What You Need to Know About Arizona Timeshare Foreclosure and Right to Cancel Laws

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  2. What You Need to Know About Arizona Timeshare Foreclosure and Right to Cancel Laws
What You Need to Know About Arizona Timeshare Foreclosure and Right to Cancel Laws
Real Estate

According to a September 2020 report by the American Resort Development Association, Arizona is home to 48 timeshare resorts representing 4,811 units. Arizona’s Timeshare Owners’ Association and Management Act governs timeshare transactions in the state, including foreclosures and a buyer’s right to cancel a purchase.

Timeshare foreclosures

Timeshare buyers that take out a loan to pay for their interest in a deeded timeshare are likely to face foreclosure if they fail to make their mortgage payments. Timeshare foreclosures in Arizona are typically nonjudicial foreclosures, which means that the foreclosure is handled by a trustee instead of a court.

In addition, a timeshare’s homeowners’ association may initiate nonjudicial foreclosure proceedings if an owner has failed to pay assessments, which generally include maintenance fees, taxes, utilities, and other special assessments. Before a nonjudicial foreclosure action can be taken, the association or management group must provide the timeshare owner with a notice of delinquency that is mailed to the owner and recorded with the county recorder in the county where the timeshare is located.

Once notified, the owner has 30 days in which to cure the delinquency. If no action is taken by the owner within that 30-day timeframe, then the HOA or management group can request that the trustee begin nonjudicial foreclosure proceedings.

However, if the owner acquired a timeshare prior to January 1, 2009, that owner can stop a nonjudicial foreclosure by signing and returning a form provided with their delinquency notice via certified mail. While this will halt the foreclosure proceedings, the HOA or management group can still pursue civil litigation to collect the delinquent assessments.

It should also be noted that Arizona law does not allow a deficiency judgment after a nonjudicial foreclosure on timeshares.

Timeshare purchase agreement cancellations

Arizona law allows timeshare buyers to cancel a purchase contract up until midnight on the 7th calendar day following the date when the purchase agreement was signed. To cancel the contract, buyers must provide written notice to the seller at the seller’s address as indicated in the contract. The cancellation is effective as of the date on which the cancellation notice is sent.

Our real estate attorneys represent parties on either side of real estate and financing transactions, including buyers, sellers, landlords, tenants, lenders, borrowers, trustees, guarantors, shareholders, partners, and others. We advise, structure, negotiate, and document a variety of real estate and financing transactions, including leases, purchase and sale agreements, financing agreements, and development agreements for a variety of commercial and residential projects. Contact us today and learn how we can help.

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