33-2206

33-2206. Duties of the managing entity

A. The duties of the applicable managing entity for a timeshare plan or timeshare
property may include, but are not limited to:

1. Management of the timeshare plan or management and maintenance of the timeshare
property, or both, in accordance with the timeshare instrument.

2. Collection of all assessments for common expenses, including reserves, if
applicable, in accordance with the timeshare instrument.

3. Making available annually to all owners an itemized annual budget that includes
all estimated revenues and expenses. The budget shall be prepared by the managing entity
for the current fiscal year and adopted as provided in the timeshare instrument. The
managing entity shall notify the owners of the availability of the adopted annual budget
not later than forty-five days after its adoption. The budget shall contain, as a
footnote or otherwise, any related party transaction disclosures or notes related to the
timeshare plan or timeshare property that appear in any audited financial statements of
the managing entity, manager and management firm for the previous budget year. The budget
prepared by any managing entity may be for a timeshare plan or only for specified
timeshare property as provided in the timeshare instrument.

4. Maintenance of all books and records concerning the timeshare plan or timeshare
property, or both.

5. If owners are not entitled to use specific timeshare periods, scheduling
occupancy of the accommodation in accordance with the timeshare instrument. A timeshare
instrument may provide timeshare owners with the use rights to accommodations beyond the
owners' timeshare interests as an incident of ownership on terms set forth in the
timeshare instrument.

6. Maintaining insurance policies in accordance with the timeshare instrument.

7. Acting as agent of the owners pursuant to section 42-13454.

8. Performing any other functions and duties that are necessary and proper to
maintain the timeshare plan or timeshare property, as provided in the timeshare
instrument. The timeshare instrument may impose requirements on the managing entity
beyond those set forth in this chapter.

B. Monies in any deferred maintenance or capital expenditure reserve account may
not be transferred to an operating account for any purpose other than to pay for deferred
maintenance or capital expenditures without the consent of owners of a majority of the
timeshare interests in the timeshare property. Except as provided in the timeshare
instrument, the managing entity may transfer monies in any operating account to any
deferred maintenance or capital expenditure reserve account without the vote or approval
of owners of the timeshare interests. The managing entity or board may transfer monies
from one reserve account to another reserve account without the vote or approval of the
owners of the timeshare interests.

C. The managing entity may invest the operating and reserve monies of the timeshare
plan or timeshare property but the managing entity shall give safety of capital greater
weight than production of income. The managing entity shall not invest timeshare plan or
timeshare property monies with a developer or with any entity that is not independent of
any developer or any managing entity, and the managing entity shall not invest timeshare
plan or timeshare property monies in notes and mortgages related in any way to the
timeshare plan or timeshare property.

D. The managing entity of a timeshare plan or timeshare property shall not
commingle operating monies with reserve monies but the managing entity may maintain
operating and reserve monies within a single account for a period not to exceed ninety
days after the date on which the managing entity received payment of those monies.

E. A managing entity that serves as managing entity of more than one timeshare plan
shall not commingle the common expense monies of any one timeshare plan with the common
expense monies of any other timeshare plan.

F. The managing entity may levy and enforce assessments on any timeshare interests
in accordance with the timeshare instrument, and the assessment constitutes a debt of the
owner of the interest at the time the assessment is made. Assessments and other monetary
obligations are governed as follows:

1. The timeshare instrument shall provide for the allocation of common expenses
among timeshare interests, as assessments, on a reasonable basis. The timeshare
instrument may allocate expenses differently between accommodations that are part of the
timeshare plan and facilities that are not part of the timeshare plan if the different
allocations are based on reasonable differences in the benefit provided to each type of
property. The timeshare instrument shall allocate common expenses to timeshare interests
owned or not yet sold by a developer on the same basis that common expenses are allocated
to similar or equivalent timeshare interests sold to purchasers, as assessments, except
if a subsidy agreement or similar document is in place that provides for the developer to
pay no, or a lesser share of, common expenses in return for subsidizing any deficits or
shortfalls in the operating monies of the timeshare plan, and if that exclusion from or
reduced assessments and subsidy agreement or other document are referred to in the public
reports issued under section 32-2197.08.

2. The managing entity may impose reasonable monetary penalties for violation of
the timeshare instrument, as an assessment, as authorized by the timeshare instrument.

3. Assessments may include personal charges and other amounts as authorized by the
timeshare instrument.

4. The managing entity may assign to the delinquent owners the costs of collection,
including attorney fees, administrative fees, late fees, interest and penalties as
authorized by the timeshare instrument.

5. The amount of any assessment plus any other charges such as interest, collection
costs, attorney fees, administrative fees, late fees, interest and penalties, as may be
provided for in the timeshare instrument, are a lien on the timeshare interest assessed
from the time the assessment became due. The lien has priority over other liens as
provided in the timeshare instrument. The lien may be enforced, foreclosed or realized on
as provided in the timeshare instrument.

6. On the receipt of a written request, the managing entity shall furnish to an
owner or any lender who has a security interest in a timeshare interest or the timeshare
property a statement setting forth the amount of unpaid assessments made against the
owner's timeshare interest. The statement must be furnished within ten business days
after receipt of the request and is binding on the managing entity, the association, the
board and every owner.