Bill Text: HI HB1220 | 2020 | Regular Session | Introduced


Bill Title: Relating To Time Sharing Plans.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2019-12-01 - Carried over to 2020 Regular Session. [HB1220 Detail]

Download: Hawaii-2020-HB1220-Introduced.html

HOUSE OF REPRESENTATIVES

H.B. NO.

1220

THIRTIETH LEGISLATURE, 2019

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

relating to time sharing plans.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


     SECTION 1.  Chapter 514E, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§514E-     Ministerial amendments.  (a)  The developer may submit an amended disclosure statement that updates:

     (1)  The name (unless the entity or form of entity has also changed), address, or other contact information contained in the disclosure statement;

     (2)  The budget contained in, or attached as, an exhibit to the disclosure statement, and the amount of the annual or other assessments for the time share interests;

     (3)  The real property taxes, transient accommodations taxes, transient occupancy taxes, general excise taxes, or any other taxes of any kind or nature applicable to the time share interests, the time share units, or the time share plan; or

     (4)  The description of any pending or anticipated litigation.

     (b)  An amended disclosure statement submitted pursuant to:

     (1)  Subsection (a)(1), (a)(2), or (a)(3) shall set an effective date for the amended disclosure statement, which shall be no sooner than twenty days after the date of submittal, and the amended disclosure statement shall be deemed accepted by the director as of that date unless otherwise agreed to by the developer and the director; and

     (2)  Subsection (a)(4) shall set an effective date for the amended disclosure statement, which shall be no sooner than forty-five days after the date of submittal, and shall be accompanied by copies of pleadings or other documents supporting the proposed change to the exhibit.  Within thirty days after the amended disclosure statement and supporting documentation is submitted, the director shall notify the developer of any changes to the exhibit required by the director.  Unless otherwise agreed to by the developer and the director, the amended disclosure statement, with any changes to the exhibit required by the director, shall be deemed accepted by the director as of the effective date shown on the amended disclosure statement."

     SECTION 2.  Section 514E-1, Hawaii Revised Statutes, is amended by adding three new definitions to be appropriately inserted and to read as follows:

     ""Plan documents" means the primary plan documents and the supplementary plan documents.

     "Primary plan documents" means the constituent documents of the time share plan, including, but not limited to, any time share declaration, any trust agreement, the articles of incorporation and bylaws of the association (if the association is a corporation) or the operating agreement or similar organizational document (if the association is a limited liability company or other entity), the rules for reserving the use of the time share units, and the rules governing the occupancy of the time share units.  Any plan document that modifies the terms and provisions of the time share plan (for example, by establishing a new class or category of time share interest having rights that differ from existing time share interests in the time share plan) shall constitute a primary plan document and shall not constitute a supplementary plan document.

     "Supplementary plan documents" means any instrument that:

     (1)  Submits or commits property to the time share plan;

     (2)  Makes property previously submitted to the time share plan available for use by the time share owners;

     (3)  Removes property from the time share plan; or

     (4)  Terminates the right of time share owners to use property previously made available for use by the time share owners;

including, but not limited to, any declaration of annexation, declaration of de-annexation, active property declaration, notice of access, notice of conveyance, notice of activation, or any deed conveying property to the trustee of a time share plan or to the time share owners association."

     SECTION 3.  Section 514E-9, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(a)  Any offering of a time sharing plan to the public shall disclose:

     (1)  The name and address of the developer and of the time share units;

     (2)  The name and address of the plan manager, if any, and a description of the plan manager's responsibilities and authority;

     (3)  A description of the time share units, including the developer's schedule for completion of all buildings, units, and amenities and dates of availability;

     (4)  If the time share plan is located in a condominium property regime, a description of the project and, if the purchaser will be a direct owner of a unit in the condominium, a brief description of any pertinent provisions of the project instruments[;]of the condominium;

     (5)  Any restraints on the transfer of the buyer's time share interest in the time share units or plan;

     (6)  Whether the time share plan is a time share ownership plan or a time share use plan, along with a description of the rights and responsibilities under said plan;

     (7)  A statement that there is a seven-calendar-day period of mutual rescission;

     (8)  A statement that pursuant to section 514E-11.3, every sale or transfer, made in violation of this chapter is voidable at the election of the purchaser;

     (9)  [Notice] A list of the primary plan documents of the time share plan and, if the plan is limited to a single site, notice of any liens, title defects or encumbrances on or affecting the title to the units or plan;

    (10)  [Notice] An exhibit that contains notice of any pending or anticipated suits that are material to the time share units or plan, of which the developer has, or should have, knowledge;

    (11)  The total financial obligation of the purchaser, which shall consist of:

          (A)  A statement that the purchaser is obligated to pay the initial price stated in the purchaser's purchase agreement; and

          (B)  A list or description of any additional charges to which the purchaser may be subject;

    (12)  An estimate of the dues, maintenance fees, real property taxes, and similar periodic expenses, and the method or formula by which they are derived and apportioned;

    (13)  The disclosure statement under subsection (d), if applicable; and

    (14)  Other disclosures required by the director, as provided by rules adopted pursuant to chapter 91."

     SECTION 4.  Section 514E-10, Hawaii Revised Statutes, is amended to read as follows:

     "§514E-10  Registration required; developer, acquisition agent, plan manager, and exchange agent; registration renewal.  (a)  A developer shall not offer or dispose of a time share unit or a time share interest unless the disclosure statement required by section 514E-9 is filed with the director pursuant to the time specified in this chapter, or the development is exempt from filing, and the time share plan to be offered by the developer is accepted by the director for registration under this chapter.  The director shall not accept a developer's time share plan if the developer does not possess a history of honesty, truthfulness, financial integrity, and fair dealing.

     (b)  An acquisition agent (including the developer if it is also the acquisition agent) shall register under this chapter by filing with the director a statement setting forth the time sharing plan for which it is providing prospective purchasers, its address, the telephone number, other information required by the director as provided by rules adopted pursuant to chapter 91, and, if the acquisition agent is not a natural person, the name of the responsible managing employee; provided that an acquisition agent licensed under chapter 467 as a real estate broker shall not be required to register under this chapter.  All acquisition agents not licensed under chapter 467 shall be approved by the director.  The director shall not approve any acquisition agent who is not of good character and who does not possess a reputation for honesty, truthfulness, and fair dealing.  The acquisition agent shall furnish evidence that the acquisition agent is bonded as required by rules adopted by the director pursuant to chapter 91 to cover any violation by the acquisition agent of any solicitation ordinance or other regulation governing the use of the premise or premises in which the time share plan is promoted; provided that the acquisition agent shall be separately bonded for each time share plan for which it is providing prospective purchases.

     (c)  A plan manager (including the developer if it is also the plan manager) shall register under this chapter by filing with the director a statement setting forth the time sharing plan that it is managing, its principal office address, telephone number, and responsible managing employee.  The plan manager shall furnish evidence that the plan manager is bonded as required by rules adopted by the director pursuant to chapter 91 to cover any default of the plan manager and any of its employees of their duties and responsibilities; provided that the plan manager shall be separately bonded for each time share plan under the management of the plan manager.

     (d)  An exchange agent (including the developer if it is also an exchange agent) shall register under this chapter by filing with the director a statement setting forth the time sharing plan for which it is offering exchange services, its principal office address and telephone number, and designate its responsible managing employee.

     (e)  Any plan manager or developer registration required in this section shall be renewed by December 31 of each even-numbered year, and any acquisition agent or exchange agent registration required in this section shall be renewed on December 31 of each odd-numbered year; provided that this subsection shall not relieve the person required to register from the obligation to notify the director promptly of any material change in any information submitted to the director, nor shall it relieve the developer of its obligation to promptly file amendments or supplements to the disclosure statement, and to promptly supply the amendments or supplements to purchasers of time share interests.

     (f)  An application for renewal of a developer registration shall be on a form prescribed by the director and shall include:

     (1)  A current disclosure statement that meets the requirements of section 514E-9 and section 16-106-3, Hawaii Administrative Rules, if not already on file;

     (2)  A statement that is certified by the developer to be true and correct in all respects and that identifies, as appropriate:

          (A)  The time share units in the time share plan registered pursuant to this chapter; the total number of time share interests registered for sale in each unit pursuant to this chapter; and the total number of time share interests that have not yet been sold as of the date specified in the developer's certification, which date shall not be more than sixty days prior to the date of the developer's certification; or

          (B)  The property in the time share plan registered pursuant to this chapter; the total number of points registered for sale in each property pursuant to this chapter; and the total number of points in the time share plan that have not yet been sold as of the date specified in the developer's certification, which date shall not be more than sixty days prior to the date of the developer's certification;

     (3)  If the developer is a corporation, partnership, joint venture, limited liability company, or limited liability partnership, an original certificate of good standing issued by the business registration division of the department of commerce and consumer affairs not more than forty-five days before the date of submission of the renewal application; and

     (4)  The biennial renewal fee.

     (g)  Developers shall not be required to include the following in an application for renewal of a developer registration of a time share plan:

     (1)  A financial statement of the developer; or

     (2)  A policy of title insurance, a preliminary title report, abstract of title, or certificate of title on the units or time share interests in the time share plan.

     (h)  Subject to subsection (i), developers shall not be required to include copies of encumbrances against title to the time share units in:

     (1)  An application for a developer registration;

     (2)  An application to amend a developer registration; or

     (3)  An application for renewal of a developer registration.

     (i)  The developer shall be required to submit:

     (1)  Copies of the primary plan documents for the time share plan that is the subject of the application;

     (2)  Copies of any supplementary plan documents as the director shall request;

     (3)  If the time share interest will not be conveyed to the purchaser free and clear of blanket liens:

          (A)  Copies of any recorded blanket liens that will remain on title after the closing of the sale of a time share interest in the time share plan; and

          (B)  Copies of any recorded non-disturbance agreements or other instruments protecting the time share interests from any recorded blanket liens that will remain on title after the closing of the sale of a time share interest in the time share plan; and

     (4)  Copies of other recorded encumbrances as the director shall specifically request for the purpose of determining the compliance of the time share plan with the disclosure and blanket lien protection requirements of this chapter."

     SECTION 5.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 6.  This Act shall take effect upon its approval.

 

INTRODUCED BY:

_____________________________

 

 


 


 

Report Title:

Time Sharing Plans; Developer Applications and Disclosure Statements

 

Description:

Eliminates the requirement that a time share developer (1) file copies of all encumbrances affecting title to all time share units in a time share plan as part of the registration process; and (2) include in the time share disclosure statement a list all encumbrances affecting title to all time share units in a time share plan.  Requires that a time share disclosure statement include a description of the condominium documents only for those time share plans where the time share owners are actually unit owners either in fee or to the extent and for the purposes provided in a recorded unit lease.  Permits the developer to make ministerial updates to the disclosure statement on an expedited basis.

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

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