§ 18-14-404 - Required contents of public offering statements for time-share intervals.
18-14-404. Required contents of public offering statements for time-share intervals.
(a) A public offering statement must be provided to each purchaser of a time-share interval and must contain or fully and accurately disclose:
(1) The name of the developer and the principal address of the developer and the time-share intervals offered in the statement;
(2) A general description of the units including, without limitation, the developer's schedule of commencement and completion of all buildings, units, and amenities or, if completed, that they have been completed;
(3) As to all units offered by the developer in the same time-share project:
(A) The types and number of units;
(B) Identification of units that are subject to time-share intervals; and
(C) The estimated number of units that may become subject to time-share intervals;
(4) A brief description of the project;
(5) If applicable, any current budget and a projected budget for the time-share intervals for one (1) year after the date of the first transfer to a purchaser. The budget must include, without limitation:
(A) A statement of the amount included in the budget as a reserve for repairs and replacement;
(B) The projected common expense liability, if any, by category or expenditures for the time-share intervals;
(C) The projected common expense liability for all time-share intervals; and
(D) A statement of any services not reflected in the budget that the developer provides or expenses that it pays;
(6) Any initial or special fee due from the purchaser at closing, together with a description of the purpose and method of calculating the fee;
(7) A description of any liens, defects, or encumbrances on, or affecting, the title to the time-share intervals;
(8) A description of any financing offered by the developer;
(9) A statement that, within five (5) days after execution of a contract of purchase, a purchaser may cancel any contract for purchase of a time-share interval from a developer;
(10) A statement of any pending suits material to the time-share intervals of which a developer has actual knowledge;
(11) Any restraints on alienation of any number or portion of any time-share intervals;
(12) A description of the insurance coverage which shall be provided for the benefit of time-share interval owners;
(13) Any current or expected fees or charges to be paid by time-share interval owners for the use of any facilities related to the property;
(14) The extent to which financial arrangements have been provided for completion of all promised improvements; and
(15) The extent to which a time-share unit may become subject to a tax or other lien arising out of claims against other owners of the same unit.
(b) If a purchaser is offered the opportunity to subscribe to any program that provides exchanges of time-shares among purchasers in either the same time-sharing project or other time-sharing projects, or both, the developer shall deliver to the purchaser, prior to the execution of any contract between the purchaser and the company offering the exchange program, written information regarding such exchange program. The purchaser shall certify in writing to the receipt of the written information, which information shall include, but is not limited to, the following:
(1) The name and address of the exchange program;
(2) The names of all officers and directors;
(3) Whether the exchange program, or any of its officers or directors, has any legal or beneficial interest in any developer or managing agent for any time-sharing plan participating in the exchange program and, if so, the name and location of the time-sharing plan and the nature of the interest;
(4) Unless otherwise stated, a statement that the purchaser's contract with the exchange program is a contract separate and distinct from the purchaser's contract with the developer;
(5) Whether the purchaser's participation in the exchange program is dependent upon the continued affiliation of the time-sharing project with the exchange program;
(6) Whether the purchaser's membership or participation, or both, in the exchange program is voluntary or mandatory;
(7) A complete and accurate description of the terms and conditions of the purchaser's contractual relationship with the exchange program and the procedure by which changes thereto may be made;
(8) A complete and accurate description of the procedure to qualify for and effectuate exchanges;
(9) A complete and accurate description of all limitations, restrictions, or priorities employed in the operation of the exchange program including, but not limited to, limitations on exchanges based on seasonality, unit size, or levels of occupancy, expressed in bold-faced type and, in the event that such limitations, restrictions, or priorities are not uniformly applied by the exchange program, a clear description of the manner in which they are applied;
(10) Whether exchanges are arranged on a space-available basis and whether any guarantees of fulfillment of specific requests for exchanges are made by the exchange program;
(11) Whether and under what circumstances, a purchaser, in dealing with the exchange program, may lose the use and occupancy of his or her time-share in any properly applied for exchange without his or her being provided with substitute accommodations by the exchange program;
(12) The fees or range of fees for participation by purchasers in the exchange program, a statement whether any such fees may be altered by the exchange company, and the circumstances under which alterations may be made;
(13) The name and address of the site of each accommodation or facility included in the time-sharing projects which are participating in the exchange program as of the last annual audit;
(14) The number of time-share units in each time-sharing project which are available for occupancy, pursuant to the last annual audit, and which qualify for participation in the exchange program, expressed within the following numerical groupings: 1-5, 6-10, 11-20, 21-50, and 51 and over;
(15) The number of purchasers enrolled for each time-sharing project participating in the exchange program, pursuant to the last annual audit, expressed within the following numerical groupings: 1-100, 101-249, 250-499, 500-999, and 1,000 and over, and a statement of the criteria used to determine those purchasers who are currently enrolled with the exchange program;
(16) The disposition made by the exchange company of time-shares deposited with the exchange program by purchasers enrolled in the exchange program and not used by the exchange company in effecting changes;
(17) The following information, which shall be independently audited by a certified public accountant or accounting firm in accordance with the standards of the Accounting Standards Board of the American Institute of Certified Public Accountants and reported on an annual basis:
(A) The number of purchasers currently enrolled in the exchange program;
(B) The number of accommodations and facilities that have current written affiliation agreements with the exchange program;
(C) The percentage of confirmed exchanges, which shall be the number of exchanges confirmed by the exchange program divided by the number of exchanges properly applied for, together with a complete and accurate statement of the criteria used to determine whether an exchange request was properly applied for;
(D) The number of time-share periods for which the exchange program has an outstanding obligation to provide an exchange to a purchaser who relinquished a time-share during the year in exchange for a time-share in any future year;
(E) The number of exchanges confirmed by the exchange program during the year; and
(18) A statement in bold-faced type to the effect that the percentage described in subdivision (b)(17)(C) of this section is a summary of the exchange requests entered with the exchange program in the period reported and that the percentage does not indicate a purchaser's probabilities of being confirmed to any specific choice or range of choices, since availability at individual locations may vary.
(c) Each exchange company offering an exchange program to purchasers in this state must include the statement set forth in subdivision (b)(18) of this section on all promotional brochures, pamphlets, advertisements, or other materials disseminated by the exchange company which also contain the percentage of confirmed exchanges described in subdivision (b)(17)(C) of this section.
(d) A developer may satisfy the requirements of this section by delivery to purchasers of materials furnished to the developer by the exchange program, provided the exchange program has certified to the developer that the materials satisfy the requirements of this section. A developer shall have no liability to any person if the materials furnished by the exchange program fail to comply with this section.