§514E-10.2 - Limited permit.

[§514E-10.2] Limited permit. (a)
Notwithstanding any other provision of this chapter, the director may issue a
limited permit to a developer permitting the offer or sale, in this State, of
an additional interest in a time share plan to an existing purchaser in the
same time share plan; provided that:

(1) The developer or an affiliated entity of the
developer has a time share plan currently registered with the director;
provided that the registration was originally approved or amended within seven
years from the date of the offer or disposition, and the registration has not
been terminated or withdrawn;

(2) The developer has not, during the two-year period
preceding the time of the offer, had a time share registration suspended,
restricted, or revoked in any state or been convicted of an offense involving
fraud or dishonesty. In the event the developer satisfies the requirement of
paragraph (1) above through an affiliated entity, the developer has not, during
the twenty-year period preceding the time of the offer, had a time share
registration suspended, restricted, or revoked in any state or been convicted
of an offense involving fraud or dishonesty;

(3) In satisfaction of the disclosure requirements of
section 514E-9, the purchaser is provided the time share disclosure documents
the purchaser would have received if the purchase had occurred in the state or
jurisdiction where the purchaser initially purchased the time share interest;

(4) The contract for purchase signed by the purchaser
includes a notice that is the same as or similar to the rescission notice
required pursuant to section 514E-9(a)(7); provided that the rescission period
shall be at least seven days;

(5) All funds and any negotiable instruments received
during the seven-day rescission period shall be placed in an escrow account in
the State. The escrow agent shall be a bank, savings and loan association, or
trust company authorized to do business in the State under an escrow
arrangement or a corporation licensed as an escrow depository under chapter
449. The funds or negotiable instruments may be released from escrow; provided
that the release is in accordance with section 514E-17 or 514E-18. Any escrow
account established for any out-of-state time share plan offered under this
subsection may be maintained in the state where the time share plan is located
after the seven-day rescission period has expired; provided that the escrow
agent submits to personal jurisdiction in this State;

(6) The contract for purchase shall contain the following
statement in conspicuous type:

"THIS TIME SHARE
PLAN HAS NOT BEEN REVIEWED OR APPROVED BY THE STATE OF HAWAII BECAUSE YOU
ALREADY OWN AN INTEREST IN THIS TIME SHARE PLAN AND BECAUSE
(DEVELOPER OR AFFILIATE'S NAME) HAS A TIME SHARE PLAN
CURRENTLY REGISTERED WITH THE STATE OF HAWAII (INCLUDE REGISTRATION #). (IF
APPLICABLE)(AFFILIATE) IS AN AFFILIATED ENTITY OF THE SELLER AS THE TERM IS
DEFINED IN CHAPTER 514E, HAWAII REVISED STATUTES."; and

(7) The offer complies with the provisions of
sections 514E-11(2) to 514E-11(9), 514E-11(11) to 514E-11(13), and 514E-11.1.

(b) Except as provided in subsection (a), the
offer or sale of an additional interest in a time share plan by a developer in
accordance with subsection (a) shall not otherwise be subject to any other
provisions of this chapter.

(c) Notwithstanding any other provision of
this chapter, the director may issue a limited permit to a developer permitting
the offer or sale by the developer, in this State, of a time share interest in
a time share plan located outside of this State, but within the United States,
to an individual who currently owns a time share interest that was purchased
from that developer, or from an affiliated entity of that developer; provided
that:

(1) The developer or an affiliated entity of the
developer has a time share plan currently registered with the director;
provided that the registration of the developer or an affiliated entity of the
developer was originally approved or amended within seven years from the date
of the offer or disposition and which registration has not been terminated or
withdrawn;

(3) The developer shall provide the purchaser with
all time share disclosure documents required to be provided to purchasers as if
the offer occurred in the state where the time share plan is located;

(4) The contract for purchase shall include a notice
that is the same as or similar to the rescission notice required pursuant to
section 514E-9(a)(7); provided that the rescission period shall be at least
seven days;

(5) In satisfaction of section 514E-16, all funds and
any negotiable instruments received during the seven-day rescission period
shall be placed in an escrow account in the State. The escrow agent shall be a
bank, savings and loan association, or trust company authorized to do business
in the State under an escrow arrangement or a corporation licensed as an escrow
depository under chapter 449. The funds or negotiable instruments may be released
from escrow; provided that the release is in accordance with section 514E-17 or
514E-18. Any escrow account established for any out-of-state time share plan
offered under this subsection may be maintained in the state where the time
share plan is located after the seven-day rescission period has expired;
provided that the escrow agent submits to personal jurisdiction in this State;

(6) The developer shall provide the purchaser, in
writing, either in the disclosure documents or otherwise, all of the following:

(A) A description of the type of time share
plan offered, including the duration and operation of the time share plan;

(B) A description of the existing or proposed
accommodations and amenities in the time share plan;

(D) If applicable, copies of the declaration,
association articles of incorporation, association bylaws, and association
rules and regulations; and

(E) The current annual budget for the time
share plan;

(7) The time share plan being offered is registered
in the state where the time share plan is located; or in the event registration
of the time share plan is not required in the state where the time share plan
is located, the time share plan being offered is in compliance with the
applicable laws of that state; and

(8) The contract for purchase shall contain the
following statement in conspicuous type:

"THIS TIME SHARE PLAN HAS NOT BEEN
REVIEWED OR APPROVED BY THE STATE OF HAWAII BECAUSE YOU ALREADY OWN AN INTEREST
IN A TIME SHARE PLAN THAT YOU PURCHASED FROM
(DEVELOPER OR AFFILIATE'S NAME), AND
HAS A TIME SHARE PLAN CURRENTLY REGISTERED WITH THE STATE OF HAWAII (INCLUDE
REGISTRATION #). (IF APPLICABLE) (AFFILIATE) IS AN AFFILIATED ENTITY OF THE
SELLER AS THAT TERM IS DEFINED IN CHAPTER 514E, HAWAII REVISED STATUTES. THE
TIME SHARE INTEREST YOU ARE PURCHASING REQUIRES CERTAIN PROCEDURES TO BE
FOLLOWED IN ORDER FOR YOU TO USE YOUR INTEREST. THESE PROCEDURES MAY BE
DIFFERENT FROM THOSE FOLLOWED IN OTHER TIME SHARE PLANS. YOU SHOULD READ AND
UNDERSTAND THESE PROCEDURES PRIOR TO PURCHASING."

(d) The offer or sale of an interest in a time
share plan by a developer in accordance with subsection (c) above shall be
exempt from the requirements of sections 514E-3, 514E-4, 514E-5, 514E-6,
514E-7, 514E-10.5, and 514E-14; the disclosure statement requirements of
sections 514E-9 and 514E-11(1); and the registration requirements of section
514E-10.

(e) A developer offering a time share plan
under this section shall file an application on a form as set forth in
subsection (g), along with payment of a one-time fee of $1,000 per time share
plan. Within ten days from receipt by the director of a completed application
and fee, the director shall issue a limited permit to the developer reflecting
that the filing has been accepted, and that the offering of the time share plan
is permitted in accordance with the provisions of this section.

(f) If at any time the director determines
that any requirement of this section has not been complied with, the developer
shall be subject to any remedies set forth in section 514E-12.

(g) The application as described under
subsection (e) shall be signed by an officer or principal of the developer, and
shall contain the following information:

(1) The name and principal address of the developer;

(2) The name and address of the time share plan being
offered;

(3) The name and address of the managing entity of
the time share plan;

(4) The form of business entity of the developer; and

(5) The name, address, and telephone number of the
officer or principal signing the notice on behalf of the developer.

(h) A limited permit issued under this section
shall be renewed by December 31 of each year. The developer shall submit a
renewal application on a form prescribed by the director along with the renewal
fee of $50. The renewal application shall be deemed accepted upon receipt by
the director of the renewal application and fee.

(i) For purposes of this section:

"Affiliated entity" means a person or
other entity that, directly or indirectly through one or more intermediaries,
is controlled by or under common control with the developer.

"Control", "controlled by",
or "under common control with" means the possession of the power to
direct or cause the direction of the management and policies of another person
or entity, other than by commercial contract for goods or services. Control
shall be presumed to exist if the developer has an ownership interest of at
least fifty per cent in the other person or entity, or the developer has the
same parent corporation as the other entity. [L 2008, c 181, §1]