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1994 SESSION

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HB 1097 Trade and commerce; Virginia Travel Club Act.

Introduced by: David G. Brickley | all patrons    ...    notes | add to my profiles

SUMMARY:

Trade and commerce; Virginia Travel Club Act.Amends the bonding requirements for travel clubs doing business within the Commonwealth. Currently, $60,000 in cash, or a bond or letter of credit in that amount, must be deposited by travel clubs with the Commissioner of Agriculture and Consumer Affairs. A sliding scale requiring $60,000 for any travel club with 1 - 1500 travel club contracts, up to a maximum of $100,000 for travel clubs with more than 2,000 contracts, is established by the bill.

The bill also requires travel clubs to place in escrow deposits given by travel club contract purchasers at the time of execution. These deposits must remain in escrow until the expiration of the seven-day period in which the purchaser may cancel and receive a refund. Under the bill, this seven-day period begins to run upon the contracts' execution. All escrowed deposits must be protected by fidelity bonds procured by the travel clubs.

The bill also directs travel clubs to prepare and disseminate public offering statements to all prospective purchasers of travel services contracts. The statements must include (i) a comprehensive description of the travel club's organizational structure, including names, addresses and occupations of its directors, partners or trustees (ii) descriptions of past and pending legal proceedings against the travel club (iii) a copy of the travel club's current audited financial statement if its net worth is less than $500,000 and (iv) additional information related to fees, financing options, etc..

If prospective purchasers of travel club contracts are also offered the opportunity to subscribe to or participate in any exchange program registered under the Virginia Real Estate Time Share Act, the bill requires that the public offering statement (described above) must also include a comprehensive description of the exchange program including (i) information about travel club owners' interests in exchange companies (ii) the voluntary or involuntary nature of exchange programs and (iii) information about how the exchanges are conducted.

Finally, the bill prohibits travel clubs from (i) offering accommodations in lodgings when the travel clubs have no written evidence of legal right to possession of such lodgings and (ii) using the terms "time-share," "vacation ownership," "interval ownership," "time-share" benefit" or "incidental benefit" in promotional or advertising materials. The bill also exempts from the Act's coverage "products" as defined in and registered under the Virginia Real Estate Time Share Act.


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