Foreclosure on timeshare with less than half of deposit?

[ShortyCheri]

Hello. Well, my boyfriend and I went to Vegas on a timeshare vacation. It was only $99 with a viewing of their presentation. Anyhow, my boyfriend bought the timeshare and made a partial deposit of $300. The full deposit is $1,200. After talking it over with me at home, we decided we could not afford the monthly payments.

About 2 days ago, the timeshare company called asking when we were going to make the rest of the deposit or if they should just foreclose this sale and have this go down on his credit.

Is it really a foreclosure if he didn't even make the full deposit?

The timeshare in full is $12,000.

 

[DeniseM]

You have a certain number of days when you can legally get out of the deal. It's called the rescission period. Someone else will know and post what it is for Las Vegas, but it's usually around ten days. If you are past that time frame, and you signed a contract, you have committed to buying the timeshare. It doesn't matter that you only made a partial deposit, what matters is that you signed a binding contract to purchase a timeshare....

 

[Dave M]

Nevada law provides 5 days to cancel. If you're past that time, you will owe the rest of the $12,000. Thus, if they offer to foreclose and accept what has already been paid, you might strongly consider that option.

However, because it will likely adversely affect your credit, you might consider talking to an attorney before taking any action.

 

[TheFlush]

To the OP, did your BF actually close on this sale, or just make a partial deposit?

 

[dougp26364]

If there is only a partial deposit, I'm not so certain that there is any actual sale as the terms for the sale have never been met (required deposit). Speaking with an attorny knowledable in real estate law would be a good option at this point.

Hopefully you've learned a lesson. Never sign a contract and then just ignore it thinking it will go away. That sort of thinking often leads to more trouble down the road.

 

[johnmfaeth]

Hi DougP,

Wouldn't signing a sales contract that accepts a partial downpayment with a future date to pay the remainder of the downpayment, and then not rescinding, be considered "substantial partial performance" in the courts?

John

 

[Harry]

Your up the creek without a paddle...

ShortyCherie,
There are some things we do not know. If you are within the recission period cancel now. We are assuming you are not. We also do not know the resort which may help us a little on giving your odds. John indicated you may be subjected to "partial substantial performance." Actually, out here in the West we call it just substantial performance, where you don't do what you promised to do (pay the rest of the deposit and then pay the payments) you are stuck. There is a doctrine of partial or part performance which usually has to do with the statute of frauds, all more than you need to know. In a prior life, I use to tell people they have a legal and moral obligation to do what they promised to do.
Having said that there are some practical considerations. If this is a new Vegas resort, it is easier for the sales staff to write you off and go on to the next sucker. The company would have to foreclose on both of you. The use of the term forclosure is interesting and I guess correct. They can't foreclose on the deed; you don't have one yet, we assume. They can't foreclose on the deed of trust (CA term) because that is still in the making and I bet has not been finalized. Foreclosing holds up the sale of that particular unit, and they have a goal of selling as many as possible as fast as possible. Also dealing with unmarried couples in community property states (both Nevada and CA) causes more inconvenience. In addition, bad publicity does not do much for their reputation. Good luck.

 

[UWSurfer]

Some twenty or so years ago, my wife and I did a very similar thing at a resort at Lake Havasu, Arizona.

After doing the free weekend, we got talked into buying and put down a $250 deposit. After we got back home, good sense returned to us and we opted not to continue. I don't recall ever formally recinding. In fact I'm not sure we did anything more than answer a similar phone call sometime down the road and replied we wouldn't be going forward...and that was it.

I suspect the $250 covered the cost of the weekend & then some (1987-ish) and was a write off for them. Since no deed was issued or closing occurred they essentially took the money and run. It never showed up on our credit reports, but I was concerned it might for a couple of years.

Now that we're older and smarter we wouldn't approach it that way again. We were lucky, certainly young(er) and dumb(er).

fyi...

 

[dougp26364]

Hi DougP,

Wouldn't signing a sales contract that accepts a partial downpayment with a future date to pay the remainder of the downpayment, and then not rescinding, be considered "substantial partial performance" in the courts?

John

Perhaps but, we can't see the contract from here. I'm very surprised that a developer would accept a partial payment of the down payment. That's sort of a desperation move IMO and indicates that the buyer was a non-qualified tour to begin with. That resort would likely need to have some sort of modified contract allowing for a partial deposit to make the deal binding. If there is no such clause allowing for a partial deposit and the full deposit was never made, there might not even be a qualified contract as all conditions for a contract for sale have been met. Thus, the need to have an attorny well versed in real estate law look over the contract. If the conditions for contract of sale have not been met the OP may be due the refund of their initial deposit for the down payment.

But, this is all just SPECULATION on my part. I am not an attorny and I am not giving legal advice. I'm only giving idea's to run by a lawyer and things the OP might consider rather then being frightned into paying the remaining deposit and then being forced into making payments on a purchase they can not afford.

This is really an all time low for a developer IMO. To take someone that is marginally or not even qualified at all and trying to get them into a purchase that they are reasonably certain they can not afford and then forcing them to cough up the money. Maybe even a letter the the state's AG concerned about this practice might be in order for the OP. It might not be illegal but then again the state where this took place might want to take a look at this practice......or it could be a big no-no for any real estate licensed person to do.

The OP needs to read through their aggreement and see exactly what they've agreed to do. Since they have signed a contract, paid a small amount of money and then taken no action hoping it will all just go away I really think they should consult a real estate lawyer. Yes it might now cost them a few hundred dollars to get a legal opinion and have a law office draft a letter getting them completely out of this mess but, maybe next time they won't sign a contract and then ignore it pretending it didn't happen and hoping it will just go away on it's own. When you sign something saying you'll pay someone money, it's best to understand what you're signing before you do it and put money down. It may just follow you around for another 8 to 10 years and cost you thousands of dollars in higher interest rates because it sticks with you on your credit report. I'm certain we've all made mistakes similar to this. Hopefully we've all learned the lessons and moved on.

 

[Jim McLaren]

It sounds like this is the same thing that happened to me last year. When I signed a contract to buy with Coral Resorts, they asked for two checks from me. The first one which would be cashed that day covered closing costs. The other one, which they allowed me to post date two weeks was to pay for the TS itself. This check was enough for a down payment on a finance contract. This was in order for me to arrange my own financing. Fortunately I read my contract more closely and rescinded.

 

[johnmfaeth]

Hi DougP,

I agree with your entire post 100%. In any aspect of a legal situation, nothing you will ever get on the internet, including here, even comes remotely close to the benefit of sitting down with a local attorney who is competant in that aspect of the law.

That is wise advise.

John

 

[JLB]

And, even after sitting down with a competent, or incompetent attorney, the law is whatever he and the other competent or incompetent attorney decide.

And, in a trial/hearing, the law is whatever the judge decides, or has predetermined.

The Internet cannot tell you those things.

The OP should call/write/email the seller and ask them what's up, in order to find out what's up.

Just guessing from the incomplete post, it sounds as if they are trying to get the sale put together, not trying to foreclose a previous purchase. OP needs to find out if there ever was sale, with documents being recorded.

 

[Mel]

It sounds to me like they have it in their books as a sale, but they may not have recorded it yet. I would say you probably have a contract, but maybe not a closed sale (that' just a guess, you would need to contact them to find out for sure). How long has it been since he attended the presentation, and what were the terms of the contract he signed? Also, did you sign the contract too, or just him?

A forclosure would be when they "reposses" title to a piece of property, so that sounds like they may indeed have recorded a deed. But even if they have not, if he signed an agreement to make payments, they can hurt his credit. If you also signed, it will hurt your credit too.

If you read the contract through, you might be able to determine what they will do. They may have used the word "forclose" to scare you, but they might not have. If you only put $300 down, I don't picture them going forward with the process of recording a deed, so there may not be anything to forclose on. Give them a call (or have him do it, since he signed to contract), and find out where things stand.

 

[Harry]

Absolutely Correct

...And, in a trial/hearing, the law is whatever the judge decides, or has predetermined...(QUOTE]

Great advice.

 

[dougp26364]

It sounds to me like they have it in their books as a sale, but they may not have recorded it yet. I would say you probably have a contract, but maybe not a closed sale (that' just a guess, you would need to contact them to find out for sure). How long has it been since he attended the presentation, and what were the terms of the contract he signed? Also, did you sign the contract too, or just him?

A forclosure would be when they "reposses" title to a piece of property, so that sounds like they may indeed have recorded a deed. But even if they have not, if he signed an agreement to make payments, they can hurt his credit. If you also signed, it will hurt your credit too.

If you read the contract through, you might be able to determine what they will do. They may have used the word "forclose" to scare you, but they might not have. If you only put $300 down, I don't picture them going forward with the process of recording a deed, so there may not be anything to forclose on. Give them a call (or have him do it, since he signed to contract), and find out where things stand.

Keep in mind that someone trying to collect money is not always above lying. Saying things like forclose when there has not in fact been a valid contract executed. Especially if there's a hungry TS salesman that NEEDS that comission and has to get them to pay the remainder of the deposit before the contract is valid and he/she gets paid. Slipping up and saying forclosure rather than cancel could just be another scare tactic.

Or maybe not. That's why it's important the the OP take what they have to an attorney to find out exactly what their rights are. It would have been much easier to rescind the contract within the alloted time but they choose to ignore it, take the $300 loss and hope it would go away. Not necessarly the best move as it turns out.