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3713Ratification Number: 480Act Number: 434Introducing Body: HouseSubject: Provide for the regulation of the sale of "vacation multiple ownership interests"
(A434, R480, H3713)
AN ACT TO AMEND CHAPTER 32 OF TITLE 27, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO VACATION TIME SHARING PLANS BY ADDING SECTION 27-32-250 SO AS TO PROVIDE FOR THE REGULATION OF THE SALE OF "VACATION MULTIPLE OWNERSHIP INTERESTS".
Be it enacted by the General Assembly of the State of South Carolina:
Vacation multiple ownership interests
SECTION 1. Chapter 32, Title 27 of the 1976 Code is amended by adding:
"Section 27-32-250. (1) Trusts, partnership interests, undivided interests as tenants in common, corporate shares, or any other membership or use interests in a dwelling unit, wherein thirteen or fewer undivided interests, corporation shares, partnership interests, trust interests, or other membership or use interests are conveyed, referred to in this section as a 'vacation multiple ownership interest', are not considered a 'vacation time sharing plan' or a 'time sharing unit' for purposes of this chapter; provided, that no debts, encumbrances or liens, except for purchaser financing, may exist on the dwelling unit at the time fee simple title is conveyed to the tenants in common, corporation, trust, partnership, or any other purchasing organization and provided, further, that insofar as the contract of sale and sale of a vacation multiple ownership is concerned, the transaction must be handled by a real estate salesman duly licensed under the provisions of Chapter 57 of Title 40 rather than under Section 27-32-180. It is a violation of this chapter for any seller of a vacation multiple ownership interest to sell, lease, encumber, or convey in any manner or to solicit or advertise such transactions unless the seller is in compliance with the provisions of Sections 27-32-20, 27-32-30, 27-32-40, 27-32-50, 27-32-60, 27-32-70, 27-32-80, 27-32-100, 27-32-110, 27-32-120, 27-32-140, 27-32-150 and 27-32-190. Where the words 'time sharing' are used in these sections they also mean 'multiple ownership' for the purposes of this section.
(2) The sale of a vacation multiple ownership interest is exempt from sales tax in the manner provided by Section 27-32-170.
(3) Any owner selling vacation multiple ownership interests in not more than one dwelling unit a year is not subject to the provisions of this section. An individual or any corporation, trust, business or partnership in which the individual is an owner, partner, stockholder, trustee, beneficiary, or affiliate is considered the owner of the dwelling unit for purposes of this section.
(4) All funds received from purchasers of vacation multiple ownership interests must be placed in an escrow account with an insured institution and not disbursed until a sufficient number of vacation multiple ownership interests are sold to satisfy all outstanding debts, liens, and encumbrances on the dwelling unit, except for purchaser financing, and all furniture and furnishings in the dwelling unit, or until the posting with the Real Estate Commission of a bond, letter of credit, or other equivalent security satisfactory to the Commissioner, to insure payment of all outstanding debts, liens, and encumbrances on the dwelling unit and all furniture and furnishings in the dwelling unit.
(a) The definitions contained in Section 27-32-10, subsections 1, 2, 3, 4, 5, 6, 7 (except subsections 7(a) and 7(b), 12, 16, 17, and 22 are applicable to this section.
(b) 'Dwelling unit' means the actual accommodations and/or related facilities which are the subject of the vacation multiple ownership interest.
(c) 'Purchaser' means anyone who receives an undivided interest in a dwelling unit, a partner in a partnership that owns a dwelling unit, a shareholder in a corporation that owns a dwelling unit, a beneficiary in a trust that owns a dwelling unit, a holder of a leasehold interest in a dwelling unit, or any member of any other organization which owns a dwelling unit."
SECTION 2. This act shall take effect upon approval of the Governor.