Nonjudicial foreclosure of time-share estates and licenses

What it does

Summary by the Legislative Reference Bureau, the Legislature's nonpartisan drafting office. It's their wording, not ours.

Nonjudicial (or administrative) foreclosure of time shares Under current law, a time-share estate is defined as a right to occupy a real property unit during at least four separated periods over at least four years, together with a property interest in the real property unit. A time-share license is defined as a right to occupy a unit, or any of several units, under a license or lease agreement during at least four separated periods over at least four years, without a property interest in the real property unit. A person's interest in a time-share estate may be foreclosed in a court proceeding (judicial foreclosure) in the same manner as an interest in real property is foreclosed if the person defaults in payments to a creditor that has a security interest in the time-share estate, or if the person does not pay assessments that were imposed for time-share expenses and that have become a lien. Current law specifies that a lien for assessments against a time-share license may be foreclosed as provided under the Uniform Commercial Code (UCC). This bill sets out nonjudicial (administrative) procedures for foreclosing security interests in, and assessment liens against, time-share estates and time-share licenses. The bill provides that a person seeking to foreclose an owner's interest in a time-share estate or a time-share license (foreclosing entity) must use the administrative procedure, except that the owner of a time-share estate may object to the use of the administrative procedure, in which case the foreclosing entity must use the judicial foreclosure procedure. In addition, the bill provides that a foreclosing entity that uses the administrative procedure to foreclose an owner's interest in either a time-share estate or time-share license waives the right to a deficiency if the proceeds of the sale in the administrative procedure do not cover what is owed to the foreclosing entity.

Procedure for time-share estates To foreclose an owner's interest in a time-share estate, the foreclosing entity must first send notice to the owner, informing the owner of the default, of the amount of the default, and that he or she may, within 30 days, cure the default or object to the use of the administrative procedure. If the owner does not timely cure the default or object to the use of the administrative procedure, he or she has waived the right to a judicial foreclosure, and the foreclosing entity may proceed with the administrative foreclosure, which includes sale by public auction. The foreclosing entity must publish notice of the foreclosure sale in a newspaper having general circulation in the county in which the time-share estate is located. The notice must be published once in each of three successive weeks, and the first publication must be at least 30 days before the date of the sale. In lieu of publishing the full notice three times in a newspaper, the foreclosing entity may post the full notice on an Internet site for three successive weeks and publish the Internet site in a newspaper once in each of three successive weeks. In addition to publishing notice of the sale, the foreclosing entity must mail written notice of the date, time, and place of the sale to the time-share estate owner and all persons having a lien of record on the time-share estate.

Who's behind it

4 senators are its authors⁠. 3 are Republicans and 1 is a Democrat.

6 more lawmakers signed on in support⁠.

Versions and amendments

Every text the Legislature printed for this bill, including proposed changes. Each opens on the Legislature's site.

• Amendment SSA1-SB241
• LC Amendment Memo