(765 ILCS 101/5‑15)
Sec. 5‑15. Developer registration requirements.
(a) Registration required. Any person who sells, offers to sell, or attempts to solicit prospective purchasers or to solicit any individual located in Illinois to purchase a timeshare interest, or any person who creates a timeshare plan with an accommodation in the State of Illinois, shall register as a developer with the Department and shall comply with the provisions of subsection (c) of this Section.
(b) Items to be registered. A developer shall be responsible for registering with the Department, on forms provided by the Department, the following:
(1) All timeshare plans which have accommodations
| located in Illinois or which are sold or offered for sale to any individual located in Illinois. | |
(2) All sales agents who sell or offer to sell any |
| timeshare interests in any timeshare plan offered by the developer to any individual located in Illinois. | |
(3) All acquisition agents who, by means of |
| inducement, promotion, or advertisement, attempt to encourage or procure prospective purchasers located in Illinois to attend a sales presentation for any timeshare plan offered by the developer. | |
(4) All managing entities who manage any timeshare |
| plan offered or sold by the developer to any individual located in Illinois, without limitation as to whether the location of the accommodation site managed is within Illinois. | |
(c) Escrow. The developer shall comply with the following escrow requirements:
(1) A developer of a timeshare plan shall deposit |
| into an escrow account in a federally insured depository 100% of all funds which are received during the purchaser's rescission period. The deposit of such funds shall be evidenced by an executed escrow agreement between the escrow agent and the developer, which shall include provisions that: | |
(A) funds may be disbursed to the developer by |
| the escrow agent from the escrow account only after expiration of the purchaser's rescission period and in accordance with the purchase contract, subject to paragraph (2) of this subsection; and | |
(B) if a purchaser properly cancels the |
| purchase contract pursuant to its terms, the funds shall be paid to the purchaser or paid to the developer if the purchaser's funds have been previously refunded by the developer. | |
(2) If a developer contracts to sell a timeshare |
| interest and the construction of any property in which the timeshare interest is located has not been completed, the developer, upon expiration of the rescission period, shall continue to maintain in an escrow account all funds received by or on behalf of the developer from the purchaser under his or her purchase contract. The Department shall establish, by rule, the types of documentation which shall be required for evidence of completion, including but not limited to a certificate of occupancy, a certificate of substantial completion, or an inspection by the Office of the State Fire Marshal or the State Fire Marshal's designee or an equivalent public safety inspection agency in the applicable jurisdiction. Funds shall be released from escrow as follows: | |
(A) If a purchaser properly cancels the |
| purchase contract pursuant to its terms, the funds shall be paid to the purchaser or paid to the developer if the purchaser's funds have been previously refunded by the developer. | |
(B) If a purchaser defaults in the performance |
| of the purchaser's obligations under the purchase contract, the funds shall be paid to the developer. | |
(C) If the funds of a purchaser have not been |
| previously disbursed in accordance with the provisions of this paragraph (2), they may be disbursed to the developer by the escrow agent upon the issuance of acceptable evidence of completion of construction as provided herein. | |
(3) In lieu of the provisions in paragraphs (1) and |
| (2), the Department may accept from the developer a surety bond, irrevocable letter of credit, or other financial assurance acceptable to the Department, as provided by rule. Any acceptable financial assurance must be in an amount equal to or in excess of the funds which would otherwise be placed in escrow, or in an amount equal to the cost to complete the incomplete property in which the timeshare interest is located. | |
(4) The developer shall provide escrow account |
| information to the Department and shall execute in writing an authorization consenting to an audit or examination of the account by the Department on forms provided by the Department. The developer shall comply with the reconciliation and records requirements established by rule by the Department. The developer shall make documents related to the escrow account or escrow obligation available to the Department upon the Department's request. The developer shall maintain any disputed funds in the escrow account until either: | |
(A) receipt of written direction agreed to by |
| signature of all parties; or | |
(B) deposit of the funds with a court of |
| competent jurisdiction in which a civil action regarding the funds has been filed. | |
(d) Comprehensive registration. In registering a timeshare plan, the developer shall be responsible for providing information on the following:
(1) The developer's legal name, any assumed names |
| used by the developer, principal office street address, mailing address, primary contact person, and telephone number; | |
(2) The name of the developer's authorized or |
| registered agent in the State of Illinois upon whom claims can be served or service of process be had, the agent's street address in Illinois, and telephone number; | |
(3) The name, street address, mailing address, |
| primary contact person, and telephone number of any timeshare plan being registered; | |
(4) The name, street address, mailing address and |
| telephone number of any sales agent and acquisition agent utilized by the developer, and any managing entity of the timeshare plan; | |
(5) A public offering statement which complies with |
| the requirements of Sections 5‑25; and | |
(6) Any other information regarding the developer, |
| timeshare plan, sales agents, acquisition agents, or managing entities as reasonably required by the Department and established by rule. | |
(e) Abbreviated registration. The Department may accept, as provided for by rule, an abbreviated registration application of a developer of a timeshare plan in which all accommodations are located outside of the State of Illinois. A developer of a timeshare plan with any accommodation located in the State of Illinois may not file an abbreviated filing, with the exception of a succeeding developer after a merger or acquisition when all of the developers' timeshare plans were registered in Illinois immediately preceding the merger or acquisition.
The developer shall provide a certificate of registration or other evidence of registration from the appropriate regulatory agency of any other jurisdiction within the United States in which some or all of such accommodations are located. The other jurisdiction must have disclosure requirements that are substantially equivalent to or greater than the information required to be disclosed to purchasers by the State of Illinois. A developer filing an abbreviated registration application shall provide the following:
(1) The developer's legal name, any assumed names |
| used by the developer, and the developer's principal office location, mailing address, primary contact person, and telephone number. | |
(2) The name, location, mailing address, primary |
| contact person, and telephone number of the timeshare plan. | |
(3) The name of the authorized agent or registered |
| agent in Illinois upon whom claims can be served or service of process can be had, and the address in Illinois of the authorized agent or registered agent. | |
(4) The names of any sales agent, acquisition |
| agent, and managing entity, and their principal office location, mailing address, and telephone number. | |
(5) The certificate of registration or other |
| evidence of registration from any jurisdiction in which the timeshare plan is approved or accepted. | |
(6) A declaration as to whether the timeshare plan |
| is a single‑site timeshare plan or a multi‑site timeshare plan and, if a multi‑site timeshare plan, whether it consists of specific timeshare interests or non‑specific timeshare interests. | |
(7) Disclosure of each jurisdiction in which the |
| developer has applied for registration of the timeshare plan, and whether the timeshare plan, its developer, or any of its acquisition agents, sales agents, or managing entities utilized were denied registration or were the subject of any disciplinary proceeding. | |
(8) Copies of any disclosure documents required to |
| be given to purchasers or required to be filed with the jurisdiction in which the timeshare plan is approved or accepted as may be requested by the Department. | |
(9) The appropriate fee.
(10) Such other information reasonably required by |
| the Department and established by rule. | |
(f) Preliminary permits. Notwithstanding anything in this Section to the contrary, the Department may grant a 6‑month preliminary permit, as established by rule, allowing the developer to begin offering and selling timeshare interests while the registration is in process. To obtain a preliminary permit, the developer shall do all of the following:
(1) (Blank).
(2) Submit an application in form and substance |
| satisfactory to the Department for registration, including all appropriate fees and exhibits required under this Article. | |
(3) Provide evidence acceptable to the Department |
| that all funds received by the developer will be placed into an independent escrow account with instructions that funds will not be released until a final registration has been granted. | |
(4) Give to each purchaser and potential purchaser a |
| copy of the proposed public offering statement that the developer has submitted to the Department with the initial application. | |
(5) Give to each purchaser the opportunity to cancel |
| the purchase contract in accordance with Section 10‑10. The purchaser shall have an additional opportunity to cancel upon the issuance of an approved registration if the Department determines that there is a substantial difference in the disclosures contained in the final public offering statement and those given to the purchaser in the proposed public offering statement. | |
(g) Alternative registration; letter of credit or other assurance; recovery.
(1) Notwithstanding anything in this Act to the |
| contrary, the Department may accept, as established by rule, a registration from a developer for a timeshare plan if the developer provides all of the following: | |
(A) (Blank).
(B) An irrevocable letter of credit or other |
| acceptable assurance, as established by rule, in an amount of $1,000,000, from which an Illinois purchaser aggrieved by any act, representation, transaction, or conduct of a duly registered developer or his or her acquisition agent, sales agent, managing entity, or employee, which violates any provision of this Act or the rules promulgated under this Act, or which constitutes embezzlement of money or property or results in money or property being unlawfully obtained from any person by false pretenses, artifice, trickery, or forgery or by reason of any fraud, misrepresentation, discrimination, or deceit by or on the part of any developer or agent or employee of the developer and which results in actual monetary loss as opposed to a loss in market value, may recover. | |
(C) The developer's legal name, any assumed |
| names used by the developer, and the developer's principal office location, mailing address, main contact person, and telephone number. | |
(D) The name, location, mailing address, main |
| contact person, and telephone number of the timeshare plan included in the filing. | |
(E) The name of the authorized agent or |
| registered agent in Illinois upon whom claims can be served or service of process can be had, and the address in Illinois of the authorized agent or registered agent. | |
(F) The names of any sales agent, acquisition |
| agent, and managing entity, and their principal office location, mailing address, and telephone number. | |
(G) A declaration as to whether the timeshare |
| plan is a single‑site timeshare plan or a multi‑site timeshare plan and, if a multi‑site timeshare plan, whether it consists of specific timeshare interests or non‑specific timeshare interests. | |
(H) Disclosure of each jurisdiction in which the |
| developer has applied for registration of the timeshare plan, and whether the timeshare plan, its developer, or any of its acquisition agents, sales agents, or managing entities utilized were denied registration or were the subject of any disciplinary proceeding. | |
(I) The required fee.
(J) Such other information reasonably required |
| by the Department and established by rule. | |
(2) Any letter of credit or other acceptable |
| assurance shall remain in effect with the Department for a period of 12 months after the date the developer does not renew or otherwise cancel his or her registration with the State of Illinois or 12 months after the Department revokes, suspends, or otherwise disciplines such developer or his or her registration, provided there is no pending litigation alleging a violation of any provision of this Act known by the Department and certified by the developer. | |
(3) The Department shall establish procedures, by |
| rule, to satisfy claims by any Illinois purchaser pursuant to this Section. | |
(4) The Department shall automatically suspend the |
| registration of any developer pursuant to Section 15‑25 of this Act in the event the Department authorizes or directs payment to an Illinois purchaser from the letter of credit or other acceptable assurance pursuant to this Section and as established by rule. | |
(h) A developer who registers a timeshare plan pursuant to this Act shall provide the purchaser with a public offering statement that complies with Section 5‑25 and any disclosures or other written information required by this Act.
(i) Nothing contained in this Section shall affect the Department's ability to initiate any disciplinary action against a developer in accordance with this Act.
(j) For purposes of this Section, "Illinois purchaser" means a person who, within the State of Illinois, is solicited, offered, or sold a timeshare interest in a timeshare plan registered pursuant to this Section.
(Source: P.A. 96‑738, eff. 8‑25‑09.) |