§ 93A-48. Exchange programs.
§ 93A‑48. Exchangeprograms.
(a) If a purchaser isoffered the opportunity to subscribe to any exchange program, the developershall, except as provided in subsection (b), deliver to the purchaser, prior tothe execution of (i) any contract between the purchaser and the exchangecompany, and (ii) the sales contract, at least the following informationregarding the exchange program:
(1) The name and addressof the exchange company;
(2) The names of allofficers, directors, and shareholders owning five percent (5%) or more of theoutstanding stock of the exchange company;
(3) Whether the exchangecompany or any of its officers or directors has any legal or beneficialinterest in any developer or managing agent for any time share projectparticipating in the exchange program and, if so, the name and location of thetime share project and the nature of the interest;
(4) Unless the exchangecompany is also the developer a statement that the purchaser's contract withthe exchange company is a contract separate and distinct from the salescontract;
(5) Whether thepurchaser's participation in the exchange program is dependent upon thecontinued affiliation of the time share project with the exchange program;
(6) Whether thepurchaser's membership or participation, or both, in the exchange program isvoluntary or mandatory;
(7) A complete andaccurate description of the terms and conditions of the purchaser's contractualrelationship with the exchange company and the procedure by which changesthereto may be made;
(8) A complete andaccurate description of the procedure to qualify for and effectuate exchanges;
(9) A complete andaccurate description of all limitations, restrictions, or priorities employedin the operation of the exchange program, including, but not limited to,limitations on exchanges based on seasonality, unit size, or levels ofoccupancy, expressed in boldfaced type, and, in the event that suchlimitations, restrictions, or priorities are not uniformly applied by theexchange program, a clear description of the manner in which they are applied;
(10) Whether exchanges arearranged on a space available basis and whether any guarantees of fulfillmentof specific requests for exchanges are made by the exchange program;
(11) Whether and underwhat circumstances an owner, in dealing with the exchange company, may lose theuse and occupancy of the owner's time share in any properly applied forexchange without being provided with substitute accommodations by the exchangecompany;
(12) The expenses, fees orrange of fees for participation by owners in the exchange program, a statementwhether any such fees may be altered by the exchange company, and thecircumstances under which alterations may be made;
(13) The name and addressof the site of each time share project or other property which is participatingin the exchange program;
(14) The number of unitsin each project or other property participating in the exchange program whichare available for occupancy and which qualify for participation in the exchangeprogram, expressed within the following numerical groupings, 1‑5, 6‑10,11‑20, 21‑50 and 51, and over;
(15) The number of ownerswith respect to each time share project or other property which are eligible toparticipate in the exchange program expressed within the following numericalgroupings, 1‑100, 101‑249, 250‑499, 500‑999, and 1,000and over, and a statement of the criteria used to determine those owners whoare currently eligible to participate in the exchange program;
(16) The disposition madeby the exchange company of time shares deposited with the exchange program byowners eligible to participate in the exchange program and not used by theexchange company in effecting exchanges;
(17) The followinginformation which, except as provided in subsection (b) below, shall beindependently audited by a certified public accountant in accordance with thestandards of the Accounting Standards Board of the American Institute ofCertified Public Accountants and reported for each year no later than July 1,of the succeeding year:
a. The number of ownersenrolled in the exchange program and such numbers shall disclose therelationship between the exchange company and owners as being either fee payingor gratuitous in nature;
b. The number of timeshare projects or other properties eligible to participate in the exchangeprogram categorized by those having a contractual relationship between thedeveloper or the association and the exchange company and those having solely acontractual relationship between the exchange company and owners directly;
c. The percentage ofconfirmed exchanges, which shall be the number of exchanges confirmed by theexchange company divided by the number of exchanges properly applied for,together with a complete and accurate statement of the criteria used todetermine whether an exchange requested was properly applied for;
d. The number of timeshares or other intervals for which the exchange company has an outstandingobligation to provide an exchange to an owner who relinquished a time share orinterval during the year in exchange for a time share or interval in any futureyear; and
e. The number ofexchanges confirmed by the exchange company during the year; and
(18) A statement inboldfaced type to the effect that the percentage described in sub‑subdivisionc. of subdivision (17) of this subsection is a summary of the exchange requestsentered with the exchange company in the period reported and that thepercentage does not indicate a purchaser's/owner's probabilities of beingconfirmed to any specific choice or range of choices, since availability atindividual locations may vary.
The purchaser shall certify inwriting to the receipt of the information required by this subsection and anyother information which the Commission may by rule require.
(b) The informationrequired by subdivisions (a)(2), (3), (13), (14), (15), and (17) shall beaccurate as of December 31 of the year preceding the year in which theinformation is delivered, except for information delivered within the first 180days of any calendar year which shall be accurate as of December 31 of the yeartwo years preceding the year in which the information is delivered to thepurchaser. The remaining information required by subsection (a) shall beaccurate as of a date which is no more than 30 days prior to the date on whichthe information is delivered to the purchaser.
(c) In the event anexchange company offers an exchange program directly to the purchaser or owner,the exchange company shall deliver to each purchaser or owner, concurrentlywith the offering and prior to the execution of any contract between thepurchaser or owner and the exchange company the information set forth insubsection (a) above. The requirements of this paragraph shall not apply to anyrenewal of a contract between an owner and an exchange company.
(d) All promotionalbrochures, pamphlets, advertisements, or other materials disseminated by theexchange company to purchasers in this State which contain the percentage ofconfirmed exchanges described in (a)(17)c. must include the statement set forthin (a)(18). (1983,c. 814, s. 1; 2001‑487, s. 23(k).)