House of Representatives

HB 2395

Real estate timeshares; revisions

Sponsors: Representative Leff

 

X

Committee on Commerce & Economic Development

 

Caucus and COW

This bill as introduced contains a PROP 108 clause.

 

As Passed the House

 

HB 2395 modifies and revises the current real estate timeshare statutes.

 

History

The national timeshare trade association, The American Resort Development Association [ARDA], has worked with the Arizona Department of Real Estate during the past year to revise and modernize the statutes that regulate the timeshare industry.  The language is modeled after recent statutory changes made in Florida and Illinois, and contains three primary aspects.  The changes in HB 2395 seek to streamline existing requirements, authorize payment of a finder's fee, and ensure uniform taxation of timeshare properties. 

 

Provisions

·                      Allows a timeshare plan to be created in any accommodation, unless otherwise prohibited by law.  Requires a one-to-one purchaser to accommodation ratio per calendar year.

·                      Requires the developer to notify the commissioner of the Department of Real Estate if a timeshare accommodation may become subject to a tax or lien due to claims against other purchasers.  The commissioner may require such disclosure to prospective purchasers.

·                      Mandates disclosure of the designated broker used by the developer and the managing entity of the timeshare plan.

·                      Authorizes the commissioner to allow the developer to conduct pre-sales if the public report is administratively complete.  Outlines requirements.

·                      Mandates the rescission rights shall be conspicuously disclosed in the purchase agreement.

·                      Clarifies the requirements for depositing the purchaser's monies into the escrow account and outlines disbursement.  Authorizes a surety bond, irrevocable letter of credit or other financial assurance in lieu of placing monies in the escrow account.  In the case of a dispute, requires the developer to maintain monies in the escrow account until either: 1) the developer receives a written agreement signed by all parties; or, 2) a civil action is filed, in which case the developer shall deposit the monies with the appropriate court.

·                      Allows the commissioner to physically examine the timeshare.

·                      Maintains the initial filing fee of $20 per interest with a maximum fee of $1,000.  Sets a fee of $10 per interest and a maximum of $500 for an amended timeshare public report.

·                      Establishes the public report requirements, which may be given to prospective customers in writing, CD-ROM or other electronic format approved by the commissioner. 

·                      Stipulates that a party may enter into a timeshare interest reservation by first providing notice to the department.  Outlines specific requirements.  Caps the deposit at 20% of the purchase price, which must be deposited [within one business day] into an escrow or trust account.  Within 15 days of receiving the public report, the prospective seller shall provide the public report to the prospective buyer.  The buyer/seller have seven business days in which to enter into a contract [otherwise the reservation terminates].  The buyer may terminate the reservation at any time prior to execution of the purchase agreement and the seller must refund all deposits, less agreed upon fees, within five days.

·                      Outlines requirements if the department denies an application for a public report on a timeshare plan in which reservations were taken.

·                      Specifies supervisory duties of the developer, including managing and controlling all aspects of the timeshare plan.

·                      Establishes the State as the exclusive regulator over timeshare plans.

·                      Authorizes payment of a finder's fee [$600 credit per 12 months] by the developer to an unlicensed person who owns a timeshare interest in the developer's timeshare plan.  Requires the developer to maintain records for three years after payment.

·                      Outlines those who are exempt from the provisions.  Specifies disclosures that must be made prior to the execution of the purchase agreement.  Establishes exempt communications.

·                      Provides requirements and direction to the county assessor and the department of revenue for the taxation of the property.

·                      Contains a Proposition 108 clause.           

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·                      44th Legislature                                                                                                                       

·                      Second Regular Session                       3                                                         January 25, 2001

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