buyer, they are required to send you a written notice of default and then wait 30 days before completing the sale to the new buyer. Again, this is a reason to make sure that you read all your mail in a timely manner and also make sure that the Timeshare Association has your correct mailing address. You only get 30 days notice, so you need to act quickly to save your timeshare.
If the Trustee has sent you the notice, waited 30 days, and filed a notice in the public records and published it in a local newspaper, then he can sell your timeshare to a third party. The law requires that the Trustee sell your timeshare at a public auction, but the Trustee may use an online auction. Therefore, depending on what the Clerk of Court has authorized in that county for foreclosure auctions, the Trustee may be able to simply sell your timeshare for the outstanding maintenance fees on eBay or another online auction website. After the sale to the new buyer is complete, the Trustee will mail you a copy of the Certificate of Sale and all your interest in your timeshare is terminated.
There is a positive aspect to this new non-judicial foreclosure procedure for timeshares. If your Timeshare Association uses this procedure, then you will have no further personal liability for any amounts due. Therefore, if the Timeshare Association is not able to sell your unit for enough money to cover the past due fees and their attorney’s fees and costs of conducting the foreclosure sale, they have no right to come after you for the deficiency.
What can you do if the Timeshare Association uses this procedure to sell your timeshare without sending you the proper notices or giving you the 30 days to pay what you owe? You cannot set aside the sale to the new buyer. The new buyer is a “bona fide purchaser for value.” The law looks at them as an innocent third party, so you cannot make them sell your timeshare back to you or somehow reverse the sale. So, what can you do? You can sue the Timeshare Association for violating the law on how to conduct a non-judicial foreclosure.
If you have a mortgage loan for your timeshare, then your mortgage lender may also be allowed to use this same non-judicial foreclosure procedure if you are behind in payments to them. So, again, make sure that you are reading your mail regularly, making all required payments, and giving updated mailing address information to your mortgage lender. You don’t want to find that the vacation home that you have paid so much money for has been sold to someone else on eBay!!
If you have a timeshare in Florida and need to consult with an attorney about your rights, call (352) 235-9450 to schedule a consultation with attorney Zana Dupee.
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