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33-2206. Duties of the managing entity

A. The duties of the applicable managing entity for a timeshare plan or timeshare property may include, but are not limited to:

1. Management of the timeshare plan or management and maintenance of the timeshare property, or both, in accordance with the timeshare instrument.

2. Collection of all assessments for common expenses, including reserves, if applicable, in accordance with the timeshare instrument.

3. Making available annually to all owners an itemized annual budget that includes all estimated revenues and expenses. The budget shall be prepared by the managing entity for the current fiscal year and adopted as provided in the timeshare instrument. The managing entity shall notify the owners of the availability of the adopted annual budget not later than forty-five days after its adoption. The budget shall contain, as a footnote or otherwise, any related party transaction disclosures or notes related to the timeshare plan or timeshare property that appear in any audited financial statements of the managing entity, manager and management firm for the previous budget year. The budget prepared by any managing entity may be for a timeshare plan or only for specified timeshare property as provided in the timeshare instrument.

4. Maintenance of all books and records concerning the timeshare plan or timeshare property, or both.

5. If owners are not entitled to use specific timeshare periods, scheduling occupancy of the accommodation in accordance with the timeshare instrument. A timeshare instrument may provide timeshare owners with the use rights to accommodations beyond the owners' timeshare interests as an incident of ownership on terms set forth in the timeshare instrument.

6. Maintaining insurance policies in accordance with the timeshare instrument.

7. Acting as agent of the owners pursuant to section 42-13454.

8. Performing any other functions and duties that are necessary and proper to maintain the timeshare plan or timeshare property, as provided in the timeshare instrument. The timeshare instrument may impose requirements on the managing entity beyond those set forth in this chapter.

B. Monies in any deferred maintenance or capital expenditure reserve account may not be transferred to an operating account for any purpose other than to pay for deferred maintenance or capital expenditures without the consent of owners of a majority of the timeshare interests in the timeshare property. Except as provided in the timeshare instrument, the managing entity may transfer monies in any operating account to any deferred maintenance or capital expenditure reserve account without the vote or approval of owners of the timeshare interests. The managing entity or board may transfer monies from one reserve account to another reserve account without the vote or approval of the owners of the timeshare interests.

C. The managing entity may invest the operating and reserve monies of the timeshare plan or timeshare property but the managing entity shall give safety of capital greater weight than production of income. The managing entity shall not invest timeshare plan or timeshare property monies with a developer or with any entity that is not independent of any developer or any managing entity, and the managing entity shall not invest timeshare plan or timeshare property monies in notes and mortgages related in any way to the timeshare plan or timeshare property.

D. The managing entity of a timeshare plan or timeshare property shall not commingle operating monies with reserve monies but the managing entity may maintain operating and reserve monies within a single account for a period not to exceed ninety days after the date on which the managing entity received payment of those monies.

E. A managing entity that serves as managing entity of more than one timeshare plan shall not commingle the common expense monies of any one timeshare plan with the common expense monies of any other timeshare plan.

F. The managing entity may levy and enforce assessments on any timeshare interests in accordance with the timeshare instrument, and the assessment constitutes a debt of the owner of the interest at the time the assessment is made. Assessments and other monetary obligations are governed as follows:

1. The timeshare instrument shall provide for the allocation of common expenses among timeshare interests, as assessments, on a reasonable basis. The timeshare instrument may allocate expenses differently between accommodations that are part of the timeshare plan and facilities that are not part of the timeshare plan if the different allocations are based on reasonable differences in the benefit provided to each type of property. The timeshare instrument shall allocate common expenses to timeshare interests owned or not yet sold by a developer on the same basis that common expenses are allocated to similar or equivalent timeshare interests sold to purchasers, as assessments, except if a subsidy agreement or similar document is in place that provides for the developer to pay no, or a lesser share of, common expenses in return for subsidizing any deficits or shortfalls in the operating monies of the timeshare plan, and if that exclusion from or reduced assessments and subsidy agreement or other document are referred to in the public reports issued under section 32-2197.08.

2. The managing entity may impose reasonable monetary penalties for violation of the timeshare instrument, as an assessment, as authorized by the timeshare instrument.

3. Assessments may include personal charges and other amounts as authorized by the timeshare instrument.

4. The managing entity may assign to the delinquent owners the costs of collection, including attorney fees, administrative fees, late fees, interest and penalties as authorized by the timeshare instrument.

5. The amount of any assessment plus any other charges such as interest, collection costs, attorney fees, administrative fees, late fees, interest and penalties, as may be provided for in the timeshare instrument, are a lien on the timeshare interest assessed from the time the assessment became due. The lien has priority over other liens as provided in the timeshare instrument. The lien may be enforced, foreclosed or realized on as provided in the timeshare instrument.

6. On the receipt of a written request, the managing entity shall furnish to an owner or any lender who has a security interest in a timeshare interest or the timeshare property a statement setting forth the amount of unpaid assessments made against the owner's timeshare interest. The statement must be furnished within ten business days after receipt of the request and is binding on the managing entity, the association, the board and every owner.