How Cities Regulate Timeshares When States Don’t
Most cities normally follow state laws when it comes to issues like property, zoning, and consumer protections. In other words, if the state has a rule, the city enforces it. But what happens when the state removes a law—or never creates one in the first place? That’s when local governments may feel the need to fill the gap by writing their own rules. The catch is that they can only do this if state law doesn’t specifically block them from stepping in.
That’s exactly what happened in Illinois with timeshares. For years, the Real Estate Timeshare Act of 1999 laid out the rules for how timeshare plans were created, sold, and managed. But in 2018, that entire law was repealed and taken off the books. This left a huge question mark: What protections were left for consumers and how would timeshares be regulated moving forward? To answer some of these questions, Illinois later passed a different law, the Timeshare Lien and Security Interest Act, which mainly focused on financial protections such as liens, security interests, and other paperwork tied to timeshare ownership.
Why Only Illinois Can Govern Timeshares
Here’s where it gets tricky for consumers. Even though part of the state law disappeared and was replaced by something narrower, Illinois still says that only the state can regulate timeshare plans. This is written clearly in section 765 ILCS 101/1-25. That means cities—even those with broad “home rule” powers—cannot create their own rules about timeshare contracts, exchange programs, or ownership structures. So while Illinois state lawmakers left certain holes in the system, they also made sure that local governments couldn’t directly patch those holes with their own timeshare regulations.
When State Silence Doesn’t Mean Local Control
Just because the state steps back doesn’t mean cities automatically get the green light to take over. In Illinois, even after parts of the state’s timeshare law were repealed, local governments were still blocked from writing their own direct rules on how timeshares are sold or managed. This left municipalities in a tough spot: the state law didn’t explain everything clearly, but cities weren’t legally allowed to fill in the blanks either.
That doesn’t mean local leaders have zero power. Cities can sometimes work around these limits by leaning on zoning codes or other general land-use tools. Instead of writing “timeshare laws,” they can change how property is defined, where certain uses are allowed, or whether special approval is needed in certain neighborhoods. These tools give cities a way to protect residents without directly stepping into the state’s territory.
Highland Park’s Workaround: Closing a Timeshare Loophole
Highland Park ran into this very problem. Its zoning code didn’t spell out what counted as a timeshare, and that gap opened the door for arguments that residential homes could be turned into timeshares. With no clear language to stop it, some saw this as a loophole.
On September 8, 2025, the City Council acted. Rather than try to pass its own timeshare law—which it couldn’t legally do—it rewrote its zoning code to make the rules clear. The changes:
- Defined “timeshares” as homes where multiple owners share rights to use the property for short periods of time under an agreement.
- Banned timeshares in single-family residential areas and stopped short-term rentals from being used for timeshare purposes.
- Restricted timeshares to certain commercial or industrial zones (such as highway-commercial or light industry), and only then as a conditional use requiring city approval.
By approaching the issue through zoning, Highland Park stayed within its legal limits but still managed to close the loophole. This move not only protected the character of residential neighborhoods but also set clearer expectations for developers and property owners about where timeshares can—and cannot—fit into the community.
Key Takeaways: When Cities Step In, How They Do It
|
Scenario |
Municipal Action Possible? |
Example |
|---|---|---|
|
State law has been repealed, leaving a void |
Limited—cannot regulate directly if preempted |
Highland Park could not pass a “timeshare law,” but could use zoning definitions |
|
State explicitly restricts local timeshare regulation |
No direct regulation allowed |
765 ILCS 101/1-25 prohibits municipal timeshare regulation |
|
Local law is silent or undefined regarding timeshare use |
Zoning definitions or conditional use rules allowed |
Highland Park defined and restricted timeshare use via zoning code |
|
State allows localities to establish zoning restrictions generally |
Yes, via sophisticated zoning structuring |
Highland Park’s conditional use zones for non-residential timeshares |
What This Means for Timeshare Owners
For people who own timeshares, these kinds of changes can have a real impact. When state laws are rolled back and cities step in with zoning updates, it can change how—and even if—your timeshare can be used. Some of the most common effects include:
- Fewer options for resale or rentals. If cities decide timeshares don’t belong in or around residential neighborhoods, it can shut down future opportunities to rent or resell your interest.
- Potential drop in value. When the allowed uses of a property are limited, demand often goes down too. That can leave owners holding a timeshare that’s harder to market or worth less.
- Confusing patchwork of rules. Every city may handle things differently, leaving owners struggling to understand what applies where.
For owners, the bottom line can be uncertainty. A simple zoning change at the city level can ripple out into big questions about your rights, your ability to use or rent your timeshare, and even the overall value of what you own.
Final Thoughts
Cities sometimes have no choice but to act when the state doesn’t. But when states limit what local governments can do—as in Illinois—municipalities are forced to get creative. Zoning rules, property definitions, and conditional-use permits become their only tools.
Highland Park is a clear example. The city didn’t create a brand-new timeshare law—it couldn’t. Instead, it closed a loophole through its zoning code, protecting neighborhoods while staying within the limits set by state law.
Disclosure: This article is intended for informational purposes only and should not be considered legal advice. Images included are used for illustrative and artistic purposes only and do not depict actual individuals, events, or specific locations.
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At Finn Law Group, we focus on helping timeshare owners navigate exactly these kinds of complicated situations. State laws, city zoning rules, and industry practices often overlap in ways that leave consumers confused or stuck. Our role is to protect your rights, explain what the changes really mean for you, and help bring clarity to a system that can feel stacked against timeshare owners.
Led by timeshare attorneys J. Andrew Meyer and Michael D. Finn with over 75 years of combined legal experience. The Finn Law Group is a national consumer protection firm that specializes in Timeshare Law. If you feel you need the services of a timeshare attorney, contact our law firm today at 855-FINN-LAW. Want to learn more on timeshare related issues? Follow us on X formally Twitter.
