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COMMITTEE AMENDMENT ADOPTED
April 24, 2003
S. Printed 4/24/03--S.
Read the first time March 26, 2003.
TO AMEND ARTICLE 1 OF CHAPTER 32, TITLE 27, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO VACATION TIME SHARING PLANS, SO AS TO REVISE, DELETE, AND ADD CERTAIN DEFINITIONS, REVISE PROVISIONS RELATING TO ADVERTISING AND CONVEYANCE OF VACATION TIME SHARING PLANS SO AS TO DELETE CERTAIN LICENSE REQUIREMENTS FOR SELLERS AND TO EXEMPT CERTAIN COMMUNICATIONS FROM ADVERTISEMENT AND PROMOTION RESTRICTIONS, REVISE THE TERMS OF THE NOTICE OF THE RIGHT TO CANCELLATION REQUIREMENTS IN CONTRACTS FOR THE PURCHASE OF VACATION TIME SHARING PLANS AND PROVIDE FOR THE EFFECTIVE DATE OF NOTICE OF CANCELLATION, ESTABLISH NEW PROCEDURES FOR THE DISTRIBUTION OF REFUNDS UPON CANCELLATION OF CONTRACTS AND ESTABLISHMENT AND MAINTENANCE OF ESCROW ACCOUNTS IN THAT CONNECTION, PROVIDE FOR MATTERS TO BE DISCLOSED IN CONTRACTS INCLUDING WARNINGS AGAINST RELIANCE ON THE PURCHASE AS AN INVESTMENT, DELETE THE REQUIREMENT OF AN EXAMINATION FOR REGISTRATION RELATING TO LICENSES FOR SELLERS OF VACATION TIME SHARING PLANS, EXEMPT EMPLOYEES OF THE SELLER FROM LICENSING REQUIREMENTS, PROVIDE FOR VICARIOUS LIABILITY OF THE CONTROLLING SELLER, TIGHTEN PROVISIONS RELATING TO POWERS OF THE SOUTH CAROLINA REAL ESTATE COMMISSION IN CONNECTION WITH THE INVESTIGATION OF AN APPLICATION FOR REGISTRATION OF A TIME SHARING PLAN INCLUDING ASSURANCES AND BONDING AGAINST ENCUMBRANCES, AND MAKE TECHNICAL CHANGES TO CONFORM THE ARTICLE; AND TO AMEND SECTION 27-50-30, RELATING TO EXEMPTIONS IN CONNECTION WITH THE RESIDENTIAL PROPERTY CONDITION DISCLOSURE ACT, SO AS TO EXEMPT FROM THE ACT A TRANSFER OF A VACATION TIME SHARING PLAN OR A VACATION MULTIPLE OWNERSHIP INTEREST.
Amend Title To Conform
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Article 1, Chapter 32, Title 27 of the 1976 Code, as last amended by Act 262 of 2000, is further amended to read:
Section 27-32-10. For purposes of this chapter:
(1) 'Accommodations' means any hotel or motel room, condominium or cooperative unit, cabin, lodge, apartment, or
any other private or commercial structure designed for occupancy by one or more individuals or any a recreational vehicle campsite or campground.
'Business entity 'Person' means individuals, corporations, firms, associations, joint venturers, partnerships, trusts, estates, business trusts, syndicates, fiduciaries, any individual corporation firm, association, joint venture, partnership, trust estate, business trust, syndicate, fiduciary, and all any other groups group or combinations combination which engage in acts or practices in any trade or commerce.
(3) 'Contract' means any contract, promissory note, credit agreement, negotiable instrument, lease, use agreement, license, security, or other muniment conferring on the purchaser the rights, benefits, and obligations of a vacation time sharing plan.
(4) 'Commission' means the South Carolina Real Estate Commission.
(5) 'Facilities' means
any a structure, service, or property, whether improved or unimproved, made available to the purchaser for recreational, social, family, or personal use.
(6) 'Seller' means
any business entity including, but not limited to, agents, dealers, distributors, franchisers, subsidiaries, assignees, resellers, brokers, or any other representatives of them who, for a fee, commission or other valuable consideration, negotiates or attempts to negotiate the listing, sale, auction, purchase, exchange, or lease of any real estate or the improvements on it or collects rents or attempts to collect rents, or who advertises or holds himself out as engaged in any of the foregoing activities. Provided, however, that the provisions of this chapter are not applicable to:
(a) the sale of real estate by anyone who is the owner of it or who owns any interest in it, or to the attorney at law of such owner acting within the scope of his duties. Ownership of stock in a corporation is not ownership of an interest in real estate owned by the corporation and does not exempt such stockholder from the provisions of this chapter, unless the stockholder owns or controls at least ten percent of the stock of the corporation.
(b) agencies and instrumentalities of the state or federal government nor to employees of any lender or public officials making appraisals for federal, state or local units of government, nor to anyone making appraisals through such employees for lending or governmental purposes. a person who creates a vacation time sharing plan or is in the business of selling interests in a vacation time share plan, or employs agents to do the same, or a person who succeeds to the interest of a seller by sale, lease, assignment, mortgage, or other transfer; except that, the term includes only a person who offers interests in vacation time sharing plans in the State of South Carolina in the ordinary course of business. The term 'seller' does not include the following:
(a) an owner of a time sharing interest who has acquired the time sharing interest for his own use and occupancy and who later offers it for resale on his own behalf or through a real estate broker;
(b) a managing entity or owners' association of a time sharing plan, not otherwise a seller, that offers on the association's behalf time sharing interests in the time sharing plan transferred to the association through foreclosure, deed in lieu of foreclosure, or gratuitous transfer; or
(c) a person who owns or is conveyed, assigned, or transferred time sharing interests, and who subsequently conveys, assigns, or transfers all acquired time sharing interests to a single purchaser in a single transaction, which transaction may occur in stages.
(7) 'Vacation time sharing ownership plan' means any arrangement, plan, or similar devise, whether by tenancy in common, sale, term for years, deed, or other means,
whereby in which the purchaser receives an ownership interest in real property and the right to use accommodations or facilities, or both, for a period or periods of time during any a given year, but not necessarily for consecutive years, which extends for a period of more than one year. A vacation time sharing ownership plan may be created in a condominium established on a term for years or leasehold interest having an original duration of thirty years or longer. An interest in a vacation time sharing ownership plan is recognized as an interest in real property for all purposes under pursuant to the laws of this State.
(8) 'Vacation time sharing lease plan' means any arrangement, plan, or similar devise, whether by membership agreement, lease, rental agreement, license, use agreement, security, or other means,
whereby in which the purchaser receives a right to use accommodations or facilities, or both, but does not receive an ownership interest in real property, for a period or periods of time during any a given year, but not necessarily for consecutive years, which extends for a period of more than one year three years. Such These lease plans do not include an arrangement or agreement whereby in which a purchaser in exchange for an advance fee and yearly dues is entitled to select from a designated list of facilities located in more than one state, accommodations , of companies which that operate nationwide in at least nine states in the United States through franchises or ownership, for a specified time period and at reduced rates and under which no an interest in real property is not transferred.
(9) 'Vacation time sharing plan' means either a vacation time sharing ownership plan or a vacation time sharing lease plan
as defined herein.
(10) 'Time sharing unit' means the actual accommodations and related facilities which are the subject of the vacation time sharing ownership plan or lease plan.
(11)(10) 'Substantially complete' means all structural components and mechanical systems of all buildings containing or comprising any time sharing unit, facilities , or accommodations are finished in accordance with the plans or specifications of the project vacation time sharing plan, as evidenced by a recorded certificate of completion executed by an independent registered surveyor, architect, or engineer.
(12)(11) 'Unit week' means a number of consecutive days, normally seven consecutive days in duration, which may reasonably be assigned to purchasers of vacation time sharing plans by the seller.
(13) 'Receivable' means any note, contract, promise, or any other agreement to pay a fixed or determinable amount of money which, for the purposes of this chapter, shall not be in arrears for more than ninety days.
(14) 'Face value' means the principal amount of money represented by any receivable as defined in item (13), together with the amount of all interest to be collected on it.
(15)(12) 'Escrow agent' shall mean means a bank or trust company doing business in this State or a bonded trust agent bonded in at least the amount of the trust; provided, however except, that nothing contained in this chapter shall operate to prevent prevents investment of funds escrowed pursuant to this chapter by the bank, trust company, or bonded agent, and to pay with payment of all interest and dividends to the seller of vacation time sharing plans.
(16)(13) 'Escrow account' means any funds held or maintained by an escrow agent.
(17) 'Vacation time sharing sales license' means a license issued by the commission authorizing individuals to act as sellers of vacation time sharing plans.
(18)(14) 'Fund' and 'recovery fund' means the South Carolina Vacation Time Sharing Recovery Fund.
(19)(15) 'Claim' means a monetary loss sustained or allegedly sustained by a person due to the wrongdoing of a registrant or licensee.
(20) 'Licensee' means a person having a Vacation Time Sharing sales license.
(21)(16) 'Real estate broker's trust account' means a demand account in a bank or savings institution in this State held by a duly licensed South Carolina real estate broker.
Section 27-32-20. It is a violation of this chapter for
any a seller of vacation time sharing plans to:
(1) sell, lease, encumber, or convey in any manner or to solicit or advertise
such those transactions unless the seller has been duly licensed under the provisions of Section 27-32-180 or Chapter 57 of Title 40 hereunder and unless the vacation time sharing plan and the units of it affected have has first been registered with the commission. Provided, however, that the registration requirement of this chapter shall not apply to nor restrict the listing and resale of any vacation time sharing plan when:
(a) the vacation time sharing plan resold is within an existing time sharing facility currently registered with the commission pursuant to the requirements of this chapter;
(b) the vacation time sharing plan resold is subject to the identical rules, regulations, conditions, or limitations on the use of the accommodations or facilities which affect all other vacation time sharing plans within that time sharing facility.
(2) Fail to make available upon request to the commission the following materials and
any amendments or changes in it to them made while sales continue:
(a) a copy of the contract by which the rights and obligations of the parties are established
(b) copies of promotional brochures, pamphlets, advertisements, or other material disseminated to the public in connection with the sale of the vacation time sharing plan and verbatim scripts of all radio and television advertising in connection with it
(c) a statement of the type
and business of entity through which the business of selling of vacation time sharing plans is to be carried out, including a list of the names and addresses of all directors, principal officers, dealers, distributors, and sales personnel soliciting in or from the State of South Carolina, and the name and address of the business seller's agent for service of process within the State .;
(d) copies of all contracts between the
business entity person offering the vacation time sharing plan for sale to the public and each business providing accommodations and facilities to purchasers of the plan .;
(e) copies of all rules, regulations, conditions, or limitations on use of the accommodations or facilities available pursuant to the vacation time sharing plan
(f) a statement as to the existence of all liens on the accommodation or facilities which could affect the rights of the purchaser or his assignee, together with the location, date, and filing book and page number where such liens are recorded.
(g)(f) a synopsis of any sales presentation made by the seller to the purchaser over the telephone or other electronic device .;
(h)(g) a projected budget of all reoccurring recurring expenses which may become the responsibility of all time sharing purchasers.
(3) Upon receipt of all
items materials required by this section item (2), the commission shall determine the their sufficiency of it and upon satisfactory compliance with this chapter ,. The commission then shall issue its order approving their use ., and The the vacation time sharing plan shall is then considered to be deemed registered.
(3)(4) The following communications are exempt from the provisions of this chapter:
(a) stockholder communication including an annual report or interim financial report, proxy material, or other material required to be delivered to a purchaser by an agency of a state or the federal government;
(b) oral or written statement disseminated by a seller to broadcast or print media, other than paid advertising or promotional material, regarding plans for the acquisition or development of vacation time sharing property. A rebroadcast or other dissemination of these oral statements to a prospective purchaser by a seller in any manner or a distribution of copies of print media to a prospective purchaser by a seller in any manner is considered an advertisement;
(c) advertisement or promotion in any medium to the general public if the advertisement or promotion clearly states that it is not an offer in a jurisdiction in which applicable registration requirements are not fully satisfied;
(d) billboard or other sign that is affixed to real or personal property, that is not disseminated by other than visual means to a prospective purchaser, and that does not suggest or invite action on the part of the prospective purchaser; and
(e) communication addressed to and relating to the account of any person who has executed previously a contract for the purchase of a time sharing interest in a time sharing plan relating to the communication.
Section 27-32-30. It
shall be is a violation of this chapter for any business entity a person offering vacation time sharing plans for sale to the public to fail to keep among its business records the following a:
A copy of each item required to be submitted to the commission under pursuant to Section 27-32-20 .;
A copy of the contract from each sale of the vacation time sharing plan, which contract shall must be retained for a period of at least three years after parties to the vacation time sharing plan have completely performed all of their obligations thereunder under it .; and
A list of all employees, including and their last known mailing addresses, which list shall must include all current employees and all previous employees whose employment has been was terminated within the preceding three years.
Section 27-32-40. (A) It
shall be is a violation of this chapter for the seller of a vacation time-sharing time sharing plan to fail to utilize and furnish the buyer purchaser with a fully completed copy of a contract pertaining to such the sale at the time of its execution which shall include:. The contract must include the:
the actual date the contract is executed by all parties;
the name and address of the seller;
(3) total financial obligation of the purchaser, including the initial purchase price and additional charges to which the purchaser may be subject;
(4) specific term of the contract; and
(3)(5) following statement in immediate proximity to the space reserved in the contract for the signature of the buyer purchaser and in bold type on a separate page which must be signed by the buyer as an acknowledgment:
'YOU MAY CANCEL THIS CONTRACT WITHOUT PENALTY OR OBLIGATION WITHIN
FOUR FIVE DAYS AFTER THE DATE YOU SIGN THIS CONTRACT, NOT INCLUDING SUNDAY IF THAT IS THE FOURTH FIFTH DAY, FROM THE ABOVE DATE. YOU MAY ALSO CANCEL THIS CONTRACT AT ANY TIME IN CASE THE ACCOMMODATIONS OR FACILITIES ARE NO LONGER AVAILABLE AS PROVIDED IN THE CONTRACT OR THE DATE YOU RECEIVE THE DISCLOSURE STATEMENT PURSUANT TO SECTION 27-32-105, WHICHEVER OCCURS LATER. IF YOU DECIDE TO CANCEL, YOU MUST NOTIFY THE SELLER IN WRITING OF YOUR INTENT TO CANCEL BY SENDING NOTICE TO (NAME OF SELLER) BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, OR BY ANOTHER VERIFIABLE MEANS, TO (NAME OF SELLER) AT (SELLER'S ADDRESS).'
(b) in the case of a vacation time-sharing ownership plan the following statement:
'YOU MAY CANCEL THIS CONTRACT WITHOUT PENALTY OR OBLIGATION WITHIN FOUR DAYS, NOT INCLUDING SUNDAY IF THAT IS THE FOURTH DAY, FROM THE ABOVE DATE, BY NOTIFYING THE SELLER IN WRITING OF YOUR INTENT TO CANCEL, SENDING HIM NOTICE THEREOF BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED. THIS RIGHT TO CANCEL SHALL NOT SURVIVE THE ACTUAL TRANSFER OF TITLE BY DEED WHERE THERE HAS BEEN AT LEAST THREE DAYS BETWEEN THE SIGNING OF THE CONTRACT AND TRANSFER BY DEED.'
It shall be a violation of this chapter for the seller of a vacation time-sharing ownership plan to fail to furnish the buyer with an inventory of all furniture, fixtures, and appliances which will be located in the accommodation during the time period purchased under a vacation time-sharing lease plan or at closing. Notice of cancellation pursuant to this section is considered given on the date postmarked if mailed, or when transmitted from the place of origin if telegraphed, so long as the notice is actually received by the seller. If given by means of a writing transmitted other than by mail or telegraph, the notice is considered given at the time of delivery at the seller's address as identified on the contract.
Section 27-32-50. It
shall be is a violation of this chapter for the seller of vacation time sharing plans, or his assignees, to fail or refuse to honor a buyer's purchaser's request to cancel a contract as provided by Section 27-32-40 if such the request is made; provided, however, except that nothing contained in this section shall operate to does not deny the seller the option to repair, replace, or reconstruct within a reasonable time the accommodations or facilities if destroyed or damaged.
No An owner of an interest in a vacation timesharing unit time sharing plan as such term is defined in Section 27-32-10(10) may not be charged an up-front appraisal fee for the resale of his ownership interest but instead may only be charged only an up-front marketing fee or commission upon the resale of the unit interest in an amount stipulated by written agreement between the owner and his sales agent. Any A person violating the provisions of this section is deemed to have has committed an unfair trade practice under pursuant to Section 39-5-20 and is subject to all penalties and remedies provided by law for this violation.
Section 27-32-60. It
shall be is a violation of this chapter for a seller of vacation time sharing plans to:
Fail fail to refund any and all payments made by the buyer purchaser under pursuant to the contract and return any a negotiable instrument, other than a checks check, executed by the buyer purchaser in connection with the contract or services within twenty days after receipt of notice of cancellation made pursuant to Section 27-32-40, if the buyer purchaser has not received any benefits pursuant to the contract .;
If if the buyer purchaser has received any benefits pursuant to the contract, fail to refund within thirty days after receipt of notification of cancellation made pursuant to Sections 27-32-40 or 27-32-50 any and all payments made by the buyer purchaser to the seller which exceed a pro rata portion of the total price, taking into consideration the cost of and use of the time share facilities at an average rental rate per unit for all time share units, representing the proportion of any contract benefits actually received by the buyer purchaser during the time preceding cancellation .;
Fail fail to place in the a real estate broker's trust account, or another escrow arrangement approved by the commission, one hundred percent of the funds received from the purchasers of such the plans, where the seller of the time sharing plan transfers an interest therein to the purchaser, which trust account shall must provide that:
Its its purpose is to protect the buyer's purchaser's right to refund during the four-day five-day right to cancellation period as provided in Sections 27-32-40 or 27-32-50 .; and
Funds funds may be withdrawn by the seller upon transfer to the buyer and only after expiration of the four-day cancellation period as provided in Sections 27-32-40 or 27-32-50 pursuant to Section 27-32-90.
Section 27-32-70. It
shall be is a violation of this chapter for any a seller of vacation time sharing plans, or his assignees, to misrepresent in any manner the buyer's purchaser's right to cancel provided by this chapter.
Section 27-32-80. It
shall be is a violation of this chapter for any a seller of vacation time sharing plans to sell, lease, assign, or otherwise transfer or encumber the seller's interest in the vacation time sharing plan or the accommodations or facilities to a third party when such a the sale, lease, assignment, or other transfer substantially affects the rights of other owners the purchasers of the vacation time share units sharing plan, unless:
The the third party agrees in writing to fully honor fully the rights of purchasers of the vacation time sharing plan to occupy and use the accommodations or facilities .;
The the third party agrees in writing to fully honor fully the rights of purchasers of the vacation time sharing plan to cancel their contracts and receive an appropriate refund as provided in this chapter .;
The the third party agrees in writing to comply with the provisions of this chapter for as long as the third party continues to sell the vacation time sharing plan, or for as long as purchasers of the vacation time sharing plan are entitled to occupy the accommodations or use the facilities, whichever is longer in time . and
Written written notice is given sent to each purchaser of a vacation time sharing plan affected thereby by the transfer and notice shall be sent by certified mail within thirty days of the sale, lease, assignment, or other transfer.
It shall be a violation of this chapter for a seller of vacation time sharing lease plans to fail to:
(1) Deposit with an escrow agent fifty percent of the cash or receivables received from purchasers of such plans, less applicable local, state and federal sales taxes; provided, that in the event receivables are placed in escrow such receivables shall be set at face value and shall be equal to one hundred ten percent of the fifty percent required in this item.
(a) Its purpose is to protect the purchaser's right to a refund if at any time the accommodations and facilities are no longer available as provided in the contract; 'provided, however, nothing contained in this section shall operate to deny the seller the option to repair, replace or reconstruct, within a reasonable time, the accommodations or facilities, if destroyed or damaged'.
(b) The purchaser shall be entitled to a refund from the escrow account upon the conditions described above in an amount which represents the buyer's pro rata share of the monies therein.
(c) Funds may be withdrawn from the escrow account in the ratio of the amount of time available for use by the purchaser of the vacation time sharing lease plan in relation to the total time available in the plan.
(d) The escrow agent shall release or dispense funds from the escrow account to the seller of a vacation time sharing lease plan only upon receipt of a sworn statement from the seller that the accommodations and facilities have been available for use by the purchaser according to the terms of the purchaser's contract.
(e) When all outstanding liens, debts or encumbrances on the time sharing accommodations and facilities have been fully discharged, the escrow account may be discontinued.
(2) In lieu of the escrow account provided in item (1), a seller of vacation time sharing lease plans may alternatively:
(a) Assign to an escrow agent receivables, the income from which shall be adequate to pay in full and satisfy all liens and encumbrances secured by the time sharing facilities or accommodations.
(i) The escrow agent shall provide to the seller and lender a monthly statement of the account and the seller shall immediately pay to the escrow agent any amount necessary to assure payment of all liens or encumbrances referred to in this item.
(ii) When all liens and encumbrances on the time sharing facilities have been fully discharged, the escrow account may be discontinued.
(b) Sell, hypothecate or discount receivables, the proceeds from which shall be deposited with an escrow agent and administered in the manner prescribed by Section 27-32-90(2) (a) above.
(c) When any portion of the time sharing accommodations and facilities have been fully released from all liens or encumbrances, the escrow requirements of this item may be proportionately decreased.
(3) Provide the purchaser with liability and casualty insurance at the seller's expense for the accommodations and facilities to be used by the vacation time sharing lease plan purchaser in an amount equal to the replacement cost of such accommodations and facilities and to deposit with an escrow agent, annually, sufficient funds for the payment of all taxes and assessments levied against the accommodations and facilities. In the alternative, provide for the assessment against the purchaser by an association or duly appointed agent for the owners of such escrow funds for all costs including taxes, assessments, maintenance, repairs and management fees.
(4) Provide the purchaser with an instrument, in recordable form, which provides notice to all subsequent creditors of the seller of the existence of the vacation time sharing plan rights of the purchaser. Such instrument shall be provided to the purchaser by the seller at the time of signing of the contract. When recorded, such instrument shall serve to protect the purchaser's interest in the seller's accommodations from any claims by subsequent creditors of the seller.
(5) Provide a document which explains the content, purpose and protection afforded to the purchaser by the documents described in item (4) along with the procedure necessary to follow in order to secure to the purchaser the rights and protections which such documents provide.
(A) A seller of a vacation time sharing plan shall deposit into an escrow account maintained by an independent third-party agent one hundred percent of the funds received from the purchasers of the plans. The deposit of the funds must be evidenced by an executed escrow agreement between the escrow agent and the seller, which must include provisions that:
(1) funds may be disbursed to the seller by the escrow agent from the escrow account only after the expiration of the purchaser's cancellation period and in accordance with the purchase contract, subject to subsection (B) of this section; and
(2) if the purchaser properly cancels the contract pursuant to its terms, the funds must be paid to the purchaser pursuant to Section 27-32-40 or 27-32-50.
(B) If a seller contracts to sell an interest in a vacation time sharing plan and the construction of the property in which the interest of the vacation time sharing plan is located has not been substantially completed, the seller, upon expiration of the cancellation period, shall continue to maintain in an escrow account all funds received by or on behalf of the seller from the purchaser under the contract. Funds must be released from escrow as follows, if:
(1) a purchaser properly cancels the contract pursuant to its terms, the funds must be paid to the purchaser;
(2) the purchaser defaults in the performance of his obligations under the contract, the funds must be paid to the seller;
(3) the seller defaults in the performance of his obligations under the contract, the funds must be paid to the purchaser; and
(4) the funds of a purchaser have not been previously disbursed in accordance with the provisions of this subsection, they may be disbursed to the seller by the escrow agent upon the issuance of acceptable evidence of completion of construction.
(C) The commission may audit or examine the escrow account. The seller shall make available documents relating to the escrow account or escrow obligation to the commission upon the commission's request. The seller shall maintain disputed funds in the escrow account until either:
(1) receipt of written direction agreed to by signature of all parties; or
(2) deposit of the funds with a court of competent jurisdiction in which a civil action regarding the funds has been filed.
(D) An escrow agent holding funds escrowed pursuant to this section may invest the escrowed funds in securities of the United States government, or an agency of it, or in savings or time deposits in an institution insured by an agency of the United States government. Interest generated by the investments must be paid to the party to whom the escrowed funds are paid, unless otherwise specified by contract.
(E) An escrow agent holding funds escrowed pursuant to this section shall maintain separate books and records for each time sharing plan in accordance with generally acceptable accounting practices.
(F) Notwithstanding the other provisions of this section, the commission may accept from the seller a surety bond, irrevocable letter of credit, or other financial assurance acceptable to the commission in an amount equal to or in excess of the funds that otherwise would be placed in escrow.
Section 27-32-95. It shall be a violation of this chapter for a seller of vacation time sharing ownership plans to fail to:
(1) Deposit with an escrow agent fifty percent of the cash or receivables received from the purchasers of such plans, less applicable local, state or federal sales taxes; provided, however, that in the event receivables are placed in escrow, such receivables shall be set at face value and shall be equal to one hundred ten percent of the fifty percent required in this item.
(a) Its purpose is to protect the purchaser's ownership interest in the accommodations or facilities and to provide funds from which periodic payments can be made to retire any outstanding indebtedness on the time sharing facilities or accommodations.
(b) The escrow agent shall release or dispense to the seller of the vacation time sharing ownership plan funds from the escrow account, at least quarterly but not more frequently than monthly, in an amount which shall not exceed one hundred percent of the sum of all accrued indebtedness secured by the time sharing accommodations or facilities.
(c) Prior to the release or dispensation of such escrow funds, the seller shall furnish the escrow agent with a sworn statement which reveals by category the total amount of all liens or indebtedness secured by the time sharing accommodations or facilities, the amount of indebtedness anticipated during the next succeeding reporting period and the amount of any deficit or surplus accruing from the preceding reporting period.
(d) When all outstanding liens or encumbrances secured by the time sharing facilities or accommodations have been fully discharged, the escrow account may be discontinued.
(2) In lieu of the escrow account provided in Section 27-32-95(1) above, a seller of vacation time sharing ownership plans may alternatively:
(a) Assign to an escrow agent receivables, the income from which shall be adequate to pay in full and satisfy all liens and encumbrances secured by the time sharing facilities and accommodations.
(i) The escrow agent shall provide to the lender a monthly statement of the account and the seller shall immediately pay to the escrow agent an amount necessary to assure payment of all recurring debts as referred to in this item.
(ii) When all liens and encumbrances on the time sharing facilities have been fully discharged, the escrow amount may be discontinued.
(b) Sell, hypothecate or discount receivables, the proceeds from which shall be deposited with an escrow agent and administered in the manner prescribed by Section 27-32-95(2) (a) above.
(c) When any portion of the time sharing accommodations and facilities have been fully released from all debts, liens or encumbrances, the escrow requirements of this item may be proportionately decreased.
(3) Provide the purchaser with liability and casualty insurance at the seller's expense for the accommodations and facilities to be used by the vacation time sharing lease plan purchaser in an amount equal to the replacement cost of such accommodations and facilities and to deposit with an escrow agent, annually, sufficient funds for the payment of all taxes and assessments levied against the accommodations and facilities. In the alternative, provide for the assessment against the purchaser by an association or duly appointed agent for the owners of such escrow funds for all costs including taxes, assessments, maintenance, repairs and management fees. [Reserved]
It shall be a violation of this chapter for any seller of vacation time sharing plans to fail to fully and conspicuously disclose in the contract:
(1) The total financial obligation of the purchaser, which shall include the initial purchase price and any additional charges to which the purchaser may be subject.
(2) Any individual or business entity which has or may have the right to alter, amend or add to charges to which the purchaser may be subject and the terms and conditions under which such charges may be imposed.
(3) The nature and duration of each agreement between the business offering the vacation time sharing plans for sale and the individual or business entity managing the accommodations or other facilities.
(4) In immediate proximity to the space reserved in the contract for the signature of the buyer and in boldface type of the same size as required by subsection (3) of Section 27-32-40 a statement as follows:
'No purchaser should rely upon representations other than those included in the contract.'
However, inclusion of this statement shall not impair the purchaser's right to bring any legal action based upon any cause of action arising from verbal statements.
(5) The date of availability of each amenity of the offered accommodations and facilities when they are not completed at the time of sale of such plan.
(6) The specific term of the contract.
It is a violation of this chapter for a person who sells or offers to sell an interest in a vacation time sharing plan subject to Section 27-32-20, to fail to provide to the prospective purchaser a separate written public offering statement regarding the vacation time sharing plan and the purchaser's rights and obligations associated with the purchase of an interest in that vacation time sharing plan. The written statement must include:
(1) the name and address of the seller;
(2) a brief description of the interest being offered in the vacation time sharing plan;
(3) a person with the right to alter, amend, or add to charges to which the purchaser may be subject and the terms and conditions under which those charges may be imposed;
(4) a general description of all furniture, fixtures, and appliances, if known, to be located in the accommodations during the time period purchased;
(5) the nature and duration of each agreement between the person selling the vacation time sharing plans and the person managing the accommodations or other facilities of the time sharing plan;
(6) a description of provisions to protect the purchaser's interest from loss due to foreclosure on an underlying financial obligation of the vacation time sharing plan;
(7) a description of assurances of completion required pursuant to Section 27-32-140;
(8) the date of availability of each amenity of the offered accommodations and facilities if they are not completed at the time of sale of each vacation time sharing plan;
(9) a statement, if applicable, that the salespersons for the vacation time sharing plan represent the seller and not the prospective purchaser;
(10) a statement, substantially similar to the following:
'You should purchase a time sharing interest as a vacation experience and for your personal use and enjoyment. You should not purchase a time sharing interest as an investment or for profit upon its rental or resale.';
(11) in immediate proximity to the space reserved on the disclosure statement for the signature of the purchaser and in bold type a statement as follows:
'A purchaser should not rely upon representations other than those included in the contract and this disclosure statement.';
(12) a space for the signature of the purchaser acknowledging receipt of the disclosure statement and the date of receipt; and
(13) other information the seller or the Real Estate Commission considers necessary for the protection of purchasers.
Section 27-32-110. It
shall be is a violation of this chapter for any a seller of vacation time sharing plans to:
Use use any a promotional device , including, but not limited to, sweepstakes, lodging certificates, gift awards, premiums, or discounts, without fully disclosing fully that such the promotional devices device are is being used for the purpose of soliciting the sale of vacation time sharing plans .;
Use use any a promotional device as set forth above described in item (1) to obtain the names and addresses of prospective purchasers without fully and prominently disclosing that names and addresses so are acquired will be used for the purpose of soliciting the sale of the vacation time sharing plans .;
Misrepresent misrepresent the amount of time or period of time the accommodations and facilities will be are available to any a purchaser .;
Misrepresent misrepresent or deceptively represent the location of the offered accommodations and facilities .;
Misrepresent misrepresent the size, nature, extent, qualities, or characteristics of the offered accommodations and facilities .;
Misrepresent misrepresent the nature or extent of any services incident to the accommodations and facilities .;
Make make any misleading or deceptive representations with respect to the contents of the contract or the buyer's purchaser's rights, privileges, or benefits thereunder under it .;
Fail fail to honor and comply with all provisions of the contract with the purchaser .;
Misrepresent misrepresent the conditions under which a customer purchaser may exchange his rights to an accommodation in one location for rights to an accommodation in another location .;
(a) Include include in any a contract any a provision purporting to waive any a right or benefit provided for purchasers under pursuant to this chapter, or (b) To seek or solicit such a waiver during the effective period of these rules .; and
Do do any other act which constitutes of fraud, misrepresentation, or failure to make a disclosure of a material fact.
Section 27-32-115. Notwithstanding another provision of law, a seller may pay a finder's fee to a person who is not licensed pursuant to Chapter 57 of Title 40 and who owns an interest in the seller's vacation time sharing plan. This section does not permit a person who receives the finder's fee to advertise or promote the time sharing interest, show property, discuss terms and conditions of purchase, or otherwise participate in negotiations with regard to the time sharing interests, unless the person is a regular employee of the seller or properly licensed pursuant to Chapter 57 of Title 40.
Section 27-32-120. (A)(1) If, upon investigation by the Real Estate Commission, a person is found to be in violation of this chapter, the commission shall inform the person of the violation by certified mail, return receipt requested
,. and if If the commission finds the violation is of a minor nature, it may assess a monetary fine.
(2) Within ten days from receipt of the certified mail, the person found in violation of this chapter may pay the fine or take other remedial steps as the commission, in its sole discretion, may require. If
no a fine is not paid and no other remedial agreement is not reached within the time allowed or any extension of time granted by the commission, the person may be prosecuted for the violation as otherwise provided in this section.
Upon payment of a fine or agreement for remedial action, the The commission is may authorized to release a person found in violation of this chapter from any further liability to the State arising from the violation, once the person pays the fine or agrees to remedial action.
(B) A person who wilfully violates
any a provision of this chapter is guilty of a misdemeanor and, upon conviction, for a first offense must be fined not more than five thousand dollars for each violation. Conviction for a second offense is a misdemeanor and the person must be fined not more than five thousand dollars or imprisoned not more than six months, or both, for each violation. Conviction for a third or subsequent offense is a felony and the person must be fined not more than five thousand dollars or imprisoned not more than five years, or both, for each violation. For purposes of this chapter, a wilful violation occurs when the person committing the violation knew or should have known that his conduct was a violation of this chapter.
(C) In addition to the penalties provided in this section,
any a contract for the sale of a time-shared unit an interest in a vacation time sharing plan in violation of this chapter is voidable at the sole option of the purchaser and entitles the purchaser to a refund of all consideration paid by him pursuant to the contract.
(D) A deficiency in an escrow required by this chapter, which results solely from the cancellation or worthlessness of receivables previously placed in escrow, is not a violation of this chapter. In the event of an escrow deficiency, a lender who has advanced funds to a project has no liability to contribute funds to the escrow to cure the deficiency, and the lender's lien on the project property is not affected by the deficiency.
Section 27-32-130. The Real Estate Commission is responsible for the enforcement and implementation of this chapter and the Department of Labor, Licensing
, and Regulation, at the request of the Real Estate Commission, shall prosecute any a violation hereunder under this chapter. The commission shall promulgate regulations for the implementation of this chapter, and such regulations are subject to the State Administrative Procedures Act. The provisions of this section are not construed to do not limit in any manner the right of a purchaser or lessee to bring a private action to enforce the provisions of this chapter.
Section 27-32-140. (A)
If a A seller who files with the commission any a vacation time sharing plan or any an amendment to it which describes or concerns time sharing units the vacation time sharing plan, accommodations, or facilities not substantially completed, the seller, upon request of the commission , also shall file with the commission the following:
(1) a verified statement showing all costs involved in completing the property;
(2) a verified statement of the time of completion of construction of the property;
(3) satisfactory evidence of sufficient funds to cover all costs to complete the property;
(4) a copy of the executed construction contract and
any other contracts for the completion of the property;
(5) a one hundred percent payment bond covering the entire cost of construction of the property;
(6) if purchasers' funds are to be used for the construction of the property, an executed copy of the escrow agreement with an escrow company or financial institution authorized to do business within the State, which provides that:
(a) disbursements of purchasers' funds may be made from time to time to pay for construction of the property, architectural, engineering, finance, and legal fees, and other costs for the completion of the property in proportion to the value of the work completed by the contractor as certified by a registered surveyor, architect, or engineer on bills submitted and approved by the lender of construction funds or the escrow agent;
(b) disbursements of the balance of purchasers' funds remaining after completion of the property may be made only after the escrow agent or lender receives satisfactory evidence that the period for filing mechanics' and materialmen's liens has expired
. or The the right to claim those liens has been waived or adequate provision has been made for satisfaction of any claimed mechanics' or materialmen's lien;
any other restrictions requirements of the commission relative to the retention and disbursement of purchasers' funds required by the commission have been met; and
any other materials or information required by the commission have been provided.
(7)(B) The commission shall not register or issue any an order approving any a vacation time sharing plan unless the commission determines, on the basis of materials submitted by the developer seller, that the t ime sharing units, accommodations , or facilities or any additions to it will be completed.
Section 27-32-150. (A)
For the registration of all vacation time sharing plans and the accommodations and facilities affected by it which are located within the State, there must be paid to the commission the sum of one hundred dollars, together with an annual renewal fee of fifty dollars. An initial filing fee of ten dollars per each seven-day use availability, but not exceeding a maximum initial filing fee of five hundred dollars, must accompany an application for registration of a vacation time sharing plan. Upon amending an existing registration to add interests in a vacation time sharing plan, a filing fee of five dollars for each seven-day use availability added by the amendment, but not exceeding a maximum filing fee of two hundred fifty dollars, must be submitted. The annual vacation time sharing plan renewal fee is two hundred fifty dollars.
For the registration of all vacation time sharing plans and the accommodations and facilities affected by it which are located outside the State, there must be paid to the commission the sum of two hundred fifty dollars, together with an annual renewal fee of one hundred dollars. All books, files, accounts, and other documents pertaining to the advertisement and sale of vacation time sharing plans located outside the State filed with the commission are subject to examination by the commission and the examinee shall pay a fee for each examiner employed to make such examination of fifty dollars per day or fraction of it, plus the actual expenses, including the cost of transportation of the examiner, while he is absent from his office for purposes of conducting the examination.
(C) The commission shall retain
such fees and other funds which may that come into its possession to use to defray expenses in the administration and enforcement of this chapter.
(D) If the commission determines that the registration, sale, or operation of
any a vacation time sharing plan violates the provisions of this act chapter in such a manner as that indicates bad faith or dishonesty, the commission, after notice and hearing, may assess all reasonable costs of investigation and prosecution of such those violations.
Section 27-32-160. The commission may accept
grants in aid grants-in-aid from any a private or public source and may contract with agencies charged with similar functions in this or other jurisdictions, in furtherance of the objectives of this chapter.
Section 27-32-170. The gross proceeds from the sale or resale of a vacation time sharing plan and the exchange of an interest in a vacation time sharing plan are exempt from sales tax imposed by Chapter 36 of Title 12 pursuant to the provisions of Section 12-36-2120.
(A) Any person desiring to act as a seller of vacation time sharing plans shall file with the commission a written application upon such form as the commission shall designate and shall pass to the satisfaction of the commission the examination hereinafter prescribed.
(B) Prerequisites for taking the vacation time sharing sales examination are as follows:
(1) evidence satisfactory to the commission that the applicant bears a good reputation for honesty and truthfulness;
(2) a current examination of the applicant's credit history, the results of which must indicate that the applicant has satisfactorily met all past debts or made adequate provisions for them;
(3) an irrevocable consent to jurisdiction in this State and appointment of the commission as agent for service of process;
(4) employment by a licensed South Carolina real estate broker.
(C) The commission shall prepare and conduct an examination on the fundamentals of this chapter and related topics and shall schedule such examination at least quarterly. No applicant shall be entitled to examination unless all prerequisites enumerated above have been met and evidence of it received by the commission at least ten working days before the examination. The minimum passing grade is seventy-five percent.
(D) If the applicant has met all prerequisites for examination hereunder, but has not undergone examination, the applicant may request and the commission, in its sole discretion and upon good cause shown, may issue a temporary vacation time sharing sales license. The applicant may receive such temporary license pending the next scheduled test session and the release of the results from it, whereupon the temporary license shall expire. No temporary license granted hereunder is renewed. The fee for the temporary license, which is in addition to the required examination fee and regular license fee, is twenty-five dollars.
(E) Every applicant shall pay the sum of twenty-five dollars for each examination taken. Every applicant shall also pay a license fee of one hundred dollars upon successful completion of the examination. The commission is entitled to retain all fees collected to defray its expenses. No fees collected hereunder are in lieu of any business license fees or taxes imposed by any city, county, or municipal authority. The commission is entitled to contract with any outside source to prepare and conduct vacation time sharing sales examinations in its behalf and to pay for the reasonable cost thereof from the examination fees collected.
(F) Vacation time sharing sales licenses are renewed annually, on or before June thirtieth, upon submission of a renewal request in such form as the commission shall prescribe and payment of a fifty dollar renewal fee. Failure to timely renew shall result in cancellation of the license.
(A) Except as provided in subsection (B) of this section, a person desiring to engage in the sale of vacation time sharing plans on behalf of a seller shall first register with the commission. The registration must be submitted to the commission by the person on a form prescribed by the commission and including the name, address, and telephone number of the person and additional information as requested by the commission.
(B) Regular employees of the seller are exempt from the registration requirements of subsection (A) and from all licensing requirements of Chapter 57 of Title 40.
(C) A person registering pursuant to this section shall pay an initial registration fee in the amount of one hundred dollars. This fee must accompany the registration application submitted to the commission.
(D) The seller shall supervise, manage, and control all aspects of the offering and sale of a vacation time sharing plan. A violation of this chapter by a registrant employed by a seller as an independent contractor, either directly or through a third party, in connection with the offering or sales of interests in vacation time sharing plans may be considered to be a violation by the seller, as well as by the registrant who committed the violation, if the seller knew or should have known of the conduct constituting the violation.
(E) The registration of a person registered pursuant to this section is subject to annual renewal, on or before June thirtieth, upon submission of a renewal application in a form as the commission prescribes and payment of a fifty-dollar renewal fee. Failure to timely renew results in cancellation of the registration.
Section 27-32-190. (A)
Every A vacation time sharing plan for sale or offered for sale in this State must be registered with the South Carolina Real Estate Commission as follows:
A.(1) Upon receipt of an application for registration in proper form, the commission shall must initiate an examination to determine that the:
(1)(a) the seller can may sell, convey, otherwise transfer, or cause to be sold, conveyed, or otherwise transferred the vacation time sharing plan offered for sale if the purchaser complies with the terms of the offer;
(2)(b) the advertising material and general promotional plan are not false or misleading;
(3)(c) the requirements of this chapter have been fulfilled;
(4)(d) the seller has not, or , if a corporation, its officers, directors, and principals have not been convicted of any a crime involving land dispositions, crimes of moral turpitude, any securities law violations, fraudulent business activities, or any aspect of the vacation time sharing business in this State, the United States, or any other another state or foreign country within the past ten years, and has have not been subject to any an injunction or administrative order within the past ten years restraining a false or misleading promotional plan involving any of the activities above; and
(e) interests in accommodations and facilities conveyed to a purchaser are free and clear of all liens, mortgages, and encumbrances of every kind, the existence or foreclosure of which may result in loss or diminution of the purchaser's ownership or use rights, as represented in the vacation time sharing plan. The seller shall provide adequate assurances to the commission that all interests conveyed to purchasers in accommodations and facilities, and the accommodations and facilities themselves, shall remain unencumbered excepting only tax liens, owners' association assessments, encumbrances including mortgage liens which are subordinate to the vacation time sharing plan or other encumbrances arising from the purchaser's actions, and purchase money mortgages, contracts for deed, or similar purchase money security interests arising from transactions in which the purchasers acquired their interests. Those assurances may consist of bonds, nondisturbance instruments, and recorded instruments advising third parties of the existence of purchaser use rights and providing for subordination of future liens. For those plans in which an interest in accommodations and facilities is not conveyed, the commission may require either a cash or surety bond, or both, in an amount up to but not to exceed a combined total of two hundred fifty thousand dollars.
B.(2) Upon receipt of the application for registration in proper form, the commission shall issue a notice of filing to the applicant. Within thirty days from the date of the notice of filing the commission receives an application for registration, the commission shall must enter an order registering the vacation time sharing plan or rejecting the registration. If no an order of rejection is not entered within thirty days from the date of notice of filing application, the vacation time sharing plan is considered registered unless the applicant has consented in writing to a delay. No A reasonable request for an extension of time by the commission may must not be withheld.
(1)(a) If the commission affirmatively determines, upon inquiry and examination, that the requirements of this chapter have been met, it shall must enter an order registering the plan.
(2)(b) If the commission determines, upon inquiry and examination, that any of the requirements of this chapter have not been met, the commission shall must notify the applicant that the application for registration must be corrected in the particulars specified within fifteen days. The commission has the discretion to grant a longer period of time for the applicant to make the required corrections. If the requirements are not met within the time allowed, the commission shall must enter an order rejecting the registration which shall and include including the findings of fact upon which the order is based. The order rejecting the registration shall is not become effective for twenty days during which time the applicant may petition for reconsideration and must be entitled granted to a hearing.
(3)(c) If it appears that a person, company, or any a business organization has engaged , or , is about to engage in an act or practice constituting a violation of a provision of this chapter or any rule or order under it, the commission, through the Department of Labor, Licensing , and Regulation, with or without prior administrative proceedings, may bring an action in the circuit court to enjoin the acts or practices and to enforce compliance with this chapter or any rule or order hereunder under it. The commission shall contact must notify, whenever practicable, any a person or business violating this chapter before recourse to in the circuit court. Upon proper showing, injunctive relief or temporary restraining orders may be granted, and a receiver or conservator may be appointed. Neither the commission nor the Department of Labor, Licensing , and Regulation is required to post bond in any a court proceeding.
C.(B) The commission may:
any a public or private investigation which it considers necessary, either within or outside of this State, to determine whether any if a person has violated or is about to violate this chapter or any rule or order hereunder under it, or to aid in the enforcement of this chapter or in the prescribing of rules and forms under it .;
(2) require or permit
any a person to file a statement in writing, under oath or otherwise as the commission determines, as to all facts and circumstances concerning the matter to be investigated .;
(3) for the purpose of any investigation or proceeding
under pursuant to this chapter, the commission or any an officer designated by rule may administer oaths or affirmation , and, upon its own motion or upon request of any a party, shall must subpoena witnesses, compel their attendance, take evidence, and require the production of any a matter which is relevant to the investigation, including the existence, description, nature, custody, condition, and location of any books, documents, or other tangible things and the identity and location of persons having knowledge of relevant facts or any other another matter reasonably calculated to lead to the discovery of material evidence .;
(4) apply to the circuit court for an order compelling compliance upon a person's failure to obey a subpoena or to answer questions propounded by the investigating officer and upon reasonable notice to all persons affected by it,
the commission, through the Department of Labor, Licensing , and Regulation , may apply to the circuit court for an order compelling compliance.;
D. The commission may:
(1)(5) issue an order requiring the seller to cease and desist from any an unlawful practice and to take such affirmative action as to the judgment of the commission will to carry out the purposes of this chapter , if, after notice and hearing, the commission determines that a seller has:
any provisions a provision of this chapter;
(b) directly or through
any an agent of or employees employee knowingly engaged in any false, deceptive, or misleading advertising, promotional, or sales methods to offer or dispose of an interest in any a vacation time sharing plan;
any a substantial change in the plan of development and sale of the vacation time sharing plan subsequent to after the order of the registration without obtaining the prior written approval of the commission; or
any unlawful a lawful order or rule of the commission.
(2)(6) Make make findings of fact in writing that the public interest will be is irreparably harmed by delay in issuing an order and in such case may issue a temporary cease and desist order. Before issuing the temporary cease and desist order, the commission, whenever possible by telephone or otherwise, shall must give notice to the seller of the proposal to issue a cease and desist order to the seller. Every Each temporary cease and desist order shall must include in its terms a provision that, upon request, a hearing will must be held promptly to determine whether or not it the order becomes permanent .;
E. The commission may:
(1)(7) Revoke revoke any a registration of a vacation time sharing plan if, after notice and hearing upon a written finding of fact, it the commission determines that the seller has:
(a) failed to comply with the terms of a cease and desist order;
(b) been convicted in
any a court of competent jurisdiction, subsequent to after the filing of the application for registration, of a crime involving fraud, deception, false pretenses, misrepresentation, false advertising, or dishonest dealing;
(c) disposed of, concealed, or diverted
any funds or assets of any a person so as to defeat the rights of vacation time sharing plan purchasers;
(d) failed to faithfully perform any stipulation or agreement made with the commission as an inducement to grant
any a registration, to reinstate any a registration, or to approve any promotional plan or advertisement; or
(e) made intentional misrepresentations or concealed material facts in an application for registration
. Findings of fact that a specific provision of law has been violated must be accompanied by a concise and explicit statement of the underlying facts supporting the findings.; and
(2)(8) Issue issue a cease and desist order instead of revoking a registration if it finds, after notice and hearing, that the seller has been guilty of a violation for which revocation could be ordered.
Section 27-32-200. (A) There is created a special fund
to be known as the 'Vacation Time Sharing Recovery Fund', which must be maintained by the commission and funded as hereinafter provided for the payment of claims to persons injured by the acts of persons registered or licensed under the provisions pursuant to this chapter.
In addition to the license fees required under the provisions of this chapter, every licensee shall pay an annual fee in such amount as the commission shall determine but in no event exceeding twenty-five dollars for the establishment of a vacation time sharing recovery fund. Such The funds must be held and accumulated from year to year by in the State Treasury in a special fund for the commission, to be designated as the 'South Carolina Vacation Time Sharing Recovery Fund'. The fund must be is a continuing fund not subject to fiscal year limitations, and must be is under the administrative direction of the commission. Expenditures from this fund must be made in accordance with the provisions of this chapter without legislative appropriation. Warrants for expenditures from the fund must be drawn by the Comptroller General pursuant to claims approved and signed by the commission.
Section 27-32-210. (A)
Any A person aggrieved by the conduct of a registrant or licensee hereunder is eligible to may seek recovery from the fund Vacation Time Sharing Recovery fund if the following conditions have been met:
(1) the facts giving rise to the applicant's claim occurred on or after January 1, 1982, and were based on a specific violation of this chapter
(2) the applicant has made demand upon the registrant or licensee by certified mail, return receipt requested, for his actual damages and
such the demand has been refused or ignored .;
(3) the applicant is not:
(a) related by blood or marriage to the registrant or licensee;
(b) registered or licensed
under the provisions of pursuant to this chapter;
(c) the employer, principal or broker in charge of the registrant or licensee; or
(d) a party jointly responsible for the claim
Application application for recovery has been is made not later than one year from the date or discovery of the loss.
Failure of the applicant to fully comply with this section constitutes waiver of all rights hereunder.
(B) Application for recovery must be made under oath and upon
such a form as prescribed by the commission shall prescribe and shall contain containing the following minimum information:
(1) name and address of the applicant;
(2) name and address of the registrant or licensee and his last known working address;
(3) amount of recovery sought, together with evidence supporting the claim;
(4) copies of all complaints or other legal process initiated;
(5) disclosure of any partial satisfaction received, offered, or otherwise available from the registrant or licensee, his broker-in-charge, or from
any a bond or policy of insurance or any other source; and
(6) a detailed statement of the events precipitating the loss, together with documents and other evidence supporting the claim.
(C) Upon receiving a claim in proper form, the commission shall forward the claim by certified mail, return receipt requested, to the last known address of the registrant or licensee and to the broker-in-charge of
such the registrant or licensee. The registrant or licensee and the broker-in-charge shall within twenty days file a verified answer to the claim within twenty days. If no an answer is not filed within twenty days, the broker or registrant or licensee is in default and the commission shall schedule an arbitration of the claim. If the broker or registrant or licensee files a timely answer, the commission shall investigate the claim for a period not to exceed sixty days and shall thereafter after that promptly schedule an arbitration of the claim. The registrant or licensee, broker, commission, and claimant are entitled to present evidence, and question , and cross examine witnesses as parties to the arbitration.
(D) Failure of the applicant to comply fully with this section is a waiver of all rights under the section.
Payments These limitations apply to payments from the recovery fund are limited in the following respects:
(1) Only the applicant's actual damages are paid from the recovery fund.
No An applicant is entitled to may not recover punitive, special, or consequential damages , or attorney's fees.
(2) The fund is not liable for more than five thousand dollars
per for each transaction, regardless of the number of persons aggrieved or the number of time sharing interests involved in such the transaction.
(3) The liability of the fund
shall may not exceed in the aggregate ten thousand dollars for any one registrant or licensee in a single calendar year and in no event shall it may exceed twenty thousand dollars for any one registrant or licensee.
(4) If the maximum liability of the fund is insufficient to pay in full the valid claims of all aggrieved persons whose claims relate to the same transaction or to the same registrant or licensee, the amount for which the fund is liable must be distributed among the claimants in a ratio that their respective claims bear to the total of
such the valid claims or in the manner as the Board of Arbitrators in its sole discretion shall decide. The Board of Arbitrators in its sole discretion is empowered to join in one action all claims having a common factual basis so that an equitable distribution from the fund may be achieved.
In the event If valid claims against the fund exceed the monies therein contained it contains, the commission shall satisfy the unpaid claims or portions of them as soon as a sufficient amount of money has been deposited, together with interest at the rate of eight percent per annum a year from the date of award. All claims against the fund must be made in the same order as the awards from it were authorized by the Board of Arbitrators. Any An award hereunder shall is not specifically not be a claim against the State if it cannot be is not paid due to a lack of funds in the Vacation Time Sharing Recovery Fund.
Section 27-32-230. (A)
Any A person registered or licensed under the provisions of pursuant to this chapter and any a person claiming an interest in the fund shall submit to the decision of a Board of Arbitrators, which shall in every respect be is final and binding. The Board of Arbitrators must be composed of three arbitrators, one chosen by the applicant, one chosen by the registrant or licensee, and the commission or its designee. If the registrant or licensee fails to nominate an arbitrator within five days of request or does not respond to the claim, the commission shall nominate the third arbitrator. The decision of the majority shall rule rules. All arbitrations Arbitrations must be held at the office of the commission at such a time as it shall prescribe and according to such rules of procedure as it shall prescribe prescribes.
(B) Upon payment of
any a claim, the registration or license, of the offending licensee is revoked automatically revoked. The registrant or licensee shall not be is not qualified for reregistering or relicensing until all amounts paid on his account are repaid in full to the Recovery Fund recovery fund, together with annual interest at the rate of eight percent per annum. Nothing in this This section shall does not prevent the commission or any other another authority from pursuing any other another remedy at law or equity.
Any An applicant receiving an award from the fund shall subrogate all rights relative to such the claim unto to the commission to the full extent of all amounts so paid, including interest, and shall cooperate with the commission in the prosecution of the subrogated claim. Any amounts so recovered against the a registrant, or licensee or other responsible parties must be deposited into the fund, less the costs and expenses of collection.
Section 27-32-240. (1) For purposes of property taxation,
each a time share unit , operating under a "vacation time sharing ownership plan " as defined in item (8) (7) of Section Section 27-32-10, must be valued in the same manner as if the unit were owned by a single owner. The total cumulative purchase price paid by the time share owners for a unit may not be utilized by the tax assessor's offices assessor as a factor in determining the assessed value of the unit. A unit operating under a "vacation time sharing lease plan " as defined in item (9) (8) of Section 27-32-10, may, however, be assessed the same as other income producing and investment property is assessed.
(2) The assessment and taxation of real property committed to a vacation time ownership plan must be in the name of the
business entity person that is designated to provide or receive the funds for payment of the taxes as set forth in item (3) of Section 27-32-95.
(3) Should the
business entity person fail to pay the taxes, an execution for the taxes must be issued in the joint name of all the owners of the time sharing periods and must be collected as provided by law.
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 in which thirteen or fewer undivided interests, corporation shares, partnership interests, trust interests, or other membership or use interests are conveyed, are referred to in this section as a "vacation multiple ownership interest" interests and are not considered a "vacation time sharing plan " or a "time sharing unit " for purposes of this chapter ;. provided, that no debts Debts, encumbrances, or liens, except for purchaser financing, may not 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 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 pursuant to Chapter 57 of Title 40 rather than under Section 27-32-180 unless handled by a regular employee of the seller. It is a violation of this chapter for any a seller of a vacation multiple ownership interest to sell, lease, encumber, or convey in any manner, or to solicit or advertise such those 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 phrase 'time sharing' are is used in these those sections, they it also mean means 'multiple ownership' for the purposes of this section.
(2) The sale or resale of
any a vacation multiple ownership interest and the exchange of an interest in a vacation multiple ownership interest is exempt from sales tax imposed by Chapter 36 of Title 12 pursuant to the provisions of Section 12-36-2120.
Any An 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 a 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.
All funds Funds received from purchasers of vacation multiple ownership interests must be placed in an escrow account with an insured institution and must not be disbursed until a sufficient number of vacation multiple ownership interests are is 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 commission, to insure ensure 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, items 1, 2, 3, 4, 5, 6,
[except subsections 6 (a) and 6 (b)], 11, 15, 16 10, 12, 13, and 21 16 are applicable to this section.
(b) 'Dwelling unit' means the actual accommodations
and/or and related facilities which are the subject of the vacation multiple ownership interest.
(c) 'Purchaser' means
anyone one 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 a member of any other another organization which that owns a dwelling unit."
SECTION 2. Section 27-50-30 of the 1976 Code, as added by Act 336 of 2002, is amended to read:
"Section 27-50-30. This article does not apply to transfers:
(1) pursuant to court order including transfers in administration of an estate, pursuant to a writ of execution, by foreclosure sale, by a trustee in bankruptcy, by a receiver, by eminent domain, and resulting from a decree for specific performance;
(2) to a mortgagee from the mortgagor or his successor in interest in a mortgage if the indebtedness is in default, by a trustee pursuant to a deed of trust or to a mortgagee pursuant to a mortgage if the indebtedness is in default, by a trustee under a mortgagee pursuant to a foreclosure sale, or by a mortgagee who has acquired the real property at a sale conducted pursuant to a judgment and order of foreclosure;
(3) by a fiduciary in the course of the administration of a decedent's estate, guardianship, conservatorship, or trust;
(4) from one or more co-owners solely to one or more other co-owners;
(5) made solely to a spouse or a person or persons in the lineal line of consanguinity of one or more transferors;
(6) between spouses resulting from a divorce decree or support order or marital property distribution order;
(7) made by virtue of the record owner's failure to pay federal, state, or local taxes;
(8) to or from the federal government;
(9) to the State, its agencies and departments, and its political subdivisions including school districts;
(10) involving the first sale of a dwelling never inhabited;
(11) real property sold at public auction;
(12) to a residential trust;
(13) between parties when both parties agree in writing not to complete a disclosure statement
(14) of a vacation time sharing plan as defined in Section 27-32-10(9); and
(15) of a vacation multiple ownership interest as described in Section 27-32-250."
SECTION 3. This act takes effect upon approval by the Governor.
This web page was last updated on Thursday, June 25, 2009 at 10:04 A.M.