11225. A person shall not be required to register a time-share plan
with the commissioner pursuant to this chapter if any of the
following applies:
(a) The person is an owner of a time-share interest who has
acquired the time-share interest for the person's own use and
occupancy and who later offers it for resale.
(b) The person is a managing entity or an association that is not
otherwise a developer of a time-share plan in its own right, solely
while acting as an association or under a contract with an
association to offer or sell a time-share interest transferred to the
association through foreclosure, deed in lieu of foreclosure, or
gratuitous transfer, if these acts are performed in the regular
course of, or as an incident to, the management of the association
for its own account in the time-share plan. Notwithstanding the
exemption from registration, the association or managing entity shall
provide each purchaser of a time-share interest covered by this
subdivision a copy of the time-share instruments, a copy of the
then-current budget, a written statement of the then-current
assessment amounts, and shall provide the purchaser the opportunity
to rescind the purchase within seven days after receipt of these
documents. Immediately prior to the space reserved in the contract
for the signature of the purchaser, the association or managing
entity shall disclose, in conspicuous type, substantially the
following notice of cancellation:
YOU MAY CANCEL THIS CONTRACT WITHOUT ANY PENALTY OR OBLIGATION
WITHIN SEVEN CALENDAR DAYS OF RECEIPT OF THE PUBLIC REPORT OR AFTER
THE DATE YOU SIGN THIS CONTRACT, WHICHEVER DATE IS LATER. IF YOU
DECIDE TO CANCEL THIS CONTRACT, YOU MUST NOTIFY THE ASSOCIATION (OR
MANAGING ENTITY) IN WRITING OF YOUR INTENT TO CANCEL. YOUR NOTICE OF
CANCELLATION SHALL BE EFFECTIVE UPON THE DATE SENT AND SHALL BE SENT
TO (NAME OF ASSOCIATION OR MANAGING ENTITY) AT (ADDRESS OF
ASSOCIATION OR MANAGING ENTITY). YOUR NOTICE OF CANCELLATION MAY ALSO
BE SENT BY FACSIMILE TO (FACSIMILE NUMBER OF THE ASSOCIATION OR
MANAGING ENTITY) OR BY HAND-DELIVERY. ANY ATTEMPT TO OBTAIN A WAIVER
OF YOUR CANCELLATION RIGHT IS VOID AND OF NO EFFECT.
(c) The person is conveyed, assigned, or transferred more than
seven time-share interests from a developer in a single voluntary or
involuntary transaction and subsequently conveys, assigns, or
transfers all of the time-share interests received from the developer
to a single purchaser in a single transaction.
(d) (1) The developer is offering or disposing of a time-share
interest to a purchaser who has previously acquired a time-share
interest from the same developer if the developer has a time-share
plan registered under this chapter, which was originally approved by
the commissioner within the preceding seven years, and the developer
complies in all respects with the provisions of Section 11245, and,
further, provides the purchaser with (A) a cancellation period of at
least seven days, (B) all the time-share disclosure documents that
are required to be provided to purchasers as if the sale occurred in
the state or jurisdiction where the time-share property is located,
and (C) the following disclaimer in conspicuous type:
WARNING: THE CALIFORNIA DEPARTMENT OF REAL ESTATE HAS NOT EXAMINED
THIS OFFERING, INCLUDING, BUT NOT LIMITED TO, THE CONDITION OF
TITLE, THE STATUS OF BLANKET LIENS ON THE PROJECT (IF ANY),
ARRANGEMENTS TO ASSURE PROJECT COMPLETION, ESCROW PRACTICES, CONTROL
OVER PROJECT MANAGEMENT, RACIALLY DISCRIMINATORY PRACTICES (IF ANY),
TERMS, CONDITIONS, AND PRICE OF THE OFFER, CONTROL OVER ANNUAL
ASSESSMENTS (IF ANY), OR THE AVAILABILITY OF WATER, SERVICES,
UTILITIES, OR IMPROVEMENTS. IT MAY BE ADVISABLE FOR YOU TO CONSULT AN
ATTORNEY OR OTHER KNOWLEDGEABLE PROFESSIONAL WHO IS FAMILIAR WITH
REAL ESTATE AND DEVELOPMENT LAW IN THE STATE WHERE THIS TIME-SHARE
PROPERTY IS SITUATED.
(2) By making such an offering or disposition, the person is
deemed to consent to the jurisdiction of the commissioner in the
event of a dispute with the purchaser in connection with the offering
or disposition.
(e) It is a single site time-share plan located outside of the
boundaries of the United States or component site of a specific
time-share interest multisite time-share plan located wholly outside
of the boundaries of the United States, or a nonspecific time-share
interest multisite time-share plan in which all component sites are
located wholly outside of the boundaries of the United States.
However, it is unlawful and a violation of this chapter for a person,
in this state, to sell or lease or offer for sale or lease a
time-share interest in such a time-share plan, located outside the
United States, unless the printed material, literature, advertising,
or invitation in this state relating to that sale, lease, or offer
clearly and conspicuously contains the following disclaimer in
capital letters of at least 10-point type:
WARNING: THE CALIFORNIA DEPARTMENT OF REAL ESTATE HAS NOT EXAMINED
THIS OFFERING, INCLUDING, BUT NOT LIMITED TO, THE CONDITION OF
TITLE, THE STATUS OF BLANKET LIENS ON THE PROJECT (IF ANY),
ARRANGEMENTS TO ASSURE PROJECT COMPLETION, ESCROW PRACTICES, CONTROL
OVER PROJECT MANAGEMENT, RACIALLY DISCRIMINATORY PRACTICES (IF ANY),
TERMS, CONDITIONS, AND PRICE OF THE OFFER, CONTROL OVER ANNUAL
ASSESSMENTS (IF ANY), OR THE AVAILABILITY OF WATER, SERVICES,
UTILITIES, OR IMPROVEMENTS. IT MAY BE ADVISABLE FOR YOU TO CONSULT AN
ATTORNEY OR OTHER KNOWLEDGEABLE PROFESSIONAL WHO IS FAMILIAR WITH
REAL ESTATE AND DEVELOPMENT LAW IN THE COUNTRY WHERE THIS TIME-SHARE
PROPERTY IS SITUATED.
(1) If an offer of time-share interest in a time-share plan
described in subdivision (e) is not initially made in writing, the
foregoing disclaimer shall be received by the offeree in writing
prior to a visit to a location, sales presentation, or contact with a
person representing the offeror, when the visit or contact was
scheduled or arranged by the offeror or its representative. The
deposit of the disclaimer in the United States mail, addressed to the
offeree and with first-class postage prepaid, at least five days
prior to the scheduled or arranged visit or contact, shall be deemed
to constitute delivery for purposes of this section.
(2) If any California resident is presented with an agreement or
purchase contract to lease or purchase a time-share interest as
described in subdivision (e), where an offer to lease or purchase
that time-share interest was made to that resident in California, a
copy of the disclaimer set forth in subdivision (e) shall be inserted
in at least 10-point type at the top of the first page of that
agreement or purchase contract and shall be initialed by that
California resident.
(3) Nothing contained in this subdivision shall be deemed to
exempt from registration in this state a nonspecific time-share
interest multisite time-share plan in which any component site in the
time-share plan is located in the United States.
11226. (a) Any person who, to any individual located in the state,
sells, offers to sell, or attempts to solicit prospective purchasers
to purchase a time-share interest, or any person who creates a
time-share plan with an accommodation in the state, shall register
the time-share plan with the commissioner, unless the time-share plan
is otherwise exempt under this chapter.
(b) A developer, or any of its agents, shall not sell, offer, or
dispose of a time-share interest in the state unless all necessary
registration requirements are provided and approved by the
commissioner, or the sale, offer, or disposition is otherwise
permitted by this chapter, or while an order revoking or suspending a
registration is in effect.
(c) In registering a time-share plan, the developer shall provide
the commissioner all of the following information:
(1) The developer's legal name, any assumed names used by the
developer, principal office street address, mailing address, primary
contact person, and telephone number.
(2) The name of the developer's authorized or registered agent in
the state upon whom claims can be served or service of process be
had, the agent's street address in California, and telephone number.
(3) The name, street address, mailing address, primary contact
person, and telephone number of the time-share plan being registered.
(4) The name, street address, mailing address, and telephone
number of any managing entity of the time-share plan.
(5) A public report that complies with the requirements of Section
11234, or for a time-share plan located outside of the state, a
public report that has been authorized for use by the situs state
regulatory agency and that contains disclosures as determined by the
commissioner upon review to be substantially equivalent to or greater
than the information required to be disclosed pursuant to Section
11234.
(6) A description of the inventory control system that will ensure
compliance with Section 11250.
(7) Any other information regarding the developer, time-share
plan, or managing entities as established by regulation.
(d) An applicant for a public report for a time-share plan shall
present evidence of the following for each accommodation in each
time-share property that is, or will be, offered for sale in this
state pursuant to the registration:
(1) That the accommodation is presently suitable for human
occupancy or that financial arrangements have been made to complete
construction or renovation of the accommodation to make it suitable
for human occupancy on or before the first date for occupancy by a
time-share interest owner.
(2) That the accommodation is owned or leased by the developer of
the time-share plan or is the subject of an enforceable option or
contract under which the developer will build, purchase, or lease the
accommodation. Notwithstanding this subdivision, the developer shall
present evidence prior to the receipt of a final public report that
the accommodation to be sold is owned or leased by the developer and
that the accommodation is free and clear of encumbrances in
accordance with Sections 11244 and 11255.
(e) If an accommodation in a time-share plan is located within a
local governmental jurisdiction or subdivision of real property in
which the dedication of accommodations to time-sharing is expressly
prohibited by ordinance or recorded restriction, either absolutely or
without a permit or other entitlement from the governing body, the
applicant for a public report shall present evidence of a permit or
other entitlement by the appropriate authority for the local
government or the subdivision.
(f) (1) The developer shall amend or supplement its disclosure
documents and registration information, to reflect any material
change in any information required by this chapter or the regulations
implementing this chapter. The developer shall notify the
commissioner of the material change prior to implementation of the
change, unless the change is beyond the control of the developer; in
which event, the developer shall provide written notice to the
commissioner as soon as reasonably practicable after the occurrence
of the event necessitating the change. All amendments, supplements,
and facts relevant to the material change shall be filed with the
commissioner within 20 calendar days of the material change.
(2) The developer may continue to sell time-share interests in the
time-share plan so long as, prior to closing, the developer provides
a notice to each purchaser that describes the material change and
provides to each purchaser the previously approved public report.
(A) If the change is material and adverse to the purchaser, all
purchaser funds shall be held in escrow, or pursuant to alternative
assurances permitted by subdivision (c) of Section 11243, and no
closing shall occur until the amendment relating to the material and
adverse change has been approved by the commissioner. After the
amendment relating to the material and adverse change has been
approved and the amended public report has been issued, the amended
public report shall be sent to the purchaser, and an additional
seven-day rescission period shall commence. The developer shall be
required to maintain evidence of the receipt by each purchaser of the
amended public report.
(B) If the commissioner refuses to approve the amendment relating
to the material and adverse change, all sales made using the notice
shall be subject to rescission and all funds returned.
(3) The developer shall update the public report to reflect any
changes to the time-share plan that are not material and adverse,
including the addition of any component sites, within a reasonable
time, and may continue to sell and close time-share interests prior
to the date that the amended public report is approved.
(g) An applicant for a public report for a multisite, time-share
plan consisting of specific time-share interests, as defined in
subparagraph (A) of paragraph (2) of subdivision (z) of Section
11212, affiliated with sites operated through the time-share plan's
reservation system, shall certify both of the following:
(1) That a purchaser has, or will have, contractual or membership
rights to use accommodations at each affiliated site and that, if an
accommodation or promised improvement is, or may become, subject to a
blanket encumbrance, that the blanket encumbrance is, or will be,
subordinate to these rights.
(2) That a certificate of occupancy has been issued with respect
to the accommodations at each affiliated site or that adequate
provisions exist or will exist for the completion of all such
accommodations. For any affiliated site accommodations that are not
complete, the public report shall clearly identify in conspicuous
type that those accommodations are not completed. For any
accommodations that are not complete and for which adequate
provisions for completion do not exist at the time the public report
is issued, the public report shall also provide in conspicuous type
that those accommodations might not be built, provided, however, that
a developer's failure to build the accommodations shall not relieve
the developer of any obligations created by the certification made
pursuant to this subdivision.
(h) For purposes of subdivision (d) of this section, the
"time-share property being offered for sale in this state" shall mean
the following:
(1) With respect to a single site time-share plan, the time-share
property being registered pursuant to this chapter.
(2) With respect to a specific time-share interest multisite
time-share plan, the specific time-share property being registered
pursuant to this chapter.
(3) With respect to a nonspecific time-share interest multisite
time-share plan, all time-share properties in the time-share plan.
11226.1. Any person offering to sell or lease any interest subject
to the requirements of Section 11226 shall make a copy of each of the
following documents available for examination by a prospective
purchaser or lessee before the execution of an offer to purchase or
lease and shall give a copy of those documents to each purchaser or
lessee as soon as practicable before transfer of the interest being
acquired by the purchaser or lessee:
(a) The declaration of covenants, conditions, and restrictions for
the time-share plan.
(b) Articles of incorporation or association for the time-share
owners' association.
(c) Bylaws of the owners' association.
(d) Any other instrument that establishes or defines the common,
mutual, and reciprocal rights and responsibilities of the owners or
lessees of interest in the time-share plan as members of the owners'
association or otherwise.
(e) The current budget and financial statements for the time-share
plan.
11227. (a) Subject to subdivision (h), the commissioner shall issue
a final public report if all registration requirements have been met
as set forth in this chapter and if all deficiencies and substantive
inadequacies in the substantially complete application for a final
public report for the time-share plan have been corrected.
(b) The commissioner may issue a conditional public report prior
to issuing a final public report for a time-share plan if the
requirements of subdivision (c) are met, all deficiencies and
substantive inadequacies in the substantially complete application
for a final public report for the time-share plan have been
corrected, the material elements of the offering to be made under the
authority of the conditional public report have been established,
and all requirements for the issuance of the conditional public
report have been met, except for one or more of the following
requirements, as may be applicable:
(1) A final map has not been recorded.
(2) A condominium plan has not been recorded.
(3) A declaration of covenants, conditions, and restrictions has
not been recorded.
(4) A declaration of annexation has not been recorded.
(5) A recorded subordination of existing liens to the time-share
instruments or declaration of annexation or escrow instructions to
effect recordation prior to the first sale, are lacking.
(6) Filed articles of incorporation are lacking.
(7) A current preliminary report of a licensed title insurance
company issued after filing of the final map and recording of the
time-share instrument covering all time-share interests to be
included in the public report has not been provided.
(8) Other requirements the commissioner determines are likely to
be timely satisfied by the applicant.
(c) An applicant for a conditional public report shall submit the
following information and documents with the applicable filing fee:
(1) A copy of the statement set forth in subdivision (e).
(2) A sales agreement or lease to be used in any transaction
conducted under authority of the conditional public report. The sales
agreement or lease shall include all of the following provisions:
(A) No escrow will close, funds will not be released from escrow,
and the interest contracted for will not be conveyed until a current
final public report for the time-share plan is furnished to the
purchaser.
(B) The contract may be rescinded, in which event the entire sum
of money paid or advanced by the purchaser shall be returned if (i) a
final public report has not been issued within six months after the
date of issuance of the conditional public report if the conditional
public report is not renewed, (ii) the final public report is not
issued within 12 months after the initial conditional public report
is received if the conditional public report has been renewed for an
additional six-month period, or (iii) the purchaser or lessee is
dissatisfied with the final public report because of a material and
adverse change.
(3) Escrow instructions to be used in any transaction conducted
under authority of the conditional public report that includes at
least the following information:
(A) The name and address of the escrow depository.
(B) A description of the nature of the transaction.
(C) Provisions ensuring compliance with Section 11243.
(D) Provisions ensuring that no escrow will close, funds will not
be released from escrow, and the interest contracted for will not be
conveyed until a current final public report for the time-share plan
is furnished to the purchaser or lessee.
(E) Provisions for the return of money as prescribed in
subparagraph (B) of paragraph (2).
(d) A decision by the commissioner to not issue a conditional
public report shall be noticed in writing to the applicant within
five business days after his or her decision and that notice shall
specifically state the reasons why the report is not being issued.
(e) A person may sell or lease, or offer for sale or lease,
time-share interests in a time-share plan pursuant to a conditional
public report if, as a condition of the sale or lease or offer for
sale or lease, delivery of legal title or other interest contracted
for will not take place until issuance of a final public report and
provided that the requirements of subdivision (c) are met.
(f) A developer, principal, or his or her agent shall provide a
prospective purchaser a copy of the conditional public report and a
written statement including all of the following information:
(1) Specification of the information required for issuance of a
final public report.
(2) Specification of the information required in the final public
report that is not available in the conditional public report, along
with a statement of the reasons why that information is not available
at the time of issuance of the conditional public report.
(3) A statement that no person acting as a principal or agent
shall sell or lease, or offer for sale or lease, time-share interests
in a time-share plan for which a conditional public report has been
issued except as provided in this chapter.
(4) Specification of the requirements of subdivision (e).
(g) The prospective purchaser shall sign a receipt that he or she
has received and has read the conditional public report and the
written statement provided pursuant to subdivision (f).
(h) The term of a conditional public report may not exceed six
months unless renewed pursuant to this subdivision. The conditional
public report may be renewed for one additional six-month period if
the commissioner determines that the requirements for issuance of a
final public report are likely to be satisfied during the renewal
term. The renewal of a conditional public report shall not act to
afford a purchaser who received the initial conditional public report
any additional rescission rights other than those provided to a
purchaser when a final public report is issued and a material and
adverse change has been made.
(i) For single site time-share plans and component sites of a
multisite time-share plan located outside of the state, a disclosure
document that has been authorized for use by the state regulatory
agency in the state in which the time-share plan or component site is
located that contains the disclosures as determined by the
commissioner upon review to be substantially equivalent to or greater
than the information required to be disclosed pursuant to Section
11234, shall be accepted in lieu of a public report required pursuant
to this section. The disclosure document shall contain a cover page
issued by the commissioner certifying the approval of its use in lieu
of the public report required herein.
(j) Notwithstanding anything in this section to the contrary, the
commissioner may grant a 12-month preliminary public report allowing
the developer to begin offering and selling time-share interests, in
a time-share plan regardless of whether the accommodations of the
time-share plan are located within or outside of the state, while the
registration is pending with the commissioner. The commissioner may
grant one additional 12-month period if the developer is actively and
diligently pursuing registration under this chapter. The preliminary
public report shall automatically terminate with respect to those
time-share interests covered by a final public report that is issued
before the scheduled termination date of the preliminary report. To
obtain a preliminary public report, the developer shall provide all
of the following:
(1) Submit the reservation instrument to be used in a form
previously approved by the department with at least the following
provisions:
(A) The right of both the developer and the potential purchaser to
unilaterally cancel the reservation at any time.
(B) The payment to the potential purchaser of his or her total
deposit following cancellation of the reservation by either party.
(C) The placing of the deposit into an interest bearing escrow
account.
(2) Agree to provide each potential purchaser with a copy of the
preliminary public report and an executed receipt for a copy before
any money or other thing of value has been accepted by or on behalf
of the developer in connection with the reservation.
(3) Agree to provide a copy of the reservation instrument signed
by the potential purchaser and by or on behalf of the developer to
the potential purchaser, and place any deposit taken from the
potential purchaser into a neutral escrow depository acceptable to
the commissioner.
11228. The term of a final public report shall be limited to five
years. A renewal shall be issued if the developer, owner, or agent
makes application for renewal of any report and has submitted the
additional information that the commissioner may require.
11229. (a) In connection with its review of the registration
application of a time-share plan, the commissioner may make an
examination of any time-share property submitted for registration
pursuant to this chapter, and shall, unless there are grounds for
denial, issue to the developer a public report authorizing the sale
or lease in this state of the time-share interests within the
time-share plan submitted pursuant to this chapter. The report shall
contain the data obtained in accordance with Section 11234.
(b) The commissioner may deny the issuance of the public report
based on the applicant's failure to comply with any of the provisions
of this chapter or the regulations of the commissioner pertaining
thereto, including, but not limited to, all of the following:
(1) The sale or lease would constitute misrepresentation to, or
deceit or fraud of, the purchasers or lessees.
(2) Inability to deliver title or other interest contracted for.
(3) Inability to demonstrate, in accordance with this chapter,
that adequate financial arrangements have been made for all offsite
improvements included in the offering.
(4) Inability to demonstrate, in accordance with this chapter,
that adequate financial arrangements have been made for any
community, recreational, or other facilities included in the
offering.
(5) Failure to make a showing that the parcels can be used for the
purpose for which they are offered.
(6) Failure to provide in the contract or other writing the use or
uses for which the parcels are offered, together with any covenants
or conditions relative thereto.
(c) Any developer objecting to the denial of a public report may,
within 30 days after receipt of the order of denial, file a written
request for a hearing. The commissioner shall hold the hearing within
20 days thereafter unless the party requesting the hearing requests
a postponement. If the hearing is not held within 20 days after
request for a hearing is received plus the period of the postponement
or if a proposed decision is not rendered within 45 days after
submission and an order adopting or rejecting the proposed decision
is not issued within 15 days thereafter, the order of denial shall be
rescinded and a public report issued.
11230. If the time-share plan, including any accommodations, or
amenities within the common area are not completed prior to the
issuance of a final public report for the time-share plan, the
developer shall specify a reasonable date for completion and shall
comply with any one of the following conditions:
(a) Arranges for lien and completion bond or bonds, enforceable by
the association, in an amount and subject to the terms, conditions,
and coverage necessary to assure completion of the improvements
lien-free. The bond shall not exceed 120 percent of the cost for
completion, and the bond shall provide for the reduction of the bond
amount as work is completed.
(b) All funds from the sale of time-share interests as the
commissioner shall determine are sufficient to assure construction of
the improvement or improvements shall be bonded or impounded in a
neutral escrow depository acceptable to the commissioner until the
improvements have been completed and all applicable lien periods have
expired.
(c) An amount sufficient to cover the costs of construction shall
be deposited in a neutral escrow depository acceptable to the
commissioner under a written escrow agreement providing for
disbursements from the escrow as work is completed.
(d) An alternative plan that may be approved by the commissioner.
11231. Every registration required to be filed with the
commissioner under this chapter shall be reviewed and issued the
specified public report in accordance with the following schedule:
(a) Time-share registration. Registration shall be effective only
upon the issuance of a public report by the commissioner that shall
occur no later than 60 calendar days after the actual receipt by the
commissioner of the properly completed application. The commissioner
shall provide a list of deficiencies in the application, if any,
within 60 calendar days of receipt. This same time period applies
when amending a public report to add additional phases or component
sites of the time-share plan.
(b) Preliminary public report registration. A preliminary public
report shall be issued within 15 calendar days of receipt, unless the
commissioner provides to the applicant a written list of
deficiencies in the application, if any, within 15 calendar days of
receipt of an application.
(c) Amended public report where no additional phases or component
sites are added. An effective date for an amendment to a public
report should occur no more than 45 calendar days after actual
receipt by the commissioner of the amendment. The commissioner shall
provide a list of deficiencies regarding the amendments, if any,
within 45 calendar days of receipt.
11232. (a) The commissioner may by regulation prescribe filing fees
in connection with applications to the Department of Real Estate for
a public report pursuant to the provisions of this chapter that are
lower than the maximum fees specified in subdivision (b) if the
commissioner determines that the lower fees are sufficient to offset
the costs and expenses incurred in the administration of this
chapter. The commissioner shall hold at least one hearing each
calendar year to determine if lower fees than those specified in
subdivision (b) should be prescribed.
(b) The filing fees for an application for a public report to be
issued under authority of this chapter shall not exceed the following
for each time-share plan, location, or phase of the time-share plan
in which interests are to be offered for sale or lease:
(1) One thousand seven hundred dollars ($1,700) plus ten dollars
($10) for each time-share interest to be offered for an original
public report application.
(2) Six hundred dollars ($600) plus ten dollars ($10) for each
time-share plan interest to be offered that was not permitted to be
offered under the public report to be renewed for a renewal public
report or permit application.
(3) Five hundred dollars ($500) plus ten dollars ($10) for each
time-share interest to be offered under the amended public report for
which a fee has not previously been paid for an amended public
report application.
(4) Five hundred dollars ($500) for a conditional public report
application.
(c) Fees collected by the commissioner under authority of this
chapter shall be deposited into the Real Estate Fund pursuant to
Chapter 6 (commencing with Section 10450) of Part 1. Fees received by
the commissioner pursuant to this article shall be deemed earned
upon receipt. No part of any fee is refundable unless the
commissioner determines that it was paid as a result of mistake or
inadvertency. This section shall remain in effect unless it is
superseded pursuant to Section 10266 or subdivision (a) of Section
10266.5, whichever is applicable.
11233. An applicant for a public report for a time-share plan in
which the use and occupancy of the time-share interest purchased in
the time-share plan is determined according to a point system shall
include in the application the following information:
(a) Whether additional points may be acquired by purchase or
otherwise, in the future and the manner in which future purchases of
points may be made.
(b) The transferability of points to other persons, other years or
other time-share plans.
(c) A copy of the then-current point value use directory, along
with rules and procedures for changes by the developer or the
association in the manner in which point values may be used.
(1) No change exceeding 10 percent per annum in the manner in
which point values may be used may be made without the assent of at
least 25 percent of the voting power of the association other than
the developer.
(2) No time-share interest owner shall be prevented from using a
time-share plan as a result of changes in the manner in which point
values may be used.
(3) In the event point values are changed or adjusted, no
time-share owner shall be prevented from using his or her home resort
in the same manner as was provided for under the original purchase
contract.
(d) Any limitations or restrictions upon the use of point values.
(e) A description of an inventory control system that will ensure
compliance with Section 11250.
11234. A developer shall prepare, for issuance by the commissioner,
a public report that shall fully and accurately disclose those facts
concerning the time-share developer and time-share plan that are
required by this chapter or by regulation. The developer shall
provide the public report to each purchaser of a time-share interest
in a time-share plan at the time of purchase. The public report shall
be in writing and dated and shall require the purchaser to certify
in writing the receipt thereof. The public report for a single site
time-share plan is subject to the requirements of subdivision (a).
The public report for a specific time-share interest multisite
time-share plan is subject to the requirements of both subdivisions
(a) and (b). The public report for a nonspecific time-share interest
multisite time-share plan is subject to the requirements of
subdivision (c). For time-share plans located outside of the state, a
public report that has been authorized for use by the situs state
regulatory agency and that contains disclosures as determined by the
commissioner upon review to be substantially equivalent to or greater
than the information required to be disclosed pursuant to this
section may be used by the developer to meet the requirements of this
section. A developer may, upon approval by the commissioner, submit
a public report that combines, in a manner prescribed by the
commissioner, the information required to be disclosed by the
applicable subdivisions of this section and the information required
to be disclosed in a public report issued by a regulatory agency in
one or more other states.
(a) Public reports for a single site and those component sites of
a specific time-share interest multisite time-share plan that are
offered in this state shall include the following:
(1) The name and address of the developer and the type of
time-share plan being offered and the name and address of the
time-share project.
(2) A description of the existing or proposed accommodations,
including the type and number of time-share interests in the
accommodations, and if the accommodations are proposed or not yet
complete or fully functional, an estimated date of completion.
(3) The number of accommodations and time-share interests,
expressed in periods of seven-day use availability or other time
increments applicable to the time-share plan, committed to the
multisite time-share plan, and available for use by purchasers and a
representation about the percentage of useable time authorized for
sale, and if that percentage is 100 percent, then a statement
describing how adequate periods of time for maintenance and repair
will be provided.
(4) A description of any existing or proposed amenities of the
time-share plan and, if the amenities are proposed or not yet
complete or fully functional, the estimated date of completion.
(5) The extent to which financial arrangements have been made for
the completion of any incomplete, promised improvements.
(6) A description of the duration, phases, and operation of the
time-share plan.
(7) The name and principal address of the managing entity and a
description of the procedures, if any, for altering the powers and
responsibilities of the managing entity and for removing or replacing
it.
(8) The current annual budget as required by Section 11240, along
with the projected assessments and a description of the method for
calculating and apportioning the assessments among purchasers, all of
which shall be attached as an exhibit to the public report.
(9) Any initial or special fee due from the purchaser at closing
together with a description of the purpose and the method of
calculating the fee.
(10) A description of any financing offered by or available
through the developer.
(11) A description of any liens, defects, or encumbrances on or
affecting the title to the time-share interests.
(12) A description of any bankruptcies, pending civil or criminal
suits, adjudications, or disciplinary actions of which the developer
has knowledge, that would have a material effect on the developer's
ability to perform its obligations.
(13) Any current or expected fees or charges to be paid by
time-share purchasers for the use of any amenities related to the
time-share plan.
(14) A description and amount of insurance coverage provided for
the protection of the purchaser.
(15) The extent to which a time-share interest may become subject
to a tax lien or other lien arising out of claims against purchasers
of different time-share interests.
(16) A statement disclosing any right of first refusal or other
restraint on the transfer of all or any portion of a time-share
interest.
(17) A statement disclosing that a deposit made in connection with
the purchase of a time-share interest shall be held by an escrow
agent until expiration of any right to cancel the contract and that a
deposit shall be returned to the purchaser if he or she elects to
exercise his or her right of cancellation. Alternatively, if the
commissioner has accepted from the developer a surety bond,
irrevocable letter of credit, or other financial assurance, each of
which shall be enforceable by the association, in lieu of placing
deposits in an escrow account: (A) a statement disclosing that the
developer has provided a surety bond, irrevocable letter of credit,
or other financial assurance in an amount equal to or in excess of
the funds that would otherwise be placed in an escrow account, (B) a
description of the type of financial assurance that has been
obtained, (C) a statement that if the purchaser elects to exercise
his or her right of cancellation as provided in the contract, the
developer shall return the deposit, and (D) a description of the
person or entity to whom the purchaser should apply for payment.
(18) A statement that the assessments collected from the
purchasers will be kept in a segregated account separate from the
assessments collected from the purchasers of other time-share plans
managed by the same managing entity, along with a statement
identifying the location of the account and a disclosure of the
rights of owners to inspect the records pertaining to their accounts.
(19) If the time-share plan provides purchasers with the
opportunity to participate in an exchange program, a description of
the name and address of the exchange company and the method by which
a purchaser accesses the exchange program.
(20) Any other information that the developer, with the approval
of the commissioner, desires to include in the public report.
(21) Any other information reasonably requested by the
commissioner.
(b) Public reports for specific time-share interest multisite
time-share plans shall include the following additional disclosures:
(1) A description of each component site, including the name and
address of each component site.
(2) The number of accommodations and time-share interests,
expressed in periods of seven-day use availability or other time
increments applicable to each component site of the time-share plan,
committed to the multisite time-share plan and available for use by
purchasers and a representation about the percentage of useable time
authorized for sale, and if that percentage is 100 percent, then a
statement describing how adequate periods of time for maintenance and
repair will be provided.
(3) Each type of accommodation in terms of the number of bedrooms,
bathrooms, and sleeping capacity, and a statement of whether or not
the accommodation contains a full kitchen. For purposes of this
description, a "full kitchen" means a kitchen having a minimum of a
dishwasher, range, sink, oven, and refrigerator.
(4) A description of amenities available for use by the purchaser
at each component site.
(5) A description of the reservation system, which shall include
the following:
(A) The entity responsible for operating the reservation system,
its relationship to the developer, and the duration of any agreement
for operation of the reservation system.
(B) A summary of the rules and regulations governing access to and
use of the reservation system.
(C) The existence of and an explanation regarding any priority
reservation features that affect a purchaser's ability to make
reservations for the use of a given accommodation on a
first-come-first-served basis.
(6) The name and principal address of the managing entity for the
multisite time-share plan and a description of the procedures, if
any, for altering the powers and responsibilities of the managing
entity and for removing or replacing it.
(7) A description of any right to make any additions,
substitutions, or deletions of accommodations, amenities, or
component sites, and a description of the basis upon which
accommodations, amenities, or component sites may be added to,
substituted in, or deleted from the multisite time-share plan.
(8) A description of the purchaser's liability for any fees
associated with the multisite time-share plan.
(9) The location of each component site of the multisite
time-share plan, the historical occupancy of each component site for
the prior 12-month period, if the component site was part of the
multisite time-share plan during the 12-month time period, as well as
any periodic adjustment or amendment to the reservation system that
may be needed in order to respond to actual purchaser use patterns
and changes in purchaser use demand for the accommodations existing
at that time within the multisite time-share plan.
(10) Any other information that the developer, with the approval
of the commissioner, desires to include in the time-share disclosure
statement.
(c) Public reports for nonspecific time-share interest multisite
time-share plans shall include the following:
(1) The name and address of the developer.
(2) A description of the type of interest and usage rights the
purchaser will receive.
(3) A description of the duration and operation of the time-share
plan.
(4) A description of the type of insurance coverage provided for
each component site.
(5) An explanation of who holds title to the accommodations of
each component site.
(6) A description of each component site, including the name and
address of each component site.
(7) The number of accommodations and time-share interests,
expressed in periods of seven-day use availability or other time
increments applicable to the multisite time-share plan for each
component site committed to the multisite time-share plan and
available for use by purchasers and a representation about the
percentage of useable time authorized for sale, and if that
percentage is 100 percent, then a statement describing how adequate
periods of time for maintenance and repair will be provided.
(8) Each type of accommodation in terms of the number of bedrooms,
bathrooms, and sleeping capacity, and a statement of whether or not
the accommodation contains a full kitchen. For purposes of this
description, a "full kitchen" means a kitchen having a minimum of a
dishwasher, range, sink, oven, and refrigerator.
(9) A description of amenities available for use by the purchaser
at each component site.
(10) A description of any incomplete amenities at any of the
component sites along with a statement as to any assurance for
completion and the estimated date the amenities will be available.
(11) The location of each component site of the multisite
time-share plan, the historical occupancy of each component site for
the prior 12-month period, if the component site was part of the
multisite time-share plan during such 12-month time period, as well
as any periodic adjustment or amendment to the reservation system
that may be needed in order to respond to actual purchaser use
patterns and changes in purchaser use demand for the accommodations
existing at that time within the multisite time-share plan.
(12) A description of any right to make any additions,
substitutions, or deletions of accommodations, amenities, or
component sites, and a description of the basis upon which
accommodations, amenities, or component sites may be added to,
substituted in, or deleted from the multisite time-share plan.
(13) A description of the reservation system that shall include
all of the following:
(A) The entity responsible for operating the reservation system,
its relationship to the developer, and the duration of any agreement
for operation of the reservation system.
(B) A summary of the rules and regulations governing access to and
use of the reservation system.
(C) The existence of and an explanation regarding any priority
reservation features that affect a purchaser's ability to make
reservations for the use of a given accommodation on a
first-come-first-served basis.
(14) A description of any liens, defects, or encumbrances that
materially affect the purchaser's use rights.
(15) The name and principal address of the managing entity for the
multisite time-share plan and a description of the procedures, if
any, for altering the powers and responsibilities of the managing
entity and for removing or replacing it, and a description of the
relationship between a multisite time-share plan managing entity and
the managing entity of the component sites of a multisite time-share
plan, if different from the multisite time-share plan managing
entity.
(16) The current annual budget as provided in Section 11240, along
with the projected assessments and a description of the method for
calculating and apportioning the assessments among purchasers, all of
which shall be attached as an exhibit to the public report.
(17) Any current fees or charges to be paid by time-share
purchasers for the use of any amenities related to the time-share
plan and a statement that the fees or charges are subject to change.
(18) Any initial or special fee due from the purchaser at closing,
together with a description of the purpose and method of calculating
the fee.
(19) A description of any financing offered by or available
through the developer.
(20) A description of any bankruptcies, pending civil or criminal
suits, adjudications, or disciplinary actions of which the developer
has knowledge, which would have a material effect on the developer's
ability to perform its obligations.
(21) A statement disclosing any right of first refusal or other
restraint on the transfer of all or any portion of a time-share
interest.
(22) A statement disclosing that a deposit made in connection with
the purchase of a time-share interest shall be held by an escrow
agent until expiration of any right to cancel the contract and that a
deposit shall be returned to the purchaser if he or she elects to
exercise his or her right of cancellation. Alternatively, if the
commissioner has accepted from the developer a surety bond,
irrevocable letter of credit, or other financial assurance in lieu of
placing deposits in an escrow account: (A) a statement disclosing
that the developer has provided a surety bond, irrevocable letter of
credit, or other financial assurance in an amount equal to or in
excess of the funds that would otherwise be placed in an escrow
account, (B) a description of the type of financial assurance that
has been arranged, (C) a statement that if the purchaser elects to
exercise his or her right of cancellation as provided in the
contract, the developer shall return the deposit, and (D) a
description of the person or entity to whom the purchaser should
apply for payment.
(23) If the time-share plan provides purchasers with the
opportunity to participate in an exchange program, a description of
the name and address of the exchange company and the method by which
a purchaser accesses the exchange program.
(24) Any other information that the developer, with the approval
of the commissioner, desires to include in the time-share disclosure
statement.
(d) The commissioner may establish by regulation provisions
regarding the delivery of the public report and other required
information through alternative media forms.
(e) The commissioner may, upon finding that the subject matter is
otherwise adequately covered or the information is unnecessary or
inapplicable, waive any requirement set forth in this section.
11235. (a) A person who has entered into a contract to purchase a
short-term product shall have the right to rescind the contract until
midnight of the seventh calendar day, or a later time as provided in
the contract, following the day on which the contract is first made,
in which event the purchaser shall be entitled to a refund of 100
percent of the consideration paid under the contract, without
deduction.
(b) The developer or other person who offers a short-term product
shall clearly and conspicuously disclose, in writing, to all
purchasers of a short-term product, all of the following:
(1) The right of rescission provided for in subdivision (a).
(2) That reservations for accommodations under the contract are
subject to availability and that there is no guarantee that a
purchaser will be able to obtain specific accommodations during a
specific time period, if applicable.
(3) Specific blackout dates, if applicable.
(4) That the earlier the purchaser requests a reservation, the
greater the opportunity to received a confirmed reservation.
(5) That, if the purchaser later purchases a time-share interest,
the developer shall provide the purchaser with the then-current
public report for the time-share plan being purchased and that the
purchaser shall have until midnight of the seventh calendar day
following receipt of the public report to cancel the purchase of the
time-share interest.
(c) If a purchaser is unable to obtain a confirmed reservation for
a specific accommodation and time period requested, the developer or
other person who offers the short-term product shall attempt to
provide the purchaser with a substantially similar alternative to the
reservation requested. If the developer or other person who offers
the short-term product is unable to provide the reservation requested
or an acceptable alternative during the initial term of the
contract, the purchaser may request and be granted an extension of
the contract for a period of 12 months.
(d) The contract for the purchase of a short-term product shall
include the date of the contract and shall contain, in immediate
proximity to the space reserved for the signature of the purchaser, a
conspicuous statement as follows:
"YOU HAVE THE RIGHT TO CANCEL THIS CONTRACT AT ANY TIME PRIOR TO
MIDNIGHT OF THE SEVENTH (7TH)
11225. A person shall not be required to register a time-share plan
with the commissioner pursuant to this chapter if any of the
following applies:
(a) The person is an owner of a time-share interest who has
acquired the time-share interest for the person's own use and
occupancy and who later offers it for resale.
(b) The person is a managing entity or an association that is not
otherwise a developer of a time-share plan in its own right, solely
while acting as an association or under a contract with an
association to offer or sell a time-share interest transferred to the
association through foreclosure, deed in lieu of foreclosure, or
gratuitous transfer, if these acts are performed in the regular
course of, or as an incident to, the management of the association
for its own account in the time-share plan. Notwithstanding the
exemption from registration, the association or managing entity shall
provide each purchaser of a time-share interest covered by this
subdivision a copy of the time-share instruments, a copy of the
then-current budget, a written statement of the then-current
assessment amounts, and shall provide the purchaser the opportunity
to rescind the purchase within seven days after receipt of these
documents. Immediately prior to the space reserved in the contract
for the signature of the purchaser, the association or managing
entity shall disclose, in conspicuous type, substantially the
following notice of cancellation:
YOU MAY CANCEL THIS CONTRACT WITHOUT ANY PENALTY OR OBLIGATION
WITHIN SEVEN CALENDAR DAYS OF RECEIPT OF THE PUBLIC REPORT OR AFTER
THE DATE YOU SIGN THIS CONTRACT, WHICHEVER DATE IS LATER. IF YOU
DECIDE TO CANCEL THIS CONTRACT, YOU MUST NOTIFY THE ASSOCIATION (OR
MANAGING ENTITY) IN WRITING OF YOUR INTENT TO CANCEL. YOUR NOTICE OF
CANCELLATION SHALL BE EFFECTIVE UPON THE DATE SENT AND SHALL BE SENT
TO (NAME OF ASSOCIATION OR MANAGING ENTITY) AT (ADDRESS OF
ASSOCIATION OR MANAGING ENTITY). YOUR NOTICE OF CANCELLATION MAY ALSO
BE SENT BY FACSIMILE TO (FACSIMILE NUMBER OF THE ASSOCIATION OR
MANAGING ENTITY) OR BY HAND-DELIVERY. ANY ATTEMPT TO OBTAIN A WAIVER
OF YOUR CANCELLATION RIGHT IS VOID AND OF NO EFFECT.
(c) The person is conveyed, assigned, or transferred more than
seven time-share interests from a developer in a single voluntary or
involuntary transaction and subsequently conveys, assigns, or
transfers all of the time-share interests received from the developer
to a single purchaser in a single transaction.
(d) (1) The developer is offering or disposing of a time-share
interest to a purchaser who has previously acquired a time-share
interest from the same developer if the developer has a time-share
plan registered under this chapter, which was originally approved by
the commissioner within the preceding seven years, and the developer
complies in all respects with the provisions of Section 11245, and,
further, provides the purchaser with (A) a cancellation period of at
least seven days, (B) all the time-share disclosure documents that
are required to be provided to purchasers as if the sale occurred in
the state or jurisdiction where the time-share property is located,
and (C) the following disclaimer in conspicuous type:
WARNING: THE CALIFORNIA DEPARTMENT OF REAL ESTATE HAS NOT EXAMINED
THIS OFFERING, INCLUDING, BUT NOT LIMITED TO, THE CONDITION OF
TITLE, THE STATUS OF BLANKET LIENS ON THE PROJECT (IF ANY),
ARRANGEMENTS TO ASSURE PROJECT COMPLETION, ESCROW PRACTICES, CONTROL
OVER PROJECT MANAGEMENT, RACIALLY DISCRIMINATORY PRACTICES (IF ANY),
TERMS, CONDITIONS, AND PRICE OF THE OFFER, CONTROL OVER ANNUAL
ASSESSMENTS (IF ANY), OR THE AVAILABILITY OF WATER, SERVICES,
UTILITIES, OR IMPROVEMENTS. IT MAY BE ADVISABLE FOR YOU TO CONSULT AN
ATTORNEY OR OTHER KNOWLEDGEABLE PROFESSIONAL WHO IS FAMILIAR WITH
REAL ESTATE AND DEVELOPMENT LAW IN THE STATE WHERE THIS TIME-SHARE
PROPERTY IS SITUATED.
(2) By making such an offering or disposition, the person is
deemed to consent to the jurisdiction of the commissioner in the
event of a dispute with the purchaser in connection with the offering
or disposition.
(e) It is a single site time-share plan located outside of the
boundaries of the United States or component site of a specific
time-share interest multisite time-share plan located wholly outside
of the boundaries of the United States, or a nonspecific time-share
interest multisite time-share plan in which all component sites are
located wholly outside of the boundaries of the United States.
However, it is unlawful and a violation of this chapter for a person,
in this state, to sell or lease or offer for sale or lease a
time-share interest in such a time-share plan, located outside the
United States, unless the printed material, literature, advertising,
or invitation in this state relating to that sale, lease, or offer
clearly and conspicuously contains the following disclaimer in
capital letters of at least 10-point type:
WARNING: THE CALIFORNIA DEPARTMENT OF REAL ESTATE HAS NOT EXAMINED
THIS OFFERING, INCLUDING, BUT NOT LIMITED TO, THE CONDITION OF
TITLE, THE STATUS OF BLANKET LIENS ON THE PROJECT (IF ANY),
ARRANGEMENTS TO ASSURE PROJECT COMPLETION, ESCROW PRACTICES, CONTROL
OVER PROJECT MANAGEMENT, RACIALLY DISCRIMINATORY PRACTICES (IF ANY),
TERMS, CONDITIONS, AND PRICE OF THE OFFER, CONTROL OVER ANNUAL
ASSESSMENTS (IF ANY), OR THE AVAILABILITY OF WATER, SERVICES,
UTILITIES, OR IMPROVEMENTS. IT MAY BE ADVISABLE FOR YOU TO CONSULT AN
ATTORNEY OR OTHER KNOWLEDGEABLE PROFESSIONAL WHO IS FAMILIAR WITH
REAL ESTATE AND DEVELOPMENT LAW IN THE COUNTRY WHERE THIS TIME-SHARE
PROPERTY IS SITUATED.
(1) If an offer of time-share interest in a time-share plan
described in subdivision (e) is not initially made in writing, the
foregoing disclaimer shall be received by the offeree in writing
prior to a visit to a location, sales presentation, or contact with a
person representing the offeror, when the visit or contact was
scheduled or arranged by the offeror or its representative. The
deposit of the disclaimer in the United States mail, addressed to the
offeree and with first-class postage prepaid, at least five days
prior to the scheduled or arranged visit or contact, shall be deemed
to constitute delivery for purposes of this section.
(2) If any California resident is presented with an agreement or
purchase contract to lease or purchase a time-share interest as
described in subdivision (e), where an offer to lease or purchase
that time-share interest was made to that resident in California, a
copy of the disclaimer set forth in subdivision (e) shall be inserted
in at least 10-point type at the top of the first page of that
agreement or purchase contract and shall be initialed by that
California resident.
(3) Nothing contained in this subdivision shall be deemed to
exempt from registration in this state a nonspecific time-share
interest multisite time-share plan in which any component site in the
time-share plan is located in the United States.
11226. (a) Any person who, to any individual located in the state,
sells, offers to sell, or attempts to solicit prospective purchasers
to purchase a time-share interest, or any person who creates a
time-share plan with an accommodation in the state, shall register
the time-share plan with the commissioner, unless the time-share plan
is otherwise exempt under this chapter.
(b) A developer, or any of its agents, shall not sell, offer, or
dispose of a time-share interest in the state unless all necessary
registration requirements are provided and approved by the
commissioner, or the sale, offer, or disposition is otherwise
permitted by this chapter, or while an order revoking or suspending a
registration is in effect.
(c) In registering a time-share plan, the developer shall provide
the commissioner all of the following information:
(1) The developer's legal name, any assumed names used by the
developer, principal office street address, mailing address, primary
contact person, and telephone number.
(2) The name of the developer's authorized or registered agent in
the state upon whom claims can be served or service of process be
had, the agent's street address in California, and telephone number.
(3) The name, street address, mailing address, primary contact
person, and telephone number of the time-share plan being registered.
(4) The name, street address, mailing address, and telephone
number of any managing entity of the time-share plan.
(5) A public report that complies with the requirements of Section
11234, or for a time-share plan located outside of the state, a
public report that has been authorized for use by the situs state
regulatory agency and that contains disclosures as determined by the
commissioner upon review to be substantially equivalent to or greater
than the information required to be disclosed pursuant to Section
11234.
(6) A description of the inventory control system that will ensure
compliance with Section 11250.
(7) Any other information regarding the developer, time-share
plan, or managing entities as established by regulation.
(d) An applicant for a public report for a time-share plan shall
present evidence of the following for each accommodation in each
time-share property that is, or will be, offered for sale in this
state pursuant to the registration:
(1) That the accommodation is presently suitable for human
occupancy or that financial arrangements have been made to complete
construction or renovation of the accommodation to make it suitable
for human occupancy on or before the first date for occupancy by a
time-share interest owner.
(2) That the accommodation is owned or leased by the developer of
the time-share plan or is the subject of an enforceable option or
contract under which the developer will build, purchase, or lease the
accommodation. Notwithstanding this subdivision, the developer shall
present evidence prior to the receipt of a final public report that
the accommodation to be sold is owned or leased by the developer and
that the accommodation is free and clear of encumbrances in
accordance with Sections 11244 and 11255.
(e) If an accommodation in a time-share plan is located within a
local governmental jurisdiction or subdivision of real property in
which the dedication of accommodations to time-sharing is expressly
prohibited by ordinance or recorded restriction, either absolutely or
without a permit or other entitlement from the governing body, the
applicant for a public report shall present evidence of a permit or
other entitlement by the appropriate authority for the local
government or the subdivision.
(f) (1) The developer shall amend or supplement its disclosure
documents and registration information, to reflect any material
change in any information required by this chapter or the regulations
implementing this chapter. The developer shall notify the
commissioner of the material change prior to implementation of the
change, unless the change is beyond the control of the developer; in
which event, the developer shall provide written notice to the
commissioner as soon as reasonably practicable after the occurrence
of the event necessitating the change. All amendments, supplements,
and facts relevant to the material change shall be filed with the
commissioner within 20 calendar days of the material change.
(2) The developer may continue to sell time-share interests in the
time-share plan so long as, prior to closing, the developer provides
a notice to each purchaser that describes the material change and
provides to each purchaser the previously approved public report.
(A) If the change is material and adverse to the purchaser, all
purchaser funds shall be held in escrow, or pursuant to alternative
assurances permitted by subdivision (c) of Section 11243, and no
closing shall occur until the amendment relating to the material and
adverse change has been approved by the commissioner. After the
amendment relating to the material and adverse change has been
approved and the amended public report has been issued, the amended
public report shall be sent to the purchaser, and an additional
seven-day rescission period shall commence. The developer shall be
required to maintain evidence of the receipt by each purchaser of the
amended public report.
(B) If the commissioner refuses to approve the amendment relating
to the material and adverse change, all sales made using the notice
shall be subject to rescission and all funds returned.
(3) The developer shall update the public report to reflect any
changes to the time-share plan that are not material and adverse,
including the addition of any component sites, within a reasonable
time, and may continue to sell and close time-share interests prior
to the date that the amended public report is approved.
(g) An applicant for a public report for a multisite, time-share
plan consisting of specific time-share interests, as defined in
subparagraph (A) of paragraph (2) of subdivision (z) of Section
11212, affiliated with sites operated through the time-share plan's
reservation system, shall certify both of the following:
(1) That a purchaser has, or will have, contractual or membership
rights to use accommodations at each affiliated site and that, if an
accommodation or promised improvement is, or may become, subject to a
blanket encumbrance, that the blanket encumbrance is, or will be,
subordinate to these rights.
(2) That a certificate of occupancy has been issued with respect
to the accommodations at each affiliated site or that adequate
provisions exist or will exist for the completion of all such
accommodations. For any affiliated site accommodations that are not
complete, the public report shall clearly identify in conspicuous
type that those accommodations are not completed. For any
accommodations that are not complete and for which adequate
provisions for completion do not exist at the time the public report
is issued, the public report shall also provide in conspicuous type
that those accommodations might not be built, provided, however, that
a developer's failure to build the accommodations shall not relieve
the developer of any obligations created by the certification made
pursuant to this subdivision.
(h) For purposes of subdivision (d) of this section, the
"time-share property being offered for sale in this state" shall mean
the following:
(1) With respect to a single site time-share plan, the time-share
property being registered pursuant to this chapter.
(2) With respect to a specific time-share interest multisite
time-share plan, the specific time-share property being registered
pursuant to this chapter.
(3) With respect to a nonspecific time-share interest multisite
time-share plan, all time-share properties in the time-share plan.
11226.1. Any person offering to sell or lease any interest subject
to the requirements of Section 11226 shall make a copy of each of the
following documents available for examination by a prospective
purchaser or lessee before the execution of an offer to purchase or
lease and shall give a copy of those documents to each purchaser or
lessee as soon as practicable before transfer of the interest being
acquired by the purchaser or lessee:
(a) The declaration of covenants, conditions, and restrictions for
the time-share plan.
(b) Articles of incorporation or association for the time-share
owners' association.
(c) Bylaws of the owners' association.
(d) Any other instrument that establishes or defines the common,
mutual, and reciprocal rights and responsibilities of the owners or
lessees of interest in the time-share plan as members of the owners'
association or otherwise.
(e) The current budget and financial statements for the time-share
plan.
11227. (a) Subject to subdivision (h), the commissioner shall issue
a final public report if all registration requirements have been met
as set forth in this chapter and if all deficiencies and substantive
inadequacies in the substantially complete application for a final
public report for the time-share plan have been corrected.
(b) The commissioner may issue a conditional public report prior
to issuing a final public report for a time-share plan if the
requirements of subdivision (c) are met, all deficiencies and
substantive inadequacies in the substantially complete application
for a final public report for the time-share plan have been
corrected, the material elements of the offering to be made under the
authority of the conditional public report have been established,
and all requirements for the issuance of the conditional public
report have been met, except for one or more of the following
requirements, as may be applicable:
(1) A final map has not been recorded.
(2) A condominium plan has not been recorded.
(3) A declaration of covenants, conditions, and restrictions has
not been recorded.
(4) A declaration of annexation has not been recorded.
(5) A recorded subordination of existing liens to the time-share
instruments or declaration of annexation or escrow instructions to
effect recordation prior to the first sale, are lacking.
(6) Filed articles of incorporation are lacking.
(7) A current preliminary report of a licensed title insurance
company issued after filing of the final map and recording of the
time-share instrument covering all time-share interests to be
included in the public report has not been provided.
(8) Other requirements the commissioner determines are likely to
be timely satisfied by the applicant.
(c) An applicant for a conditional public report shall submit the
following information and documents with the applicable filing fee:
(1) A copy of the statement set forth in subdivision (e).
(2) A sales agreement or lease to be used in any transaction
conducted under authority of the conditional public report. The sales
agreement or lease shall include all of the following provisions:
(A) No escrow will close, funds will not be released from escrow,
and the interest contracted for will not be conveyed until a current
final public report for the time-share plan is furnished to the
purchaser.
(B) The contract may be rescinded, in which event the entire sum
of money paid or advanced by the purchaser shall be returned if (i) a
final public report has not been issued within six months after the
date of issuance of the conditional public report if the conditional
public report is not renewed, (ii) the final public report is not
issued within 12 months after the initial conditional public report
is received if the conditional public report has been renewed for an
additional six-month period, or (iii) the purchaser or lessee is
dissatisfied with the final public report because of a material and
adverse change.
(3) Escrow instructions to be used in any transaction conducted
under authority of the conditional public report that includes at
least the following information:
(A) The name and address of the escrow depository.
(B) A description of the nature of the transaction.
(C) Provisions ensuring compliance with Section 11243.
(D) Provisions ensuring that no escrow will close, funds will not
be released from escrow, and the interest contracted for will not be
conveyed until a current final public report for the time-share plan
is furnished to the purchaser or lessee.
(E) Provisions for the return of money as prescribed in
subparagraph (B) of paragraph (2).
(d) A decision by the commissioner to not issue a conditional
public report shall be noticed in writing to the applicant within
five business days after his or her decision and that notice shall
specifically state the reasons why the report is not being issued.
(e) A person may sell or lease, or offer for sale or lease,
time-share interests in a time-share plan pursuant to a conditional
public report if, as a condition of the sale or lease or offer for
sale or lease, delivery of legal title or other interest contracted
for will not take place until issuance of a final public report and
provided that the requirements of subdivision (c) are met.
(f) A developer, principal, or his or her agent shall provide a
prospective purchaser a copy of the conditional public report and a
written statement including all of the following information:
(1) Specification of the information required for issuance of a
final public report.
(2) Specification of the information required in the final public
report that is not available in the conditional public report, along
with a statement of the reasons why that information is not available
at the time of issuance of the conditional public report.
(3) A statement that no person acting as a principal or agent
shall sell or lease, or offer for sale or lease, time-share interests
in a time-share plan for which a conditional public report has been
issued except as provided in this chapter.
(4) Specification of the requirements of subdivision (e).
(g) The prospective purchaser shall sign a receipt that he or she
has received and has read the conditional public report and the
written statement provided pursuant to subdivision (f).
(h) The term of a conditional public report may not exceed six
months unless renewed pursuant to this subdivision. The conditional
public report may be renewed for one additional six-month period if
the commissioner determines that the requirements for issuance of a
final public report are likely to be satisfied during the renewal
term. The renewal of a conditional public report shall not act to
afford a purchaser who received the initial conditional public report
any additional rescission rights other than those provided to a
purchaser when a final public report is issued and a material and
adverse change has been made.
(i) For single site time-share plans and component sites of a
multisite time-share plan located outside of the state, a disclosure
document that has been authorized for use by the state regulatory
agency in the state in which the time-share plan or component site is
located that contains the disclosures as determined by the
commissioner upon review to be substantially equivalent to or greater
than the information required to be disclosed pursuant to Section
11234, shall be accepted in lieu of a public report required pursuant
to this section. The disclosure document shall contain a cover page
issued by the commissioner certifying the approval of its use in lieu
of the public report required herein.
(j) Notwithstanding anything in this section to the contrary, the
commissioner may grant a 12-month preliminary public report allowing
the developer to begin offering and selling time-share interests, in
a time-share plan regardless of whether the accommodations of the
time-share plan are located within or outside of the state, while the
registration is pending with the commissioner. The commissioner may
grant one additional 12-month period if the developer is actively and
diligently pursuing registration under this chapter. The preliminary
public report shall automatically terminate with respect to those
time-share interests covered by a final public report that is issued
before the scheduled termination date of the preliminary report. To
obtain a preliminary public report, the developer shall provide all
of the following:
(1) Submit the reservation instrument to be used in a form
previously approved by the department with at least the following
provisions:
(A) The right of both the developer and the potential purchaser to
unilaterally cancel the reservation at any time.
(B) The payment to the potential purchaser of his or her total
deposit following cancellation of the reservation by either party.
(C) The placing of the deposit into an interest bearing escrow
account.
(2) Agree to provide each potential purchaser with a copy of the
preliminary public report and an executed receipt for a copy before
any money or other thing of value has been accepted by or on behalf
of the developer in connection with the reservation.
(3) Agree to provide a copy of the reservation instrument signed
by the potential purchaser and by or on behalf of the developer to
the potential purchaser, and place any deposit taken from the
potential purchaser into a neutral escrow depository acceptable to
the commissioner.
11228. The term of a final public report shall be limited to five
years. A renewal shall be issued if the developer, owner, or agent
makes application for renewal of any report and has submitted the
additional information that the commissioner may require.
11229. (a) In connection with its review of the registration
application of a time-share plan, the commissioner may make an
examination of any time-share property submitted for registration
pursuant to this chapter, and shall, unless there are grounds for
denial, issue to the developer a public report authorizing the sale
or lease in this state of the time-share interests within the
time-share plan submitted pursuant to this chapter. The report shall
contain the data obtained in accordance with Section 11234.
(b) The commissioner may deny the issuance of the public report
based on the applicant's failure to comply with any of the provisions
of this chapter or the regulations of the commissioner pertaining
thereto, including, but not limited to, all of the following:
(1) The sale or lease would constitute misrepresentation to, or
deceit or fraud of, the purchasers or lessees.
(2) Inability to deliver title or other interest contracted for.
(3) Inability to demonstrate, in accordance with this chapter,
that adequate financial arrangements have been made for all offsite
improvements included in the offering.
(4) Inability to demonstrate, in accordance with this chapter,
that adequate financial arrangements have been made for any
community, recreational, or other facilities included in the
offering.
(5) Failure to make a showing that the parcels can be used for the
purpose for which they are offered.
(6) Failure to provide in the contract or other writing the use or
uses for which the parcels are offered, together with any covenants
or conditions relative thereto.
(c) Any developer objecting to the denial of a public report may,
within 30 days after receipt of the order of denial, file a written
request for a hearing. The commissioner shall hold the hearing within
20 days thereafter unless the party requesting the hearing requests
a postponement. If the hearing is not held within 20 days after
request for a hearing is received plus the period of the postponement
or if a proposed decision is not rendered within 45 days after
submission and an order adopting or rejecting the proposed decision
is not issued within 15 days thereafter, the order of denial shall be
rescinded and a public report issued.
11230. If the time-share plan, including any accommodations, or
amenities within the common area are not completed prior to the
issuance of a final public report for the time-share plan, the
developer shall specify a reasonable date for completion and shall
comply with any one of the following conditions:
(a) Arranges for lien and completion bond or bonds, enforceable by
the association, in an amount and subject to the terms, conditions,
and coverage necessary to assure completion of the improvements
lien-free. The bond shall not exceed 120 percent of the cost for
completion, and the bond shall provide for the reduction of the bond
amount as work is completed.
(b) All funds from the sale of time-share interests as the
commissioner shall determine are sufficient to assure construction of
the improvement or improvements shall be bonded or impounded in a
neutral escrow depository acceptable to the commissioner until the
improvements have been completed and all applicable lien periods have
expired.
(c) An amount sufficient to cover the costs of construction shall
be deposited in a neutral escrow depository acceptable to the
commissioner under a written escrow agreement providing for
disbursements from the escrow as work is completed.
(d) An alternative plan that may be approved by the commissioner.
11231. Every registration required to be filed with the
commissioner under this chapter shall be reviewed and issued the
specified public report in accordance with the following schedule:
(a) Time-share registration. Registration shall be effective only
upon the issuance of a public report by the commissioner that shall
occur no later than 60 calendar days after the actual receipt by the
commissioner of the properly completed application. The commissioner
shall provide a list of deficiencies in the application, if any,
within 60 calendar days of receipt. This same time period applies
when amending a public report to add additional phases or component
sites of the time-share plan.
(b) Preliminary public report registration. A preliminary public
report shall be issued within 15 calendar days of receipt, unless the
commissioner provides to the applicant a written list of
deficiencies in the application, if any, within 15 calendar days of
receipt of an application.
(c) Amended public report where no additional phases or component
sites are added. An effective date for an amendment to a public
report should occur no more than 45 calendar days after actual
receipt by the commissioner of the amendment. The commissioner shall
provide a list of deficiencies regarding the amendments, if any,
within 45 calendar days of receipt.
11232. (a) The commissioner may by regulation prescribe filing fees
in connection with applications to the Department of Real Estate for
a public report pursuant to the provisions of this chapter that are
lower than the maximum fees specified in subdivision (b) if the
commissioner determines that the lower fees are sufficient to offset
the costs and expenses incurred in the administration of this
chapter. The commissioner shall hold at least one hearing each
calendar year to determine if lower fees than those specified in
subdivision (b) should be prescribed.
(b) The filing fees for an application for a public report to be
issued under authority of this chapter shall not exceed the following
for each time-share plan, location, or phase of the time-share plan
in which interests are to be offered for sale or lease:
(1) One thousand seven hundred dollars ($1,700) plus ten dollars
($10) for each time-share interest to be offered for an original
public report application.
(2) Six hundred dollars ($600) plus ten dollars ($10) for each
time-share plan interest to be offered that was not permitted to be
offered under the public report to be renewed for a renewal public
report or permit application.
(3) Five hundred dollars ($500) plus ten dollars ($10) for each
time-share interest to be offered under the amended public report for
which a fee has not previously been paid for an amended public
report application.
(4) Five hundred dollars ($500) for a conditional public report
application.
(c) Fees collected by the commissioner under authority of this
chapter shall be deposited into the Real Estate Fund pursuant to
Chapter 6 (commencing with Section 10450) of Part 1. Fees received by
the commissioner pursuant to this article shall be deemed earned
upon receipt. No part of any fee is refundable unless the
commissioner determines that it was paid as a result of mistake or
inadvertency. This section shall remain in effect unless it is
superseded pursuant to Section 10266 or subdivision (a) of Section
10266.5, whichever is applicable.
11233. An applicant for a public report for a time-share plan in
which the use and occupancy of the time-share interest purchased in
the time-share plan is determined according to a point system shall
include in the application the following information:
(a) Whether additional points may be acquired by purchase or
otherwise, in the future and the manner in which future purchases of
points may be made.
(b) The transferability of points to other persons, other years or
other time-share plans.
(c) A copy of the then-current point value use directory, along
with rules and procedures for changes by the developer or the
association in the manner in which point values may be used.
(1) No change exceeding 10 percent per annum in the manner in
which point values may be used may be made without the assent of at
least 25 percent of the voting power of the association other than
the developer.
(2) No time-share interest owner shall be prevented from using a
time-share plan as a result of changes in the manner in which point
values may be used.
(3) In the event point values are changed or adjusted, no
time-share owner shall be prevented from using his or her home resort
in the same manner as was provided for under the original purchase
contract.
(d) Any limitations or restrictions upon the use of point values.
(e) A description of an inventory control system that will ensure
compliance with Section 11250.
11234. A developer shall prepare, for issuance by the commissioner,
a public report that shall fully and accurately disclose those facts
concerning the time-share developer and time-share plan that are
required by this chapter or by regulation. The developer shall
provide the public report to each purchaser of a time-share interest
in a time-share plan at the time of purchase. The public report shall
be in writing and dated and shall require the purchaser to certify
in writing the receipt thereof. The public report for a single site
time-share plan is subject to the requirements of subdivision (a).
The public report for a specific time-share interest multisite
time-share plan is subject to the requirements of both subdivisions
(a) and (b). The public report for a nonspecific time-share interest
multisite time-share plan is subject to the requirements of
subdivision (c). For time-share plans located outside of the state, a
public report that has been authorized for use by the situs state
regulatory agency and that contains disclosures as determined by the
commissioner upon review to be substantially equivalent to or greater
than the information required to be disclosed pursuant to this
section may be used by the developer to meet the requirements of this
section. A developer may, upon approval by the commissioner, submit
a public report that combines, in a manner prescribed by the
commissioner, the information required to be disclosed by the
applicable subdivisions of this section and the information required
to be disclosed in a public report issued by a regulatory agency in
one or more other states.
(a) Public reports for a single site and those component sites of
a specific time-share interest multisite time-share plan that are
offered in this state shall include the following:
(1) The name and address of the developer and the type of
time-share plan being offered and the name and address of the
time-share project.
(2) A description of the existing or proposed accommodations,
including the type and number of time-share interests in the
accommodations, and if the accommodations are proposed or not yet
complete or fully functional, an estimated date of completion.
(3) The number of accommodations and time-share interests,
expressed in periods of seven-day use availability or other time
increments applicable to the time-share plan, committed to the
multisite time-share plan, and available for use by purchasers and a
representation about the percentage of useable time authorized for
sale, and if that percentage is 100 percent, then a statement
describing how adequate periods of time for maintenance and repair
will be provided.
(4) A description of any existing or proposed amenities of the
time-share plan and, if the amenities are proposed or not yet
complete or fully functional, the estimated date of completion.
(5) The extent to which financial arrangements have been made for
the completion of any incomplete, promised improvements.
(6) A description of the duration, phases, and operation of the
time-share plan.
(7) The name and principal address of the managing entity and a
description of the procedures, if any, for altering the powers and
responsibilities of the managing entity and for removing or replacing
it.
(8) The current annual budget as required by Section 11240, along
with the projected assessments and a description of the method for
calculating and apportioning the assessments among purchasers, all of
which shall be attached as an exhibit to the public report.
(9) Any initial or special fee due from the purchaser at closing
together with a description of the purpose and the method of
calculating the fee.
(10) A description of any financing offered by or available
through the developer.
(11) A description of any liens, defects, or encumbrances on or
affecting the title to the time-share interests.
(12) A description of any bankruptcies, pending civil or criminal
suits, adjudications, or disciplinary actions of which the developer
has knowledge, that would have a material effect on the developer's
ability to perform its obligations.
(13) Any current or expected fees or charges to be paid by
time-share purchasers for the use of any amenities related to the
time-share plan.
(14) A description and amount of insurance coverage provided for
the protection of the purchaser.
(15) The extent to which a time-share interest may become subject
to a tax lien or other lien arising out of claims against purchasers
of different time-share interests.
(16) A statement disclosing any right of first refusal or other
restraint on the transfer of all or any portion of a time-share
interest.
(17) A statement disclosing that a deposit made in connection with
the purchase of a time-share interest shall be held by an escrow
agent until expiration of any right to cancel the contract and that a
deposit shall be returned to the purchaser if he or she elects to
exercise his or her right of cancellation. Alternatively, if the
commissioner has accepted from the developer a surety bond,
irrevocable letter of credit, or other financial assurance, each of
which shall be enforceable by the association, in lieu of placing
deposits in an escrow account: (A) a statement disclosing that the
developer has provided a surety bond, irrevocable letter of credit,
or other financial assurance in an amount equal to or in excess of
the funds that would otherwise be placed in an escrow account, (B) a
description of the type of financial assurance that has been
obtained, (C) a statement that if the purchaser elects to exercise
his or her right of cancellation as provided in the contract, the
developer shall return the deposit, and (D) a description of the
person or entity to whom the purchaser should apply for payment.
(18) A statement that the assessments collected from the
purchasers will be kept in a segregated account separate from the
assessments collected from the purchasers of other time-share plans
managed by the same managing entity, along with a statement
identifying the location of the account and a disclosure of the
rights of owners to inspect the records pertaining to their accounts.
(19) If the time-share plan provides purchasers with the
opportunity to participate in an exchange program, a description of
the name and address of the exchange company and the method by which
a purchaser accesses the exchange program.
(20) Any other information that the developer, with the approval
of the commissioner, desires to include in the public report.
(21) Any other information reasonably requested by the
commissioner.
(b) Public reports for specific time-share interest multisite
time-share plans shall include the following additional disclosures:
(1) A description of each component site, including the name and
address of each component site.
(2) The number of accommodations and time-share interests,
expressed in periods of seven-day use availability or other time
increments applicable to each component site of the time-share plan,
committed to the multisite time-share plan and available for use by
purchasers and a representation about the percentage of useable time
authorized for sale, and if that percentage is 100 percent, then a
statement describing how adequate periods of time for maintenance and
repair will be provided.
(3) Each type of accommodation in terms of the number of bedrooms,
bathrooms, and sleeping capacity, and a statement of whether or not
the accommodation contains a full kitchen. For purposes of this
description, a "full kitchen" means a kitchen having a minimum of a
dishwasher, range, sink, oven, and refrigerator.
(4) A description of amenities available for use by the purchaser
at each component site.
(5) A description of the reservation system, which shall include
the following:
(A) The entity responsible for operating the reservation system,
its relationship to the developer, and the duration of any agreement
for operation of the reservation system.
(B) A summary of the rules and regulations governing access to and
use of the reservation system.
(C) The existence of and an explanation regarding any priority
reservation features that affect a purchaser's ability to make
reservations for the use of a given accommodation on a
first-come-first-served basis.
(6) The name and principal address of the managing entity for the
multisite time-share plan and a description of the procedures, if
any, for altering the powers and responsibilities of the managing
entity and for removing or replacing it.
(7) A description of any right to make any additions,
substitutions, or deletions of accommodations, amenities, or
component sites, and a description of the basis upon which
accommodations, amenities, or component sites may be added to,
substituted in, or deleted from the multisite time-share plan.
(8) A description of the purchaser's liability for any fees
associated with the multisite time-share plan.
(9) The location of each component site of the multisite
time-share plan, the historical occupancy of each component site for
the prior 12-month period, if the component site was part of the
multisite time-share plan during the 12-month time period, as well as
any periodic adjustment or amendment to the reservation system that
may be needed in order to respond to actual purchaser use patterns
and changes in purchaser use demand for the accommodations existing
at that time within the multisite time-share plan.
(10) Any other information that the developer, with the approval
of the commissioner, desires to include in the time-share disclosure
statement.
(c) Public reports for nonspecific time-share interest multisite
time-share plans shall include the following:
(1) The name and address of the developer.
(2) A description of the type of interest and usage rights the
purchaser will receive.
(3) A description of the duration and operation of the time-share
plan.
(4) A description of the type of insurance coverage provided for
each component site.
(5) An explanation of who holds title to the accommodations of
each component site.
(6) A description of each component site, including the name and
address of each component site.
(7) The number of accommodations and time-share interests,
expressed in periods of seven-day use availability or other time
increments applicable to the multisite time-share plan for each
component site committed to the multisite time-share plan and
available for use by purchasers and a representation about the
percentage of useable time authorized for sale, and if that
percentage is 100 percent, then a statement describing how adequate
periods of time for maintenance and repair will be provided.
(8) Each type of accommodation in terms of the number of bedrooms,
bathrooms, and sleeping capacity, and a statement of whether or not
the accommodation contains a full kitchen. For purposes of this
description, a "full kitchen" means a kitchen having a minimum of a
dishwasher, range, sink, oven, and refrigerator.
(9) A description of amenities available for use by the purchaser
at each component site.
(10) A description of any incomplete amenities at any of the
component sites along with a statement as to any assurance for
completion and the estimated date the amenities will be available.
(11) The location of each component site of the multisite
time-share plan, the historical occupancy of each component site for
the prior 12-month period, if the component site was part of the
multisite time-share plan during such 12-month time period, as well
as any periodic adjustment or amendment to the reservation system
that may be needed in order to respond to actual purchaser use
patterns and changes in purchaser use demand for the accommodations
existing at that time within the multisite time-share plan.
(12) A description of any right to make any additions,
substitutions, or deletions of accommodations, amenities, or
component sites, and a description of the basis upon which
accommodations, amenities, or component sites may be added to,
substituted in, or deleted from the multisite time-share plan.
(13) A description of the reservation system that shall include
all of the following:
(A) The entity responsible for operating the reservation system,
its relationship to the developer, and the duration of any agreement
for operation of the reservation system.
(B) A summary of the rules and regulations governing access to and
use of the reservation system.
(C) The existence of and an explanation regarding any priority
reservation features that affect a purchaser's ability to make
reservations for the use of a given accommodation on a
first-come-first-served basis.
(14) A description of any liens, defects, or encumbrances that
materially affect the purchaser's use rights.
(15) The name and principal address of the managing entity for the
multisite time-share plan and a description of the procedures, if
any, for altering the powers and responsibilities of the managing
entity and for removing or replacing it, and a description of the
relationship between a multisite time-share plan managing entity and
the managing entity of the component sites of a multisite time-share
plan, if different from the multisite time-share plan managing
entity.
(16) The current annual budget as provided in Section 11240, along
with the projected assessments and a description of the method for
calculating and apportioning the assessments among purchasers, all of
which shall be attached as an exhibit to the public report.
(17) Any current fees or charges to be paid by time-share
purchasers for the use of any amenities related to the time-share
plan and a statement that the fees or charges are subject to change.
(18) Any initial or special fee due from the purchaser at closing,
together with a description of the purpose and method of calculating
the fee.
(19) A description of any financing offered by or available
through the developer.
(20) A description of any bankruptcies, pending civil or criminal
suits, adjudications, or disciplinary actions of which the developer
has knowledge, which would have a material effect on the developer's
ability to perform its obligations.
(21) A statement disclosing any right of first refusal or other
restraint on the transfer of all or any portion of a time-share
interest.
(22) A statement disclosing that a deposit made in connection with
the purchase of a time-share interest shall be held by an escrow
agent until expiration of any right to cancel the contract and that a
deposit shall be returned to the purchaser if he or she elects to
exercise his or her right of cancellation. Alternatively, if the
commissioner has accepted from the developer a surety bond,
irrevocable letter of credit, or other financial assurance in lieu of
placing deposits in an escrow account: (A) a statement disclosing
that the developer has provided a surety bond, irrevocable letter of
credit, or other financial assurance in an amount equal to or in
excess of the funds that would otherwise be placed in an escrow
account, (B) a description of the type of financial assurance that
has been arranged, (C) a statement that if the purchaser elects to
exercise his or her right of cancellation as provided in the
contract, the developer shall return the deposit, and (D) a
description of the person or entity to whom the purchaser should
apply for payment.
(23) If the time-share plan provides purchasers with the
opportunity to participate in an exchange program, a description of
the name and address of the exchange company and the method by which
a purchaser accesses the exchange program.
(24) Any other information that the developer, with the approval
of the commissioner, desires to include in the time-share disclosure
statement.
(d) The commissioner may establish by regulation provisions
regarding the delivery of the public report and other required
information through alternative media forms.
(e) The commissioner may, upon finding that the subject matter is
otherwise adequately covered or the information is unnecessary or
inapplicable, waive any requirement set forth in this section.
11235. (a) A person who has entered into a contract to purchase a
short-term product shall have the right to rescind the contract until
midnight of the seventh calendar day, or a later time as provided in
the contract, following the day on which the contract is first made,
in which event the purchaser shall be entitled to a refund of 100
percent of the consideration paid under the contract, without
deduction.
(b) The developer or other person who offers a short-term product
shall clearly and conspicuously disclose, in writing, to all
purchasers of a short-term product, all of the following:
(1) The right of rescission provided for in subdivision (a).
(2) That reservations for accommodations under the contract are
subject to availability and that there is no guarantee that a
purchaser will be able to obtain specific accommodations during a
specific time period, if applicable.
(3) Specific blackout dates, if applicable.
(4) That the earlier the purchaser requests a reservation, the
greater the opportunity to received a confirmed reservation.
(5) That, if the purchaser later purchases a time-share interest,
the developer shall provide the purchaser with the then-current
public report for the time-share plan being purchased and that the
purchaser shall have until midnight of the seventh calendar day
following receipt of the public report to cancel the purchase of the
time-share interest.
(c) If a purchaser is unable to obtain a confirmed reservation for
a specific accommodation and time period requested, the developer or
other person who offers the short-term product shall attempt to
provide the purchaser with a substantially similar alternative to the
reservation requested. If the developer or other person who offers
the short-term product is unable to provide the reservation requested
or an acceptable alternative during the initial term of the
contract, the purchaser may request and be granted an extension of
the contract for a period of 12 months.
(d) The contract for the purchase of a short-term product shall
include the date of the contract and shall contain, in immediate
proximity to the space reserved for the signature of the purchaser, a
conspicuous statement as follows:
"YOU HAVE THE RIGHT TO CANCEL THIS CONTRACT AT ANY TIME PRIOR TO
MIDNIGHT OF THE SEVENTH (7TH)
11225. A person shall not be required to register a time-share plan
with the commissioner pursuant to this chapter if any of the
following applies:
(a) The person is an owner of a time-share interest who has
acquired the time-share interest for the person's own use and
occupancy and who later offers it for resale.
(b) The person is a managing entity or an association that is not
otherwise a developer of a time-share plan in its own right, solely
while acting as an association or under a contract with an
association to offer or sell a time-share interest transferred to the
association through foreclosure, deed in lieu of foreclosure, or
gratuitous transfer, if these acts are performed in the regular
course of, or as an incident to, the management of the association
for its own account in the time-share plan. Notwithstanding the
exemption from registration, the association or managing entity shall
provide each purchaser of a time-share interest covered by this
subdivision a copy of the time-share instruments, a copy of the
then-current budget, a written statement of the then-current
assessment amounts, and shall provide the purchaser the opportunity
to rescind the purchase within seven days after receipt of these
documents. Immediately prior to the space reserved in the contract
for the signature of the purchaser, the association or managing
entity shall disclose, in conspicuous type, substantially the
following notice of cancellation:
YOU MAY CANCEL THIS CONTRACT WITHOUT ANY PENALTY OR OBLIGATION
WITHIN SEVEN CALENDAR DAYS OF RECEIPT OF THE PUBLIC REPORT OR AFTER
THE DATE YOU SIGN THIS CONTRACT, WHICHEVER DATE IS LATER. IF YOU
DECIDE TO CANCEL THIS CONTRACT, YOU MUST NOTIFY THE ASSOCIATION (OR
MANAGING ENTITY) IN WRITING OF YOUR INTENT TO CANCEL. YOUR NOTICE OF
CANCELLATION SHALL BE EFFECTIVE UPON THE DATE SENT AND SHALL BE SENT
TO (NAME OF ASSOCIATION OR MANAGING ENTITY) AT (ADDRESS OF
ASSOCIATION OR MANAGING ENTITY). YOUR NOTICE OF CANCELLATION MAY ALSO
BE SENT BY FACSIMILE TO (FACSIMILE NUMBER OF THE ASSOCIATION OR
MANAGING ENTITY) OR BY HAND-DELIVERY. ANY ATTEMPT TO OBTAIN A WAIVER
OF YOUR CANCELLATION RIGHT IS VOID AND OF NO EFFECT.
(c) The person is conveyed, assigned, or transferred more than
seven time-share interests from a developer in a single voluntary or
involuntary transaction and subsequently conveys, assigns, or
transfers all of the time-share interests received from the developer
to a single purchaser in a single transaction.
(d) (1) The developer is offering or disposing of a time-share
interest to a purchaser who has previously acquired a time-share
interest from the same developer if the developer has a time-share
plan registered under this chapter, which was originally approved by
the commissioner within the preceding seven years, and the developer
complies in all respects with the provisions of Section 11245, and,
further, provides the purchaser with (A) a cancellation period of at
least seven days, (B) all the time-share disclosure documents that
are required to be provided to purchasers as if the sale occurred in
the state or jurisdiction where the time-share property is located,
and (C) the following disclaimer in conspicuous type:
WARNING: THE CALIFORNIA DEPARTMENT OF REAL ESTATE HAS NOT EXAMINED
THIS OFFERING, INCLUDING, BUT NOT LIMITED TO, THE CONDITION OF
TITLE, THE STATUS OF BLANKET LIENS ON THE PROJECT (IF ANY),
ARRANGEMENTS TO ASSURE PROJECT COMPLETION, ESCROW PRACTICES, CONTROL
OVER PROJECT MANAGEMENT, RACIALLY DISCRIMINATORY PRACTICES (IF ANY),
TERMS, CONDITIONS, AND PRICE OF THE OFFER, CONTROL OVER ANNUAL
ASSESSMENTS (IF ANY), OR THE AVAILABILITY OF WATER, SERVICES,
UTILITIES, OR IMPROVEMENTS. IT MAY BE ADVISABLE FOR YOU TO CONSULT AN
ATTORNEY OR OTHER KNOWLEDGEABLE PROFESSIONAL WHO IS FAMILIAR WITH
REAL ESTATE AND DEVELOPMENT LAW IN THE STATE WHERE THIS TIME-SHARE
PROPERTY IS SITUATED.
(2) By making such an offering or disposition, the person is
deemed to consent to the jurisdiction of the commissioner in the
event of a dispute with the purchaser in connection with the offering
or disposition.
(e) It is a single site time-share plan located outside of the
boundaries of the United States or component site of a specific
time-share interest multisite time-share plan located wholly outside
of the boundaries of the United States, or a nonspecific time-share
interest multisite time-share plan in which all component sites are
located wholly outside of the boundaries of the United States.
However, it is unlawful and a violation of this chapter for a person,
in this state, to sell or lease or offer for sale or lease a
time-share interest in such a time-share plan, located outside the
United States, unless the printed material, literature, advertising,
or invitation in this state relating to that sale, lease, or offer
clearly and conspicuously contains the following disclaimer in
capital letters of at least 10-point type:
WARNING: THE CALIFORNIA DEPARTMENT OF REAL ESTATE HAS NOT EXAMINED
THIS OFFERING, INCLUDING, BUT NOT LIMITED TO, THE CONDITION OF
TITLE, THE STATUS OF BLANKET LIENS ON THE PROJECT (IF ANY),
ARRANGEMENTS TO ASSURE PROJECT COMPLETION, ESCROW PRACTICES, CONTROL
OVER PROJECT MANAGEMENT, RACIALLY DISCRIMINATORY PRACTICES (IF ANY),
TERMS, CONDITIONS, AND PRICE OF THE OFFER, CONTROL OVER ANNUAL
ASSESSMENTS (IF ANY), OR THE AVAILABILITY OF WATER, SERVICES,
UTILITIES, OR IMPROVEMENTS. IT MAY BE ADVISABLE FOR YOU TO CONSULT AN
ATTORNEY OR OTHER KNOWLEDGEABLE PROFESSIONAL WHO IS FAMILIAR WITH
REAL ESTATE AND DEVELOPMENT LAW IN THE COUNTRY WHERE THIS TIME-SHARE
PROPERTY IS SITUATED.
(1) If an offer of time-share interest in a time-share plan
described in subdivision (e) is not initially made in writing, the
foregoing disclaimer shall be received by the offeree in writing
prior to a visit to a location, sales presentation, or contact with a
person representing the offeror, when the visit or contact was
scheduled or arranged by the offeror or its representative. The
deposit of the disclaimer in the United States mail, addressed to the
offeree and with first-class postage prepaid, at least five days
prior to the scheduled or arranged visit or contact, shall be deemed
to constitute delivery for purposes of this section.
(2) If any California resident is presented with an agreement or
purchase contract to lease or purchase a time-share interest as
described in subdivision (e), where an offer to lease or purchase
that time-share interest was made to that resident in California, a
copy of the disclaimer set forth in subdivision (e) shall be inserted
in at least 10-point type at the top of the first page of that
agreement or purchase contract and shall be initialed by that
California resident.
(3) Nothing contained in this subdivision shall be deemed to
exempt from registration in this state a nonspecific time-share
interest multisite time-share plan in which any component site in the
time-share plan is located in the United States.
11226. (a) Any person who, to any individual located in the state,
sells, offers to sell, or attempts to solicit prospective purchasers
to purchase a time-share interest, or any person who creates a
time-share plan with an accommodation in the state, shall register
the time-share plan with the commissioner, unless the time-share plan
is otherwise exempt under this chapter.
(b) A developer, or any of its agents, shall not sell, offer, or
dispose of a time-share interest in the state unless all necessary
registration requirements are provided and approved by the
commissioner, or the sale, offer, or disposition is otherwise
permitted by this chapter, or while an order revoking or suspending a
registration is in effect.
(c) In registering a time-share plan, the developer shall provide
the commissioner all of the following information:
(1) The developer's legal name, any assumed names used by the
developer, principal office street address, mailing address, primary
contact person, and telephone number.
(2) The name of the developer's authorized or registered agent in
the state upon whom claims can be served or service of process be
had, the agent's street address in California, and telephone number.
(3) The name, street address, mailing address, primary contact
person, and telephone number of the time-share plan being registered.
(4) The name, street address, mailing address, and telephone
number of any managing entity of the time-share plan.
(5) A public report that complies with the requirements of Section
11234, or for a time-share plan located outside of the state, a
public report that has been authorized for use by the situs state
regulatory agency and that contains disclosures as determined by the
commissioner upon review to be substantially equivalent to or greater
than the information required to be disclosed pursuant to Section
11234.
(6) A description of the inventory control system that will ensure
compliance with Section 11250.
(7) Any other information regarding the developer, time-share
plan, or managing entities as established by regulation.
(d) An applicant for a public report for a time-share plan shall
present evidence of the following for each accommodation in each
time-share property that is, or will be, offered for sale in this
state pursuant to the registration:
(1) That the accommodation is presently suitable for human
occupancy or that financial arrangements have been made to complete
construction or renovation of the accommodation to make it suitable
for human occupancy on or before the first date for occupancy by a
time-share interest owner.
(2) That the accommodation is owned or leased by the developer of
the time-share plan or is the subject of an enforceable option or
contract under which the developer will build, purchase, or lease the
accommodation. Notwithstanding this subdivision, the developer shall
present evidence prior to the receipt of a final public report that
the accommodation to be sold is owned or leased by the developer and
that the accommodation is free and clear of encumbrances in
accordance with Sections 11244 and 11255.
(e) If an accommodation in a time-share plan is located within a
local governmental jurisdiction or subdivision of real property in
which the dedication of accommodations to time-sharing is expressly
prohibited by ordinance or recorded restriction, either absolutely or
without a permit or other entitlement from the governing body, the
applicant for a public report shall present evidence of a permit or
other entitlement by the appropriate authority for the local
government or the subdivision.
(f) (1) The developer shall amend or supplement its disclosure
documents and registration information, to reflect any material
change in any information required by this chapter or the regulations
implementing this chapter. The developer shall notify the
commissioner of the material change prior to implementation of the
change, unless the change is beyond the control of the developer; in
which event, the developer shall provide written notice to the
commissioner as soon as reasonably practicable after the occurrence
of the event necessitating the change. All amendments, supplements,
and facts relevant to the material change shall be filed with the
commissioner within 20 calendar days of the material change.
(2) The developer may continue to sell time-share interests in the
time-share plan so long as, prior to closing, the developer provides
a notice to each purchaser that describes the material change and
provides to each purchaser the previously approved public report.
(A) If the change is material and adverse to the purchaser, all
purchaser funds shall be held in escrow, or pursuant to alternative
assurances permitted by subdivision (c) of Section 11243, and no
closing shall occur until the amendment relating to the material and
adverse change has been approved by the commissioner. After the
amendment relating to the material and adverse change has been
approved and the amended public report has been issued, the amended
public report shall be sent to the purchaser, and an additional
seven-day rescission period shall commence. The developer shall be
required to maintain evidence of the receipt by each purchaser of the
amended public report.
(B) If the commissioner refuses to approve the amendment relating
to the material and adverse change, all sales made using the notice
shall be subject to rescission and all funds returned.
(3) The developer shall update the public report to reflect any
changes to the time-share plan that are not material and adverse,
including the addition of any component sites, within a reasonable
time, and may continue to sell and close time-share interests prior
to the date that the amended public report is approved.
(g) An applicant for a public report for a multisite, time-share
plan consisting of specific time-share interests, as defined in
subparagraph (A) of paragraph (2) of subdivision (z) of Section
11212, affiliated with sites operated through the time-share plan's
reservation system, shall certify both of the following:
(1) That a purchaser has, or will have, contractual or membership
rights to use accommodations at each affiliated site and that, if an
accommodation or promised improvement is, or may become, subject to a
blanket encumbrance, that the blanket encumbrance is, or will be,
subordinate to these rights.
(2) That a certificate of occupancy has been issued with respect
to the accommodations at each affiliated site or that adequate
provisions exist or will exist for the completion of all such
accommodations. For any affiliated site accommodations that are not
complete, the public report shall clearly identify in conspicuous
type that those accommodations are not completed. For any
accommodations that are not complete and for which adequate
provisions for completion do not exist at the time the public report
is issued, the public report shall also provide in conspicuous type
that those accommodations might not be built, provided, however, that
a developer's failure to build the accommodations shall not relieve
the developer of any obligations created by the certification made
pursuant to this subdivision.
(h) For purposes of subdivision (d) of this section, the
"time-share property being offered for sale in this state" shall mean
the following:
(1) With respect to a single site time-share plan, the time-share
property being registered pursuant to this chapter.
(2) With respect to a specific time-share interest multisite
time-share plan, the specific time-share property being registered
pursuant to this chapter.
(3) With respect to a nonspecific time-share interest multisite
time-share plan, all time-share properties in the time-share plan.
11226.1. Any person offering to sell or lease any interest subject
to the requirements of Section 11226 shall make a copy of each of the
following documents available for examination by a prospective
purchaser or lessee before the execution of an offer to purchase or
lease and shall give a copy of those documents to each purchaser or
lessee as soon as practicable before transfer of the interest being
acquired by the purchaser or lessee:
(a) The declaration of covenants, conditions, and restrictions for
the time-share plan.
(b) Articles of incorporation or association for the time-share
owners' association.
(c) Bylaws of the owners' association.
(d) Any other instrument that establishes or defines the common,
mutual, and reciprocal rights and responsibilities of the owners or
lessees of interest in the time-share plan as members of the owners'
association or otherwise.
(e) The current budget and financial statements for the time-share
plan.
11227. (a) Subject to subdivision (h), the commissioner shall issue
a final public report if all registration requirements have been met
as set forth in this chapter and if all deficiencies and substantive
inadequacies in the substantially complete application for a final
public report for the time-share plan have been corrected.
(b) The commissioner may issue a conditional public report prior
to issuing a final public report for a time-share plan if the
requirements of subdivision (c) are met, all deficiencies and
substantive inadequacies in the substantially complete application
for a final public report for the time-share plan have been
corrected, the material elements of the offering to be made under the
authority of the conditional public report have been established,
and all requirements for the issuance of the conditional public
report have been met, except for one or more of the following
requirements, as may be applicable:
(1) A final map has not been recorded.
(2) A condominium plan has not been recorded.
(3) A declaration of covenants, conditions, and restrictions has
not been recorded.
(4) A declaration of annexation has not been recorded.
(5) A recorded subordination of existing liens to the time-share
instruments or declaration of annexation or escrow instructions to
effect recordation prior to the first sale, are lacking.
(6) Filed articles of incorporation are lacking.
(7) A current preliminary report of a licensed title insurance
company issued after filing of the final map and recording of the
time-share instrument covering all time-share interests to be
included in the public report has not been provided.
(8) Other requirements the commissioner determines are likely to
be timely satisfied by the applicant.
(c) An applicant for a conditional public report shall submit the
following information and documents with the applicable filing fee:
(1) A copy of the statement set forth in subdivision (e).
(2) A sales agreement or lease to be used in any transaction
conducted under authority of the conditional public report. The sales
agreement or lease shall include all of the following provisions:
(A) No escrow will close, funds will not be released from escrow,
and the interest contracted for will not be conveyed until a current
final public report for the time-share plan is furnished to the
purchaser.
(B) The contract may be rescinded, in which event the entire sum
of money paid or advanced by the purchaser shall be returned if (i) a
final public report has not been issued within six months after the
date of issuance of the conditional public report if the conditional
public report is not renewed, (ii) the final public report is not
issued within 12 months after the initial conditional public report
is received if the conditional public report has been renewed for an
additional six-month period, or (iii) the purchaser or lessee is
dissatisfied with the final public report because of a material and
adverse change.
(3) Escrow instructions to be used in any transaction conducted
under authority of the conditional public report that includes at
least the following information:
(A) The name and address of the escrow depository.
(B) A description of the nature of the transaction.
(C) Provisions ensuring compliance with Section 11243.
(D) Provisions ensuring that no escrow will close, funds will not
be released from escrow, and the interest contracted for will not be
conveyed until a current final public report for the time-share plan
is furnished to the purchaser or lessee.
(E) Provisions for the return of money as prescribed in
subparagraph (B) of paragraph (2).
(d) A decision by the commissioner to not issue a conditional
public report shall be noticed in writing to the applicant within
five business days after his or her decision and that notice shall
specifically state the reasons why the report is not being issued.
(e) A person may sell or lease, or offer for sale or lease,
time-share interests in a time-share plan pursuant to a conditional
public report if, as a condition of the sale or lease or offer for
sale or lease, delivery of legal title or other interest contracted
for will not take place until issuance of a final public report and
provided that the requirements of subdivision (c) are met.
(f) A developer, principal, or his or her agent shall provide a
prospective purchaser a copy of the conditional public report and a
written statement including all of the following information:
(1) Specification of the information required for issuance of a
final public report.
(2) Specification of the information required in the final public
report that is not available in the conditional public report, along
with a statement of the reasons why that information is not available
at the time of issuance of the conditional public report.
(3) A statement that no person acting as a principal or agent
shall sell or lease, or offer for sale or lease, time-share interests
in a time-share plan for which a conditional public report has been
issued except as provided in this chapter.
(4) Specification of the requirements of subdivision (e).
(g) The prospective purchaser shall sign a receipt that he or she
has received and has read the conditional public report and the
written statement provided pursuant to subdivision (f).
(h) The term of a conditional public report may not exceed six
months unless renewed pursuant to this subdivision. The conditional
public report may be renewed for one additional six-month period if
the commissioner determines that the requirements for issuance of a
final public report are likely to be satisfied during the renewal
term. The renewal of a conditional public report shall not act to
afford a purchaser who received the initial conditional public report
any additional rescission rights other than those provided to a
purchaser when a final public report is issued and a material and
adverse change has been made.
(i) For single site time-share plans and component sites of a
multisite time-share plan located outside of the state, a disclosure
document that has been authorized for use by the state regulatory
agency in the state in which the time-share plan or component site is
located that contains the disclosures as determined by the
commissioner upon review to be substantially equivalent to or greater
than the information required to be disclosed pursuant to Section
11234, shall be accepted in lieu of a public report required pursuant
to this section. The disclosure document shall contain a cover page
issued by the commissioner certifying the approval of its use in lieu
of the public report required herein.
(j) Notwithstanding anything in this section to the contrary, the
commissioner may grant a 12-month preliminary public report allowing
the developer to begin offering and selling time-share interests, in
a time-share plan regardless of whether the accommodations of the
time-share plan are located within or outside of the state, while the
registration is pending with the commissioner. The commissioner may
grant one additional 12-month period if the developer is actively and
diligently pursuing registration under this chapter. The preliminary
public report shall automatically terminate with respect to those
time-share interests covered by a final public report that is issued
before the scheduled termination date of the preliminary report. To
obtain a preliminary public report, the developer shall provide all
of the following:
(1) Submit the reservation instrument to be used in a form
previously approved by the department with at least the following
provisions:
(A) The right of both the developer and the potential purchaser to
unilaterally cancel the reservation at any time.
(B) The payment to the potential purchaser of his or her total
deposit following cancellation of the reservation by either party.
(C) The placing of the deposit into an interest bearing escrow
account.
(2) Agree to provide each potential purchaser with a copy of the
preliminary public report and an executed receipt for a copy before
any money or other thing of value has been accepted by or on behalf
of the developer in connection with the reservation.
(3) Agree to provide a copy of the reservation instrument signed
by the potential purchaser and by or on behalf of the developer to
the potential purchaser, and place any deposit taken from the
potential purchaser into a neutral escrow depository acceptable to
the commissioner.
11228. The term of a final public report shall be limited to five
years. A renewal shall be issued if the developer, owner, or agent
makes application for renewal of any report and has submitted the
additional information that the commissioner may require.
11229. (a) In connection with its review of the registration
application of a time-share plan, the commissioner may make an
examination of any time-share property submitted for registration
pursuant to this chapter, and shall, unless there are grounds for
denial, issue to the developer a public report authorizing the sale
or lease in this state of the time-share interests within the
time-share plan submitted pursuant to this chapter. The report shall
contain the data obtained in accordance with Section 11234.
(b) The commissioner may deny the issuance of the public report
based on the applicant's failure to comply with any of the provisions
of this chapter or the regulations of the commissioner pertaining
thereto, including, but not limited to, all of the following:
(1) The sale or lease would constitute misrepresentation to, or
deceit or fraud of, the purchasers or lessees.
(2) Inability to deliver title or other interest contracted for.
(3) Inability to demonstrate, in accordance with this chapter,
that adequate financial arrangements have been made for all offsite
improvements included in the offering.
(4) Inability to demonstrate, in accordance with this chapter,
that adequate financial arrangements have been made for any
community, recreational, or other facilities included in the
offering.
(5) Failure to make a showing that the parcels can be used for the
purpose for which they are offered.
(6) Failure to provide in the contract or other writing the use or
uses for which the parcels are offered, together with any covenants
or conditions relative thereto.
(c) Any developer objecting to the denial of a public report may,
within 30 days after receipt of the order of denial, file a written
request for a hearing. The commissioner shall hold the hearing within
20 days thereafter unless the party requesting the hearing requests
a postponement. If the hearing is not held within 20 days after
request for a hearing is received plus the period of the postponement
or if a proposed decision is not rendered within 45 days after
submission and an order adopting or rejecting the proposed decision
is not issued within 15 days thereafter, the order of denial shall be
rescinded and a public report issued.
11230. If the time-share plan, including any accommodations, or
amenities within the common area are not completed prior to the
issuance of a final public report for the time-share plan, the
developer shall specify a reasonable date for completion and shall
comply with any one of the following conditions:
(a) Arranges for lien and completion bond or bonds, enforceable by
the association, in an amount and subject to the terms, conditions,
and coverage necessary to assure completion of the improvements
lien-free. The bond shall not exceed 120 percent of the cost for
completion, and the bond shall provide for the reduction of the bond
amount as work is completed.
(b) All funds from the sale of time-share interests as the
commissioner shall determine are sufficient to assure construction of
the improvement or improvements shall be bonded or impounded in a
neutral escrow depository acceptable to the commissioner until the
improvements have been completed and all applicable lien periods have
expired.
(c) An amount sufficient to cover the costs of construction shall
be deposited in a neutral escrow depository acceptable to the
commissioner under a written escrow agreement providing for
disbursements from the escrow as work is completed.
(d) An alternative plan that may be approved by the commissioner.
11231. Every registration required to be filed with the
commissioner under this chapter shall be reviewed and issued the
specified public report in accordance with the following schedule:
(a) Time-share registration. Registration shall be effective only
upon the issuance of a public report by the commissioner that shall
occur no later than 60 calendar days after the actual receipt by the
commissioner of the properly completed application. The commissioner
shall provide a list of deficiencies in the application, if any,
within 60 calendar days of receipt. This same time period applies
when amending a public report to add additional phases or component
sites of the time-share plan.
(b) Preliminary public report registration. A preliminary public
report shall be issued within 15 calendar days of receipt, unless the
commissioner provides to the applicant a written list of
deficiencies in the application, if any, within 15 calendar days of
receipt of an application.
(c) Amended public report where no additional phases or component
sites are added. An effective date for an amendment to a public
report should occur no more than 45 calendar days after actual
receipt by the commissioner of the amendment. The commissioner shall
provide a list of deficiencies regarding the amendments, if any,
within 45 calendar days of receipt.
11232. (a) The commissioner may by regulation prescribe filing fees
in connection with applications to the Department of Real Estate for
a public report pursuant to the provisions of this chapter that are
lower than the maximum fees specified in subdivision (b) if the
commissioner determines that the lower fees are sufficient to offset
the costs and expenses incurred in the administration of this
chapter. The commissioner shall hold at least one hearing each
calendar year to determine if lower fees than those specified in
subdivision (b) should be prescribed.
(b) The filing fees for an application for a public report to be
issued under authority of this chapter shall not exceed the following
for each time-share plan, location, or phase of the time-share plan
in which interests are to be offered for sale or lease:
(1) One thousand seven hundred dollars ($1,700) plus ten dollars
($10) for each time-share interest to be offered for an original
public report application.
(2) Six hundred dollars ($600) plus ten dollars ($10) for each
time-share plan interest to be offered that was not permitted to be
offered under the public report to be renewed for a renewal public
report or permit application.
(3) Five hundred dollars ($500) plus ten dollars ($10) for each
time-share interest to be offered under the amended public report for
which a fee has not previously been paid for an amended public
report application.
(4) Five hundred dollars ($500) for a conditional public report
application.
(c) Fees collected by the commissioner under authority of this
chapter shall be deposited into the Real Estate Fund pursuant to
Chapter 6 (commencing with Section 10450) of Part 1. Fees received by
the commissioner pursuant to this article shall be deemed earned
upon receipt. No part of any fee is refundable unless the
commissioner determines that it was paid as a result of mistake or
inadvertency. This section shall remain in effect unless it is
superseded pursuant to Section 10266 or subdivision (a) of Section
10266.5, whichever is applicable.
11233. An applicant for a public report for a time-share plan in
which the use and occupancy of the time-share interest purchased in
the time-share plan is determined according to a point system shall
include in the application the following information:
(a) Whether additional points may be acquired by purchase or
otherwise, in the future and the manner in which future purchases of
points may be made.
(b) The transferability of points to other persons, other years or
other time-share plans.
(c) A copy of the then-current point value use directory, along
with rules and procedures for changes by the developer or the
association in the manner in which point values may be used.
(1) No change exceeding 10 percent per annum in the manner in
which point values may be used may be made without the assent of at
least 25 percent of the voting power of the association other than
the developer.
(2) No time-share interest owner shall be prevented from using a
time-share plan as a result of changes in the manner in which point
values may be used.
(3) In the event point values are changed or adjusted, no
time-share owner shall be prevented from using his or her home resort
in the same manner as was provided for under the original purchase
contract.
(d) Any limitations or restrictions upon the use of point values.
(e) A description of an inventory control system that will ensure
compliance with Section 11250.
11234. A developer shall prepare, for issuance by the commissioner,
a public report that shall fully and accurately disclose those facts
concerning the time-share developer and time-share plan that are
required by this chapter or by regulation. The developer shall
provide the public report to each purchaser of a time-share interest
in a time-share plan at the time of purchase. The public report shall
be in writing and dated and shall require the purchaser to certify
in writing the receipt thereof. The public report for a single site
time-share plan is subject to the requirements of subdivision (a).
The public report for a specific time-share interest multisite
time-share plan is subject to the requirements of both subdivisions
(a) and (b). The public report for a nonspecific time-share interest
multisite time-share plan is subject to the requirements of
subdivision (c). For time-share plans located outside of the state, a
public report that has been authorized for use by the situs state
regulatory agency and that contains disclosures as determined by the
commissioner upon review to be substantially equivalent to or greater
than the information required to be disclosed pursuant to this
section may be used by the developer to meet the requirements of this
section. A developer may, upon approval by the commissioner, submit
a public report that combines, in a manner prescribed by the
commissioner, the information required to be disclosed by the
applicable subdivisions of this section and the information required
to be disclosed in a public report issued by a regulatory agency in
one or more other states.
(a) Public reports for a single site and those component sites of
a specific time-share interest multisite time-share plan that are
offered in this state shall include the following:
(1) The name and address of the developer and the type of
time-share plan being offered and the name and address of the
time-share project.
(2) A description of the existing or proposed accommodations,
including the type and number of time-share interests in the
accommodations, and if the accommodations are proposed or not yet
complete or fully functional, an estimated date of completion.
(3) The number of accommodations and time-share interests,
expressed in periods of seven-day use availability or other time
increments applicable to the time-share plan, committed to the
multisite time-share plan, and available for use by purchasers and a
representation about the percentage of useable time authorized for
sale, and if that percentage is 100 percent, then a statement
describing how adequate periods of time for maintenance and repair
will be provided.
(4) A description of any existing or proposed amenities of the
time-share plan and, if the amenities are proposed or not yet
complete or fully functional, the estimated date of completion.
(5) The extent to which financial arrangements have been made for
the completion of any incomplete, promised improvements.
(6) A description of the duration, phases, and operation of the
time-share plan.
(7) The name and principal address of the managing entity and a
description of the procedures, if any, for altering the powers and
responsibilities of the managing entity and for removing or replacing
it.
(8) The current annual budget as required by Section 11240, along
with the projected assessments and a description of the method for
calculating and apportioning the assessments among purchasers, all of
which shall be attached as an exhibit to the public report.
(9) Any initial or special fee due from the purchaser at closing
together with a description of the purpose and the method of
calculating the fee.
(10) A description of any financing offered by or available
through the developer.
(11) A description of any liens, defects, or encumbrances on or
affecting the title to the time-share interests.
(12) A description of any bankruptcies, pending civil or criminal
suits, adjudications, or disciplinary actions of which the developer
has knowledge, that would have a material effect on the developer's
ability to perform its obligations.
(13) Any current or expected fees or charges to be paid by
time-share purchasers for the use of any amenities related to the
time-share plan.
(14) A description and amount of insurance coverage provided for
the protection of the purchaser.
(15) The extent to which a time-share interest may become subject
to a tax lien or other lien arising out of claims against purchasers
of different time-share interests.
(16) A statement disclosing any right of first refusal or other
restraint on the transfer of all or any portion of a time-share
interest.
(17) A statement disclosing that a deposit made in connection with
the purchase of a time-share interest shall be held by an escrow
agent until expiration of any right to cancel the contract and that a
deposit shall be returned to the purchaser if he or she elects to
exercise his or her right of cancellation. Alternatively, if the
commissioner has accepted from the developer a surety bond,
irrevocable letter of credit, or other financial assurance, each of
which shall be enforceable by the association, in lieu of placing
deposits in an escrow account: (A) a statement disclosing that the
developer has provided a surety bond, irrevocable letter of credit,
or other financial assurance in an amount equal to or in excess of
the funds that would otherwise be placed in an escrow account, (B) a
description of the type of financial assurance that has been
obtained, (C) a statement that if the purchaser elects to exercise
his or her right of cancellation as provided in the contract, the
developer shall return the deposit, and (D) a description of the
person or entity to whom the purchaser should apply for payment.
(18) A statement that the assessments collected from the
purchasers will be kept in a segregated account separate from the
assessments collected from the purchasers of other time-share plans
managed by the same managing entity, along with a statement
identifying the location of the account and a disclosure of the
rights of owners to inspect the records pertaining to their accounts.
(19) If the time-share plan provides purchasers with the
opportunity to participate in an exchange program, a description of
the name and address of the exchange company and the method by which
a purchaser accesses the exchange program.
(20) Any other information that the developer, with the approval
of the commissioner, desires to include in the public report.
(21) Any other information reasonably requested by the
commissioner.
(b) Public reports for specific time-share interest multisite
time-share plans shall include the following additional disclosures:
(1) A description of each component site, including the name and
address of each component site.
(2) The number of accommodations and time-share interests,
expressed in periods of seven-day use availability or other time
increments applicable to each component site of the time-share plan,
committed to the multisite time-share plan and available for use by
purchasers and a representation about the percentage of useable time
authorized for sale, and if that percentage is 100 percent, then a
statement describing how adequate periods of time for maintenance and
repair will be provided.
(3) Each type of accommodation in terms of the number of bedrooms,
bathrooms, and sleeping capacity, and a statement of whether or not
the accommodation contains a full kitchen. For purposes of this
description, a "full kitchen" means a kitchen having a minimum of a
dishwasher, range, sink, oven, and refrigerator.
(4) A description of amenities available for use by the purchaser
at each component site.
(5) A description of the reservation system, which shall include
the following:
(A) The entity responsible for operating the reservation system,
its relationship to the developer, and the duration of any agreement
for operation of the reservation system.
(B) A summary of the rules and regulations governing access to and
use of the reservation system.
(C) The existence of and an explanation regarding any priority
reservation features that affect a purchaser's ability to make
reservations for the use of a given accommodation on a
first-come-first-served basis.
(6) The name and principal address of the managing entity for the
multisite time-share plan and a description of the procedures, if
any, for altering the powers and responsibilities of the managing
entity and for removing or replacing it.
(7) A description of any right to make any additions,
substitutions, or deletions of accommodations, amenities, or
component sites, and a description of the basis upon which
accommodations, amenities, or component sites may be added to,
substituted in, or deleted from the multisite time-share plan.
(8) A description of the purchaser's liability for any fees
associated with the multisite time-share plan.
(9) The location of each component site of the multisite
time-share plan, the historical occupancy of each component site for
the prior 12-month period, if the component site was part of the
multisite time-share plan during the 12-month time period, as well as
any periodic adjustment or amendment to the reservation system that
may be needed in order to respond to actual purchaser use patterns
and changes in purchaser use demand for the accommodations existing
at that time within the multisite time-share plan.
(10) Any other information that the developer, with the approval
of the commissioner, desires to include in the time-share disclosure
statement.
(c) Public reports for nonspecific time-share interest multisite
time-share plans shall include the following:
(1) The name and address of the developer.
(2) A description of the type of interest and usage rights the
purchaser will receive.
(3) A description of the duration and operation of the time-share
plan.
(4) A description of the type of insurance coverage provided for
each component site.
(5) An explanation of who holds title to the accommodations of
each component site.
(6) A description of each component site, including the name and
address of each component site.
(7) The number of accommodations and time-share interests,
expressed in periods of seven-day use availability or other time
increments applicable to the multisite time-share plan for each
component site committed to the multisite time-share plan and
available for use by purchasers and a representation about the
percentage of useable time authorized for sale, and if that
percentage is 100 percent, then a statement describing how adequate
periods of time for maintenance and repair will be provided.
(8) Each type of accommodation in terms of the number of bedrooms,
bathrooms, and sleeping capacity, and a statement of whether or not
the accommodation contains a full kitchen. For purposes of this
description, a "full kitchen" means a kitchen having a minimum of a
dishwasher, range, sink, oven, and refrigerator.
(9) A description of amenities available for use by the purchaser
at each component site.
(10) A description of any incomplete amenities at any of the
component sites along with a statement as to any assurance for
completion and the estimated date the amenities will be available.
(11) The location of each component site of the multisite
time-share plan, the historical occupancy of each component site for
the prior 12-month period, if the component site was part of the
multisite time-share plan during such 12-month time period, as well
as any periodic adjustment or amendment to the reservation system
that may be needed in order to respond to actual purchaser use
patterns and changes in purchaser use demand for the accommodations
existing at that time within the multisite time-share plan.
(12) A description of any right to make any additions,
substitutions, or deletions of accommodations, amenities, or
component sites, and a description of the basis upon which
accommodations, amenities, or component sites may be added to,
substituted in, or deleted from the multisite time-share plan.
(13) A description of the reservation system that shall include
all of the following:
(A) The entity responsible for operating the reservation system,
its relationship to the developer, and the duration of any agreement
for operation of the reservation system.
(B) A summary of the rules and regulations governing access to and
use of the reservation system.
(C) The existence of and an explanation regarding any priority
reservation features that affect a purchaser's ability to make
reservations for the use of a given accommodation on a
first-come-first-served basis.
(14) A description of any liens, defects, or encumbrances that
materially affect the purchaser's use rights.
(15) The name and principal address of the managing entity for the
multisite time-share plan and a description of the procedures, if
any, for altering the powers and responsibilities of the managing
entity and for removing or replacing it, and a description of the
relationship between a multisite time-share plan managing entity and
the managing entity of the component sites of a multisite time-share
plan, if different from the multisite time-share plan managing
entity.
(16) The current annual budget as provided in Section 11240, along
with the projected assessments and a description of the method for
calculating and apportioning the assessments among purchasers, all of
which shall be attached as an exhibit to the public report.
(17) Any current fees or charges to be paid by time-share
purchasers for the use of any amenities related to the time-share
plan and a statement that the fees or charges are subject to change.
(18) Any initial or special fee due from the purchaser at closing,
together with a description of the purpose and method of calculating
the fee.
(19) A description of any financing offered by or available
through the developer.
(20) A description of any bankruptcies, pending civil or criminal
suits, adjudications, or disciplinary actions of which the developer
has knowledge, which would have a material effect on the developer's
ability to perform its obligations.
(21) A statement disclosing any right of first refusal or other
restraint on the transfer of all or any portion of a time-share
interest.
(22) A statement disclosing that a deposit made in connection with
the purchase of a time-share interest shall be held by an escrow
agent until expiration of any right to cancel the contract and that a
deposit shall be returned to the purchaser if he or she elects to
exercise his or her right of cancellation. Alternatively, if the
commissioner has accepted from the developer a surety bond,
irrevocable letter of credit, or other financial assurance in lieu of
placing deposits in an escrow account: (A) a statement disclosing
that the developer has provided a surety bond, irrevocable letter of
credit, or other financial assurance in an amount equal to or in
excess of the funds that would otherwise be placed in an escrow
account, (B) a description of the type of financial assurance that
has been arranged, (C) a statement that if the purchaser elects to
exercise his or her right of cancellation as provided in the
contract, the developer shall return the deposit, and (D) a
description of the person or entity to whom the purchaser should
apply for payment.
(23) If the time-share plan provides purchasers with the
opportunity to participate in an exchange program, a description of
the name and address of the exchange company and the method by which
a purchaser accesses the exchange program.
(24) Any other information that the developer, with the approval
of the commissioner, desires to include in the time-share disclosure
statement.
(d) The commissioner may establish by regulation provisions
regarding the delivery of the public report and other required
information through alternative media forms.
(e) The commissioner may, upon finding that the subject matter is
otherwise adequately covered or the information is unnecessary or
inapplicable, waive any requirement set forth in this section.
11235. (a) A person who has entered into a contract to purchase a
short-term product shall have the right to rescind the contract until
midnight of the seventh calendar day, or a later time as provided in
the contract, following the day on which the contract is first made,
in which event the purchaser shall be entitled to a refund of 100
percent of the consideration paid under the contract, without
deduction.
(b) The developer or other person who offers a short-term product
shall clearly and conspicuously disclose, in writing, to all
purchasers of a short-term product, all of the following:
(1) The right of rescission provided for in subdivision (a).
(2) That reservations for accommodations under the contract are
subject to availability and that there is no guarantee that a
purchaser will be able to obtain specific accommodations during a
specific time period, if applicable.
(3) Specific blackout dates, if applicable.
(4) That the earlier the purchaser requests a reservation, the
greater the opportunity to received a confirmed reservation.
(5) That, if the purchaser later purchases a time-share interest,
the developer shall provide the purchaser with the then-current
public report for the time-share plan being purchased and that the
purchaser shall have until midnight of the seventh calendar day
following receipt of the public report to cancel the purchase of the
time-share interest.
(c) If a purchaser is unable to obtain a confirmed reservation for
a specific accommodation and time period requested, the developer or
other person who offers the short-term product shall attempt to
provide the purchaser with a substantially similar alternative to the
reservation requested. If the developer or other person who offers
the short-term product is unable to provide the reservation requested
or an acceptable alternative during the initial term of the
contract, the purchaser may request and be granted an extension of
the contract for a period of 12 months.
(d) The contract for the purchase of a short-term product shall
include the date of the contract and shall contain, in immediate
proximity to the space reserved for the signature of the purchaser, a
conspicuous statement as follows:
"YOU HAVE THE RIGHT TO CANCEL THIS CONTRACT AT ANY TIME PRIOR TO
MIDNIGHT OF THE SEVENTH (7TH)
