Is A Florida Timeshare Subject To Foreclosure?
When you purchase a deeded timeshare, you are actually buying an interest in real property. As with any real estate purchase, many buyers finance their timeshares by taking out a mortgage loan. Additionally, many timeshare contracts require residents to pay certain maintenance fees and assessments, just as you would with any homeowners’ association.
So if you fail to pay your mortgage or maintenance fees on time, can your timeshare interest actually be subject to foreclosure? The short answer is “yes.” And under Florida law, timeshare holders may be subject to a quicker legal process than a normal residential foreclosure.
Judicial vs. Non-Judicial Foreclosure
When it comes to residential homeowners, Florida law requires a judicial foreclosure process. This means that the mortgage lender or homeowners’ association (HOA) must go to court and file a lawsuit against the homeowner. The homeowner has the right to contest the action in a formal court hearing. But if the homeowner does not contest the proceeding, or the judge decides the lender or HOA’s case has merit, the court can order the property sold at a foreclosure auction.
In the case of timeshares, Florida also permits non-judicial foreclosures. What this means is that instead of going to court and filing a lawsuit, the mortgage lender or HOA simply appoints a trustee to oversee the foreclosure process. The trustee will then send a letter to the timeshare holder warning them to “cure the deficiency”–i.e., get current on mortgage payments or maintenance fees–or face foreclosure.
If you as the timeshare holder do not take action within a specified time period, the trustee can then proceed to complete the foreclosure and auction off your interest in the timeshare, without the need for a court order.
Could You Still Be on the Hook After the Foreclosure?
What are your options in the event of a non-judicial foreclosure of your deeded timeshare interest? Obviously, you can simply pay the money that you owe to cure the defect. But if that is not an option, you can also attempt to negotiate a repayment plan with the lender or HOA. You may also wish to simply sell your timeshare interest.
A common question we get with respect to the latter option is, “What if the money I get from the sale is not enough to pay back my mortgage loan? Can the lender sue me for the rest?” Under Florida law, if a timeshare owner does not contest a non-judicial foreclosure, then the lender is barred from seeking a deficiency judgment–i.e., collecting the difference between what the property sells for and what is owed on the original mortgage.
Of course, before you take any action, it is in your best interest to first speak with a qualified Tampa timeshare attorney who can review your case and advise you of your options. Contact HD Law Partners today to schedule a free consultation with a member of our team.