Exchange program--information required to be furnishedpurchaser--exchange companies to file certain informationannually--failure to comply, penalty.
407.625. 1. If a purchaser is offered the opportunity tosubscribe to any exchange program, the developer shall, except asprovided in subsection 2 of this section, deliver to thepurchaser, prior to the execution of any contract between thepurchaser and the exchange company and the sales contract, atleast the following information regarding such exchange program,and the purchaser shall certify, in writing, to the receipt ofsuch written information:
(1) The name and address of the exchange company;
(2) The names of all officers, directors, and shareholdersowning five percent or more of the outstanding stock of theexchange company;
(3) Whether the exchange company or any of its officers ordirectors has any legal or beneficial interest in any developeror managing agent for any time-share plan participating in theexchange program and, if so, the name and location of thetime-share plan and the nature of the interest;
(4) Unless the exchange company is also the developer or anaffiliate, a statement that the purchaser's contract with theexchange company is a contract separate and distinct from thesales contract;
(5) Whether the purchaser's participation in the exchangeprogram is dependent upon the continued affiliation of thetime-share plan with the exchange program;
(6) Whether the purchaser's membership or participation, orboth, in the exchange program is voluntary or mandatory;
(7) A complete and accurate description of the terms andconditions of the purchaser's contractual relationship with theexchange company and the procedure by which changes thereto maybe made;
(8) A complete and accurate description of the procedure toqualify for and effectuate exchanges;
(9) A complete and accurate description of all limitations,restrictions, or priorities employed in the operation of theexchange program, including, but not limited to, limitations onexchanges based on seasonality, unit size, or levels ofoccupancy, expressed in boldfaced type, and, in the event thatsuch limitations, restrictions, or priorities are not uniformlyapplied by the exchange program, a clear description of themanner in which they are applied;
(10) Whether exchanges are arranged on a space availablebasis and whether any guarantees of fulfillment of specificrequests for exchanges are made by the exchange program;
(11) Whether and under what circumstances an owner, indealing with the exchange company, may lose the use and occupancyof his time-share in any properly applied for exchange withouthis being provided with substitute accommodations by the exchangecompany;
(12) The fees or range of fees for participation by ownersin the exchange program, a statement whether any such fees may bealtered by the exchange company, and the circumstances underwhich alterations may be made;
(13) The name and address of the site of each time-shareproperty, accommodation or facility which is participating in theexchange program;
(14) The number of units in each property participating inthe exchange program which are available for occupancy and whichqualify for participation in the exchange program, expressedwithin the following numerical groupings: 1-5, 6-10, 11-20,21-50, and 51 and over;
(15) The number of owners with respect to each time-shareplan or other property which are eligible to participate in theexchange program expressed within the following numericalgroupings: 1-100, 101-249, 250-499, 500-999, and 1,000 and over;and a statement of the criteria used to determine those ownerswho are currently eligible to participate in the exchangeprogram;
(16) The disposition made by the exchange company oftime-shares deposited with the exchange program by ownerseligible to participate in the exchange program and not used bythe exchange company in effecting exchanges;
(17) The following information, which, except as provided insubsection 2 of this section, shall be independently audited by acertified public accountant or accounting firm in accordance withthe standards of the Accounting Standards Board of the AmericanInstitute of Certified Public Accountants and reported for eachyear no later than July first of the succeeding year, beginningno later than July 1, 1986:
(a) The number of owners enrolled in the exchange program.Such numbers shall disclose the relationship between the exchangecompany and owners as being either fee paying or gratuitous innature;
(b) The number of time-share properties, accommodations orfacilities eligible to participate in the exchange programcategorized by those having a contractual relationship betweenthe developer or the association and the exchange company andthose having solely a contractual relationship between theexchange company and owners directly;
(c) The percentage of confirmed exchanges, which shall bethe number of exchanges confirmed by the exchange company dividedby the number of exchanges properly applied for, together with acomplete and accurate statement of the criteria used to determinewhether an exchange request was properly applied for;
(d) The number of time-shares for which the exchange companyhas an outstanding obligation to provide an exchange to an ownerwho relinquished a time-share during the year in exchange for atime-share in any future year;
(e) The number of exchanges confirmed by the exchangecompany during the year;
(18) A statement in boldfaced type to the effect that thepercentage described in paragraph (c) of subdivision (17) of thissubsection is a summary of the exchange requests entered with theexchange company in the period reported and that the percentagedoes not indicate a purchaser's/owner's probabilities of beingconfirmed to any specific choice or range of choices, sinceavailability at individual locations may vary.
2. The information required by subsection 1 of this sectionshall be accurate as of a date which is no more than thirty daysprior to the date on which the information is delivered to thepurchaser; except that, the information required by subdivisions(2), (3), (13), (14), (15) and (17) of subsection 1 of thissection shall be accurate as of December thirty-first of thepreceding year if the information is delivered between July firstand December thirty-first of any year; information deliveredbetween January first and June thirtieth of any year shall beaccurate as of December thirty-first of the year prior to thepreceding year. At no time shall such information be accurate asof a date which is more than eighteen months prior to the date ofdelivery. All references in this subsection to the word "year"shall mean calendar year.
3. In the event an exchange company offers an exchangeprogram directly to the purchaser or owner, the exchange companyshall deliver to each purchaser or owner, simultaneously withsuch offering and prior to the execution of any contract betweenthe purchaser or owner and the exchange company, the informationset forth in subsection 1 of this section. The requirements ofthis subsection shall not apply to any renewal of a contractbetween an owner and an exchange company.
4. Each exchange company shall include the statement setforth in subdivision (18) of subsection 1 of this section on allpromotional brochures, pamphlets, advertisements, or othermaterials disseminated by the exchange company which also containthe percentage of confirmed exchanges described in paragraph (c)of subdivision (17) of subsection 1 of this section.
5. An exchange company shall, on or before July first ofeach year, file with the attorney general and secretary of theassociation for the time-share plan in which the time-shares areoffered or disposed, the information required by subsection 1 ofthis section with respect to the preceding year. If the attorneygeneral determines that any of the information supplied fails tomeet the requirements of this section, the attorney general mayundertake enforcement action against the exchange company inaccordance with the provisions of sections 407.600 to 407.630.No developer shall have any liability arising out of the use,delivery or publication by the developer of written informationprovided to it by the exchange company pursuant to this section.Except for written information provided to the developer by theexchange company, no exchange company shall have any liabilitywith respect to any representation made by the developer relatingto the exchange program or exchange company; or the use, deliveryor publication by the developer of any information relating tothe exchange program or exchange company. The failure of theexchange company to observe the requirements of this section, orthe use by it of any unfair or deceptive act or practice inconnection with the operation of the exchange program, shall be aviolation of sections 407.600 to 407.630.
6. The offering of an exchange program in this state inconjunction with the offer or sale of time-shares in this stateshall not constitute a security under the laws of this state.
Exchange program--information required to be furnishedpurchaser--exchange companies to file certain informationannually--failure to comply, penalty.
407.625. 1. If a purchaser is offered the opportunity tosubscribe to any exchange program, the developer shall, except asprovided in subsection 2 of this section, deliver to thepurchaser, prior to the execution of any contract between thepurchaser and the exchange company and the sales contract, atleast the following information regarding such exchange program,and the purchaser shall certify, in writing, to the receipt ofsuch written information:
(1) The name and address of the exchange company;
(2) The names of all officers, directors, and shareholdersowning five percent or more of the outstanding stock of theexchange company;
(3) Whether the exchange company or any of its officers ordirectors has any legal or beneficial interest in any developeror managing agent for any time-share plan participating in theexchange program and, if so, the name and location of thetime-share plan and the nature of the interest;
(4) Unless the exchange company is also the developer or anaffiliate, a statement that the purchaser's contract with theexchange company is a contract separate and distinct from thesales contract;
(5) Whether the purchaser's participation in the exchangeprogram is dependent upon the continued affiliation of thetime-share plan with the exchange program;
(6) Whether the purchaser's membership or participation, orboth, in the exchange program is voluntary or mandatory;
(7) A complete and accurate description of the terms andconditions of the purchaser's contractual relationship with theexchange company and the procedure by which changes thereto maybe made;
(8) A complete and accurate description of the procedure toqualify for and effectuate exchanges;
(9) A complete and accurate description of all limitations,restrictions, or priorities employed in the operation of theexchange program, including, but not limited to, limitations onexchanges based on seasonality, unit size, or levels ofoccupancy, expressed in boldfaced type, and, in the event thatsuch limitations, restrictions, or priorities are not uniformlyapplied by the exchange program, a clear description of themanner in which they are applied;
(10) Whether exchanges are arranged on a space availablebasis and whether any guarantees of fulfillment of specificrequests for exchanges are made by the exchange program;
(11) Whether and under what circumstances an owner, indealing with the exchange company, may lose the use and occupancyof his time-share in any properly applied for exchange withouthis being provided with substitute accommodations by the exchangecompany;
(12) The fees or range of fees for participation by ownersin the exchange program, a statement whether any such fees may bealtered by the exchange company, and the circumstances underwhich alterations may be made;
(13) The name and address of the site of each time-shareproperty, accommodation or facility which is participating in theexchange program;
(14) The number of units in each property participating inthe exchange program which are available for occupancy and whichqualify for participation in the exchange program, expressedwithin the following numerical groupings: 1-5, 6-10, 11-20,21-50, and 51 and over;
(15) The number of owners with respect to each time-shareplan or other property which are eligible to participate in theexchange program expressed within the following numericalgroupings: 1-100, 101-249, 250-499, 500-999, and 1,000 and over;and a statement of the criteria used to determine those ownerswho are currently eligible to participate in the exchangeprogram;
(16) The disposition made by the exchange company oftime-shares deposited with the exchange program by ownerseligible to participate in the exchange program and not used bythe exchange company in effecting exchanges;
(17) The following information, which, except as provided insubsection 2 of this section, shall be independently audited by acertified public accountant or accounting firm in accordance withthe standards of the Accounting Standards Board of the AmericanInstitute of Certified Public Accountants and reported for eachyear no later than July first of the succeeding year, beginningno later than July 1, 1986:
(a) The number of owners enrolled in the exchange program.Such numbers shall disclose the relationship between the exchangecompany and owners as being either fee paying or gratuitous innature;
(b) The number of time-share properties, accommodations orfacilities eligible to participate in the exchange programcategorized by those having a contractual relationship betweenthe developer or the association and the exchange company andthose having solely a contractual relationship between theexchange company and owners directly;
(c) The percentage of confirmed exchanges, which shall bethe number of exchanges confirmed by the exchange company dividedby the number of exchanges properly applied for, together with acomplete and accurate statement of the criteria used to determinewhether an exchange request was properly applied for;
(d) The number of time-shares for which the exchange companyhas an outstanding obligation to provide an exchange to an ownerwho relinquished a time-share during the year in exchange for atime-share in any future year;
(e) The number of exchanges confirmed by the exchangecompany during the year;
(18) A statement in boldfaced type to the effect that thepercentage described in paragraph (c) of subdivision (17) of thissubsection is a summary of the exchange requests entered with theexchange company in the period reported and that the percentagedoes not indicate a purchaser's/owner's probabilities of beingconfirmed to any specific choice or range of choices, sinceavailability at individual locations may vary.
2. The information required by subsection 1 of this sectionshall be accurate as of a date which is no more than thirty daysprior to the date on which the information is delivered to thepurchaser; except that, the information required by subdivisions(2), (3), (13), (14), (15) and (17) of subsection 1 of thissection shall be accurate as of December thirty-first of thepreceding year if the information is delivered between July firstand December thirty-first of any year; information deliveredbetween January first and June thirtieth of any year shall beaccurate as of December thirty-first of the year prior to thepreceding year. At no time shall such information be accurate asof a date which is more than eighteen months prior to the date ofdelivery. All references in this subsection to the word "year"shall mean calendar year.
3. In the event an exchange company offers an exchangeprogram directly to the purchaser or owner, the exchange companyshall deliver to each purchaser or owner, simultaneously withsuch offering and prior to the execution of any contract betweenthe purchaser or owner and the exchange company, the informationset forth in subsection 1 of this section. The requirements ofthis subsection shall not apply to any renewal of a contractbetween an owner and an exchange company.
4. Each exchange company shall include the statement setforth in subdivision (18) of subsection 1 of this section on allpromotional brochures, pamphlets, advertisements, or othermaterials disseminated by the exchange company which also containthe percentage of confirmed exchanges described in paragraph (c)of subdivision (17) of subsection 1 of this section.
5. An exchange company shall, on or before July first ofeach year, file with the attorney general and secretary of theassociation for the time-share plan in which the time-shares areoffered or disposed, the information required by subsection 1 ofthis section with respect to the preceding year. If the attorneygeneral determines that any of the information supplied fails tomeet the requirements of this section, the attorney general mayundertake enforcement action against the exchange company inaccordance with the provisions of sections 407.600 to 407.630.No developer shall have any liability arising out of the use,delivery or publication by the developer of written informationprovided to it by the exchange company pursuant to this section.Except for written information provided to the developer by theexchange company, no exchange company shall have any liabilitywith respect to any representation made by the developer relatingto the exchange program or exchange company; or the use, deliveryor publication by the developer of any information relating tothe exchange program or exchange company. The failure of theexchange company to observe the requirements of this section, orthe use by it of any unfair or deceptive act or practice inconnection with the operation of the exchange program, shall be aviolation of sections 407.600 to 407.630.
6. The offering of an exchange program in this state inconjunction with the offer or sale of time-shares in this stateshall not constitute a security under the laws of this state.
Exchange program--information required to be furnishedpurchaser--exchange companies to file certain informationannually--failure to comply, penalty.
407.625. 1. If a purchaser is offered the opportunity tosubscribe to any exchange program, the developer shall, except asprovided in subsection 2 of this section, deliver to thepurchaser, prior to the execution of any contract between thepurchaser and the exchange company and the sales contract, atleast the following information regarding such exchange program,and the purchaser shall certify, in writing, to the receipt ofsuch written information:
(1) The name and address of the exchange company;
(2) The names of all officers, directors, and shareholdersowning five percent or more of the outstanding stock of theexchange company;
(3) Whether the exchange company or any of its officers ordirectors has any legal or beneficial interest in any developeror managing agent for any time-share plan participating in theexchange program and, if so, the name and location of thetime-share plan and the nature of the interest;
(4) Unless the exchange company is also the developer or anaffiliate, a statement that the purchaser's contract with theexchange company is a contract separate and distinct from thesales contract;
(5) Whether the purchaser's participation in the exchangeprogram is dependent upon the continued affiliation of thetime-share plan with the exchange program;
(6) Whether the purchaser's membership or participation, orboth, in the exchange program is voluntary or mandatory;
(7) A complete and accurate description of the terms andconditions of the purchaser's contractual relationship with theexchange company and the procedure by which changes thereto maybe made;
(8) A complete and accurate description of the procedure toqualify for and effectuate exchanges;
(9) A complete and accurate description of all limitations,restrictions, or priorities employed in the operation of theexchange program, including, but not limited to, limitations onexchanges based on seasonality, unit size, or levels ofoccupancy, expressed in boldfaced type, and, in the event thatsuch limitations, restrictions, or priorities are not uniformlyapplied by the exchange program, a clear description of themanner in which they are applied;
(10) Whether exchanges are arranged on a space availablebasis and whether any guarantees of fulfillment of specificrequests for exchanges are made by the exchange program;
(11) Whether and under what circumstances an owner, indealing with the exchange company, may lose the use and occupancyof his time-share in any properly applied for exchange withouthis being provided with substitute accommodations by the exchangecompany;
(12) The fees or range of fees for participation by ownersin the exchange program, a statement whether any such fees may bealtered by the exchange company, and the circumstances underwhich alterations may be made;
(13) The name and address of the site of each time-shareproperty, accommodation or facility which is participating in theexchange program;
(14) The number of units in each property participating inthe exchange program which are available for occupancy and whichqualify for participation in the exchange program, expressedwithin the following numerical groupings: 1-5, 6-10, 11-20,21-50, and 51 and over;
(15) The number of owners with respect to each time-shareplan or other property which are eligible to participate in theexchange program expressed within the following numericalgroupings: 1-100, 101-249, 250-499, 500-999, and 1,000 and over;and a statement of the criteria used to determine those ownerswho are currently eligible to participate in the exchangeprogram;
(16) The disposition made by the exchange company oftime-shares deposited with the exchange program by ownerseligible to participate in the exchange program and not used bythe exchange company in effecting exchanges;
(17) The following information, which, except as provided insubsection 2 of this section, shall be independently audited by acertified public accountant or accounting firm in accordance withthe standards of the Accounting Standards Board of the AmericanInstitute of Certified Public Accountants and reported for eachyear no later than July first of the succeeding year, beginningno later than July 1, 1986:
(a) The number of owners enrolled in the exchange program.Such numbers shall disclose the relationship between the exchangecompany and owners as being either fee paying or gratuitous innature;
(b) The number of time-share properties, accommodations orfacilities eligible to participate in the exchange programcategorized by those having a contractual relationship betweenthe developer or the association and the exchange company andthose having solely a contractual relationship between theexchange company and owners directly;
(c) The percentage of confirmed exchanges, which shall bethe number of exchanges confirmed by the exchange company dividedby the number of exchanges properly applied for, together with acomplete and accurate statement of the criteria used to determinewhether an exchange request was properly applied for;
(d) The number of time-shares for which the exchange companyhas an outstanding obligation to provide an exchange to an ownerwho relinquished a time-share during the year in exchange for atime-share in any future year;
(e) The number of exchanges confirmed by the exchangecompany during the year;
(18) A statement in boldfaced type to the effect that thepercentage described in paragraph (c) of subdivision (17) of thissubsection is a summary of the exchange requests entered with theexchange company in the period reported and that the percentagedoes not indicate a purchaser's/owner's probabilities of beingconfirmed to any specific choice or range of choices, sinceavailability at individual locations may vary.
2. The information required by subsection 1 of this sectionshall be accurate as of a date which is no more than thirty daysprior to the date on which the information is delivered to thepurchaser; except that, the information required by subdivisions(2), (3), (13), (14), (15) and (17) of subsection 1 of thissection shall be accurate as of December thirty-first of thepreceding year if the information is delivered between July firstand December thirty-first of any year; information deliveredbetween January first and June thirtieth of any year shall beaccurate as of December thirty-first of the year prior to thepreceding year. At no time shall such information be accurate asof a date which is more than eighteen months prior to the date ofdelivery. All references in this subsection to the word "year"shall mean calendar year.
3. In the event an exchange company offers an exchangeprogram directly to the purchaser or owner, the exchange companyshall deliver to each purchaser or owner, simultaneously withsuch offering and prior to the execution of any contract betweenthe purchaser or owner and the exchange company, the informationset forth in subsection 1 of this section. The requirements ofthis subsection shall not apply to any renewal of a contractbetween an owner and an exchange company.
4. Each exchange company shall include the statement setforth in subdivision (18) of subsection 1 of this section on allpromotional brochures, pamphlets, advertisements, or othermaterials disseminated by the exchange company which also containthe percentage of confirmed exchanges described in paragraph (c)of subdivision (17) of subsection 1 of this section.
5. An exchange company shall, on or before July first ofeach year, file with the attorney general and secretary of theassociation for the time-share plan in which the time-shares areoffered or disposed, the information required by subsection 1 ofthis section with respect to the preceding year. If the attorneygeneral determines that any of the information supplied fails tomeet the requirements of this section, the attorney general mayundertake enforcement action against the exchange company inaccordance with the provisions of sections 407.600 to 407.630.No developer shall have any liability arising out of the use,delivery or publication by the developer of written informationprovided to it by the exchange company pursuant to this section.Except for written information provided to the developer by theexchange company, no exchange company shall have any liabilitywith respect to any representation made by the developer relatingto the exchange program or exchange company; or the use, deliveryor publication by the developer of any information relating tothe exchange program or exchange company. The failure of theexchange company to observe the requirements of this section, orthe use by it of any unfair or deceptive act or practice inconnection with the operation of the exchange program, shall be aviolation of sections 407.600 to 407.630.
6. The offering of an exchange program in this state inconjunction with the offer or sale of time-shares in this stateshall not constitute a security under the laws of this state.
