Commencement

This Act comes into force on the 31st day of December, 37 SCHEDULE 1 TIMESHARE ACT Matters Which Every Developer or His Sales Agent Must Include In His Public Offering Statement. [Section 14] Every developer or his sales agent shall, unless exempted by the Board, include in his public offering statement the following information, where applicable to his timeshare accommodation, (a) the name of the developer and the principal address of such developer, the timeshare property’s primary location, and the timeshare rights being offered for sale, including, (i) the name and address of every officer of the developer; and (ii) the name and address of each person owning or controlling an interest of twenty per centum or more in the timeshare property or accommodation; (b) a complete description of the timeshare accommodation and the facilities and amenities of the timeshare property made available to purchasers, including provisions, if any, that have been made for public utilities in the timeshare accommodation, including water, electricity, telephone and sewerage facilities, and also including, without limitation, the developer’s good faith 38 Timeshare estimate, schedule of commencement and completion of the timeshare project, its facilities and amenities or, if completed, a statement indicating that they have been completed and the date of such completion; (c) the description contemplated in paragraph (b) shall include a description of any recreational and other commonly used facilities of the timeshare property which will not be used exclusively by purchasers of the timeshare units and which require the payment of any portion of the maintenance and expenses of such facilities, either directly or indirectly, by the purchasers; such description shall include, but not be limited to, the following, (i) each building or facility committed to be built; (ii) facilities not committed to be built except under certain conditions, and a statement of those conditions or contingencies; (iii) as to each facility committed to be built, or which will be committed to be built upon the happening of one of the subparagraph (ii), a statement whether it will be owned by the purchasers having the use thereof or by an association or other entity which will be controlled by the purchasers, or others, and the location in the exhibits of the lease or other document providing for the use of those facilities; Timeshare 39 (iv) the year in which each facility will be available for use by the purchasers or. in the alternative, the maximum number of purchasers who may use the facilities at the time each of the facilities is committed to be completed; (v) if there are leases, a description thereof, including the length of their terms, the rents payable, and descriptions of any options to purchase; (d) if it is mandatory that the purchasers pay fees, rent, dues or other amounts under a recreational facilities lease or club membership for the use of any facilities as referred to in paragraph (c), the following statements in conspicuous type; (i) membership in the recreational facilities club is mandatory for purchasers; (ii) purchasers are required, as a condition precedent, to be leases under the recreational facilities lease; and (iii) purchasers are required to pay their share of the costs and expenses of maintenance, management, upkeep, replacement, rent and fees under the recreational facilities lease or the other instruments providing the facilities, or similar statements of the nature of the organisation or the manner in which the use rights arc 40 Timeshare created, and that purchasers are required to pay; (e) a description (including the amount) of all amounts due from the purchaser at a completion of the sales agreement, together with a description of the purpose and method of calculating such amounts; (f) an explanation of the status of the title to the real property underlying the timeshare property, including a statement of the existence of any lien, defect, judgment, mortgage or other encumbrance affecting the title to the property, and how such lien, defect, judgment, mortgage or other encumbrance will be removed, satisfied or subordinated prior to completion; (g) a general description of any financing offered the purchaser by the developer; (h) a statement of any pending suits against the developer which may materially and adversely impact the offering of timeshare rights and of which such developer has actual knowledge; (i) a description of the insurance coverage provided for the benefit of purchasers and their guests; (j) the name and address of the managing entity, a statement whether the developer may change the managing entity or its control and, if so, the manner by which the developer may change the managing entity, a statement of the arrangements for management, maintenance and operation of the Timeshare 41 accommodations and facilities and of other property (other than incidental benefit) that will serve the purchasers; and a description of the management arrangement and any and all con-tracts for these purposes having a term in excess of one year, including the names of the contracting parties, the term of the contract, the nature of the services included, and the compensation, stated for a month and for a year, and provisions for increases in the compensation; copies of all de-scribed contracts shall be attached as exhibits; (k) any current or expected fees or charges to be paid by the purchasers for the use and enjoyment of any facilities which are not already disclosed under paragraph (d); (l) the extent to which financial arrangements, if any, have been provided for completion of any part of the timeshare accommodation and units; (m) the extent to which a purchaser can exchange his timeshare rights in that project with that of another purchaser, in another project, and the procedures and costs necessary to do so; (n) a brief narrative description of the significant features of the sales agreement and any document referred to therein, any contract or lease to be signed by the purchaser at closing, and any contract or lease that will or may be subject to cancellation by the purchaser; (o) any services which the developer provides or expense he pays and which he expects may become at any subsequent time a timesharing expense of the purchasers; 42 Timeshare (p) a description of the restrictions, if any, to be imposed on timeshare rights concerning the use of any of the accommodations or facilities, including statements whether there are restrictions upon children and pets, and references to the volumes and pages of the timeshare plan documents containing the restrictions shall be attached as an exhibit; if there are no restrictions, there shall be a statement of such fact; (q) an estimated operating budget for the timeshare accommodation schedule of the purchaser’s expense shall be attached as an exhibit and shall contain the following information, (i) the estimated annual expenses of the timeshare accommodation collectible from purchasers by assessments; the estimated payments by the purchaser for assessments shall also be stated in the estimated amounts for the times when they will be due; expenses shall also be shown for the shortest timeshare period (or smallest timeshare rights, as the case maybe) offered for sale by the developer, if the timeshare plan provides for the offer and sale of units to be used on a non-timeshare basis, the estimated monthly and annual expenses shall be set forth in a separate schedule; and (ii) the estimated weekly, monthly, and annual expenses (if any) of the purchaser of each timeshare rights other than assessments payable to the managing entity contemplated in Timeshare 43 subparagraph (i); expenses which are personal to purchasers that are not uniformly incurred by all purchasers or that are not provided for or contemplated by the timeshare plan documents may be excluded from this estimate; (r) if the developer intends to subsidize or guarantee the level of assessments, such subsidy or guarantee must be based upon a good faith estimate of the revenues and expenses of the timeshare plan; the subsidy or guarantee must include a description of the following, (i) the specific time period measured in one or more calendar or fiscal years during which the subsidy or guarantee will be in effect; and (ii) the level expressed in total dollars, at which the developer subsidizes or guarantees the budget, as well as the developer’s good faith estimate of the fiscal impact upon the annual budget immediately after the expiration of the said subsidy or guarantee; (s) all other circumstances or features affecting the timeshare property or accommodation determined by the developer in good faith to be unusual and material to such project; (t) a statement or provision on the face of the public offering statement, in bold face type and separated from the other text as follows, 44 Timeshare “THIS PUBLIC OFFERING STATEMENT CONTAINS IMPORTANT MATTERS TO BE CONSIDERED IN ACQUIRING TIMESHARE RIGHTS. THE STATEMENTS CONTAINED HEREIN ARE ONLY SUMMARY IN NATURE. A PROSPECTIVE PURCHASER SHOULD REFER TO ALL REFERENCES AND EXHIBITS HERETO, CONTRACT DOCUMENTS AND SALES AGREEMENTS. YOU SHOULD NOT RELY UPON ORAL REPRESENTATIONS AS BEING CORRECT. REFER TO THIS DOCUMENT AND ACCOMPANYING EXHIBITS FOR CORRECT REPRESENTATIONS. THE DEVELOPER IS PRO- HIBITED FROM MAKING ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THE SALES AGREEMENT AND THIS PUBLIC OFFERING STATEMENT”; (u) copies of the following documents and plans, to the extent they are applicable, shall be filed with the Board and included as exhibits, except as otherwise provided below, (i) any declaration of covenants and restrictions, or proposed declaration if the declaration has not been recorded; (ii) if there is an association established as a body corporate, the articles and memorandum of association creating the association; (iii) the bye-laws or memorandum of association of the association, the Timeshare 45 timeshare property or the timeshare accommodation; (iv) the ground lease or other underlying title of the real property on which the timeshare accommodation is situated; (v) the management agreement and all maintenance and other contracts regarding the management and operation of the time share accommodation which have terms in excess of one year; (vi) the estimated operating budget for the timeshare accommodation and the required schedule of purchaser’s expenses; (vii) the floor plan of each type of unit and the plot plan showing the location of all accommodations and facilities of the timeshare accommodation; (viii) any lease of recreational facilities and other facilities of the timeshare accommodation which will be used only by purchasers of the timeshare plan; (ix) any lease of facilities of the timeshare accommodation used by purchasers and others; (x) a statement of condition of the existing building or buildings of the timeshare accommodation, time share rights in an operation being converted from an existing building; 46 Timeshare (xi) the form of sales agreements or lease of the timeshare rights; (xii) the documents containing any restrictions on use of the property described in paragraph (p) (xiii) any other documents or instruments creating the timeshare plan; and (xiv) any other contract or lease to be signed by the purchasers. The public offering statement provided to purchasers shall only be required to include copies of the exhibits required to be filed with the Board pursuant to subparagraphs (u)(i) or (ii), (iii), and (xiii) of this Schedule, provided that the purchasers also are given a receipt for timeshare plan documents and a list describing any exhibit required to be filed with the Board which is not delivered to the purchasers. Timeshare 47 SCHEDULE 2 TIMESHARE ACT Matters Which Shall Be Included In Every Sales Agreement [Section 16] 1. Each developer shall utilize and furnish each purchaser a fully completed copy of a sales agreement which shall include the following information, (a) the actual date the sales agreement is executed by each party; (b) the names and addresses of the developer and (where applicable) the sales agent (if different from the developer), any holder of a mortgage or other security instrument encumbering all or a portion of the timeshare property or accommodation (excluding those mortgages or other security instruments described in section 17(2) of this Act) and any owner or lessor of any underlying estate in freehold or leasehold of the timeshare property; (c) the total financial obligation of the purchaser, including the initial purchase price and any additional charges to which the purchaser may be subject, such as financing, reservation, maintenance, management and recreation charges; (d) the estimated date of completion of construction of each accommodation, facility or unit which is not completed at the time the 48 Timeshare sales agreement is executed and which is the subject of the sales agreement; (e) a description of the nature and duration of the timesharing rights being sold and of the timeshare plan, including the specific number of years constituting the term of the timeshare plan; (f) immediately prior to the space reserved in the sales agreement for the signature of the purchaser, in conspicuous type, substantially the following statements, “YOU MAY CANCEL THIS SALES AGREEMENT WITHOUT ANY PENALTY OR OBLIGATION WITHIN THREE DAYS FROM THE DATE YOU SIGN THIS CONTRACT. IF YOU DECIDE TO CANCEL THIS CONTRACT, YOU MUST NOTIFY THE DEVELOPER AND ESCROW AGENT OF YOUR INTENT TO CANCEL. YOUR NOTICE OF CANCELLATION SHALL BE EFFECTIVE UPON THE DATE SENT AND SHALL BE SENT TO (NAME OF DEVELOPER AND ESCROW AGENT) AND AT (ADDRESS OF DEVELOPER AND ESCROW AGENT). ANY ATTEMPT TO OBTAIN A WAIVER OF YOUR CANCELLATION RIGHT IS UNLAWFUL. WHILE YOU MAY EXECUTE ALL COMPLETION DOCUMENTS IN ADVANCE, THE COMPLETION, BEFORE EXPIRATION OF YOUR THREE DAY CANCELLATION PERIOD, IS PROHIBITED”; (g) a statement that, in the event the purchaser cancels the sales agreement during the three Timeshare 49 day cancellation period, the escrow agent will refund to the purchaser the total amount of all payments made by the purchaser under the sales agreement, reduced by the proportion of any benefits (such as an overnight stay at the timeshare unit), the purchaser has actually received under the sales agreement prior to the effective date of the cancellation; the statement shall further provide that the refund will be made within fifteen days after receipt of notice of cancellation: a developer and a purchaser shall agree in writing on a specific value for each contract benefit received by the purchaser for the purposes of this paragraph; the term “contract benefit” shall not include public offering statements or other documentation or materials that must be furnished to a purchaser pursuant to any law; (h) unless the developer is at the time of the sale of the timeshare rights the owner in fee simple absolute of all accommodations and facilities of which the timeshare property is comprised, free and clear of all liens and encumbrances, a statement that the developer is not the sole owner of the underlying fee of the timeshare accommodations or facilities without liens or encumbrances, which statement shall include, (i) the names and addresses of all persons or entities having an ownership interest or other legal or beneficial interest in the accommodations or facilities; and (ii) the actual interest of the developer in the said accommodations or facilities. 50 Timeshare 2. The following statements in substantially the same form in conspicuous type located immediately prior to the disclosure required by paragraph (c), THE CURRENT YEAR’S ASSESSMENT FOR COMMON EXPENSES ALLOCABLE TO THE TIMESHARE RIGHTS YOU ARE PURCHASING IS $. THIS ASSESSMENT, WHICH MAY BE INCREASED FROM TIME TO TIME BY THE MANAGING ENTITY OF THE TIMESHARE ACCOMMODATION IS PAYABLE IN FULL EACH YEAR ON OR BEFORE THIS ASSESSMENT (INCLUDES/DOES NOT INCLUDE) YEARLY TOWN PROPERTY FEES, WHICH (ARE/ ARE NOT) BILLED AND COLLECTED SEPARATELY. (IF TOWN PROPERTY FEES ARE NOT INCLUDED IN THE CURRENT YEARS ASSESSMENT FOR COMMON EXPENSES, THE FOLLOWING STATEMENT MUST BE INCLUDED: THE MOST RECENT ANNUAL ASSESSMENT FOR TOWN PROPERTY FEES FOR THE TIMESHARE RIGHTS YOU ARE PURCHASING IS $ .) (IF THERE ARE ANY DELINQUENT ASSESSMENTS FOR COMMON EXPENSES OR TOWN PROPERTY FEES OUTSTANDING WITH RESPECT TO THE TIMESAHRE RIGHTS IN QUESTION, THE FOLLOWING STATEMENT MUST BE INCLUDED: A DELINQUENCY IN THE AMOUNT OF $ FOR UNPAID COMMON EXPENSES OR TOWN PROPERTY FEES CURRENTLY EXISTS WITH RESPECT TO THE TIMESHARE RIGHTS YOU ARE PURCHASING, TOGETHER WITH A PER DIEM CHARGE OF $ FOR INTEREST AND LATE CHARGES.) EACH OWNER IS PERSONALLY LIABLE FOR THE PAYMENTS OF SUCH OWNER’S ASSESSMENTS FOR COMMON EXPENSES, AND FAILURE TO TIMELY PAY THESE ASSESSMENTS MAY RESULT IN RESTRICTION OR LOSS OF YOUR USE AND/OR RIGHTS. THERE ARE MANY IMPORTANT DOCUMENTS RELATING TO THE TIMESHARE PLAN WHICH YOU SHOULD REVIEW PRIOR TO PURCHASING Timeshare 51 TIMESHARE RIGHTS, INCLUDING THE DECLARATION OF COVENANTS AND RESTRICTIONS, IF APPLICABLE [THE ASSOCIATION ARTICLES AND BYE-LAWS OR MEMORANDUM OF ASSOCIATION, IF APPLICABLE]; THE CURRENT YEAR’S OPERATING AND RESERVE BUDGETS; AND ANY RULES AND REGULATIONS AFFECTING THE USE OF TIMESHARE UNITS, ACCOMMODATIONS AND FACILITIES.