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Can a Timeshare Put a Lien on Your House?
The Timeshare Defense Attorneys can answer your questions, such as, “Can a timeshare put a lien on your house?” Call us today to schedule a consultation!
Can the Timeshare Developer Put a Lien on My Home?
Many timeshare owners get to a stage when they no longer want or need the timeshare. At this point, they resent the continuous and ever-escalating annual maintenance fees, real property taxes, and other costs relating to the property, which they may no longer use.
Keen to get rid of the pesky costs, many timeshare owners may decide to stop paying all the incidental fees and costs. Some cannot afford to pay at that point, leading to them defaulting on their maintenance payments. While this course of action may appear easy, it does more harm than good.
There are consequences if you fail to keep up with your timeshare payments, and yes, the developer can put a lien on your home if the timeshare contract allows it. You could also face foreclosure proceedings concerning the timeshare property, and your credit rating could also take a dive.
If you’re behind on your timeshare payments and are worried about facing a lien or foreclosure and the implications on your assets, you might need to consult reputable timeshare attorneys in Florida for guidance and legal advice.
Read on to understand how it works and how your timeshare lawyers can assist you in such circumstances.
What Is a Lien?
A lien refers to a security interest arising when a debt is unpaid at the due date. It allows the creditor to establish their claim against the debtor’s assets and, in some cases, dispose of the property to pay off the debts.
When you default on your timeshare payments, you essentially become a debtor of the timeshare developer until you pay off your debt voluntarily. Otherwise, your property becomes subject to a lien in favor of the developer.
How Can a Developer Put a Lien Against Your Home?
If you fail to pay up your timeshare fees, the developer can put a lien against your timeshare. The right to a lien can also extend to your home if it is stated in your timeshare contract.
However, even if it is permitted, developers are not likely to take legal action against your home due to your default. Instead, they are more likely to foreclose on the timeshare property and take it back as timeshare stock to resell.
More often than not, when you stop paying, the developer will hand you over to a collection agency that will hound you for payments. In such cases, you might be forced to pay to avoid the constant threats from debt collectors.
Nevertheless, if the developer chooses to take you to court over the unpaid debts, it may no longer matter whether or not your timeshare agreement allows your home to be used as security. If the developer wins, they automatically become judgment creditors. In this case, they can levy execution of the judgment on any of your available assets, including your place of residence (if you own the place). In such circumstances, the developers do not need to focus on putting a lien on the timeshare alone — your home and any other asset you own become fair game.
Foreclosure Proceedings on Your Timeshare
Timeshare foreclosures result from a timeshare lien and allow the timeshare developer to recover their money by taking possession of the timeshare or other property.
There are two types of foreclosure as follows:
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A judicial foreclosure requires going to court to get a judgment that allows the timeshare association to sell the owner’s interest in the timeshare.
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Non-judicial foreclosures are regulated differently by state law in different states, and these regulations must be complied with. The process allows for foreclosure without the need to go to court when specific requirements are met.
Note that the developer’s right to place a lien/foreclose on the timeshare property depends on the type of timeshare as follows:
Deeded Timeshares
You have a deeded timeshare if you bought a fraction of the timeshare property and were issued with a deed of ownership that reflects your interest. In such circumstances, a lien against your timeshare is possible since you are regarded as the real estate owner of your timeshare.
Right to Use Timeshares
As the name suggests, a right-to-use timeshare does not give you an actual interest in the physical property but rather a right to use the property. Therefore, there is no deed, no ownership, and the property is legally considered personal property. So instead of foreclosure, the developer would take steps to legally repossess the timeshare.
What to Do if the Developer Sues for Unpaid Fees
If the developer commences a lawsuit against you for the recovery of the outstanding debt, you will be notified of the lawsuit. You would also get an opportunity to respond to the notice. If you fail to respond, the case may be determined against you in your absence. Once you respond, it will buy you time, and you can consider your options.
Even if the developer eventually prevails in court, they will send you a notice and demand that you now pay the debt. If you don’t pay, you could be summoned back to court. If the court finds you do not have money to pay yet, and you own a home that can be sold to pay for the debt, you may end up having your house sold on auction to pay the debt owed.
How an Attorney Can Help
If you’re behind on your timeshare payments and are facing possible foreclosure, it is important that you get help from a skilled timeshare attorney. Your attorney can assess your case and contract document to determine if your home is safe from foreclosure proceedings and help you decide on a suitable strategy to protect your home and other assets. Consider getting in touch with one today.
If you have further questions about timeshare foreclosure or any issues regarding timeshares, talk to an attorney from Timeshare Defense Attorneys. In the meantime, try to continue paying maintenance fees to avoid credit rating, foreclosure, and tax issues.
