Bill
HB 992
Expands timeshare delinquency remedies with a new nonjudicial trustee foreclosure option, allows liens, denial of use, and rental proceeds to recover unpaid assessments.
Status and timeline
- Introduced in the North Carolina General Assembly in 2025.
- Passed both chambers through multiple committee substitutes and amendments.
- Ratified by the General Assembly (June 30, 2025); enrolled and presented to the Governor (July 1, 2025).
- Signed into law by the Governor on July 9, 2025 (Session Law 2025‑75).
Purpose / intent
- Establish a clear statutory framework that (1) expands and clarifies the remedies available to timeshare managing entities to collect delinquent assessments, including creating a nonjudicial “timeshare trustee foreclosure” option, and (2) revises the State’s process for establishing paternity of children born out of wedlock (the paternity changes are referenced in the bill title and text but are not fully shown in the provided excerpts).
Key provisions — timeshare assessments and foreclosure
- Interest, fees, and collection costs: Delinquent assessments may accrue interest (up to the highest lawful rate or a lower rate set by the managing entity). Reasonable late fees and collection costs (including collection agency fees and reasonable attorney’s fees) are chargeable to the delinquent owner and are secured by a lien on the timeshare.
- Denial of use: After at least 30 days past due, the managing entity may give written notice to the owner and thereafter deny the owner (and persons claiming use through the owner) access to the timeshare or to make/cancel reservations until the delinquency is cured or reasonably disproved.
- If an affiliated exchange company is notified, an incoming user with a confirmed assignment received within 48 hours of the exchange company’s receipt of the notice may still use the assigned rights.
- Renting by the managing entity: If delinquency persists, the managing entity may give a further notice (no earlier than 30 days after the assessment due date) that it may rent the delinquent owner’s use rights. Net rental proceeds (after customary charges/commissions) are applied to the owner’s delinquency; the owner remains liable for any shortfall. Rental efforts may not start earlier than 10 days after the notice of intent to rent.
- Lien mechanics and priority:
- The managing entity has a lien on a timeshare for assessments from the date the assessment becomes due; the lien also covers costs of damage caused by the owner/guest/lessee.
- The lien generally relates back to the recording of the original timeshare declaration (or the applicable amendment); however, as to first mortgages of record, priority and effectiveness may be tied to filing of the claim of lien in the county clerk’s office.
- A claim of lien must identify the timeshare program, the specific timeshare, owner, amount due, and due dates.
- Foreclosure options:
- The managing entity (or lien holder) may pursue a judicial foreclosure action (in rem/mortgage-style foreclosure) or may initiate a nonjudicial timeshare trustee foreclosure proceeding under the new statutory trustee-foreclosure process created by the bill (see G.S. 93A‑62.1 as enacted). Using the nonjudicial trustee procedure does not waive the right to pursue a money judgment.
- Miscellaneous: The bill reiterates that collection costs and fees may be assessed against the delinquent owner and collected as common expenses where authorized.
Who is affected
- Timeshare owners who fall behind on assessments (subject to denial of use, rental of use rights, lien, and foreclosure).
- Managing entities (associations, timeshare program managers) — gain additional statutory remedies, including a trustee foreclosure option.
- Mortgagees, purchasers, exchange companies, guests, lessees, and potential buyers — affected by lien priority rules, reservation denials, and rental/foreclosure procedures.
- Courts and clerks — required to process claims of lien and any related judicial foreclosures; administrative impacts from new trustee-foreclosure filings.
Paternity provisions
- The bill’s title and multiple versions state it also “changes the process for establishing paternity of children born out of wedlock.” The specific statutory text amending paternity procedures is not included in the excerpts provided here. Readers seeking details on those changes should consult the enacted Session Law (SL 2025‑75) or the published amendments to the relevant chapters of North Carolina law.
Practical considerations / next steps
- Timeshare managing entities should review and, if necessary, update their collection and notice procedures, declaration documents, and contracts to align with the new statutory foreclosure option and notice requirements.
- Owners should review their rights and the new timelines for notices, rental, and foreclosure.
- Legal counsel is recommended for parties facing foreclosure or complex priority issues (mortgage vs. assessment lien).
- For the exact paternity changes and the effective date(s) of all provisions, consult the final Session Law (2025‑75) and the codified North Carolina General Statutes after enactment.
Compiled from official sources — confirm details with the bill’s official record.
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