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2012 SESSION
12102185DBe it enacted by the General Assembly of Virginia:
1. That §§ 55-361.1, 55-362, 55-363, 55-366 through 55-371, 55-374 through 55-376.1, 55-380, 55-383, 55-385, 55-386, 55-390, 55-394.1, 55-396, and 55-400 of the Code of Virginia are amended and reenacted and that the Code of Virginia is amended by adding sections numbered 55-370.1:1, 55-376.5, 55-380.1 through 55-380.4, and 55-396.1 as follows:
§ 55-361.1. Applicability.
A. This chapter shall have exclusive jurisdiction and shall
apply to any product offering or disposition made within this Commonwealth
after July 1, 1985, in a time-share project located within this Commonwealth.
Sections 55-360, 55-361.1, 55-362, 55-362.1, 55-363, 55-364, 55-365.1, 55-369,
55-370, 55-370.1, 55-372, 55-373, 55-375, 55-380, 55-381, 55-382, 55-384,
55-385, 55-389, and 55-400 of this chapter
shall apply to a time-share project within this the Commonwealth which was
created prior to July 1, 1985.
B. This chapter shall not affect rights or obligations created by preexisting provisions of any time-share instrument which transfers an estate or interest in real property.
C. This chapter shall apply to any product offering or
disposition in a time-share project located outside the Commonwealth and
offered for sale in the Commonwealth with the exception that Articles 2 (§
55-366 et seq.), 3 (§ 55-374 et seq.), and 4 (§ 55-387 et seq.) of this chapter shall apply
only to the extent permitted by the laws of the situs.
D. This chapter shall not apply to any product offering or disposition of a time-share estate in a time-share project located outside the Commonwealth to a purchaser who is a resident of the Commonwealth and who currently owns a time-share estate from the same developer from an affiliated entity under common ownership and control with the same developer if:
1. The developer or affiliated entity has a time-share project currently registered with the Board that was originally approved within the previous seven years from the date of the offering or disposition; and
2. The developer or affiliated entity making such offering or disposition:
a. Complies in all material respects with the provisions of § 55-374.1, subsections A and B of § 55-375, and subsections B and D of § 55-376;
b. Provides the purchaser with all time-share disclosure documents required to be provided to purchasers as if the offering or disposition occurred in the situs state;
c. Includes a notice in the contract to purchase that is the same as or substantially similar to that required in subsection E of § 55-376 and a right of rescission of not less than seven days; and
d. Provides the purchaser, either in the disclosure documents provided pursuant to subdivision b or in supplementary or additional materials, all of the following if the situs state where the time-share project is located does not require such disclosure documents: (i) a description of the type of time-share program offered, including the duration and operation of the program; (ii) a description of the existing or proposed time-share units and common elements, including the type and number of time-share estates in the time-share units expressed in use increments applicable to the time-share program, a categorization by numbers of bedrooms for each type of time-share unit, and, if the time-share units or common elements are proposed or incomplete, a schedule for commencement, completion, and availability of the units; (iii) a description of the method and timing for performing maintenance on the time-share units; (iv) copies of the time-share instrument, association formation documents, association bylaws, and association rules and regulations, if applicable; and (v) the current annual budget for the time-share project.
E. By making any offering or disposition pursuant to subsection D, the developer is deemed to consent to the jurisdiction of the Board in the event of a dispute with the purchaser in connection with the offering or disposition.
§ 55-362. Definitions.
When used in this chapter, or in a time-share instrument, unless the context requires a different meaning:
"Additional land" has the meaning ascribed to it in
subsection C of § 55-367;.
"Affiliate" means a person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with the person specified.
"Alternative purchase" means anything valued in
excess of $100 which is offered to a potential purchaser by the developer
during the developer's sales presentation and which is purchased by such potential
purchaser for more than $100, even though the purchaser did not purchase a
time-share. An alternative purchase is not a time-share. A membership camping
contract as defined in § 59.1-313 is not an alternative purchase. An
alternative purchase shall be registered with the Board unless it is otherwise
registered as a travel service under the Virginia Travel Club Act (§ 59.1-445
et seq.), and shall include, without limitation, vacation packages (howsoever
denominated) and exit programs (howsoever denominated);.
"Association" means the association organized under
the provisions of § 55-368;. For purposes of the Virginia Nonstock Corporation
Act (§ 13.1-801 et seq.), the
association shall be deemed to be the corporation and each time-share owner
shall be deemed to be a member.
"Association formation documents" means all documents constituting, at any particular time, the charter and includes (i) the articles of incorporation as defined in the Virginia Nonstock Corporation Act (§ 13.1-801 et seq.), (ii) the articles of incorporation as defined in the Virginia Stock Corporation Act (§ 13.1-601 et seq.), and (iii) the articles of organization under the Virginia Limited Liability Company Act (§ 13.1-1000 et seq.).
"Board" or "CICB" means
the Common Interest Community Board, an agency within the meaning of the
Administrative Process Act (§ 2.2-4000 et seq.);.
"Board of directors" means an executive and
administrative entity, by whatever name denominated, designated in a time-share
estate project instrument as the governing body of the time-share estate
owners' association;.
"Common elements" means in the case
of a time-share estate project and program the real estate,
improvements thereon, and the personalty situate within the time-share project
that are subject to the time-share program.
"Common elements" shall not include the units and the time-shares;, excluding time-share units
and the time-shares therein. "Common elements" means in the case of a
time-share use project and program the real estate, improvements thereon, and
the personalty situate within the time-share project that are subject to the
time-share program, including all time-share
units and the time-shares therein.
"Common expenses" means all charges or costs incurred or to be incurred to operate, maintain, repair, renew, alter, or renovate the time-share project (including all time-share units and common elements therein), including any reserves therefor. During the developer control period, common expenses and time-share estate occupancy expenses shall be synonymous and interchangeable terms; thereafter, common expenses and time-share program expenses shall be synonymous and interchangeable terms.
"Consumer documents" means the aggregate of the
following documents:, including but not limited to
the purchase agreement, deed, reverter
deed, note, and the
deed of trust, settlement statement, and
any other document customarily associated with a consumer loan.
A consumer document shall be
deemed is one of
the consumer documents;.
"Contact information" means any information that can be used to contact an owner, including the owner's name, address, telephone number, email address, or user identity on any electronic networking service.
"Contract," "sales contract," "purchase
contract," "contract of purchase" or "contract to
purchase" shall be interchangeable throughout this chapter and shall mean
any legally binding instrument executed by the developer and a purchaser
whereby the developer is obligated to sell and the purchaser is obligated to
purchase either a time-share and its incidental benefits or an alternative
purchase registered under this chapter;.
"Conversion time-share project" means a real estate
improvement, which prior to the disposition of any time-share, was wholly or
partially occupied by persons as their permanent residence or on a transient
pay-as-you-go basis other than those who have contracted for the purchase of a
time-share and those who occupy with the consent of such purchasers;. A
conversion time-share project shall not mean a real
estate improvement that has been substantially renovated or renewed prior to
its registration with the Board.
"Deed" means the instrument by which title to a
time-share estate is transferred from one person to another person;.
"Deed of trust" means the instrument conveying the
time-share estate that is given as security for the payment of the note;.
"Default" means either a failure to have made any
payment in full and on time or a violation of a performance obligation required
by a consumer document for a period
of no less than 60 days;.
"Deliver" or "delivery" means any method of delivery used in conventional commercial practice, including delivery by hand, United States mail, commercial delivery, and electronic transmission.
"Developer" means any person or group of persons
acting in concert who (i) offers to dispose of a time-share or its or their
interest in a time-share unit for which
there has not been regardless
of whether there has been a previous disposition or and
who (ii) applies with the Board for registration
of the time-share project or time-share program or (iii) is or
was required to file for registration under § 55-390.
"Developer control period" has the meaning ascribed
to it in § 55-369;.
"Development right" means any right reserved by the
developer to create one or more additional
time-share units which may be dedicated that are committed
to the time-share program; project.
"Dispose" or "disposition" means a
transfer of a legal or equitable interest in a time-share, other than a
transfer or release of security for a debt;.
"Electronic transmission" has the meaning ascribed to it in § 13.1-1002.
"Exchange agent" or "exchange company"
means a person or persons who exchange or offer to exchange time-shares in an
exchange program with other time-shares;.
"Exchange program" means any opportunity or
procedure for the assignment or exchange of time-shares among owners in other
time-share programs as evidenced by a past or present written agreement
executed between an exchange company and the developer or the time-share estate
association; however, an "exchange program" shall not be either an
incidental benefit or an opportunity or procedure whereby a time-share owner
can exchange his time-share for another time-share within either the same
time-share or another time-share project owned in part by the developer;.
"Guest" means a person who is on the project,
additional land or development at the request of an owner, developer,
association or managing agent, or a person otherwise legally entitled to be
thereon. A guest includes, without limitation, family members of owners,
time-share exchange participants, merchants, purveyors, vendors and employees
thereof, and of the developer and association;.
"Incidental benefit" means anything valued in excess
of $100 provided by the developer that is acquired by a purchaser upon
acquisition of a time-share and includes without limitation exchange rights,
travel insurance, bonus weeks, upgrade entitlements, travel coupons, referral
awards, and golf and tennis packages. An incidental benefit is not a time-share
or an exchange program. An incidental benefit shall not be registered with the
Board;.
"Inherent risks of project activity" mean those
dangers or conditions that are an integral part of a project activity,
including certain hazards, such as surface and subsurface conditions; natural
conditions of land, vegetation, and waters; the behavior of wild or domestic
animals; and ordinary dangers of structures or equipment ordinarily used in
association or time-share operations. Inherent risks of project activity also
include the potential of a participant to act in a negligent manner that may
contribute to injury to the participant or others, including failing to follow
instructions given by the project professional or failing to exercise
reasonable caution while engaging in the project activity;.
"Lead dealer" means a
person who sells or otherwise provides to any other person
contact information concerning five or more owners to be used for a resale
service, but excludes developers,
managing entities, or exchange companies to the
extent such entities are providing other persons with
personal contact information about time-share owners
in their own time-share plans or members of
their own exchange program.
"Lien holder" means either a person who holds an
interest in an encumbrance that is not released of record as to a purchaser or
such person's successor in interest who acquires title to the time-share
project at foreclosure or by deed in lieu of foreclosure, or other instrument
however denominated;.
"Managing agent" means a person who undertakes the
duties, responsibilities, and obligations of the management of a time-share
project;.
"Managing entity" means the managing agent or, if
there is no managing agent, the time-share owners' association in a time-share
estate project and the developer in a time-share use project;.
"Material change" means a change in any information
or document disclosed in or attached to the public offering statement which
renders inaccurate, incomplete or misleading any information or document in
such a way as to affect substantially a purchaser's rights or obligations, but
shall not include a change (i) in the real estate tax assessment or rate,
utility charges or deposits, maintenance fees, association dues, assessments,
special assessments or any recurring time-share expense item provided the
change is made known (a) immediately to the prospective purchaser by a written
addendum in the public offering statement and (b) to the Board by filing with
the developer's annual report copies of the updated changes occurring over the
immediately preceding 12 months; (ii) which is an aspect or result of the
orderly development of the time-share project in accordance with the time-share
instrument; (iii) resulting from new, updated, or amended information contained
in the annual report prepared and distributed pursuant to § 55-370.1; (iv)
correcting spelling, grammar, omissions or other similar errors not affecting
the substance of the public offering statement; or (v) occurring in the
issuance of an exchange company's updated annual report or disclosure document,
provided upon its receipt by the developer, it shall be distributed in lieu of
all others in order to satisfy § 55-374;.
"Member" means an owner of a time-share that has membership rights in the association in accordance with the provisions of (i) association formation documents (ii) association bylaws or (iii) the time-share instrument.
"Memorandum of lien" has the meaning ascribed to it in subsection C of § 55-370.
"Note" means the instrument that evidences the debt
occasioned by the deferred purchase of a time-share;.
"Offering" or "offer" means any act to
sell, solicit, induce, or advertise, which originates in this the Commonwealth, whether by
radio, television, telephone, newspaper, magazine, or mail, whereby a person is
given an opportunity to acquire a time-share;.
"Owner" means purchaser.
"Participant" means any person, other than a project
professional, who engages in a project activity;.
"Person" means one or more natural persons,
corporations, partnerships, associations, trustees of a trust, limited
liability companies, other entities, or any combination thereof capable of
holding title to real property;.
"Possibility of reverter" means a provision
contained in a reverter deed whereby the time-share estate automatically
reverts or transfers back to the developer upon satisfaction of the
requirements imposed by § 55-376.1;.
"Product" means each time-share and its incidental
benefits and all alternative purchases that are registered with the Board
pursuant to this chapter;.
"Program" means the same as the term "time-share program."
"Project" means the same as the term
"time-share project";."
"Project activity" means any activity carried out or
conducted on a common element, within a time-share unit or elsewhere in the
project, additional land or development, that allows owners, their guests, and
members of the general public to view, observe, participate or enjoy
activities, including swimming pools, spas, sporting venues, and cultural,
historical or harvest-your-own activities, other amenities and events, or
natural activities and attractions for recreational, entertainment, educational
or social purposes. An activity is a project activity whether or not the participant
paid to participate in the activity;.
"Project instrument" means any recorded
documents, by whatever name denominated, which create the time-share project
and program and which may contain restrictions or covenants regulating the use,
occupancy, or disposition of time-shares
in a project; the
same as the term "time-share
instrument."
"Project professional" means any person who is
engaged in the business of providing one or more project activities, whether or
not for compensation. For the purposes of this definition, the developer,
association, and managing entity shall each be deemed a project professional;.
"Public offering statement" means the statement
required by § 55-374;.
"Purchaser" means any person other than a developer
or lender who owns or acquires a product, or who otherwise enters into a
contract for the purchase of a product;.
"Resale cost of ownership" means all the owner's expenses related to a resale time-share due and payable between the date of a resale transfer contract and the transfer of such resale time-share.
"Resale purchase contract" means an agreement negotiated by a reseller by which an owner or a reseller agrees to sell and a subsequent purchaser agrees to buy a resale time-share.
"Resale service" means engaging, directly or indirectly, for consideration, in any of the following either in person or by any medium of communication: (i) selling or offering to sell or list for sale for the owner a resale time-share, (ii) buying or offering to buy a resale time-share for transfer to a subsequent purchaser, (iii) transferring a resale time-share acquired from an owner to a subsequent purchaser or offering to assist in such transfer, (iv) invalidating or offering to invalidate for an owner the title of a resale time-share, or (v) advertising or soliciting to advertise or promote the transfer or invalidation of a resale time-share.
"Resale time-share" means a time-share, wherever located, that has previously been sold to an owner who is a natural person for personal, family, or household use and that is transferred, or is intended to be transferred, through a resale service.
"Resale transfer contract" means an agreement between a reseller and the owner by which the reseller agrees to transfer or assist in the transfer of the owner’s resale time-share.
"Reseller" means any person who, directly or indirectly, engages in a resale service.
"Reverter deed" means the deed from developer to a grantee that contains a possibility of reverter;
"Sales person" means a person an individual who sells or
offers to sell time-share interests
in a time-share program; one or more time-shares on behalf of
the developer.
"Situs" means the place outside the Commonwealth
where a developer's time-share project is located;.
"Situs Time-Share Act" means the Act act,
howsoever denominated, that regulates the offering, disposition, and sale of time-shares
applicable to the property outside the Commonwealth where the time-share
project is located;.
"Subsequent purchaser" means the purchaser or transferee of a resale time-share.
"Time-share" or "timeshare" means either a
time-share estate or a time-share use plus its incidental benefits;.
"Time-share estate" means a right to occupy a unit
or any of several units during five or more separated time periods over a
period of at least five years, including renewal options, coupled with a
freehold estate or an estate for years in a one or more
time-share project units or
a specified portion thereof;. The term means an interest
that complies in all respects with the requirements of the term "trust" as defined
in this section.
"Time-share estate occupancy expense" has the
meaning ascribed to it in § 55-369;.
"Time-share estate subject to reverter" means a
time-share estate (i) entitling the holder thereof to occupy units not more
than four weeks in any one year period;
and (ii) for which the down payment is not more than 20 percent of the total
purchase price of the time-share estate;.
"Time-share expense" means (i) expenditures, fees,
charges, or liabilities incurred with respect to the operation, maintenance,
administration, or
insuring of the time-shares, units, and common elements comprising the entire
time-share project, whether or not incurred for the repair, renovation,
upgrade, refurbishing,
or capital improvements; and (ii) any allocations of reserves;.
"Time-share instrument" means any document, however
denominated, which that creates both the time-share project and
the time-share program, and
which may contain restrictions or covenants regulating the use, occupancy, or
disposition of time-shares, time-share
units, and common elements
in a such
project and program;.
"Time-share owner" or "owner" means a
person who is an owner or co-owner of a time-share other than as security for
an obligation;.
"Time-share program" or "program" means
any arrangement of time-shares in one or more a time-share projects project whereby the use,
occupancy, or possession of real
property time-share
units has been made subject to
either a time-share estate or time-share use in which such use, occupancy, or
possession circulates among owners of the time-shares according to a fixed or
floating time schedule on a periodic basis occurring over any period of time in
excess of five years; but nonetheless terminating at a
certain date.
"Time-share project" means all of the real property
subject to a time-share program created by the execution and
recordation of a time-share instrument;.
"Time-share unit" or "unit" means the real
property or real property improvement in a project which that
is divided into time-shares and designated for separate occupancy and use; and.
"Time-share use" means a right to occupy a time-share unit or any of several time-share units during five or more separated time periods over a period of at least five years, including renewal options, not coupled with a freehold estate or an estate for years in a time-share project or a specified portion thereof. "Time-share use" shall not mean a right to use which is subject to a first-come, first-served, space-available basis as might exist in a country club, motel, hotel, health spa, campground, or membership or resort facility.
"Transfer" means a voluntary conveyance of a resale time-share to a person other than the developer, association, or managing entity of the time-share program of which the resale time-share is a part or to a person taking ownership by gift, foreclosure, or deed in lieu of foreclosure.
"Trust" means an arrangement wherein the subject accommodations or all use rights therein are transferred into a trust pursuant to the following:
1. Such accommodations shall be conveyed free and clear of all blanket liens, or a nondisturbance agreement or other agreement is in place to ensure the title to such accommodations will not be divested by foreclosure of any blanket lien on such accommodations. Those assurances may consist of nondisturbance instruments and recorded instruments advising third parties of the existence of purchaser use rights and providing for subordination of future liens;
2. The trustee must be independent of any developer or managing entity of the time-share program or any interest holder of any accommodation of such program;
3. The trust shall be irrevocable so long as any purchaser has a right to occupy any portion of the time-share property pursuant to the time-share program;
4. The trustee shall not convey, hypothecate, mortgage, assign, lease, or otherwise transfer or encumber in any fashion any interest in or portion of the accommodations to which any purchaser has a right of use or occupancy unless the time-share program is terminated pursuant to the time-share instrument, or such conveyance, hypothecation, mortgage, assignment, lease, transfer, or encumbrance is approved by a vote of two-thirds of all voting interests of the time-share program and such decision is declared by a court of competent jurisdiction to be in the best interests of the purchasers of the time-share program;
5. All purchasers of the time-share program or the owners' association of the time-share program shall be the express beneficiaries of the trust. The trustee shall act as a fiduciary to the beneficiaries of the trust. The agreement establishing the trust shall set forth the duties of the trustee. All expenses reasonably incurred by the trustee in the performance of its duties, together with any reasonable compensation of the trustee, shall be common expenses of the time-share program;
6. The trustee shall not resign upon less than 90 days' prior written notice to the managing entity and the Common Interest Communties Board;
7. The documents establishing the trust arrangement shall constitute a part of the time-share instrument;
8. For trusts holding property in a time-share program located outside the Commonwealth, the trust and trustee holding such property shall be deemed in compliance with the requirements of this subsection if such trust and trustee are authorized and qualified to conduct trust business under the laws of such jurisdiction and the agreement or law governing such trust arrangement provides substantially similar protections for the purchaser as are required in this subdivision for trusts holding property in a time-share program in the Commonwealth; and
9. The trustee shall have appointed a registered agent in the Commonwealth for service of process.
§ 55-363. Status of time-share estates with respect to real property interests.
A. A document transferring or encumbering a time-share estate shall not be rejected for recordation within this Commonwealth because of the nature or duration of that estate or interest, provided the document complies with all other recordation requirements.
B. Each time-share estate constitutes for purposes of title a separate estate or interest in a unit.
C. For purposes of local real property taxation, each time-share unit, other than a unit operated for time-share use, shall be valued in the same manner as if such unit were owned by a single taxpayer. The total cumulative purchase price paid by the time-share owners for a unit shall not be utilized by the commissioner of revenue or other local assessing officer as a factor in determining the assessed value of such unit. A unit operated as a time-share use, however, may be assessed the same as other income producing and investment property. The commissioner of revenue or other local assessing officer shall list in the land book a time-share unit in the name of the association. No assessment of a time-share unit or a common element may occur until a permanent certificate of occupancy is issued therefor.
D. No developer or association shall operate to transfer title unless such deed is executed and notarized by all grantors and accepted by the developer or association as evidenced by its execution of the same and recorded in the clerk's office where the project is located.
§ 55-366. Time-sharing permitted.
A time-share project shall be permitted on any land or improvement thereon lying within the Commonwealth unless prohibited by zoning then in effect or by the express language of any legally enforceable covenant, condition or restriction, however denominated, contained in the governing documents of record for such land, including without limitation, condominium instruments under the Condominium Act (§ 55-79.39 et seq.), a time-share instrument under this chapter, declaration under the Virginia Real Estate Cooperative Act (§ 55-424 et seq.) or a master deed under the Horizontal Property Act (§ 55-79.1 et seq.). This chapter shall not be construed to affect the validity of any provisions of any time-share program or time-share project (or any expansion thereof) or any time-share instrument recorded or in existence prior to July 1, 1981.
§ 55-367. Instruments.
A. In order to create a time-share program for a time-share estate project, the developer shall execute a time-share instrument prepared and executed in accordance with this chapter and record it in the clerk's office where such time-share project is located. The time-share instrument shall contain the following:
1. The name of the time-share project, which name must include or be followed by a qualifying adjective or term outlined in § 55-364.1;
2. The name of the locality and the state or situs in which the time-share project is situated;
3. The legal description, street address, or other description sufficient to identify the time-share project;
4. A legally
sufficient description of the real estate constituting the time-share project The method, if any,
whereby additional land may be
committed to the time-share project;
5. A statement
of the form of time-share program, i.e., whether it is a time-share estate or
time-share use;
65. Identification
of time periods set aside for accommodations of time-share units by
owners or guests by
letter, name, number, or
combination thereof;
76. Identification and types of time-shares time-share estates
and, where applicable, the method
whereby additional time-shares may be created or withdrawn;
87. The formula, fraction, or percentage
of the common expenses and any voting rights assigned to each time-share;
98. Any restrictions on the use,
occupancy, enjoyment, alteration, or alienation of time-shares;
109. The ownership interest, if
any, in personal property available to time-share owners;
1110. The program contractual terms
by which the managing entity, if any, will provide management of the project;
1211. The period for
which units are designated and committed to the time-share program and the property
classification of the units at the expiration of such period maximum number of time-share
units if all development rights are exercised;
1312. Any provision for amending
the time-share instrument;
1413. A description of the
events, including but not limited to condemnation and damage or destruction,
upon which the time-share program may or shall be terminated before the
expiration of its full term and the consequences of such termination, including
but not limited to the manner in which the time-share project or the proceeds
from the disposition thereof shall be held or distributed among owners;
1514. A statement of whether or
not the developer reserves the right to add to or delete any incidental
benefit;
1615. A statement of whether or
not the developer reserves the right to add to or delete any alternative
purchase; and
1716. Such other matters as the
developer deems appropriate.
B. In order to create a time-share program for a time-share use project, the developer shall either (i) execute and record a time-share instrument as required by subsection A or (ii) execute a time-share instrument that takes the form of and is a part of the contract which contains the information required by subsection A.
C. If the developer explicitly reserves the right to develop
additional time-shares time-share units, the
time-share instrument shall also contain the following:
1. A legally sufficient description of all land which may be added to the time-share project which shall be referred to as "additional land";
2. A statement outlining the order in which portions of the additional land may be subjected to the exercise of each development right, or a statement that no assurances are made in that regard;
3. A statement of the time limit upon which the option to develop shall expire, together with a statement of the circumstances, if any, which will terminate that option prior to the expiration of the specified time limit;
4. A statement of the maximum number of units which may be added to the time-share project, if known, and if not known, a statement to that effect; and
5. A statement of the property classification of the additional land if the developer fails to exercise the development rights as reserved in the time-share instrument.
§ 55-368. Time-share instrument for time-share estate project.
In addition to the requirements of § 55-367, the time-share
instrument for a time-share estate project shall outline or prescribe
reasonable arrangements for the management and operation of the time-share
estate program and for the maintenance, repair, and furnishing of time-share units comprising it the project,
which arrangements shall
include, but need not be limited to, provisions for the following:
1. Creation of an association, the members of which shall be include the time-share estate owners. The If the project is located in
the Commonwealth and is created after July 1, 2012, the association may shall be
formed pursuant to the Virginia Nonstock Corporation Act (§ 13.1-801 et seq.); however, the
association and
shall be formed prior to the time the project and program are registered with
the Board. Nothing shall affect the validity of the association, once formed,
and the rights applicable to it as granted by this chapter, notwithstanding the
time when such association was formed;
2. Payment of costs and common
expenses of operating the time-share estate project and program
and owning, managing,
and maintaining the common elements and time-share
units comprising it the time-share
project;
3. Employment and termination of employment of the managing
agent for the project. Any agreement pertaining to the employment of the
managing agent and executed during the developer control period shall be voidableterminable
by the association board of directors at any time
after termination of the developer control period for the time-share project,
and any provision in such agreement to the contrary is hereby declared to be
void;
4. Termination of leases and contracts for goods and services
for the time-share estate project, which are entered into during the developer
control period. Any such lease or contract shall become voidable terminable at the option of the association board of directors upon termination
of the developer control period for the entire time-share project, or sooner if
the provisions of such lease or contract so state;
5. Preparation and dissemination to time-share estate owners of the annual report required by § 55-370.1;
6. Adoption of standards and rules of conduct for the use, enjoyment, and occupancy of time-share units and the common elements by the time-share estate owners and guests as well as procedures for establishing the rights of time-share estate owners to occupancy, use, and enjoyment of time-share estate units and common elements and amenities by prearrangement or under a first-reserved, first-served priority system;
7. Collection
of regular assessments, fees or dues, and/or special assessments from
time-share estate owners to defray all time-share expenses. The methods for
determining and collecting the maintenance fees, user fees, special
assessments, and other charges or fees
from time-share owners during the developer control period necessary to pay all
time-share estate occupancy expenses; and thereafter, the method for
determining and collecting the assessments, user fees, special assessments, and other
charges or fees from time-share owners necessary to pay time-share program
expenses;
8. Comprehensive general liability insurance for death, bodily injury, and property damage arising out of, or in connection with, the use and enjoyment of the project by time-share estate owners, their guests and other users. The costs associated with securing and maintaining such insurance shall be a time-share expense. Nothing herein shall be construed to obligate the managing entity to secure insurance on the conduct of the time-share estate owners, their guests and other users, or the personal effects or property of such owners, guests, and users;
9. Methods for providing compensation or alternate use periods
or monetary compensation to a time-share estate owner if his contracted-for confirmed time-share unit
cannot be made available for the period to which the owner is entitled by
schedule or by confirmed reservation;
10. Procedures for imposing a monetary penalty or suspension of a time-share
estate owner's rights and privileges in the time-share estate program or
time-share project for failure of such a time-share estate owner to comply with provisions of the time-share
instrument or the rules and regulations of the association with respect to the
use and enjoyment of the time-share units
and common elements constituting the
time-share project. Under these procedures a time-share
estate owner must be given reasonable notice and reasonable opportunity to be
heard and explain the charges against him in person or in writing to the board
of directors of the association before a decision to impose discipline is
rendered; and;
11. Procedures for the suspension or forfeiture of a time-share estate owner's rights and privileges to participate in the time-share estate program or to use, enjoy, and occupy the time-share project during the owner’s occupancy period or at any other time because of the failure of such owner to comply with provisions of the time-share instrument or the rules and regulations with respect to the use, occupancy, and enjoyment of the time-share units and common elements constituting the time-share project or failure to pay in full all financial obligations due the developer or the association, including without limitation maintenance fees, assessments, special assessments, and user fees;
12. The effect on the time-share owner with respect to both time-share estate ownership and participation rights in the time-share estate program occasioned by the violation of the procedures outlined in subdivision 10 or 11; and
13. Employment of attorneys, accountants, and other professional persons as necessary to assist in the management of the time-share estate program and the units comprising it.
§ 55-369. Developer control in time-share estate program.
A. The time-share instrument for a time-share estate program
shall provide for a period of time, to be called the "developer control
period," during which the developer or a managing agent selected by the
developer shall manage and control the time-share estate project and the common
elements and units, or portions thereof, comprising it. All costs common expenses associated
with the control, management, and operation of the time-share estate project
during the developer control period shall belong to the developer, except for
time-share estate occupancy expenses that shall, if required by the developer
in the time-share instrument, be allocated only to and paid by time-share
estate owners other than the developer. "Time-share estate occupancy
expenses" means all costs and expenses incurred in (i) the formation,
organization, operation and administration, including capital contributions
thereto, of the association and both its board of directors and its members and
(ii) all owners' use and occupancy of the time-share estate project including
without limitation its completed and occupied time-share estate units and common
elements available for use. Such costs and expenses include but are not limited
to maintenance and housekeeping charges; repairs; refurbishing costs; insurance
premiums, including the premium for comprehensive general liability insurance
required by subdivision 8 of § 55-368; taxes; properly allocated labor,
operational, and overhead costs; general and administrative expenses; managing
agent's fee; utility charges and deposits; the cost of periodic repair and
replacement of walls and window treatments and furnishings, including furniture
and appliances; filing fees and annual registration charges of the State
Corporation Commission and the Board; counsel fees and accountant charges; and
reserves for any of the foregoing. Nothing shall preclude prohibit the developer, during
the developer control period and at any time
after the lapse of a purchaser's right of cancellation, and
without regard to the recordation of the deed, provided the
deed has been delivered to the purchaser or the purchaser's agent,
from collecting an annual or specially assessed charge from each time-share
estate owner for the
payment of as an offset against the
time-share estate occupancy expenses by way of a "maintenance fee."
However, any such funds received and not spent or any other funds received and
allocated to the benefit of the association shall be transferred to the
association by the developer at the termination of the developer control
period.
B. Fee simple title to the common elements, and title to the furniture,
appliances, and equipment located within the
project and paid for or maintained by time-share
estate occupancy expense fees shall be transferred to the time-share
estate owners' association, free of charge, no later than
at such time as the developer either
transfers of record to purchasers time-share owners legal or equitable ownership of at least ninety 90
percent of the time-share estates for the entire time-share
project or completes all of the promised common
elements and facilities comprising the time-share estate project, whichever
occurs later. The developer may, but shall not be required to, make such
transfer when the period has ended for a phase or portion of the time-share
estate project. The transfer herein required of the developer shall not exonerate
it from the responsibility of completion of the promised and incomplete common
elements and time-share units once
the transfer occurs. Upon transfer of a portion of the
time-share project or portion
to the association, the developer control period for such project or
portion thereof
shall terminate. Upon transfer of all the common elements of the
entire time-share project to the association, the developer control period
for such project shall terminate.
§ 55-370. Time-share estate owners' association control liens.
A. The board of directors of the association shall have the
authority to adopt regular annual assessments and to levy periodic special
assessments against each of the time-share estate unit owners and to collect
the same from such owners according to law, if the purpose in so doing is
determined by the board of directors to be in the best interest of the time-share project
or the time-share program and
the proceeds are used to either pay time-share common expenses or fund a reserve. In
addition, the board of directors of the association shall have the authority to
collect, on behalf of the developer or on its own account, the maintenance fee
imposed by the developer pursuant to § 55-369. The authority hereby granted and
conferred upon the association shall exist notwithstanding any covenants and
restrictions of record applicable to the project stated to the contrary and any
such covenants and restrictions are hereby declared void.
B. The developer may provide that it not be obligated to pay all or a portion of any assessment, dues, or other charges of the association, however denominated, passed, or adopted, pursuant to subsection A, if such developer so provides, in bold type, in the time-share instrument for the time-share estate project. If no such provision exists, the developer shall be responsible to pay the same assessment, dues, or other charges that a time-share estate owner is obligated to pay for each of its unsold time-shares existing at the end of the fiscal year of the association and no more if the board of directors of the association so determines. In no event shall either a time-share expense or the dues, assessment, or charges of the association discriminate against the developer.
C. The association shall have a lien on every time-share estate within its project for unpaid and past due regular or special assessments levied against that estate in accordance with the provisions of this chapter and for all unpaid and past due maintenance fees. The exemption created by § 34-4 shall not be claimed against the debt or lien of the association created by this section.
The association, in order to perfect the lien given by this subsection, shall file, before the expiration of four years from the time such special or regular assessment or maintenance fee became due and payable, in the clerk's office of the county or city in which the project is situated, a memorandum verified by the oath of any officer of the association or its managing agent and containing the following information:
1. The name and location of the project;
2. The name and address of each owner of the time-share on which the lien exists and a description of the unit in which the time-share is situate;
3. The amount of unpaid and past due special or regular assessments or unpaid and past due maintenance fees applicable to the time-share, together with the date when each became due;
4. The amount of any other charges owing occasioned by the failure of the owner to pay the assessments or maintenance fees, including late charges, interest, postage and handling, attorneys' fees, recording costs and release fees;
5. The name, address and telephone number of the association's trustee, if known at the time, who will be called upon by the association to foreclose on the lien upon the owner's failure to pay as provided in this subsection; and
6. The date of issuance of the memorandum.
Notwithstanding any other provision of this chapter, or any other provision of law requiring documents to be recorded in the deed books of the clerk's office of any court, from July 1, 1981, all memoranda of liens arising under this subsection shall be recorded in the deed books in such clerk's office. Any such memorandum shall be indexed in the general index to deeds, and such general index shall identify the lien as a lien for time-share estate regular or special assessments or maintenance fees.
It shall be the duty of the clerk in whose office such memorandum shall be filed as provided herein to record and index the same as provided in this subsection, in the names of the persons identified therein as well as in the name of the time-share estates owners' association. The cost of recording such memorandum shall be taxed against the owner of the time-share on which the lien is placed. The filing with the clerk of one memorandum on which is listed two or more delinquent time-share estate unit owners is permitted in order to perfect the lien hereby allowed and the cost of filing in this event shall be the clerk's fee as prescribed in subdivision A. 2. of § 17.1-275.
D. At any time after perfecting the lien pursuant to this section, the association may sell the time-share estate at public sale, subject to prior liens. For purposes of this section, the association shall have the power both to sell and convey the time-share estate, and shall be deemed the time-share estate owner's statutory agent for the purpose of transferring title to the time-share estate. A nonjudicial foreclosure sale shall be conducted by a trustee and in accordance with the following:
1. The association shall give notice to the time-share estate owner, prior to advertisement, as required by subdivision 4. The notice shall specify (i) the debt secured by the perfected lien; (ii) the action required to satisfy the debt secured by the perfected lien; (iii) the date, not less than 60 days from the date the notice is given to the time-share estate owner, by which the debt secured by the lien must be satisfied; and (iv) that failure to satisfy the debt secured by the lien on or before the date specified in the notice may result in the sale of the time-share estate. The notice shall further inform the time-share estate owner of the right to bring a court action in the circuit court of the county or city where the time-share project is located to assert the nonexistence of a debt or any other defenses of the time-share estate owner to the sale.
2. After expiration of the 60-day notice period provided in subdivision 1, the association may appoint a trustee to conduct the sale. The appointment of the trustee shall be filed in the clerk's office of the circuit court in the county or city in which the time-share project is located. It shall be the duty of the clerk in whose office such appointment is filed to record and index the same, as provided in this subsection, in the names of the persons identified therein as well as in the name of the association. The association, at its option, may from time to time remove the trustee and appoint a successor trustee.
3. If the time-share estate owner meets the conditions
specified in this subdivision prior to the date of the foreclosure sale, the
time-share estate owner shall have the right to have enforcement of the
perfected lien discontinued prior to the sale of the time-share estate. Such
conditions are that the time-share estate owner:
(i) satisfy the debt secured by lien that is the subject of the nonjudicial
foreclosure sale and (ii) pay all expenses and costs incurred in perfecting and
enforcing the lien, including but not limited to advertising costs and
reasonable attorney fees.
4. In addition to the advertisement required by subdivision 5, the association shall give written notice of the time, date, and place of any proposed sale in execution of the lien, including the name, address, and telephone number of the trustee, by personal delivery or by mail to (i) the present owner of the time-share estate to be sold at his last known address as such owner and address appear in the records of the association, (ii) any lienholder who holds a note against the time-share estate secured by a deed of trust recorded at least 30 days prior to the proposed sale and whose address is recorded with the deed of trust, and (iii) any assignee of such a note secured by a deed of trust provided the assignment and address of the assignee are likewise recorded at least 30 days prior to the proposed sale. Mailing a copy of the advertisement or the notice containing the same information to the owner by certified or registered mail no less than 14 days prior to such sale and to the lienholders and their assigns, at the addresses noted in the memorandum of lien, by ordinary mail no less than 14 days prior to such sale shall be a sufficient compliance with the requirement of notice.
5. The advertisement of sale by the association shall be in a newspaper having a general circulation in the city or county wherein the time-share estate to be sold and the time-share project, or any portion thereof, lies pursuant to the following provisions:
a. The association shall advertise once a week for four successive weeks; however, if the time-share estate and the time-share project or some portion thereof is located in a city or in a county immediately contiguous to a city, publication of the advertisement five different days, which may be consecutive days, shall be deemed adequate. The sale shall be held on any day following the day of the last advertisement that is no earlier than eight days following the first advertisement nor more than 30 days following the last advertisement.
b. Such advertisement shall be placed in that section of the newspaper where legal notices appear or where the type of time-share estate being sold is generally advertised for sale. The advertisement of sale, in addition to such other matters as the association finds appropriate, shall set forth a description of the time-share estate to be sold, which description need not be as extensive as that contained in the deed of trust, but shall identify the time-share project by street address, if any, or, if none, shall give the general location of such time-share project with reference to streets, routes, or known landmarks with further identification of the time-share estate to be sold. Where available, tax map identification may be used but is not required. The advertisement shall also include the date, time, place, and terms of sale and the name of the association. It shall set forth the name, address, and telephone number of the representative, agent, or attorney who may be able to respond to inquiries concerning the sale.
c. In addition to the advertisement required by subdivisions 5 a and 5 b, the association may give such other further and different advertisement as the association finds appropriate.
6. In the event of postponement of the sale, which postponement shall be at the discretion of the association, advertisement of the postponed sale shall be in the same manner as the original advertisement of sale.
7. Failure to comply with the requirements for advertisement contained in this section shall, upon petition, render a sale of the property voidable by the court. Such petition shall be filed within 60 days of the sale or the right to do so shall lapse.
8. In the event of a sale, the association shall have the following powers and duties:
a. The association may sell two or more time-share estates at the sale. Written one-price bids may be made and shall be received by the trustee from the association or any person for entry by announcement at the sale. Any person other than the trustee may bid at the foreclosure sale, including a person who has submitted a written one-price bid. Upon request to the trustee, any other bidder in attendance at a foreclosure sale shall be permitted to inspect written bids. Unless otherwise provided in the time-share instrument, the association may bid to purchase the time-share estate at a foreclosure sale. The association may own, lease, encumber, exchange, sell, or convey the time-share estate. Whenever the written bid of the association is the highest bid submitted at the sale, such written bid shall be filed by the trustee with his account of sale required under subdivision D 10 of this section and § 26-15. The written bid submitted pursuant to this subsection may be prepared by the association, its agent or attorney.
b. The association may require of any bidder at any sale a cash deposit of as much as 33.33% of the sale price before his bid is received, which shall be refunded to him if the time-share estate is not sold to him through action of the trustee. The deposit of the successful bidder shall be applied to his credit at settlement, or if such bidder fails to complete his purchase promptly, the deposit shall be applied to pay the costs and expenses of the sale, and the balance, if any, shall be retained by the association in connection with that sale.
c. The association shall receive and receipt for the proceeds of sale, no purchaser being required to see to the application of the proceeds, and apply the same in the following order: first, to the reasonable expenses of sale, including reasonable attorney fees; second, to the satisfaction of all taxes, levies, and assessments, with costs and interest; third, to the satisfaction of the lien for the time-share estate owners' assessments; fourth, to the satisfaction in the order of priority of any remaining inferior claims of record; and fifth, to pay the residue of the proceeds to the time-share estate owner or his assigns; provided, however, that the association as to such residue shall not be bound by any inheritance, devise, conveyance, assignment or lien of or upon the unit owner's equity, without actual notice thereof prior to distribution.
9. The trustee shall deliver to the purchaser a trustee's deed conveying the time-share estate with special warranty of title. The trustee shall not be required to take possession of the time-share estate prior to the sale thereof or to deliver possession of the time-share estate to the purchaser at the sale.
10. The trustee shall file an
accounting of the sale with the commissioner of accounts pursuant to § 26-15
and every account of a sale shall be recorded pursuant to § 26-16. In addition,
the accounting shall be made available for inspection and copying pursuant to §
55-370.01 upon the written request of the prior time-share estate owner,
current time-share estate owner, or any holder of a recorded lien against the
time-share estate at the time of the sale. The association shall maintain a
copy of the accounting for at least 12 months following the foreclosure sale.
11.
If the sale of a time-share estate is made pursuant to this subsection and the
accounting is made by the trustee, the title of the purchaser at such sale shall
not be disturbed unless within six months from the date of foreclosure, the
sale is set aside by the court or an appeal is allowed by the Supreme Court of
Virginia, and a decree is therein entered requiring such sale to be set aside.
When payment or satisfaction is made of a debt secured by the lien perfected by this subsection, such lien shall be released in accordance with the provisions of § 55-66.3. For the purposes of § 55-66.3, any officer of the time-share estate owners' association or its managing agent shall be deemed the duly authorized agent of the lien creditor.
E. The
commissioner of accounts to whom an account of sale is returned in connection
with the foreclosure of either a lien under subsection C or a purchase money
deed of trust taken back by the developer in the sale of a time-share in order
to satisfy § 26-15 shall be entitled to a fee, not to exceed forty-five
dollars, on each such sale. 1. An
accounting shall be prepared by the trustee with a copy delivered thereby to
the board of directors. Such accounting shall be made available for inspection
and copying upon the written request of any time-share estate owner of or any
holder of a recorded lien against the time-share estate that was
foreclosed upon at the sale. The association and the trustee shall maintain a
copy of the accounting for at least 12 months following the sale. The trustee
may, but shall not be required to, file an accounting of the sale with the
commissioner of accounts pursuant to § 26-15.
2. A trustee who forecloses under a purchase money deed of trust where the time-share owner is the grantor and the developer is the initial beneficiary may, but shall not be required to, file an accounting of the sale with the commissioner of accounts pursuant to § 26-15. An accounting shall be prepared by the trustee and made available for inspection and copying upon the written request of any time-share estate owner of or any holder of a recorded lien against the time-share estate that was foreclosed upon at the sale. The trustee shall maintain a copy of the accounting for at least 12 months following the foreclosure sale.
3. The commissioner of accounts to whom an accounting of sale is returned in connection with the foreclosure of a memorandum of lien or a purchase money deed of trust on a time-share estate shall be entitled to a fee, not to exceed $45, on each such sale.
F. Any time-share owner within the project having executed a contract for the disposition of the time-share, shall be entitled, upon request, to a recordable statement setting forth the amount of unpaid regular or special assessments or maintenance fees currently levied against that time-share. Such request shall be in writing, directed to the president of the time-share estate owners' association, and delivered to the principal office of the association. Failure of the association to furnish or make available such statement within twenty days from the actual receipt of such written request shall extinguish the lien created by subsection C as to the time-share involved. Payment of a fee reflecting the reasonable cost of materials and labor, not to exceed the actual cost thereof, may be required as a prerequisite to the issuance of such a statement.
§ 55-370.01. Time-share owners' association books and records;
meetings; use of email.
A. Subject to the provisions of subsection B, all books and records, or copies thereof, kept by or on behalf of the association shall be maintained so that such books and records, or portions thereof, are reasonably available for inspection after written request by a member in good standing or his authorized agent. The association may charge such member or his agent a reasonable fee for copying the requested information. No books or records shall be removed from their location by the examining member or his agent. The right of inspection shall exist without reference to the duration of membership and may be exercised only during reasonable business hours and at a mutually convenient time and location, under the supervision of the custodian, and upon 15 days' written notice.
For purposes of this subsection, the requested books and records shall be considered "reasonably available" if copies thereof are delivered to the requesting member or his agent within seven business days of the date the association receives the written request. However, the requesting member or his agent shall be permitted to inspect the books and records wherever located at any reasonable time, under reasonable conditions, and under the supervision of the custodian of the records. The custodian shall supply copies of the records where requested and upon payment of the copying fee.
The association shall provide members of the association with the location of the books and records, along with the name and address of the custodian, by any reasonable method, which may include posting in a reasonable location at the situs of the time-share project or in the annual report required by § 55-370.1.
B. Books and records kept by or on behalf of an association may be withheld from inspection to the extent that they concern:
1. Personnel records;
2. An individual's medical records;
3. Records relating to business transactions that are currently in negotiation;
4. Privileged communications with legal counsel;
5. Complaints against an
individual a member
of the association;
6. Agreements containing confidentiality requirements;
7. Pending litigation;
8. The name, address, phone number, electronic mail address, or other personal information of time-share owners or members of the association, unless such owner or member first approves of the disclosure in writing;
9. Disclosure of information in violation of law; or
10. Meeting minutes or other records of an executive session of the board of directors held in accordance with subsection D.
The association shall be under no obligation to provide requested records to the extent that they are matters of public record or are otherwise readily obtainable from another source.
C. The association shall maintain among its records a complete, up-to-date list of the names and addresses of all current members in good standing who are owners of time-share estates in the time-share project. The association shall not publish such list or provide a copy of it to any time-share owner or to any third party except the board of directors or the developer. However, the association shall mail to those persons listed on the list materials provided by any member in good standing, upon written request of that member, if the purpose of the mailing is to advance legitimate association business. The use of any proxies solicited in this manner must comply with the provisions of the time-share instrument and this chapter. A mailing requested for the purpose of advancing legitimate association business shall occur within 45 days after receipt of a request from a member in good standing. The board of directors of the association shall be responsible for determining the appropriateness of any mailing requested pursuant to this subsection whose decision in this regard shall be final. The association shall be paid in advance for the association's actual costs in performing the mailing, including but not limited to postage, supplies, reasonable labor, and attorney fees.
D. Meetings of the board of directors shall be open to all members of record who are eligible to vote and who are in good standing. Minutes shall be recorded and shall be available as provided in subsection A. The board of directors may convene in closed session to consider personnel matters; consult with legal counsel; discuss and consider contracts, potential or pending litigation, and matters involving violations of the time-share instrument or rules and regulations adopted pursuant thereto for which a member, his family members, tenants, guests, or other invitees are responsible; or discuss and consider the personal liability of members to the association upon the affirmative vote in open meeting to assemble in closed session. The motion shall state specifically the purpose for the closed session. Reference to the motion and the stated purpose for the closed session shall be included in the minutes. The board of directors shall restrict the consideration of matters during the closed portions of meetings only to those purposes specifically exempted and stated in the motion. No contract, motion, or other action adopted, passed, or agreed to in closed session shall become effective unless the board of directors, following the closed session, reconvenes in open meeting and takes a vote on such contract, motion, or other action, which shall have its substance reasonably identified in the open meeting. The requirements of this section shall not require the disclosure of information in violation of law.
E. Notwithstanding any provisions of the Virginia Nonstock Corporation Act (§ 13.1-801 et seq.) to the contrary:
1. The bylaws of the association may prescribe different quorum requirements for meetings of its members;
2. A director of the association may be removed from the
office pursuant to any procedure provided in its articles of
incorporation association formation
documents and, if none is provided, may be removed at a
meeting called expressly for that purpose, with or without cause, by such vote
as would suffice for his election.
F. Whenever in this chapter communication between the board of
directors and a member of the association is required by mail, any electronic
means may be used in the alternative, including e-mail email,
provided such electronic communication is personal and only between such board
and such member. Notwithstanding the foregoing or any
other provision of this chapter, an owner or member may require the association, developer, or managing
agent to communicate by United States mail.
G. Filings with the board Board
may be made by any electronic means electronic transmission
providing such board Board
is willing to accept same.
§ 55-370.1. Time-share estate owners' association annual report.
A. Commencing with Throughout
the time-share estate program and within 120
days after the close of each fiscal year thereafter by June 30 of each year thereof,
an annual report shall be prepared and distributed to all time-share estate owners.
The annual report required hereby shall be prepared and distributed for each
time-share estate project located in the Commonwealth and registered with the Board. During the developer control
period, the The
annual report shall be prepared and distributed to all time-share purchasers owners by the developer or its designated managing entity and
thereafter by the association. During the
developer control period, the cost of preparing the annual report shall be a
time-share estate occupancy expense; thereafter, the cost shall be
a time-share program expense.
B. The annual report shall contain the following:
1. A list of
the names and mailing addresses of the members of the association's board of
directors and the name of the person who prepared the report; The full legal name of the
time-share project and its address;
2. The full legal name of the association;
3. A list of the names and mailing addresses of the members of the association's board of directors and the name of the person who prepared the report;
4. The managing entity's name, address, and contact person thereat, if any, for the project;
5. A statement of whether or not the developer control period has terminated for the time-share estate project;
6. Financial statements of the association audited by an independent certified public accounting firm of the association, which contain at least the following:
2a.
A balance sheet as of the end of the fiscal previous year just ended;
3b.
An income statement as of the end of the fiscal previous year just ended; and
4c. A statement of the net
changes in the financial position of the association for the fiscal previous year just ended;
5. A 7. During the developer control period, a statement
of the maintenance fee constituting the time-share estates estate occupancy expenses, the regular
assessment, and any special assessments or other charges due for the
current year from each time-share estate owner; and after the
developer control period, a statement of the assessments constituting the time-share
program expenses and any special assessments or other charges due for the
current year from each time-share estate owner; and
68. A copy of the current budget
adopted by the association's board of directors reflecting
the anticipated time-share
estate occupancy expenses maintenance fee
and any special assessment during the developer control period and thereafter
the assessment and any special assessment, along with:
a. A statement as to who prepared the budget;
b. A statement of the budgetary assumptions concerning occupancy factors;
c. A description of any provision made in the budget for reserves for repairs and replacement;
d. A statement of any other reserves;
e. The projected financial liability for each time-share
estate owner, including a statement of (i) the nature of all charges,
assessments, maintenance fees, and other expenses which that
may be assessed, (ii) the current amounts assessed, and (iii) the method and
formula for changing any such assessments; and
f. A statement of any services not reflected in the budget
that the developer provides, or expenses that it pays, what it that the
association expects may become a time-share
occupancy expense or a time-share program expense, as the case may be, at any subsequent time, and the projected time-share program expense assessment
attributable to each of those services or expenses for the association and for
each time-share.;
9. A statement of the location of the books and records of the association along with the name and contact address of the custodian of such books and records; and
10. The amount charged by the association to reflect on its books and records each new subsequent owner of a time-share acquired from an existing owner, which amount shall not exceed $75; moreover, a statement to the effect that if such new owner did not obtain a certificate of resale issued pursuant to § 55-380, the association will provide the same at an additional charge not to exceed $100.
C. In lieu of the annual report required by subsection A,
during the first twelve 12 months of the time-share
program, the developer or the association shall prepare a budget which shall
contain the information contained in subdivision 6 of
subsection B 8.
§ 55-370.1:1. Time-share use owners' annual report.
A. Throughout the time-share use program and by June 30 of each year thereof, an annual report shall be prepared and distributed to all owners. The annual report required hereby shall be prepared and distributed for each time-share use project registered with the Board. The annual report shall be prepared and distributed to all owners by the developer. The cost of preparing the annual report shall be a time-share program expense.
B. The annual report shall contain the following:
1. The full legal name of the time-share use project and its address;
2. A list of the names and mailing addresses of the members of the developer's board of directors and the name of the person who prepared the report;
3. The managing entity's name, address, and contact person thereat, if any, for the project;
4. Financial statements for the time-share use program audited by an independent certified public accounting firm for the time-share use program, which shall contain at least the following:
a. A balance sheet of the time-share use program as of the end of the previous year just ended;
b. An income statement reflecting all revenues received from owners as such regardless of amounts, reason, or denomination and all expenses incurred because of such owners' use and occupancy of the project as of the end of the previous year just ended; and
c. A statement of the net changes in the financial position of the time-share use program for the previous year just ended;
5. A statement of the maintenance fee, howsoever denominated, and any special assessments or other charges due for the current year from each time-share use owner;
6. A copy of the current budget adopted by the developer's board of directors reflecting the maintenance fee and any special assessment, howsoever denominated, along with:
a. A statement of the number of time-share use owners then entitled to participate in the time-share use program along with a breakdown, if any, of use restrictions occasioned by seasonality and the like;
b. A statement as to who prepared the budget;
c. A statement of the budgetary assumptions concerning occupancy factors;
d. A description of any provision made in the budget for reserves for repairs and replacement;
e. A statement of any other reserves;
f. The projected financial liability for each time-share use owner, including a statement of (i) the nature of all charges, assessments, maintenance fees, and other expenses that may be assessed, (ii) the current amounts assessed, and (iii) the method and formula for changing any such assessments; and
g. A statement of any services not reflected in the budget that the developer provides, or expenses that it pays, which such developer expects may become a time-share program expense at any subsequent time and the projected time-share program expense assessment attributable to each of those services or expenses for each time-share;
7. A statement of the location of the books and records of the developer along with the name and contact address of the custodian of such books and records; and
8. The amount charged by the developer to reflect on its books and records each new subsequent owner of a time-share acquired from an existing owner, which amount shall not exceed $75.
C. In lieu of the annual report required by subsection A, during the first 12 months of the time-share use program, the developer shall prepare a budget that shall contain the information contained in subdivision B 4.
§ 55-371. Time-share instrument for time-share use project.
In addition to the requirements of § 55-367, the time-share instrument for a time-share use program shall prescribe and outline reasonable arrangements for the management and operation of the time-share use program and for the maintenance, repair, and furnishing of time-share use units comprising same, which arrangements shall include, but need not be limited to, provisions for the following:
1. Standards and procedures for upkeep, repair and interior
furnishing of time-share use units, for the replacements of such furnishings,
and for providing maid, cleaning, linen, and similar services to the such units
during use and occupancy periods;
2. Adoption of standards and rules of conduct governing the use, enjoyment, and occupancy of time-share use units by owners;
3. Payment by the developer of the costs and expenses of
operating the time-share use program and owning and maintaining the time-share
use units comprising it and facilities comprising the
project;
4. Selection of a managing agent to act for and on behalf of the developer should the developer elect not to undertake the duties, responsibilities, and obligations of the management of the time-share use program;
5. Procedures Adoption of standards and rules
of conduct for the use,
enjoyment, and occupancy of time-share units and facilities comprising the
project by the time-share use owners and guests as well
as procedures for establishing the
rights of time-share use owners to occupancy, use, and enjoyment of time-share
use units and such facilities by
prearrangement or under a first-reserved, first-served priority system;
6. Procedures for imposing and collecting regular and/or special assessments, maintenance, or use fees from time-share use owners as necessary to defray all time-share expenses and in providing materials and services to the units and facilities comprising the project, as herein required of the developer;
7. Comprehensive general liability insurance for death, bodily injury, and property damage arising out of, or in connection with, the occupancy, use, and enjoyment of time-share use units by time-share use owners, their guests, and other users. The costs associated with securing and maintaining such insurance shall be a time-share expense. Nothing herein shall be construed to obligate the developer to secure insurance on the conduct of the time-share use owners, their guests and other users, or the personal effects or property of such owners, guests, and users;
8. Methods for providing compensating or alternate use periods
or monetary compensation to a time-share use owner if a time-share use unit
cannot be made available for the period to which the owner is entitled by
schedule or by a confirmed reservation; and
9. Procedures for imposing a monetary
penalty or suspension of a time-share use owner's rights
and privileges in the time-share use program or project or termination of the
time-share use itself for failure of the time-share use owner to comply with
the provisions of the time-share use instrument, the rules and regulations
established by the developer with respect to the occupancy, use and enjoyment
of the time-share use units, or the failure to pay the charges imposed by the
developer against the time-share use owner for providing the materials and
services as herein required of the developer. Except in matters where the
time-share use owner has failed to pay the charge imposed by the developer for
a period of less than sixty days after it has become due and payable, the owner
shall be given notice and the opportunity to be heard. for failure of a time-share use owner to
comply with provisions of the time-share instrument, the contract, or the
rules and regulations with respect to the occupancy, use, and
enjoyment of the time-share units and common elements constituting the
time-share project. Under these procedures a time-share owner must be given
reasonable notice and reasonable opportunity to be heard and to explain the charges
against him in person or in writing to the managing entity before a decision to
impose discipline is rendered;
10. Procedures for the suspension of a time-share use owner's rights and privileges to participate in the time-share use program or to use, enjoy, and occupy the time-share project during his confirmed use period or other time for failure of such owner to comply with provisions of the time-share instrument, consumer documents, or the rules and regulations with respect to the use, occupancy, and enjoyment of the time-share units and common elements constituting the time-share project or the failure to pay any and all financial obligations due developer timely and in full; and
11. The effect on the time-share owner with respect to both time-share use ownership and participation rights in the time-share use program occasioned by the violation of the procedures outlined in subdivision 9 or 10.
§ 55-374. Public offering statement.
A. The developer shall prepare and distribute to each
prospective purchaser prior to the execution of a contract for the purchase of
a time-share, a copy of the current public offering statement about which the
time-share relates and its time-share project
relate. The public offering statement shall fully and accurately
disclose the material characteristics of the time-share project and time-share program
registered under this chapter and such time-share offered, and shall make known
to each prospective purchaser all material circumstances affecting such
time-share project and time-share program.
A developer need not make joint disclosures concerning two or more time-share
projects owned by the developer or any related entity unless such projects are
included in the same time-share program and marketed jointly at any of the
time-share projects. The proposed public offering statement shall be filed with
the Board, and shall be in a form prescribed by its regulations. The public
offering statement may limit the information provided for the specific
time-share project to which the developer's registration relates. The public
offering statement shall include the following only to the extent a given
disclosure is applicable; otherwise no reference shall be required of the
developer or contained in the public offering statement:
1. As to the developer:
1a. The name and principal
address of the developer and the time-share project registered with the Board
about which the public offering statement relates, including:
ab.
The name, principal occupation,
and address of every director, top five officers, partner,
limited liability company manager, or trustee of the developer;
bc. The name and address of each
person owning or controlling an interest of 20 percent or more in each time-share project
registered with the Board the developer;
cd. The particulars of any
indictment, conviction, judgment, decree,
or order of any court or administrative agency against the developer or
managing entity for violation of a federal, state, local,
or foreign country law or regulation in connection with activities relating to
time-share sales, land sales, land investments, security sales, construction or
sale of homes or improvements,
or any similar or related activity;
de.
The nature of each unsatisfied judgment, if any, against the developer or the
managing entity, the status of each pending suit involving the sale or
management of real estate to which the developer, the managing entity, or any
general partner, executive officer, director, limited liability company
manager, or majority stockholder thereof, is a defending party, and the status
of each pending suit, if any, of significance to any time-share project
registered with the Board; and
ef. The name and address of the
developer's agent for service receipt of any notice permitted by this chapter.; and
g. In a time-share use program, a copy of the current audited balance sheet of the developer;
2. As to the time-share project:
a. A general description of the time-share project
registered with the Board and the time-share units
and common elements promised and available
to purchasers, including without limitation, the developer's estimated schedule
of commencement and completion of all promised and incomplete time-share units and common
elements.;
b. The name and address of the managing entity for the project;
c. Provisions, if any, that have been made for public utilities in the time-share project including water, electricity, telephone, and sewerage facilities;
d. In a time-share estate program, the legal name of the association and a general description of the perfection of lien rights afforded the association under § 55-370;
e. A statement to the effect of whether or not the developer has reserved the right to add to or delete from the time-share program a time-share project or any incidental benefit or alternative purchase;
f. The extent to which financial arrangements have been provided for completion of any incomplete but promised time-share unit or common element being then offered for sale, including a statement of the developer's obligation to complete and bond the promised units and common elements comprising the time-share project that have not begun, or that have begun but are not yet completed;
g. If the time-share in a condominium unit may be conveyed before that unit is certified as substantially complete in accordance with § 55-79.58, a statement of the developer's obligation to complete such unit. Such statement shall include the approximate date by which the condominium unit shall be completed, together with the form and amount of the bond filed in accordance with subsection B of § 55-79.58:1;
h. A description of the insurance coverage provided for the benefit of time-share owners;
i. A description of the facilities, if any, provided by the developer to the association in a time-share estate project for the management of the project; and
j. A description of any liens, defects, or encumbrances affecting the time-share project and in particular the time-share offered to the purchaser;
3. As to all time-shares time-share units offered within the time-share project
offered by the developer:
a. The form of
time-share ownership offered in the project types, duration,
and number of units in the project registered
with the Board;
b. The types,
duration, and number of units and time-shares in the project registered with
the Board;
c. Identification of units
that are subject to the time-share program;
d.
The estimated maximum number of time-share units
that may become subject to
the part of the time-share program; project; and
e. Provisions, if any, that
have been made for public utilities in the time-share project including water,
electricity, telephone, and sewerage facilities;
f. A statement to the effect
of whether or not the developer has reserved the right to add to or delete from
the time-share program a time-share project or any incidental benefit or
alternative purchase; and
g. If the developer utilizes
the possibility of reverter, a statement to that effect referring the purchaser
to the reverter deed for an explanation thereof.
4. In a time-share estate
program, a copy of the annual report or budget required by § 55-370.1, which
copy may take the form of an exhibit to the public offering statement. In the
case where multiple time-share projects are registered with the Board, the copy
or exhibit may be in summary form.
5. In a time-share use program
where the developer's net worth is less than $250,000, a current audited
balance sheet and where the developer's net worth exceeds such amount, a
statement by such developer that its equity in the time-share program exceeds
that amount.
6. Any initial or special fee
due from the purchaser at settlement together with a description of the purpose
and method of calculating the fee.
7. A description of any liens,
defects, or encumbrances affecting the time-share project and in particular the
time-share offered to the purchaser.
8. A general description of any
financing offered by or available through the developer.
9. A statement that the
purchaser has a nonwaivable right of cancellation, referring such purchaser to
that portion of the contract in which such right may be found.
10. If the time-share interest
in a condominium unit may be conveyed before that unit is certified as
substantially complete in accordance with § 55-79.58, a statement of the
developer's obligation to complete the unit. Such statement shall include the
approximate date by which the condominium unit shall be completed, together
with the form and amount of the bond filed in accordance with subsection B of §
55-79.58:1.
11. Any restraints on
alienation of any number or portion of any time-shares.
12. A description of the
insurance coverage provided for the benefit of time-share owners.
13. The extent to which
financial arrangements, if any, have been provided for completion of any
incomplete but promised time-share unit or common element being then offered
for sale, including a statement of the developer's obligation to complete the
promised units and common elements comprising the time-share project that have
not begun, or begun but not yet completed.
14. The extent to which a
time-share unit may become subject to a tax or other lien arising out of claims
against other owners of the same unit.
15. The name and address of
the managing entity for the project.
16. Copies of the project
instrument and the association's articles of incorporation and bylaws, each of
which may be a supplement to the public offering statement.
17. Any services that the
developer provides or expense it pays and that it expects may become at any
subsequent time a time-share expense of the owners, and the projected
time-share expense liability attributable to each of those services or expenses
for each time-share.
18. A description of the terms
of the deposit escrow requirements, including a statement that deposits may be
removed from escrow at the termination of the cancellation period.
19. A description of the
facilities, if any, provided by the developer to the association in a
time-share estate project for the management of the project.
20. Any other information
required by the Board to assure full and fair meaningful disclosure to
prospective purchasers.
c. The extent to which a time-share unit may become subject to a tax or other lien arising out of claims against other owners of the same unit;
4. As to the time-share program offered by developer:
a. The date when the time-share program is to terminate;
b. Any provision in the time-share instrument for the sooner termination or extension of the time-share program that alters the date given in subdivision A 4 a; and
c. Identification of units that are subject to the time-share program;
5. As to time-shares offered by developer:
a. The form of time-share ownership offered in the project registered with the Board;
b. Any restraints on alienation of any number or portion of any time-shares;
c. A general description of any resale program offered by developer; and
d. If the developer utilizes the possibility of reverter, a statement to that effect referring the purchaser to the reverter deed for an explanation thereof;
6. As to finances or expenses affecting the time-share project or time-share program:
a. In a time-share estate program, a copy of the annual report or budget required by § 55-370.1, which copy may take the form of an exhibit to the public offering statement. In the case where multiple time-share projects are registered with the Board, the copy or exhibit may be in summary form;
b. Any initial or special fee due from the purchaser at settlement together with a description of the purpose and method of calculating the fee;
c. A general description of any financing offered by or available through the developer;
d. A statement that the purchaser has a nonwaivable right of cancellation, referring such purchaser to that portion of the contract in which such right may be found; and
e. Any services that the developer provides or expense it pays and that it expects may become at any subsequent time a common expense of the owners, and the projected time-share expense liability attributable to each of those services or expenses for each time-share;
7. A description of the terms of the deposit escrow requirements, including a statement that deposits may be removed from escrow at the termination of the cancellation period;
8. A statement to the effect that any inconsistency between contents of the public offering statement and the time-share instrument shall be resolved in favor of the time-share instrument;
9. Copies of the current time-share instrument or supplement thereto and the association formation documents and association bylaws, each of which may be a supplement to the public offering statement; and
10. Any other information required by the Board to assure full and fair meaningful disclosure to prospective purchasers.
B. If any prospective purchaser is offered the opportunity to subscribe to or participate in any exchange program, the public offering statement shall include as an exhibit or supplement, the disclosure document prepared by the exchange company in accordance with § 55-374.2 and a brief narrative description of the exchange program which shall include the following:
1. A statement of whether membership or participation in the program is voluntary or mandatory;
2. The name and address of the exchange company together with the names of its top three officers and directors;
3. A statement of whether the exchange company or any of its top three officers, directors, or holders of a 10 percent or greater interest in the exchange company has any interest in the developer, managing entity or the time-share project;
4. A statement that the purchaser's contract with the exchange company is a contract separate and distinct from the purchaser's contract with the developer; and
5. A brief narrative description of the procedure whereby exchanges are conducted.
C. The public offering statement of a conversion time-share project shall also include the following, which may take the form of an exhibit to the public offering statement:
1. A specific statement of the amount of any initial or special fee, if any, due from the purchaser of a time-share on or before settlement of the purchase contract and the basis of such fee occasioned by the fact that the project is a conversion time-share project;
2. Information on the actual expenditures, if available, made on all repairs, maintenance, operation, or upkeep of the building or buildings within the last three years. This information shall be set forth in a tabular manner within the proposed budget of the project. If such building or buildings have not been occupied for a period of three years then the information shall be set forth for the period during which such building or buildings were occupied;
3. A description of any provisions made in the budget for reserves for capital expenditures and an explanation of the basis for such reserves occasioned by the fact that the project is a conversion time-share project, or, if no provision is made for such reserves, a statement to that effect; and
4. A statement of the present condition of all structural components and major utility installations in the building, which statement shall include the approximate dates of construction, installations, and major repairs as well as the expected useful life of each such item, together with the estimated cost, in current dollars, of replacing each such component.
D. In the case of a conversion project, the developer shall give at least 90 days' notice to each of the tenants of the building or buildings which the developer intends to submit to the provisions of this chapter. During the first 60 days of such 90-day period, each of these tenants shall have the exclusive right to contract for the purchase of a time-share from the unit he occupies, but only if such unit is to be retained in the conversion project without substantial alteration in its physical layout. Such notice shall be hand delivered or sent by first-class mail, return receipt requested, and shall inform the tenants of the developer's intent to create a conversion project. Such notice may also constitute the notice to terminate the tenancy as provided for in § 55-222, except that, despite the provisions of § 55-222, a tenancy from month to month may only be terminated upon 120 days' notice as set forth herein when such termination is in regard to the creation of a conversion project. If, however, a tenant so notified remains in possession of the unit he occupies after the expiration of the 120-day period with the permission of the developer, in order to then terminate the tenancy, such developer shall give the tenant a further notice as provided in § 55-222.
The developer of a conversion project, shall, in addition to the requirements of § 55-391.1, include with the application for registration a copy of the notice required by this subsection and a certified statement that such notice which fully complies with the provisions of this subsection shall be, at the time of the registration of the conversion project, mailed or delivered to each of the tenants in the building or buildings for which registration is sought.
E. The developer shall amend the public offering statement to reflect any material change in either the time-share program or time-share project. If the developer has reserved in the time-share instrument the right to add to or delete incidental benefits or alternative purchases, the addition or deletion thereof shall not constitute a material change. Prior to distribution, the developer shall file with the Board the public offering statement amended to reflect any material change.
F. The Board may at any time require a developer to alter or supplement the form or substance of the public offering statement to assure full and fair disclosure to prospective purchasers. A developer may, in its discretion, prepare and distribute a public offering statement for each product offered or one public offering statement for all products offered.
G. In the case of a time-share project located outside the Commonwealth, similar disclosure statements required by other situs laws governing time-sharing may be acceptable alternative disclosure statements.
H. The developer shall prepare and distribute to each prospective purchaser prior to the execution of a purchase contract for a registered alternative purchase, a copy of the public offering statement about which such alternative purchase relates. The public offering statement shall fully and accurately disclose the material characteristics of such alternative purchase. The public offering statement for an alternative purchase shall be filed with the Board and shall be in a form prescribed by its regulations, if any.
The public offering statement for an alternative purchase need not contain any information about the time-share project, time-share program or the time-shares offered by the developer which was initially offered to such purchaser by the developer. If the developer so elects, the public offering statement for an alternative purchase is not required to have any exhibits.
I. The public offering statement may be in any format, including a compact disc, provided the prospective buyer has available for review at the point of sale, along with ample time for any questions and answers, a printed copy of the public offering statement prior to his execution of a contract.
§ 55-374.1. Certain advertising practices regulated.
A. Any offering which includes a gift or prize must disclose therein, with the same prominence as such offer:
1. The retail value of each gift or prize;
2. The approximate odds against any given person obtaining each gift or prize if all persons to whom the advertisement is disseminated do what is necessary to qualify for the award of the gift or prize;
3. If the number of gifts or prizes to be awarded is limited, a statement of the number of gifts or prizes to be awarded or in lieu thereof, the nature of such limitation;
4. All rules, terms, requirements, and conditions which must be fulfilled before a prospective purchaser may claim any gift or prize, including whether the prospective purchaser is required to attend a sales presentation in order to receive the gift or prize;
5. The date upon which the offer expires; and
6. A statement to the effect that the offer is being made for the purpose of soliciting the purchase of a time-share, time-share interest, interval ownership, interval ownership interest, vacation ownership, vacation ownership interest or product, as appropriate.
B. Any gift or prize offered in connection with an offering shall be delivered to the prospective purchaser no later than the day the purchaser attends a sales presentation, if required, and if not, on the day the purchaser appears to claim it, whether or not he purchases a time-share. In the event the supply of gifts or prizes is exhausted at the time required for delivery, the developer shall give the prospective purchaser a written, unconditional promise to deliver such gift or prize no later than 30 days from the date required for delivery. If such gift or prize is not obtainable, the developer shall deliver an item of equal or greater value.
C. The offering or sale of any product registered with the Board is exempt from the Virginia Travel Club Act (§ 59.1-445 et seq.), the Virginia Condominium Act (§ 55-79.39 et seq.), the Virginia Securities Act (§ 13.1-501 et seq.), the Virginia Home Solicitation Sales Act (§ 59.1-21.1 et seq.), the Subdivided Land Sales Act (§ 55-336 et seq.), Chapter 27.2 (§ 55-525.8 et seq.) of Title 55, the Virginia Consumer Protection Act (§ 59.1-196 et seq.), and the Prizes and Gifts Act (§ 59.1-415 et seq.).
D. Any inconsistency between this chapter and the provisions of the Virginia Nonstock Corporation Act (§ 13.1-801 et seq.) shall be resolved in favor of this chapter.
§ 55-374.2. Exchange programs.
A. Any exchange company which that offers an exchange
program in the Commonwealth shall prepare and register with the Board a disclosure
document including, but not limited to, the following:
1. The name and address of the exchange company;
2. The names and addresses of the top three officers, all directors, and, if the exchange company is privately held, all shareholders owning five percent or more interest in the exchange company;
3. Whether the exchange company or any of its officers or directors has any legal or beneficial interest in any developer or managing agent for any time-share program participating in the exchange program and, if so, the name and location of the time-share project and the nature of the interest;
4. Unless the exchange company is also the developer or an affiliate, a statement that the purchaser's contract with the exchange company is a contract separate and distinct from the sales contract;
5. Whether the purchaser's participation in the exchange program is dependent upon the continued affiliation of the time-share project with the exchange program;
6. Whether the purchaser's membership or participation, or both, in the exchange program is voluntary or mandatory;
7. A complete and accurate description of the terms and conditions of the purchaser's contractual relationship with the exchange company and the procedure by which changes in the terms and conditions of the exchange contract may be made;
8. A complete and accurate description of the procedure to qualify for and effectuate exchanges;
9. A complete and accurate description of all limitations, restrictions, or priorities employed in the operation of the exchange program including, but not limited to, limitations on exchanges based on seasonality, unit size, or levels of occupancy, expressed in boldfaced type, and, in the event that such limitations, restrictions, or priorities are not uniformly applied by the exchange program, a clear description of the manner in which they are applied;
10. Whether exchanges are arranged on a space available basis and whether any guarantees of fulfillment of specific requests for exchanges are made by the exchange program;
11. Whether and under what circumstances an owner, in dealing with the exchange company, may lose the use of occupancy of his time-share in any properly applied for exchange, without being provided with substitute accommodations by the exchange company;
12. The fees or range of fees for participation by owners in the exchange program, a statement of whether any such fees may be altered by the exchange company, and the circumstances under which alterations may be made;
13. The name and address of the site of each time-share property, accommodation or facility participating in the exchange program;
14. The number of units in each property participating in the exchange program which are available for occupancy and which qualify for participation in the exchange program, expressed within 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-share program or other property who are eligible to participate in the exchange program, expressed within the following numerical groupings: 1-100, 101-249, 250-499, 500-999, and 1,000 and over, and a statement of the criteria used to determine those owners currently eligible to participate in the exchange program;
16. The disposition made by the exchange company of time-shares deposited with the exchange program by owners eligible to participate in the exchange program and not used by the exchange company in effecting exchanges;
17. The following information, which, except as provided in subsection B of this section, shall be independently audited by a certified public accountant or accounting firm in accordance with the standards of the Accounting Standards Board of the American Institute of Certified Public Accountants and reported for each year no later than July 1 of the succeeding year, beginning no later than July 1, 1985:
a. The number
of owners enrolled in the exchange program. Such numbers shall disclose the
relationship between the exchange company and owners as being either fee paying
or gratuitous in nature;
b.
The number of time-share properties, accommodations,
or facilities eligible to participate in the exchange program;
cb. The percentage of confirmed exchanges,
which shall be the number of exchanges confirmed by the exchange company
divided by the number of exchanges properly applied for, together with a
complete and accurate statement of the criteria used to determine whether an
exchange request was properly applied for;
dc. The number of time-shares
for which the exchange company has an outstanding obligation to provide an
exchange to an owner who relinquished a time-share during the year in exchange
for a time-share in any future year; and
ed. The
number of exchanges confirmed by the exchange company during the year.; and
18. A statement in boldfaced type to the effect that the
percentage described in subdivision 17 c of this subsection b is a summary of the exchange
requests entered with the exchange company in the period reported and that the
percentage does not indicate a purchaser's or owner's probabilities of being
confirmed to any specific choice or range of choices, since availability at
individual locations may vary.
B. The
information required by subsection A shall be accurate as of a date which is no
more than 30 days prior to the date on which the information is delivered to
the purchaser, except that the information required by subsection A,
subdivisions 2, 12, 13, 14, 15, and 16 shall be accurate as of December 31 of
the preceding year if the information is delivered between July 1 and December
31 of any year; information delivered between January 1 and June 30 of any year
shall be accurate as of December 31 of the year prior to the preceding year. At
no time shall such information be accurate as of a date which is more than
eighteen months prior to the date of delivery. All references in this section
to the word "year" shall mean calendar year.
C.
In the event an exchange company offers an exchange program directly to the
purchaser, the exchange company shall deliver to such purchaser, simultaneously
with such offering and prior to the execution of any contract between the
purchaser and the exchange company, the information set forth in subsection A, above. The requirements of
this subsection shall not apply to any renewal of a contract between a
purchaser and an exchange company.
DC. Each exchange company must
include the statement set forth in subdivision A 18 of subsection A on all promotional
brochures, pamphlets, advertisements, or other materials disseminated by the
exchange company which that also contain the
percentage of confirmed exchanges described in subdivision 17 c of
subsection A 17 b.
ED. An exchange company shall,
on or before July 1 of each year, file with the Board and the association for
the time-share program in which the time-shares are offered or disposed, the
information required by this section with respect to the preceding year. If the
Board determines that any of the information supplied fails to meet the
requirements of this section, the Board may undertake enforcement action
against the exchange company in accordance with the provisions of Article 6 (§
55-396 et seq.) of this chapter. No developer shall have any liability arising
out of the use, delivery or publication by the developer of written information
provided to it by the exchange company pursuant to this section. Except for
written information provided to the developer by the exchange company, no exchange
company shall have any liability with respect to (i) any representation made by
the developer relating to the exchange program or exchange company, or (ii) the
use, delivery or publication by the developer of any information relating to
the exchange program or exchange company. The failure of the exchange company
to observe the requirements of this section, or the use by it of any unfair or
deceptive act or practice in connection with the operation of the exchange
program, shall be a violation of this section.
FE. The Board may establish by
regulation reasonable fees for registration of the exchange company disclosure
document. All fees shall be remitted by the Board to the Treasurer of the
Commonwealth, and shall be placed to the credit of the Common Interest
Community Management Information Fund established pursuant to § 55-529.
§ 55-375. Escrow of deposits.
A. Any deposit made in connection with the purchase or
reservation of a product time-share
or alternative purchase shall be held in escrow. All cash
deposits shall be held in a separate bank account labeled and designated solely
for that purpose.
Such escrow account shall be insured by an instrumentality of the federal government and located in Virginia. All deposits shall be held in escrow until (i) delivered to the developer upon expiration of the purchaser's cancellation period provided the purchaser's right of cancellation has not been exercised, (ii) delivered to the developer because of the purchaser's default under a contract to purchase a time-share, or (iii) refunded to the purchaser. Failure to establish escrow accounts or to make the deposits as required by this section is prima facie evidence of willful violation of this section.
B. The developer shall disclose in the contract or in the public offering that the deposit may not be held in escrow after expiration of the cancellation period and that such deposit is not protected as an escrow after expiration of the cancellation period. This disclosure shall include a statement of whether or not the developer reserves the option to sell or assign any promissory note given by a purchaser to another entity, whether or not such entity is affiliated with the developer. Both disclosures shall appear in boldfaced type of a minimum size of 10 points.
C. There shall be filed with the Common Interest Community Board a bond, letter of credit, or cash for the purpose of protecting all deposits escrowed pursuant to subsection A, in favor of the time-share purchasers. The bond, letter of credit, or cash shall be in an amount equal to the total of the deposits in escrow at any given time or $25,000, whichever is greater. Such bond, letter of credit, or cash shall be maintained for so long as the developer offers time-shares in the project. The bond shall be with a surety company authorized to do business in Virginia.
§ 55-376. Purchaser's rights of cancellation.
A. A purchaser shall have the right to cancel the contract
until midnight of the seventh calendar day following the execution of such
contract. If the seventh calendar day falls on a Sunday or legal holiday, then
the right to cancel the contract shall expire on the day immediately following
that Sunday or legal holiday. Cancellation is to be without penalty, and all
payments made by the purchaser before cancellation must be refunded within forty-five 45
days after receipt of the written
notice of cancellation.
B. If the purchaser elects to cancel a contract pursuant to subsection A, he shall only do so in a written notice to this effect and either (i) by hand-delivering the notice to the developer at its principal office or at the project or (ii) by mailing the notice by certified United States mail, return receipt requested, to the developer or its agent designated in the contract. Any such notice sent by certified mail shall be effective on the date postmarked. No purchaser shall be entitled to use an electronic transmission to effect a cancellation.
C. If, because of the occurrence of a material change, the public offering statement is amended between the time of contracting to purchase a time-share and the time of settlement, the developer shall provide the amended public offering statement to the purchaser and the right of cancellation shall renew from the date of delivery of such amended public offering statement. This subsection shall not apply if the public offering statement is amended by the developer because of a change which is not material or to disclose any change which is an aspect or result of the orderly development of the time-share project in accordance with the project instrument.
D. The right to cancel the contract as provided by this section shall not be waivable by the time-share purchaser and any provision in the contract or time-share documents indicating a waiver shall be void.
E. A statement of the purchaser's right of cancellation as set forth in subsections A and B shall appear in the contract above the purchaser's signature line. Such statement shall appear in type no smaller than any other provisions of the contract, and the caption "PURCHASER'S NONWAIVABLE RIGHT TO CANCEL" shall appear immediately preceding it in conspicuous, bold-face type.
§ 55-376.1. Possibility of reverter.
A. A possibility of reverter contained in a reverter deed for a time-share estate subject to reverter is valid, enforceable in law and in equity, and shall operate to transfer title to the time-share estate from each grantee therein back to the developer provided the following conditions are satisfied:
1. The reverter deed from the developer contains the possibility of reverter by insertion of the language required by subsection E;
2. A grantee in the reverter deed is in default and such grantee has been provided thereafter with at least two written notices to this effect, one of which shall be sent by registered mail return receipt requested, with no less than a 10-calendar day right to cure in each notice;
3. A grantee in the reverter deed has been provided with no less than 30 calendar days from the date of default in subdivision A 2, of which the two 10-calendar-day notices required in subdivision A 2 may be a part within which to cure the default before exercise of the possibility of reverter occurs;
4. At the time of exercise of the possibility of reverter, the developer is the sole holder of the note and the sole beneficiary under the deed of trust;
5. The exercise by the developer of the possibility of reverter is evidenced by an affidavit duly recorded where the reverter deed was recorded which contains the following information:
a. A description of the time-share project and time-share estate and a statement that upon recordation of the affidavit, title to such time-share estate reverts back to the developer;
b. A description
and recitation of the reverter deed which that
contained the possibility of reverter and providing a reference of when and where such deed was recorded and
its recording information;
c. A recitation that the purchaser defaulted in or violated a consumer document for no less than 45 days and failed to cure such default or violation within a period of no less than 30 calendar days thereafter;
d. A description of the note and deed of trust with a recitation that (i) the developer is the sole holder of the note and the sole beneficiary under the deed of trust, (ii) such note is cancelled and declared void, and (iii) such deed of trust is automatically released;
e. A recitation that such purchaser's rights and entitlements in the time-share estate, the time-share project and the time-share program are extinguished effective the date of recordation of the affidavit; and
f. The signature of a duly authorized representative of the developer verified under oath as to its truth of the statements contained therein; and
6. A copy of the recorded affidavit described in subdivision A
5 is sent by the developer to each purchaser by United
States mail at his address as
maintained by developer or the association, along with the statement from the developer
explaining the consequences of such affidavit with emphasis on subparts a, d
and e of subdivision subdivisions
A 5 a, d, and e.
B. The recordation of the affidavit referred to in subdivision A 5 shall automatically:
1. Transfer title to the time-share estate from each grantee in the reverter deed to the developer without the need of a deed to the developer or consent from such grantee;
2. Declare null and void and act as an automatic release of the deed of trust or mortgage given by such grantee to finance a portion of the purchase price of the time-share estate with no deficiency resulting;
3. Void and act as an automatic release of any debt from such grantee to the developer arising out of the purchase or financing of the time-share estate as evidenced by the note; and
4. Extinguish any ownership or other property right or entitlements such grantee has in and to the time-share estate, the time-share project and the time-share program.
C. The clerk of court shall record such affidavit in the land
books where the time-share project is located indexing the each purchaser in the grantor
indices and the developer in the grantee indices. For indexing purposes only, the such purchaser
shall be referred to as the grantor and the developer as the grantee. The cost
of recording the affidavit shall be limited to the clerk's fee only.
D. In the exercise of the possibility of reverter, the
developer shall be liable to the purchaser for his failure to comply with the
provisions of this section; however, such failure shall not operate to defeat
or diminish the transfer of title to the time-share estate from each grantee in
the reverter deed to the developer upon recordation of the affidavit referred
to in subdivision A 5. The developer's liability shall be limited to the amount
paid by such the purchaser towards the
purchase price of the time-share estate exclusive of interest and closing costs
but without offset for the purchaser's utilization of the time-share program. The court shall award court costs and reasonable attorney's
fees to the prevailing party.
E. The reverter deed shall contain the following statement in order to possess the possibility of reverter. The opening phrase shall be in bold face, 10-point type as follows:
Loss of Time-Share Estate. Developer has inserted into this
deed a "possibility of reverter." By this concept, should a grantee
of this reverter deed default in or violate an obligation imposed by a consumer
document for a period of at least 60 45 days
and fail to cure such violation or default within a period of no
less than 30 calendar days thereafter, title to the time-share will revert back
to the developer upon the developer recording an affidavit to this effect where
this reverter deed is recorded. Only the developer can elect to exercise the
possibility of reverter. Each grantee in this reverter deed will be sent at
least two notices of default or violation within the 30-day period with no less
than 10 days to cure in each instance. The notice will be sent to the address
of each grantee maintained at the office of the developer or the association.
After the cure period has lapsed and the developer records the affidavit, title
to the time-share estate will automatically vest in the developer and any note
executed by grantee will be deemed canceled and any recorded deed of trust
securing such note shall be automatically released. The possibility of reverter
will itself lapse and become null and void at the soonest to occur of the
following: (i) the deed of trust is released of record, (ii) a statement that
the deed of trust is released of record is executed and recorded by the
developer with a date of when the possibility of reverter was or is to lapse,
or (iii) when the time-share program terminates pursuant to either the Virginia
Real Estate Time-Share Act or the time-share instrument which created such
program.
F. The filing of the affidavit referred to in subdivision A 5 shall not result in the requirement of any filing under Chapter 2 (§ 26-8 et seq.) of Title 26.
G. Any possibility of reverter not otherwise exercised by the developer pursuant to this section shall itself lapse and become null and void at the soonest to occur of the following: (i) the deed of trust is released of record, (ii) a statement that the deed of trust is released of record is executed and recorded by the developer with a date of when the possibility of reverter was or is to lapse, or (iii) when the time-share program terminates pursuant to either this chapter or the time-share instrument.
H. In exercising the possibility of reverter, the developer shall be entitled to retain as liquidated damages all monies paid by the purchaser in conformity with any consumer document.
I. The exercise of the possibility of reverter shall not operate to diminish or eliminate (i) any debt of the purchaser to the time-share association or other third party occasioned by ownership of the time-share estate or participation in the time-share program or (ii) any recorded lien junior in priority to the deed of trust lien referred to in this section.
§ 55-376.5. Buyer's Acknowledgment.
A. Prior to the execution of a purchase contract, each purchaser shall receive a separate written document, titled "Buyer's Acknowledgment," to be signed by each purchaser and a representative of the developer other than the salesperson for the transaction.
B. The Buyer's Acknowledgment shall contain the following disclosures:
1. The name and address of the developer;
2. The name and address of the time-share project;
3. Whether the developer currently offers a resale or rental program or a buy-back program; and
4. The following statement in bold face, 10-point font size: "There is no assurance that a purchaser may resell a time-share for a certain price or on particular terms. By signing below, purchaser acknowledges that this purchase (i) is for personal use and enjoyment and not for commercial or investment purposes and (ii) is not being made based upon any representation that the time-share shall have any future market value or resale potential."
§ 55-380. Resale of time-shares.
A. In the event of any resale of a time-share by a time-share owner, other than the developer, such owner shall obtain from the developer or managing agent in the case of a time-share use program or from the time-share estate owners' association in the case of a time-share estate program and furnish to the purchaser prior to settlement on an executed agreement to purchase the time-share, a certificate of resale which shall include the following:
1. A statement disclosing the effect on the proposed transfer of any right of first refusal or other restraint on transfer of the time-share or any portion thereof;
2. A copy of the time-share instrument;
3. A copy of the current bylaws and rules and regulations of the time-share estate owners' association, if any, and the amendments thereto;
4. A copy of the current annual report prepared pursuant to § 55-370.1 or 55-370.1:1;
5. A statement setting forth the amount of any expense
liability and unpaid time-share expense or special assessment currently due and
payable from the selling time-share owner, including the disclosures of any
liens against the time-share due to the nonpayment of such fees or charges; and
6. A statement of the nature and status of any known and pending suits or judgments against the developer, managing entity, or time-share owners' association with reference to the time-share project; and
7. A copy of the Buyer's Acknowledgment required by § 55-376.5.
B. The developer, managing agent, or such officer of the
time-share owners' association as the bylaws may specify, shall furnish the
certificate of resale prescribed by subsection A hereof upon the written
request of any purchaser within thirty 30 days of the receipt of such
request. Payment of the reasonable costs of preparing the certificate may be
required as a prerequisite to the issuance of the certificate, but such fee
shall not exceed fifty dollars $50.
C. A time-share owner providing a certificate pursuant to subsection A is not liable to the purchaser for any erroneous information included in the certificate, other than for judgment liens against the time-share being sold.
D. A purchaser is not liable for any unpaid time-share expense liability or fee greater than the amount set forth in the certificate prepared in conformity with subsection A. A time-share owner is not liable to a purchaser for the failure or delay of the provider to provide the certificate in a timely manner, but the purchase contract is voidable by the purchaser until the certificate has been provided and for five days thereafter or until transfer, whichever occurs first.
E. All rights of redress of a purchaser against a selling time-share owner, the developer, managing agent, or the association for the failure to obtain or receive the statement required by subsection A are conclusively waived upon settlement on the time-share occurring.
F. The responsibilities imposed by this section on the developer, managing agent, time-share estate owners' association, or selling time-share owner shall not be waived.
§ 55-380.1. Registration required for resellers.
A. A reseller shall be registered with the CICB before receiving anything of value for providing or offering to provide a resale service.
B. Before receiving anything of value for providing or offering to provide a resale service, a reseller shall disclose in writing to the owner of a resale time-share:
1. The name and permanent business address of the reseller;
2. A commencement and transaction date for such resale service;
3. The names and addresses of any affiliates and the primary website address used by the reseller and such affiliates to be used to promote the resale time-share;
4. Whether the reseller's rights are exclusive and, if so, the scope of such rights and length of the exclusivity period;
5. Whether any person, other than the owner, may occupy, rent, exchange, or use the resale time-share during the resale service;
6. The name of any person other than the owner who will receive any rents or other consideration from the use of the resale time-share during the resale service;
7. A description of each resale service to be provided and the fees, costs, or commissions for each;
8. A description sufficient to identify the resale time-share;
9. The jurisdiction issuing the license for any services by a licensed real estate broker or salesperson; and
10. The following in at least 10-point conspicuous type:
a. The ratio or percentage of (i) the number of resale time-shares listed for sale and the number actually sold by the reseller for each of the past two calendar years or (ii) the total amount of advance fees collected compared with the total amount of fees and commissions received by the reseller upon sale of resale time-shares, in either case for the past two calendar years and followed by this statement: "Do not rely on past performance as an indicator of the likelihood of sale of your time-share."; and
b. If the retail service is limited to the placement of advertisements: "There is no guarantee that you will sell your time-share at all or within any period of time by placing this advertisement. Our only obligation to you is to post your advertisement on our website for the agreed length of time and forward all inquiries we receive to you."
C. A resale transfer contract shall include the following disclosures by the reseller:
1. The disclosures required by subdivisions B 1 through B 7;
2. A description legally sufficient for the transfer of the resale time-share;
3. A description of the document by which the owner is to (i) grant rights in the resale time-share to the reseller or any other person, including a power of attorney or similar document, and (ii) transfer the resale time-share to a subsequent purchaser;
4. Any fees or costs the time-share owner is required to pay or reimburse to the reseller or transfer company to complete the transfer;
5. The date by which the transfer of the resale time-share from the owner to the reseller, a third person, or a subsequent purchaser will be completed, not to exceed 180 days from the effective date of the resale transfer contract;
6. If the resale time-share will be transferred to a transferee other than a subsequent purchaser, the contact information of such transferee;
7. A statement that the reseller will (i) provide the owner written evidence of transfer of the resale time-share to a subsequent purchaser within 30 days of such transfer and (ii) send notice of the transfer to the association and managing entity of the time-share program for the resale transfer and any exchange company in which the resale time-share was enrolled; and
8. The following in 10-point type:
a. "No later than 180 days from the date of this agreement, we will transfer your time-share to another person. If transfer does not occur within that period, we will pay or reimburse to you the cost of ownership of your time-share for that period. If we breach our agreement, you will continue to be responsible for such cost of ownership."; and
b. "Your time-share may be sold at any price by us without your approval. If sold for a price in excess of our fee, we have no obligation to send you the excess."
D. A resale purchase contract shall require the reseller to obtain the certificate of resale described in subsection A of § 55-380 and shall also include the following:
1. A description legally sufficient for transfer of the resale time-share;
2. The name and address of the developer or managing agent for a time-share use project or the association for a time-share estate project;
3. Identification of the party responsible for notifying the developer, managing entity, association, or exchange company, as the case may be, of the transfer of the resale time-share;
4. Identification of the first year in which the subsequent purchaser is entitled to use and occupy the resale time-share; and
5. The following statement in 10-point type: "A certificate of resale is required to be provided to you containing important documents concerning the time-share project for your review. Settlement waives the right to receipt of such information."
§ 55-380.2. Exemptions from reseller requirements.
The following shall be exempt from the requirements of § 55-380.1:
1. A person who solely or with affiliates engages in a resale service with respect to an aggregate of no more than 12 resale time-shares per calendar year.
2. A person who owns or acquires more than 12 resale time-shares and who subsequently transfers all such resale time-shares to a single purchaser in a single transaction.
3. The owner, its agents, and employees of a regularly published newspaper, magazine, or other periodical publication of general circulation; broadcast station; website; or billboard, to the extent their activities are limited to solicitation and publication of advertisements and the transmission of responses to the persons who place the advertisements. Any person who would otherwise be exempt from this act pursuant to this section shall not be exempt if the person (i) solicits the placement of the advertisement by representing that the advertisement will generate cash, a certain price, or a similar type of representation for the time-share owner's resale time-share, (ii) makes a recommendation as to the sales price for which to advertise the resale time-share, (iii) makes any representations to the person placing the advertisement regarding the success rate for selling resale time-shares advertised with such person, or (iv) makes any misrepresentations as described in this act.
4. Sale by a developer, or a party acting on its behalf, of a resale time-share under a current registration of the time-share program in which the resale time-share is included.
5. Sale by an association, managing entity, or a party acting on its behalf, of a resale time-share owned by the association so long as the sale is in compliance with subsection C of § 55-380.1.
6. Attorneys, title agents, title companies, or escrow companies providing closing services in connection with the transfer of a resale time-share.
§ 55-380.3. Recordkeeping by resellers.
A. If contact information has been obtained by a reseller from any source, including a lead dealer, the reseller and lead dealer shall maintain the following records for a period of five years from the last date of contact between the reseller and the owner:
1. The name; home address; work address, if different; telephone number; email address, if any; and a copy of a current government-issued photographic identification (e.g., driver's license, passport, or military identification card) of the lead dealer who provided the contact information;
2. The date, time, and place of the transaction at which the contact information was obtained, along with the amount of consideration paid and a signed receipt from the lead dealer or copy of a cancelled check; and
3. A copy of the contact information obtained in the exact form and media in which received.
B. A reseller shall maintain records for at least five years after each transaction involving resale service including resale transfer agreements and resale purchase agreements.
C. In any civil or criminal action based on a violation of this section, there shall be a presumption that contact information was wrongfully obtained if a reseller or lead dealer fails to produce the records required by this section.
D. Any person who establishes that a reseller or lead dealer wrongfully obtained or wrongfully used contact information with respect to time-share owners or members of an exchange program shall, in addition to any other remedies that may be available in law or equity, be entitled to recover from such reseller or lead dealer an amount equal to $1,000 for each time-share owner or member about whom contact information was wrongfully obtained or used. The prevailing person in any such action shall also be entitled to recover reasonable attorney fees and costs.
§ 55-380.4. Prohibited practices.
A person violates this act by engaging in any of the following:
1. Failing to disclose information in writing concerning the marketing, sale, or transfer of resale time-shares required by this act prior to accepting any consideration or with the expectation of receiving consideration from any time-share owner, seller, or buyer.
2. Making false or misleading statements concerning offers to buy or rent; the value, pricing, timing, or availability of resale time-shares; or numbers of sellers, renters, or buyers when engaged in time-share resale activities.
3. Misrepresenting the likelihood of selling a resale time-share interest.
4. Misrepresenting the method by or source from which the reseller or lead dealer obtained the contact information of any time-share owner.
5. Misrepresenting price or value increases or decreases, assessments, special assessments, maintenance fees, or taxes or guaranteeing sales or rentals in order to obtain money or property.
6. Making false or misleading statements concerning the identity of the reseller or any of its affiliates or the time-share resale entity's or any of its affiliate's experience, performance, guarantees, services, fees, or commissions, availability of refunds, length of time in business, or endorsements by or affiliations with developers, management companies, or any other third parties.
7. Misrepresenting whether or not the reseller or its affiliates, employees, or agents hold, in any state or jurisdiction, a current real estate sales or broker's license or other government-required license.
8. Misrepresenting how funds will be utilized in any time-share resale activity conducted by the reseller.
9. Misrepresenting that the reseller or its affiliates, employees, or agents have specialized education, professional affiliations, expertise, licenses, certifications, or other specialized knowledge or qualifications.
10. Making false or misleading statements concerning the conditions under which a time-share owner, seller, or buyer may exchange or occupy the resale time-share interest.
11. Representing that any gift, prize, membership, or other benefit or service will be provided to any time-share owner, seller, or buyer without providing such gift, prize, membership, or other benefit or service in the manner represented.
12. Misrepresenting the nature of any resale time-share interest or the related time-share plan.
13. Misrepresenting the amount of the proceeds, or failing to pay the proceeds, of any rental or sale of a resale time-share interest as offered by a potential renter or buyer to the time-share owner who made such resale time-share interest available for rental or sale through the reseller.
14. Failing to transfer any resale time-share interests as represented and required by this act or to provide written evidence to the time-share owner of the recording or transfer of such time-share owner's resale time-share interest as required by this act.
15. Failing to pay any annual assessments, special assessments, personal property or real estate taxes, or other fees relating to an owner's resale time-share interest as represented or required by this act.
16. Misrepresenting or misusing the intended purpose of a power of attorney or similar document to the detriment of any grantor of such power of attorney.
§ 55-383. Statute of limitations; actions; limitation on rescission rights.
A. Except as otherwise provided in § 55-389, a judicial proceeding where the sufficiency of the time-share instrument, the accuracy of the public offering statement, or validity of any contract of purchase is in issue and a rescission of the contract or damages is sought shall be commenced within two years after the date of the contract of purchase, notwithstanding that the purchaser's terms of payments may extend beyond this period of limitation; however, with respect to the enforcement of provisions in the contract of purchase which require the continued furnishing of services and the reciprocal payments to be made by the purchaser, the period of bringing a judicial proceeding will continue for a period of two years for each breach.
Rescission of the contract shall not be granted by the court
unless (i) the inaccuracy of the public offering statement or the insufficiency
of the time-share instrument directly and adversely affected the purchaser's
right to participate in the time-share program or to own his time-share or (ii)
at the time of the contract the purchaser files his
complaint with the court, the developer
has sold more time-shares than there are
time-share units that have been completed or bonded to accommodate such sales permitted by the time-share
instrument. Further, if damages are awarded, the amount of
the damages shall be limited to actual damages sustained.
B. If a developer has substantially complied in good faith with the provisions of this chapter, a nonmaterial error or omission shall not be actionable. A nonmaterial error or omission shall not be sufficient to permit a purchaser to cancel a contract after the cancellation period provided by § 55-376 has expired.
§ 55-385. Financial records.
The person or entity responsible for either making or
collecting common expense
assessments or, maintenance fees, or special assessments
shall keep detailed financial records. All
financial and other records shall be made reasonably available at such person's
or entity's office for examination by any time-share owner and his authorized
agents.
§ 55-386. Developer's obligation to complete.
A. The developer shall complete all promised and incomplete units and common elements being offered and described in the time-share instrument and the public offering statement. The developer shall be excused for the period or periods of delay in the completion of such promised units and common elements when delayed, hindered, or prevented from doing so by causes beyond the developer's control which shall include: (i) labor disputes not caused by the developer; (ii) riots; (iii) civil commotion or insurrection; (iv) war or warlike operations; (v) governmental restrictions, regulations or control; (vi) inability to obtain any materials or services; (vii) fire or other casualties; (viii) acts of God; or (ix) forces not under the control or supervision of the developer.
B. The developer shall file with the Board a payment and
performance bond in the sum equal to 100 percent of the estimated cost of
completing all promised and incomplete units and common elements comprising the
time-share project described in the time-share instrument and the public
offering statement. Such bond shall be conditioned upon the completion of such
units and common elements in conformity with the plans and specifications for
such improvements. The bond shall be with a surety company authorized to do
business in the Commonwealth and shall
list the Board as obligee. The
Board may accept cash or an irrevocable letter of credit in lieu of the bond
required by this section. The Board shall be the sole determiner of the form,
amount, content, obligee
and conditions of the cash or letter
of credit or use the
cash posted. Should it become necessary for the Board to
call upon the bond or letter
of credit in order to assure completion of the improvements, the Board shall
have the authority to petition a court of competent jurisdiction to appoint a
receiver to administer such completion.
§ 55-390. Registration of time-share project and time-share program required.
A. A developer may not offer or dispose of any interest time-share or alternative purchase in a time-share project or offer or dispose of
any participation right in a time-share program
unless the time-share project and its program have been properly registered
with the Board. A developer may accept a nonbinding reservation together with a
deposit if the deposit is placed in an escrow account with an institution
having trust powers within this the Commonwealth and is
refundable at any time at the purchaser's option. In all cases, the reservation
must require a subsequent affirmative act by the purchaser via a separate
instrument to create a binding obligation. A developer may not dispose of or
transfer a time-share or dispose of or transfer a
participation right in a time-share program while
an order revoking or suspending the registration of the time-share program project is in effect. In the case of a time-share project
located outside this the Commonwealth and properly
registered in the situs, the Board may accept a substitute application for
registration.
B. [Repealed.]
C. The developer shall maintain records of names and addresses of current independent contractors employed by it for time-share sales purposes.
§ 55-394.1. Annual report; amendments; termination of registration.
A. The developer shall file a report in the form prescribed by the Board's regulations by June 30 of each year the registration is effective. The developer of any time-share project initially registered with the Board between January and June shall not be required to file an annual report for the year in which it was initially registered. The report shall reflect any material changes in information contained in the original application for registration or in the immediately preceding annual report, whichever is later, and shall be accompanied by the appropriate fee established by the Board's regulations or pursuant to § 55-392.1.
B. During the developer control period in a time-share estate program, the developer shall file a copy of the unit owners' association annual report required by § 55-370.1 along with the annual report required by this section.
C. The developer shall amend or supplement its registration with the Board to report any material change in the information required by §§ 55-374 and 55-391.1. Such amendments or supplemental information shall be filed with the Board within twenty business days after the occurrence of the material change.
D. In a
time-share estate program, if the annual report indicates that the developer
has transferred title to the time-share owners' association and that no further
development rights exist, the Board shall issue an order terminating the
registration of time-share projects.
E. The
Board shall issue an order terminating the registration of a time-share project
and time-share program upon written application signed by the developer in
which the developer states that (i) no
further development right rights of the project is anticipated and that exist, (ii)
the developer has ceased sales of time-shares at the project, and (iii) the
developer requests termination of registration.
§ 55-396. General powers and duties of Board.
A. The Board may adopt, amend, and repeal rules and regulations and issue orders consistent with and in furtherance of the objectives of this chapter. The Board may prescribe forms and procedures for submitting information to the Board.
B. The Board may accept grants in aid from any governmental source and may contract with agencies charged with similar functions in this or other jurisdictions, in furtherance of the objectives of this chapter.
C. The Board may cooperate with agencies performing similar functions in this and other jurisdictions to develop uniform filing procedures and forms, uniform disclosure standards, and uniform administrative practices, and may develop information that may be useful in the discharge of the Board's duties.
D. 1. If
the Board determines after legal notice and opportunity for hearing that a
developer or agent of developer has The
Board may issue an order requiring the developer to cease and desist from any
of the following and take such affirmative action that in the
judgment of the Board will carry out the purposes of this chapter if
after legal notice and opportunity for hearing, the Board determines
that a developer or an agent of a developer has:
a. Made any representation in any document or information filed with the Board which is false or misleading;
b. Engaged or is engaging in any unlawful act or practice;
c. Disseminated or caused to be disseminated orally, or in writing, any false or misleading promotional materials in connection with a time-share program;
d. Concealed, diverted, or disposed of any funds or assets of any person in a manner impairing rights of purchasers of time-shares in the time-share program;
e. Failed to perform any stipulation or agreement made to induce the Board to issue an order relating to that time-share program;
f. Otherwise violated any provision of this chapter or any of the Board's rules and regulations or orders; or
g. Disposed of any time-share in a project without first
complying with the requirements of this chapter, it may
issue an order requiring the developer to cease and desist from the unlawful
practice and to take such affirmative action as in the judgment of
the Board will carry out the purposes of this chapter.
2. If the Board makes a finding of fact at a hearing that the public interest will be irreparably harmed by delay in issuing an order, as prescribed in subdivision 1 of this subsection, it may issue a temporary cease and desist order. With the issuance of a temporary cease and desist order, the Board, by registered mail or other personal written service, shall give notice of the issuance to the developer. Every temporary cease and desist order shall include in its terms:
a. A provision clearly stating the reasons for issuing such cease and desist order, the date of the hearing on its issuance, and the nature and extent of the facts and findings on which the order was based;
b. A provision that a hearing by the Board may be held, after due notice but not more than fifteen days from the date such temporary cease and desist order is effective, to determine whether or not a cease and desist order as called for in the immediately preceding subsection shall be issued;
c. A provision that such temporary cease and desist order may remain in full force for a period of not more than fifteen days from the date of its issuance or the date on which the Board has determined that an order as prescribed in subdivision 1 of this subsection is to be issued, whichever shall occur first; and
d. A provision that a failure to comply with such temporary cease and desist order will be a violation of this chapter. The Board shall not issue more than one temporary cease and desist order with reference to such finding of fact as prescribed in this subsection.
E. The Board may also issue a cease and desist order if the developer has not registered the time-share program as required by this chapter.
F. The Board, after notice and hearing, may issue an order revoking the registration of the developer's time-share program upon determination that such developer or agent thereof has failed to comply with a cease and desist order issued by the Board affecting the developer's time-share program.
G. If it appears that any person has engaged, is engaging, or is about to engage in any act or practice in violation of this chapter or any of the Board's rules, regulations or orders applicable thereto, the Board, without prior administrative proceedings, may bring suit in the circuit court of the city or county in which any portion of the time-share project is located to enjoin that act or practice or for other appropriate relief. The Board is not required to post a bond or prove that no adequate remedy at law exists.
H. Upon request of a time-share owner, the Board shall, in accordance with subsection B of § 55-382, issue its determination whether compliance with § 55-375 or 55-386 has occurred.
§ 55-396.1. Protection of the interests of the association and all time-share owners; appointment of receiver.
A. Each member of the board of directors of the association owes a fiduciary duty to the other members of such board and to the members of such association with respect to the management and operation of the time-share project and time-share program, especially with respect to the receipt and disbursement of funds, including assessments and special assessments. All funds deposited with the association shall be handled in a fiduciary capacity and shall be kept in one or more separate accounts in an FDIC-insured financial institution located in the Commonwealth. The funds shall be the property of the association and shall be used only in accordance with the approved budget then in effect unless the board of directors, by resolution, decides otherwise. All records having administrative or fiscal value to the association compiled or generated on behalf of a time-share estate project or time-share program are the property of the association. The board of directors may retain and dispose of association records in accordance with the bylaws of the association then in effect.
B. Each primary or key executive officer of the developer in a time-share use project owes a fiduciary duty to its time-share owners with respect to the management and operation of the time-share project and time-share program, especially with respect to the receipt and disbursement of funds, including maintenance fees, assessments, levies, user fees, and special assessments to which it provides management services and to the handling of the funds or the records of the time-share use project. All funds paid by the time-share owners to the developer or deposited therewith shall be handled in a fiduciary capacity and shall be kept in one or more separate accounts in an FDIC-insured financial institution located in the Commonwealth. The funds received from the owners by way of annual dues, assessment, special assessment, resort levy, and the like shall be the property of the time-share owners and shall be segregated in the records of the developer in a manner that permits the funds to be so identified and used for the maintenance and upkeep of the time-share use project and management of the time-share use program. In this regard, no more than 25 percent of such funds received shall go to management for overhead and profit.
C. A managing agent owes a fiduciary duty to the association to which it provides management services with respect to the manager's handling of the funds or the records of such association. All funds deposited with the managing agent shall be handled in a fiduciary capacity and shall be kept in a separate fiduciary trust account or accounts in an FDIC-insured financial institution located in the Commonwealth and separate from the assets of the managing agent. The funds shall be the property of the association and shall be segregated for each depository in the records of the managing agent in a manner that permits the funds to be identified on an association basis. All records having administrative or fiscal value to the association that a managing agent holds, maintains, compiles, or generates on behalf of a time-share estate project are the property of the association. A managing agent may retain and dispose of association records in accordance with a policy contained in the contract between the managing agent and the association. Within a reasonable time after a written request for any such records, the managing agent shall provide copies of the requested records to the association at the association's expense. The managing agent shall return all association records that it retains and any originals of legal instruments or official documents that are in the possession of the managing agent to the association within a reasonable time after termination of the contract for management services without additional cost to the association. Records maintained in electronic format may be returned in such format.
D. If the Board has reasonable cause to believe that a person described in subsection A, B, or C is unwilling or unable to discharge its fiduciary responsibilities as described in such subsections, the Board may submit an ex parte petition to the Circuit Court where the jurisdiction is proper for the issuance of an order authorizing the immediate inspection by and production to representatives of the petitioner of any records, documents, and physical or other evidence belonging to the managing agent, member of the board of directors, or officer, as the case may be. The court may issue such order without notice if the petition, supported by affidavit of the petitioner and such other evidence as the court may require, shows reasonable cause to believe that such action is required to prevent immediate loss of property or money. The court may also temporarily enjoin further activity by the managing agent, member of the board of directors, or officer, as the case may be, and take such further action as shall be necessary to conserve, protect, and disburse the funds involved, including the appointment of a receiver. The papers filed with the court pursuant to this subsection shall be placed under seal.
E. If the Board has reasonable cause to believe that a managing agent, member of the board of directors, or officer, as the case may be, is unable to properly discharge his fiduciary duties or responsibilities, the Board may file a petition with the Circuit Court , where the jurisdiction is proper, seeking one or both of the following relief: (i) an injunction prohibiting the withdrawal of any bank deposits or the disposition of any other assets belonging to or subject to the control of the managing agent, board of directors, or officer, as the case may be, or (ii) the appointment of a receiver for all or part of the funds or property constituting the time-share project or time-share program. Each person against whom the petition is filed shall be given notice of the time and place of the hearing on the petition and an opportunity to offer evidence. The court, in its discretion, may require a receiver appointed pursuant to this subsection to post bond, with or without surety. The papers filed with the court under this subsection shall be placed under seal until such time as the court grants an injunction or appoints a receiver. The court may issue an injunction, appoint a receiver, or provide such other relief as such court may consider proper if, after a hearing, it finds that such relief is necessary or appropriate to prevent loss, diminution, or dissipation of property constituting the time-share project or time-share program.
F. In any proceeding under subsection E, any person or entity known to the Board to be indebted to or having in his possession property, real or personal, belonging to or subject to the control of the managing agent, member of the board of directors, or officer, as the case may be, and which property the Board reasonably believes may become part of the receivership assets, shall be served with a copy of the petition and notice of the time and place of the hearing.
G. The court shall describe the powers and duties of the receiver in its appointing order, which may be amended from time to time. The receiver shall, unless otherwise ordered by the court in the appointing order, (i) prepare and file with the Board a list of all known time-share owners in the project or program, whether in good standing or otherwise; (ii) prepare and file with the Board a schedule of the receipt of monies from time-share owners in the project or program at for a period of no less than five years or such shorter period as records are available; (iii) prepare and file with the Board a schedule of the expenses paid, capital or otherwise, for a period of no less than five years or such shorter period as records are available; (iv) prepare and file with the Board a schedule of all payments made to each member of the board of directors, managing agent, or key or executive officer of the developer, as the case may be, for a period of no less than five years or such shorter period as records are available; (v) notify in writing the association to which the subject managing agent provides management services of the appointment and take whatever action the receiver deems appropriate to protect the interests of such association until such time as it has had an opportunity to obtain a successor managing agent; (vi) facilitate the transfer of records and information to such successor managing agent; (vii) identify and take control of all bank accounts, including without limitation trust and operating accounts, over which the subject managing agent, the board of directors, or the developer, as the case may be, had signatory authority in connection with the time-share project or time-share program; (viii) prepare and submit an accounting of receipts and disbursements and account balances of all funds under the receiver's control for submission to the court within four months of the appointment and annually thereafter until the receivership is terminated by the court; (ix) attempt to collect any accounts receivable related to the time-share project or the time-share program; (x) identify and attempt to recover any assets wrongfully diverted from the subject time-share project or time-share program or assets acquired with funds wrongfully diverted from the time-share project or time-share program; (xi) determine the nature and amount of all claims of creditors of the time-share project and time-share program, including the association, if any; (xii) prepare and file with the court a report of such assets and claims proposing a plan for the distribution of funds in the receivership to such creditors in accordance with the provisions of subsection H; and (xiii) prepare and file with the court a report on the status of the time-share project and time-share program with a recommendation as to whether or either or both shall be terminated or continued and the conditions under which such is to occur.
H. Upon the court's approval of the receiver's report referenced in subsection G, at a hearing after such notice as the court may require, the receiver shall either (i) continue the time-share project or time-share program in accordance with the order entered into connection therewith or (ii) terminate the time-share program and liquidate the time-share project and thereafter distribute the assets and funds in the receivership first to clients whose funds were or ought to have been held in a fiduciary capacity by the subject managing agent, member of the board of directors, or officer, as the case may be, then to the receiver for fees, costs, and expenses awarded pursuant to subsection I, and thereafter to the creditors of the time-share project and, if the time-share program is terminated, then to the time-share owners as provided by court order to this effect.
I. A receiver appointed pursuant to this section shall be entitled, upon proper application to the court in which the appointment was made, to recover an award of reasonable fees, costs, and expenses.
J. The provisions of this section are declared to be remedial. The purpose of this section is to protect the interests of time-share owners adversely affected by a managing agent, a member of the board of directors, or a principal or key officer of the developer who has breached his fiduciary duty. The provisions of this section shall be liberally administered in order to protect those interests and thereby the public's interest in the quality of time-share projects, time-share programs, associations, managing agents, and exchange companies registered with the Board without regard for whether the situs of the time-share project is within or without the Commonwealth.
§ 55-400. Penalties.
A. Any person who willfully violates any of the provisions of §§ 55-374, 55-374.1, 55-374.2,
55-375, 55-376, 55-381, 55-385, or 55-390,
or any order issued pursuant to §§ 55-396 through 55-399 shall be is
guilty of a Class 5 felony 1 misdemeanor.
Each violation shall be deemed a separate offense.
B. Any developer, member, agent or affiliate of any developer of time-shares registered pursuant to § 55-393.1, who violates any provision of this chapter or regulations promulgated pursuant to this chapter, and who is not criminally prosecuted, may be subject to a monetary penalty. If it has been determined by the Board upon or after a hearing that a respondent has violated this chapter or the Board's rules and regulations, the Board shall proceed to determine the amount of the monetary penalty for such violation, which shall not exceed $2,000 for each violation. Such penalty may be sued for and recovered in the name of the Commonwealth.
2. That § 55-398 of the Code of Virginia is repealed.