CHAPTER 221. TEXAS TIMESHARE ACT
PROPERTY CODE
TITLE 12. MISCELLANEOUS SHARED REAL PROPERTY INTERESTS
CHAPTER 221. TEXAS TIMESHARE ACT
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 221.001. SHORT TITLE. This chapter shall be known and may
be cited as the Texas Timeshare Act.
Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,
1987. Renumbered from Sec. 201.001 by Acts 1989, 71st Leg., ch.
2, Sec. 13.03(b), eff. Aug. 28, 1989.
Sec. 221.002. DEFINITIONS. As used in this chapter:
(1) "Accommodation" means any apartment, condominium or
cooperative unit, hotel or motel room, cabin, lodge, or other
private or commercial structure that:
(A) is affixed to real property;
(B) is designed for occupancy or use by one or more individuals;
and
(C) is part of a timeshare plan.
(2) "Advertisement" means any written, oral, or electronic
communication that is directed to or targeted at individuals in
this state and contains a promotion, inducement, or offer to sell
a timeshare interest, including a promotion, inducement, or offer
to sell:
(A) contained in a brochure, pamphlet, or radio or television
transcript;
(B) communicated by electronic media or telephone; or
(C) solicited through direct mail.
(3) "Amenities" means all common areas and includes recreational
and maintenance facilities of the timeshare plan.
(4) "Assessment" means an amount assessed against or collected
from a purchaser by an association or its managing entity in a
fiscal year, regardless of the frequency with which the amount is
assessed or collected, to cover expenditures, charges, reserves,
or liabilities related to the operation of a timeshare plan or
timeshare properties managed by the same managing entity.
(5) "Association" means a council or association composed of all
persons who have purchased a timeshare interest.
(6) "Commission" means the Texas Real Estate Commission.
(7) "Component site" means a specific geographic location where
accommodations that are part of a multisite timeshare plan are
located. Separate phases of a single timeshare property in a
specific geographic location and under common management are a
single component site.
(8) "Developer" means:
(A) any person, excluding a sales agent, who creates a timeshare
plan or is in the business of selling timeshare interests or
employs a sales agent to sell timeshare interests; or
(B) any person who succeeds in the developer's interest by sale,
lease, assignment, mortgage, or other transfer if the person:
(i) offers at least 12 timeshare interests in a particular
timeshare plan; and
(ii) is in the business of selling timeshare interests or
employs a sales agent to sell timeshare interests.
(9) "Dispose" or "disposition" means a voluntary transfer of any
legal or equitable timeshare interest but does not include the
transfer or release of a real estate lien or of a security
interest.
(10) "Escrow agent" means a bonded escrow company, a financial
institution whose accounts are insured by a governmental agency
or instrumentality, or an attorney or title insurance agent
licensed in this state who is responsible for the receipt and
disbursement of funds in accordance with this chapter.
(11) "Exchange company" means any person who owns or operates an
exchange program.
(12) "Exchange disclosure statement" means a written statement
that includes the information required by Section 221.033.
(13) "Exchange program" means any method, arrangement, or
procedure for the voluntary exchange of timeshare interests among
purchasers or owners.
(14) "Incidental use right" means the right to use
accommodations and amenities at one or more timeshare properties
that is not guaranteed and is administered by the managing entity
of the timeshare properties that makes vacant accommodations at
the timeshare properties available to owners of timeshare
interests in the timeshare properties.
(15) "Managing entity" means the person responsible for
operating and maintaining a timeshare property.
(16) "Multisite timeshare plan" means a plan in which a
timeshare purchaser has:
(A) a specific timeshare interest, which is the right to use and
occupy accommodations at a specific timeshare property and the
right to use and occupy accommodations at one or more other
component sites created by or acquired solely through the
reservation system of the timeshare plan; or
(B) a nonspecific timeshare interest, which is the right to use
and occupy accommodations at more than one component site created
by or acquired solely through the reservation system of the
timeshare plan but which does not include a right to use and
occupy a particular accommodation.
(17) "Offering" or "offer" means any advertisement, inducement,
or solicitation and includes any attempt to encourage a person to
purchase a timeshare interest other than as a security for an
obligation.
(18) "Project instrument" means a timeshare instrument or one or
more recordable documents, by whatever name denominated, applying
to the whole of a timeshare project and containing restrictions
or covenants regulating the use, occupancy, or disposition of
units in a project, including a declaration for a condominium,
association articles of incorporation, association bylaws, and
rules for a condominium in which a timeshare plan is created.
(19) "Promotion" means any program, activity, contest, or gift,
prize, or other item of value used to induce any person to attend
a timeshare sales presentation.
(20) "Purchaser" means any person, other than a developer, who
by means of a voluntary transfer acquires a legal or equitable
interest in a timeshare interest other than as a security for an
obligation.
(21) "Reservation system" means the method, arrangement, or
procedure by which a purchaser, in order to reserve the use and
occupancy of an accommodation of a multisite timeshare plan for
one or more timeshare periods, is required to compete with other
purchasers in the same multisite timeshare plan, regardless of
whether the reservation system is operated and maintained by the
multisite timeshare plan, a managing entity, an exchange company,
or any other person. If a purchaser is required to use an
exchange program as the purchaser's principal means of obtaining
the right to use and occupy the accommodations and facilities of
the plan, the arrangement is considered a reservation system. If
the exchange company uses a mechanism to exchange timeshare
periods among members of the exchange program, the use of the
mechanism is not considered a reservation system of the multisite
timeshare plan.
(22) "Single-site timeshare plan" means a timeshare plan in
which a timeshare purchaser's right to use and occupy
accommodations is limited to a single timeshare property. A
single-site timeshare plan that includes an incidental use right
or a program under which the owner of a timeshare interest at a
specific timeshare property may exchange a timeshare period for
another timeshare period at the same or another timeshare
property under common management does not transform the
single-site timeshare plan into a multisite timeshare plan.
(23) "Timeshare disclosure statement" means a written statement
that includes the information required by Section 221.032.
(24) "Timeshare estate" means an arrangement under which the
purchaser receives a right to occupy a timeshare property and an
estate interest in the real property.
(25) "Timeshare interest" means a timeshare estate or timeshare
use.
(26) "Timeshare instrument" means a master deed, master lease,
declaration, or any other instrument used in the creation of a
timeshare plan.
(27) "Timeshare period" means the period within which the
purchaser of a timeshare interest is entitled to the exclusive
possession, occupancy, and use of an accommodation.
(28) "Timeshare plan" means any arrangement, plan, scheme, or
similar method, excluding an exchange program but including a
membership agreement, sale, lease, deed, license, or right-to-use
agreement, by which a purchaser, in exchange for consideration,
receives an ownership right in or the right to use accommodations
for a period of time less than a year during a given year, but
not necessarily consecutive years.
(29) "Timeshare property" means:
(A) one or more accommodations and any related amenities subject
to the same timeshare instrument; and
(B) any other property or property rights appurtenant to the
accommodations and amenities.
(30) "Timeshare use" means any arrangement under which the
purchaser receives a right to occupy a timeshare property, but
under which the purchaser does not receive an estate interest in
the timeshare property.
Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,
1987. Renumbered from Sec. 201.002 by Acts 1989, 71st Leg., ch.
2, Sec. 13.03(b), eff. Aug. 28, 1989. Amended by Acts 1993, 73rd
Leg., ch. 443, Sec. 1, eff. Sept. 1, 1993.
Amended by:
Acts 2005, 79th Leg., Ch.
539, Sec. 1, eff. January 15, 2006.
Sec. 221.003. APPLICABILITY. (a) This chapter applies to all
timeshare properties that are located in this state or offered
for sale in this state.
(b) Timeshare properties located outside this state are subject
only to Subchapters C through H.
(c) This chapter applies to any timeshare property in existence
on or after August 26, 1985, but does not affect a timeshare
contract in existence before that date.
(d) A timeshare property subject to this chapter is not subject
to Chapter 209 unless an individual timeshare owner continuously
occupies a single timeshare property as the owner's primary
residence 12 months of the year.
(e) If a person with a specific program that might otherwise be
subject to this chapter received from the commission, before
January 31, 2005, a written determination that the program is
exempt from this chapter as the chapter existed when the
determination was made, the program remains exempt from this
chapter if:
(1) the program does not vary materially from the terms on which
the exemption was granted; or
(2) the program varies materially from the terms on which the
exemption was granted, but the person receives from the
commission a new written determination that the program is exempt
from this chapter.
Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,
1987. Renumbered from Sec. 201.003 by Acts 1989, 71st Leg., ch.
2, Sec. 13.03(b), eff. Aug. 28, 1989.
Amended by:
Acts 2005, 79th Leg., Ch.
539, Sec. 2, eff. January 15, 2006.
SUBCHAPTER B. CREATION OF TIMESHARE REGIME
Sec. 221.011. DECLARATION. (a) The developer of a timeshare
plan any part of which is located in this state must record the
timeshare instrument in this state. When a person expressly
declares an intent to subject the property to a timeshare plan
through the recordation of a timeshare instrument that sets forth
the information provided in Subsections (b) and (c), that
property shall be established thenceforth as a timeshare plan.
(b) The declaration made in a timeshare instrument recorded
under this section must include:
(1) a legal description of the timeshare property, including a
ground plan indicating the location of each existing or proposed
building included in the timeshare plan;
(2) a description of each existing or proposed accommodation,
including the location and square footage of each unit and an
interior floor plan of each existing or proposed building;
(3) a description of any amenities furnished or to be furnished
to the purchaser;
(4) a statement of the fractional or percentage part that each
timeshare interest bears to the entire timeshare plan;
(5) if applicable, a statement that the timeshare property is
part of a multisite timeshare plan; and
(6) any additional provisions that are consistent with this
section.
(c) Any timeshare interest created under this section is subject
to Section 1101.002(5), Occupations Code, but Sections
1101.351(a)(1) and (c), Occupations Code, do not apply to the
acts of an exchange company in exchanging timeshare periods.
Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,
1987. Renumbered from Sec. 201.011 by Acts 1989, 71st Leg., ch.
2, Sec. 13.03(b), eff. Aug. 28, 1989. Amended by Acts 1993, 73rd
Leg., ch. 443, Sec. 2, eff. Sept. 1, 1993; Acts 2003, 78th Leg.,
ch. 1276, Sec. 14A.809, eff. Sept. 1, 2003.
Amended by:
Acts 2005, 79th Leg., Ch.
539, Sec. 3, eff. January 15, 2006.
Sec. 221.012. CONVEYANCE AND ENCUMBRANCE. Once the property is
established as a timeshare plan, each timeshare interest may be
individually conveyed or encumbered and shall be entirely
independent of all other timeshare interests in the same
timeshare property. Any title or interest in a timeshare
interest may be recorded.
Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,
1987. Renumbered from Sec. 201.012 by Acts 1989, 71st Leg., ch.
2, Sec. 13.03(b), eff. Aug. 28, 1989.
Amended by:
Acts 2005, 79th Leg., Ch.
539, Sec. 3, eff. January 15, 2006.
Sec. 221.013. COMMON OWNERSHIP. (a) Any timeshare interest may
be jointly or commonly owned by more than one person.
(b) A timeshare estate may be jointly or commonly owned in the
same manner as any other real property interest in this state.
Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,
1987. Renumbered from Sec. 201.013 by Acts 1989, 71st Leg., ch.
2, Sec. 13.03(b) eff. Aug. 28, 1989.
Amended by:
Acts 2005, 79th Leg., Ch.
539, Sec. 3, eff. January 15, 2006.
Sec. 221.014. PARTITION. An action for partition of a timeshare
interest may not be maintained during the term of a timeshare
plan.
Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,
1987. Renumbered from Sec. 201.014 by Acts 1989, 71st Leg., ch.
2, Sec. 13.03(b), eff. Aug. 28, 1989.
Amended by:
Acts 2005, 79th Leg., Ch.
539, Sec. 3, eff. January 15, 2006.
SUBCHAPTER C. REGISTRATION
Sec. 221.021. REGISTRATION REQUIRED. (a) Except as provided by
Subsection (b) or (d) of this section or another provision of
this chapter, a person may not offer or dispose of a timeshare
interest unless the timeshare plan is registered with the
commission.
(b) Before a registration application for a timeshare plan is
submitted or completed, a developer or any person acting on the
developer's behalf may accept a reservation and a deposit from a
prospective purchaser if the deposit is placed in a segregated
escrow account with an independent escrow agent and if the
deposit is fully refundable at any time at the request of the
purchaser. The deposit may not be forfeited unless the purchaser
affirmatively creates a binding obligation by a subsequent
written instrument.
(c) A developer or any person acting on the developer's behalf
may not offer or dispose of a timeshare interest during any
period within which there is in effect an order by the commission
or by any court of competent jurisdiction revoking or suspending
the registration of the timeshare plan of which such timeshare
interest is a part.
(d) At the developer's request, the commission may authorize the
developer to conduct presales before a timeshare plan is
registered if the registration application is administratively
complete, as determined by the commission or as established by
commission rule. The authorization for presales permits the
developer to offer and dispose of timeshare interests during the
period the application is in process. To obtain a presales
authorization, the developer must:
(1) submit a written request to the commission for an
authorization to conduct presales;
(2) submit an administratively complete application for
registration, including appropriate fees and exhibits required by
the commission; and
(3) provide evidence acceptable to the commission that all funds
received by the developer will be placed with an escrow agent
with instructions requiring the funds to be retained until a
registration application is complete as determined by the
commission.
(e) During the presales authorization period, the developer
must:
(1) provide to each purchaser and prospective purchaser a copy
of the proposed timeshare disclosure statement that the developer
submitted to the commission with the initial registration
application; and
(2) offer each purchaser the opportunity to cancel the purchase
contract as provided by Section 221.041.
(f) After the final timeshare disclosure statement is approved
by the commission, the developer must:
(1) give each purchaser and prospective purchaser a copy of the
final timeshare disclosure statement; and
(2) if the commission determines that a materially adverse
change exists between the disclosures contained in the proposed
timeshare disclosure statement and the final timeshare disclosure
statement, provide the purchaser a second opportunity to cancel
the purchase contract as provided by Section 221.041.
(g) The requirements of this subchapter remain in effect during
the period the developer offers or disposes of timeshare
interests of the timeshare plan registered with the commission.
The developer must notify the commission in writing when all of
the timeshare interests of a timeshare plan have been disposed
of.
Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,
1987. Renumbered from Sec. 201.021 by Acts 1989, 71st Leg., ch.
2, Sec. 13.03(b), eff. Aug. 28, 1989.
Amended by:
Acts 2005, 79th Leg., Ch.
539, Sec. 4, eff. January 15, 2006.
Sec. 221.022. APPLICATION FOR REGISTRATION. (a) An application
for registration filed under this section must include a
timeshare disclosure statement and any required exchange
disclosure statement required by Section 221.033, recorded copies
of all timeshare instruments, and other information as may be
required by the commission. If the timeshare property is a newly
developed property, recorded copies of the timeshare instruments
must be provided promptly after recorded copies are available
from the entity with which the instruments are recorded. If
existing or proposed accommodations are in a condominium, an
applicant who complies with this section is not required to
prepare or deliver a condominium information statement or a
resale certificate as described by Chapter 82.
(b) If existing or proposed accommodations are in a condominium
or similar development, the application for registration must
contain the project instruments of that development and
affirmatively indicate that the creation and disposition of
timeshare interests are not prohibited by those instruments. If
the project instruments do not expressly authorize the creation
and disposition of timeshare interests, the application must
contain evidence that existing owners of the condominium
development were provided written notice, at least 60 days before
the application for registration, that timeshare interests would
be created and sold. If the project instruments prohibit the
creation or disposition of timeshare interests, the application
must contain a certification by the authorized representative of
all existing owners that the project instruments have been
properly amended to permit that creation and disposition.
(c) The commission may accept an abbreviated registration
application from a developer of a timeshare plan for any
accommodations in the plan located outside this state. The
developer must file written notice of the intent to register
under this section not later than the 15th day before the date
the abbreviated application is submitted.
(d) A developer of a timeshare plan with any accommodation
located in this state may not file an abbreviated application
unless:
(1) the developer is a:
(A) successor in interest after a merger or acquisition; or
(B) joint venture in which the previous developer or its
affiliate is a partner or a member; and
(2) the previous developer registered the timeshare plan in this
state preceding the merger, acquisition, or joint venture.
(e) A developer filing an abbreviated application must provide:
(1) the legal name and any assumed names and the principal
office location, mailing address, telephone number, and primary
contact person of the developer;
(2) the name, location, mailing address, telephone number, and
primary contact person of the timeshare plan;
(3) the name and address of the developer's authorized or
registered agent for service of process in this state;
(4) the name, primary office location, mailing address, and
telephone number of the managing entity of the timeshare plan;
(5) the certificate or other evidence of registration from any
jurisdiction in which the timeshare plan is approved or accepted;
(6) the certificate or other evidence of registration from the
appropriate regulatory agency of any other jurisdiction in the
United States in which some or all of the accommodations are
located;
(7) a declaration stating whether the timeshare plan is a
single-site timeshare plan or a multisite timeshare plan;
(8) if the plan is a multisite timeshare plan, a declaration
stating whether the plan consists of specific timeshare interests
or nonspecific timeshare interests;
(9) a disclosure of each jurisdiction in which the developer has
applied for registration of the timeshare plan and whether the
timeshare plan, the developer, or the managing entity used were
denied registration or, during the five-year period before the
registration application date, were the subject of a final
adverse disposition in a disciplinary proceeding;
(10) if requested by the commission, copies of any disclosure
documents required to be provided to purchasers or filed with any
jurisdiction that approved or accepted the timeshare plan;
(11) the appropriate filing fee; and
(12) any other information reasonably requested by the
commission or required by commission rule.
(f) A foreign jurisdiction providing evidence of registration as
provided by Subsection (e)(6) must have registration and
disclosure requirements that are substantially similar to or
stricter than the requirements of this chapter.
(g) The commission shall investigate all matters relating to the
application and may in its discretion require a personal
inspection of the proposed timeshare property by any persons
designated by it. All direct expenses incurred by the commission
in inspecting the property shall be borne by the applicant. The
commission may require the applicant to pay an advance deposit
sufficient to cover those expenses.
Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,
1987. Renumbered from Sec. 201.022 by Acts 1989, 71st Leg., ch.
2, Sec. 13.03(b), eff. Aug. 28, 1989.
Amended by:
Acts 2005, 79th Leg., Ch.
539, Sec. 4, eff. January 15, 2006.
Acts 2009, 81st Leg., R.S., Ch.
279, Sec. 1, eff. September 1, 2009.
Sec. 221.023. AMENDMENT OF REGISTRATION. The developer shall
file amendments to the registration reporting to the commission
any materially adverse change in any document contained in the
registration not later than the 30th day after the date the
developer knows or reasonably should know of the change. The
developer may continue to offer and dispose of timeshare
interests under the existing registration pending review of the
amendments by the commission if the materially adverse change is
disclosed to prospective purchasers.
Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,
1987. Renumbered from Sec. 201.023 by Acts 1989, 71st Leg., ch.
2, Sec. 13.03(b), eff. Aug. 28, 1989.
Amended by:
Acts 2005, 79th Leg., Ch.
539, Sec. 4, eff. January 15, 2006.
Sec. 221.024. POWERS OF COMMISSION. (a) The commission may
prescribe and publish forms and adopt rules necessary to carry
out the provisions of this chapter and may suspend or revoke the
registration of any developer, place on probation the
registration of a developer that has been suspended or revoked,
reprimand a developer, impose an administrative penalty of not
more than $10,000, or take any other disciplinary action
authorized by this chapter if, after notice and hearing, the
commission determines that a developer has materially violated
this chapter, the Deceptive Trade Practices-Consumer Protection
Act (Subchapter E, Chapter 17, Business & Commerce Code), or
the Contest and Gift Giveaway Act (Chapter 621, Business &
Commerce Code).
(b) The commission:
(1) shall authorize the State Office of Administrative Hearings
to conduct hearings in contested cases; and
(2) may establish reasonable fees for forms and documents it
provides to the public and for the filing or registration of
documents required by this chapter.
(c) If the commission initiates a disciplinary proceeding under
this chapter, the person is entitled to a hearing before the
State Office of Administrative Hearings. The commission by rule
shall adopt procedures to permit an appeal to the commission from
a determination made by the State Office of Administrative
Hearings in a disciplinary action.
(d) The commission shall set the time and place of the hearing.
(e) A disciplinary procedure under this chapter is governed by
the contested case procedures of Chapter 2001, Government Code.
(f) The commission may file a suit in a district court of Travis
County to prevent a violation of this chapter or for any other
appropriate relief.
(g) Judicial review of a commission order imposing an
administrative penalty is:
(1) instituted by filing a petition as provided by Subchapter G,
Chapter 2001, Government Code; and
(2) by trial de novo.
Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,
1987. Renumbered from Sec. 201.024 by Acts 1989, 71st Leg., ch.
2, Sec. 13.03(b), eff. Aug. 28, 1989. Amended by Acts 1989, 71st
Leg., ch. 381, Sec. 1, eff. June 14, 1989; Acts 1999, 76th Leg.,
ch. 62, Sec. 7.87, eff. Sept. 1, 1999.
Amended by:
Acts 2005, 79th Leg., Ch.
539, Sec. 4, eff. January 15, 2006.
Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 2.34, eff. April 1, 2009.
Acts 2009, 81st Leg., R.S., Ch.
23, Sec. 8, eff. May 12, 2009.
Sec. 221.025. EFFECT OF REGISTRATION ON OTHER LAWS: EXEMPTION
FROM CERTAIN LAWS. (a) A developer's compliance with this
chapter exempts the developer's offer and disposition of
timeshare interests subject to this chapter from securities and
dealer registration under The Securities Act (Article 581-1 et
seq., Vernon's Texas Civil Statutes).
(b) A timeshare plan created as a condominium regime before
January 1, 1994, that complies with this chapter is exempt from
the requirements of Section 81.112 relating to club membership.
(c) A timeshare plan subject to Chapter 82 that complies with
this chapter is exempt from the requirements of Section 82.0675
relating to club membership.
(d) A developer's compliance with this chapter as to any
timeshare plan exempts any company, as defined by Chapter 181,
Finance Code (Texas Trust Company Act), that holds title to the
timeshare interests in the timeshare plan from compliance with
the Texas Trust Company Act as to the company's activities
relating to the holding of that title.
Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,
1987. Renumbered from Sec. 201.025 by Acts 1989, 71st Leg., ch.
2, Sec. 13.03(b), eff. Aug. 28, 1989.
Amended by:
Acts 2005, 79th Leg., Ch.
539, Sec. 4, eff. January 15, 2006.
Sec. 221.026. ISSUANCE AND RENEWAL OF REGISTRATION. (a) The
commission by rule shall adopt requirements for the issuance and
renewal of a developer's registration under this chapter,
including:
(1) the form required for application for registration or a
renewal of registration; and
(2) any supporting documentation required for registration or
renewal of registration.
(b) The commission shall issue or renew a registration under
this chapter for a period not to exceed 24 months.
(c) The commission may assess and collect a fee for the issuance
or renewal of a registration under this chapter.
(d) The commission may assess and collect a late fee if the
commission has not received the fee or any supporting
documentation required before the 61st day after the date a
registration is issued or renewed under this section.
(e) Failure to pay a renewal fee or late fee is a violation of
this chapter.
Added by Acts 2005, 79th Leg., Ch.
539, Sec. 4, eff. January 15, 2006.
Sec. 221.027. TEMPORARY SUSPENSION. (a) The presiding officer
of the commission shall appoint a disciplinary panel consisting
of three commission members to determine whether the registration
for a timeshare plan under this chapter should be temporarily
suspended.
(b) If the disciplinary panel determines from the information
presented to the panel that a timeshare plan registered under
this chapter would, by the continued disposition of the timeshare
property, constitute a continuing threat to the public welfare,
the panel shall temporarily suspend the registration of the
timeshare plan.
(c) A registration may be suspended under this section without
notice or hearing on the complaint if:
(1) institution of proceedings for a hearing before the State
Office of Administrative Hearings is initiated simultaneously
with the temporary suspension; and
(2) a hearing is held under Chapter 2001, Government Code, and
this chapter as soon as possible.
(d) Notwithstanding Chapter 551, Government Code, the
disciplinary panel may hold a meeting by telephone conference
call if immediate action is required and convening the panel at
one location is inconvenient for any member of the panel.
Added by Acts 2007, 80th Leg., R.S., Ch.
1411, Sec. 58, eff. September 1, 2007.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
23, Sec. 9, eff. May 12, 2009.
SUBCHAPTER D. DISCLOSURE
Sec. 221.031. ADVERTISEMENTS AND PROMOTIONS. (a) At any time,
the commission may request a developer to file for review by the
commission any advertisement used in this state by the developer
in connection with offering a timeshare interest. The developer
shall provide the advertisement not later than the 15th day after
the date the commission makes the request. If the commission
determines that the advertisement violates this chapter or
Chapter 621, Business & Commerce Code, the commission shall
notify the developer in writing, stating the specific grounds for
the commission's determination not later than the 15th day after
the date the commission makes its determination. The commission
may grant the developer provisional approval for the
advertisement if the developer agrees to correct the deficiencies
identified by the commission. A developer, on its own
initiative, may submit any proposed advertisement to the
commission for review and approval by the commission.
(b) Any advertisement that contains a promotion in connection
with the offering of a timeshare interest must comply with
Chapter 621, Business & Commerce Code.
(c) As provided by Subsections (d) and (e), an advertisement
that contains a promotion in connection with the offering of a
timeshare interest must include, in addition to any disclosures
required under Chapter 621, Business & Commerce Code, the
following:
(1) a statement to the effect that the promotion is intended to
solicit purchasers of timeshare interests;
(2) if applicable, a statement to the effect that any person
whose name is obtained during the promotion may be solicited to
purchase a timeshare interest;
(3) the full name of the developer of the timeshare property;
and
(4) if applicable, the full name and address of any marketing
company involved in the promotion of the timeshare property,
excluding the developer or an affiliate or subsidiary of the
developer.
(d) An advertisement containing the disclosures required by
Chapter 621, Business & Commerce Code, and Subsection (c)
must be provided in writing or electronically:
(1) at least once before a scheduled sales presentation; and
(2) in a reasonable period before the scheduled sales
presentation to ensure that the recipient receives the
disclosures before leaving to attend the sales presentation.
(e) The developer is not required to provide the disclosures
required by this section in every advertisement or other written,
oral, or electronic communication provided or made to a recipient
before a scheduled sales presentation.
Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,
1987. Renumbered from Sec. 201.031 by Acts 1989, 71st Leg., ch.
2, Sec. 13.03(b), eff. Aug. 28, 1989. Amended by Acts 1989, 71st
Leg., ch. 381, Sec. 2, eff. June 14, 1989.
Amended by:
Acts 2005, 79th Leg., Ch.
539, Sec. 5, eff. January 15, 2006.
Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 2.35, eff. April 1, 2009.
Sec. 221.032. TIMESHARE DISCLOSURE STATEMENT. (a) Before the
signing of any agreement to acquire a timeshare interest, the
developer shall provide a timeshare disclosure statement to the
prospective purchaser and shall obtain from the purchaser a
written acknowledgement of receipt of the timeshare disclosure
statement.
(b) The timeshare disclosure statement for a single-site
timeshare plan or a multisite timeshare plan that includes a
specific timeshare interest must include:
(1) the type of timeshare plan offered and the name and address
of:
(A) the developer; and
(B) the single site or specific site offered for the multisite
timeshare plan;
(2) a description of the duration and operation of the timeshare
plan;
(3) a description of the existing or proposed accommodations,
including the type and number of timeshare interests in the
accommodations expressed in periods of seven-day use availability
or other time increment applicable to the timeshare plan. The
description of each type of accommodation included in the
timeshare plan shall be categorized by the number of bedrooms,
the number of bathrooms, and sleeping capacity, and shall include
a statement indicating whether the accommodation contains a full
kitchen, which means a kitchen that has a minimum of a
dishwasher, range, sink, oven, and refrigerator. If the
accommodations are proposed or incomplete, a schedule for
commencement, completion, and availability of the accommodations
shall be provided;
(4) a description of any existing or proposed amenities of the
timeshare plan and, if the amenities are proposed or incomplete,
a schedule for commencement, completion, and availability of the
amenities;
(5) the extent to which financial arrangements have been
provided for the completion of all promised accommodations and
amenities that are committed to be built;
(6) a description of the method and timing for performing
maintenance of the accommodations;
(7) a statement indicating that, on an annual basis, the sum of
the nights that purchasers are entitled to use the accommodations
does not exceed the number of nights the accommodations are
available for use by the purchasers;
(8) a description of the method by which purchasers' use of the
accommodations is scheduled;
(9) a statement that an association exists or is expected to be
created or that such an association does not exist and is not
expected to be created and, if such an association exists or is
reasonably contemplated, a description of its powers and
responsibilities;
(10) relating to the single-site timeshare plan or the specific
timeshare interest of a multisite timeshare plan, copies of the
following documents, if applicable, including any amendments to
the documents, unless separately provided to the purchaser
simultaneously with the timeshare disclosure statement:
(A) the declaration;
(B) the association articles of incorporation;
(C) the association bylaws;
(D) the association rules; and
(E) any lease or contract, excluding the purchase contract and
other loan documents required to be signed by the purchaser at
closing;
(11) the name and principal address of the managing entity and a
description of the procedures, if any, for altering the powers
and responsibilities of the managing entity and for removing or
replacing it;
(12) the current annual budget, if available, or the projected
annual budget for the timeshare plan or timeshare properties
managed by the same managing entity if assessments are deposited
in a common account. The budget must include:
(A) a statement of the amount reserved or budgeted for repairs,
replacements, and refurbishment;
(B) the projected common expense liability, if any, by category
of expenditure for the timeshare plan or timeshare properties
managed by the same managing entity; and
(C) the assumptions on which the operating budget is based;
(13) the projected assessments and a description of the method
for calculating and apportioning those assessments among
purchasers;
(14) any initial fee or special fee due from the purchaser at
closing, together with a description of the purpose and method of
calculating the fee;
(15) a description of any lien, defect, or encumbrance on or
affecting title to the timeshare interest and, if applicable, a
copy of each written warranty provided by the developer;
(16) a description of any bankruptcy that is pending or that has
occurred within the past five years, pending civil or criminal
suit, adjudication, or disciplinary actions material to the
timeshare plan of which the developer has knowledge;
(17) a description of any financing offered by or available
through the developer;
(18) any current or anticipated fees or charges to be paid by
timeshare purchasers for the use of any accommodations or
amenities related to the timeshare plan, and a statement that the
fees or charges are subject to change;
(19) a description and amount of insurance coverage provided for
the protection of the purchaser;
(20) the extent to which a timeshare interest may become subject
to a tax lien or other lien arising out of claims against
purchasers of different timeshare interests;
(21) a description of those matters required by Section 221.041;
(22) a statement disclosing any right of first refusal or other
restraint on the transfer of all or any portion of a timeshare
interest;
(23) a statement disclosing that any deposit made in connection
with the purchase of a timeshare interest must be held by an
escrow agent until expiration of any right to cancel the contract
and that any deposit must be returned to the purchaser if the
purchaser elects to exercise the right of cancellation; or, if
the commission accepts from the developer a surety bond,
irrevocable letter of credit, or other form of financial
assurance instead of an escrow deposit, a statement disclosing
that the developer has provided a surety bond, irrevocable letter
of credit, or other form of financial assurance in an amount
equal to or in excess of the funds that would otherwise be held
by an escrow agent and that the deposit must be returned if the
purchaser elects to exercise the right of cancellation;
(24) if applicable, a statement that the assessments collected
from the purchasers may be placed in a common account with the
assessments collected from the purchasers of other timeshare
properties managed by the same managing entity;
(25) if the timeshare plan provides purchasers with the
opportunity to participate in an exchange program, a description
of the name and address of the exchange company and the method by
which a purchaser accesses the exchange program; and
(26) any other information the commission determines is
necessary to protect prospective purchasers or to implement the
purpose of this chapter.
(c) A developer who offers a specific timeshare interest in a
multisite timeshare plan also must fully disclose the following
information in written, graphic, or tabular form:
(1) a description of each component site, including the name and
address of each component site;
(2) a description of each type of accommodation in each
component site, categorized by the number of bedrooms, the number
of bathrooms, and sleeping capacity, and a statement indicating
whether the accommodation contains a full kitchen, which means a
kitchen that has a minimum of a dishwasher, range, sink, oven,
and refrigerator;
(3) a description of the amenities at each component site
available for use by the purchasers;
(4) a description of the reservation system, which must include:
(A) the entity responsible for operating the reservation system,
its relationship to the developer, and the duration of any
agreement for operation of the reservation system;
(B) a summary or the rules governing access to and use of the
reservation system; and
(C) the existence of and explanation regarding any priority
reservation features that affect a purchaser's ability to make
reservations for the use of a given accommodation on a
first-come, first-served basis;
(5) the name and principal address of the managing entity for
the multisite timeshare plan and a description of the procedures,
if any, for altering the powers and responsibilities of the
managing entity and for removing or replacing it;
(6) a description of any right to make additions to,
substitutions in, or deletions from accommodations, amenities, or
component sites, and a description of the basis on which
accommodations, amenities, or component sites may be added to,
substituted in, or deleted from the multisite timeshare plan;
(7) a description of the purchaser's liability for any fees
associated with the multisite timeshare plan;
(8) the location of each component site of the multisite
timeshare plan, the historical occupancy of each component site
for the prior 12-month period, if the component site was part of
the multisite timeshare plan during such 12-month time period, as
well as any periodic adjustment or amendment to the reservation
system that may be needed in order to respond to actual purchaser
use patterns and changes in purchaser use demand for the
accommodations existing at the time within the multisite
timeshare plan; and
(9) any other information the commission determines is necessary
to protect prospective purchasers or to implement the purpose of
this chapter.
(d) A developer who offers a nonspecific timeshare interest in a
multisite timeshare plan must disclose the following information
in written, graphic, or tabular form:
(1) the name and address of the developer;
(2) a description of the type of interest and the usage rights
the purchaser will receive;
(3) a description of the duration and operation of the timeshare
plan;
(4) a description of the type of insurance coverage provided for
each component site;
(5) an explanation of who holds title to the accommodations of
each component site;
(6) a description of each component site, including the name and
address of each component site;
(7) a description of the existing or proposed accommodations,
expressed in periods of seven-day use availability or any other
time increment applicable to the timeshare plan. The description
of each type of accommodation included in the timeshare plan
shall be categorized by the number of bedrooms, the number of
bathrooms, and sleeping capacity, and shall include a statement
indicating whether the accommodation contains a full kitchen,
which means a kitchen that has a minimum of a dishwasher, range,
sink, oven, and refrigerator. If the accommodations are proposed
or incomplete, a schedule for commencement, completion, and
availability of the accommodations shall be provided;
(8) a statement that an association exists or is expected to be
created or that such an association does not exist and is not
expected to be created and, if such an association exists or is
reasonably contemplated, a description of its powers and
responsibilities;
(9) if applicable, copies of the following documents applicable
to the multisite timeshare plan, including any amendments to the
documents, unless separately provided to the purchaser
simultaneously with the timeshare disclosure statement:
(A) the declaration;
(B) the association articles of incorporation;
(C) the association bylaws;
(D) the association rules; and
(E) any lease or contract, excluding the purchase contract and
other loan documents required to be signed by the purchaser at
closing;
(10) a description of the method and timing for performing
maintenance of the accommodations;
(11) a statement indicating that, on an annual basis, the sum of
the nights that purchasers are entitled to use the accommodations
does not exceed the number of nights the accommodations are
available for use by the purchasers;
(12) a description of each type of accommodation included in the
timeshare plan, categorized by the number of bedrooms, the number
of bathrooms, and sleeping capacity, and a statement indicating
whether the accommodation contains a full kitchen, which means a
kitchen that has a minimum of a dishwasher, range, sink, oven,
and refrigerator;
(13) a description of amenities available for use by the
purchaser at each component site;
(14) the location of each component site of the multisite
timeshare plan, the historical occupancy of each component site
for the prior 12-month period, if the component site was part of
the multisite timeshare plan during such 12-month time period, as
well as any periodic adjustment or amendment to the reservation
system that may be needed in order to respond to actual purchaser
use patterns and changes in purchaser use demand for the
accommodations existing at the time within the multisite
timeshare plan;
(15) a description of the right to make any additions,
substitutions, or deletions of accommodations, amenities, or
component sites, and a description of the basis upon which
accommodations, amenities, or component sites may be added to,
substituted in, or deleted from the multisite timeshare plan;
(16) a description of the reservation system that shall include
all of the following:
(A) the entity responsible for operating the reservation system,
its relationship to the developer, and the duration of any
agreement for operation of the reservation system;
(B) a summary of the rules governing access to and use of the
reservation system; and
(C) the existence of and an explanation regarding any priority
reservation features that affect a purchaser's ability to make
reservations for the use of a given accommodation on a
first-come, first-served basis;
(17) the name and principal address of the managing entity for
the multisite timeshare plan and a description of the procedures,
if any, for altering the powers and responsibilities of the
managing entity and for removing or replacing it, and a
description of the relationship between the multisite timeshare
plan managing entity and the managing entity of the component
sites of the multisite timeshare plan, if different from the
multisite timeshare plan managing entity;
(18) the current annual budget of the multisite timeshare plan,
if available, or the projected annual budget for the multisite
timeshare plan, which must include:
(A) a statement of the amount reserved or budgeted for repairs,
replacements, and refurbishment;
(B) the projected common expense liability, if any, by category
of expenditure for the multisite timeshare plan; and
(C) the assumptions on which the operating budget is based;
(19) the projected assessments and a description of the method
for calculating and apportioning those assessments among
purchasers of the multisite timeshare plan;
(20) if applicable, a statement that the assessments collected
from the purchasers may be placed in a common account with the
assessments collected from the purchasers of other timeshare
properties managed by the same managing entity;
(21) any current fees or charges to be paid by timeshare
purchasers for the use of any amenities related to the timeshare
plan and a statement that the fees or charges are subject to
change;
(22) any initial or special fee due from the purchaser at
closing, together with a description of the purpose of and method
of calculating the fee;
(23) a description of the purchaser's liability for any fees
associated with the multisite timeshare plan;
(24) a description of any lien, defect, or encumbrance on or
affecting title to the timeshare interest and, if applicable, a
copy of each written warranty provided by the developer;
(25) the extent to which a timeshare interest may become subject
to a tax lien or other lien arising out of claims against
purchasers of different timeshare interests;
(26) a description of those matters required by Section 221.041;
(27) a description of any financing offered by or available
through the developer;
(28) a description of any bankruptcy that is pending or that has
occurred within the past five years, pending civil or criminal
suits, adjudications, or disciplinary actions material to the
timeshare plan of which the developer has knowledge;
(29) a statement disclosing any right of first refusal or other
restraint on the transfer of all or a portion of a timeshare
interest;
(30) a statement disclosing that any deposit made in connection
with the purchase of a timeshare interest must be held by an
escrow agent until expiration of any right to cancel the contract
and that any deposit must be returned to the purchaser if the
purchaser elects to exercise the right of cancellation; or, if
the commission accepts from the developer a surety bond,
irrevocable letter of credit, or other form of financial
assurance instead of an escrow deposit, a statement disclosing
that the developer has provided a surety bond, irrevocable letter
of credit, or other form of financial assurance in an amount
equal to or in excess of the funds that would otherwise be held
by an escrow agent and that the deposit must be returned if the
purchaser elects to exercise the right of cancellation;
(31) if the timeshare plan provides purchasers with the
opportunity to participate in an exchange program, a description
of the name and address of the exchange company and the method by
which a purchaser accesses the exchange program; and
(32) any other information the commission determines is
necessary to protect prospective purchasers or to implement the
purpose of this chapter.
(e) A developer may include any other information in a timeshare
disclosure statement required by this section on approval by the
commission.
(f) If a timeshare plan is located wholly outside this state,
the commission may permit the developer to submit a timeshare
disclosure statement the developer is currently providing
purchasers or an equivalent timeshare disclosure statement filed
for the timeshare plan in another state if the current statement
or the equivalent statement substantially complies with the
requirements of this subchapter. This subsection does not exempt
the developer from other requirements of this chapter.
Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,
1987. Renumbered from Sec. 201.032 by Acts 1989, 71st Leg., ch.
2, Sec. 13.03(b), eff. Aug. 28, 1989. Amended by Acts 1993, 73rd
Leg., ch. 443, Sec. 3, eff. Sept. 1, 1993.
Amended by:
Acts 2005, 79th Leg., Ch.
539, Sec. 5, eff. January 15, 2006.
Acts 2009, 81st Leg., R.S., Ch.
279, Sec. 2, eff. September 1, 2009.
Sec. 221.033. EXCHANGE DISCLOSURE STATEMENT. (a) Before the
signing of any agreement to purchase a timeshare interest in
which a prospective purchaser is also offered participation in
any exchange program, the developer shall also deliver to the
prospective purchaser the exchange disclosure statement of any
exchange company whose service is advertised or offered by the
developer or other person in connection with the disposition.
(b) If participation in an exchange program is offered for the
first time after a disposition has occurred, any person offering
that participation shall also deliver an exchange disclosure
statement to the purchaser before the execution by the purchaser
of any instrument relating to participation in the exchange
program.
(c) In all cases, the person offering participation in the
exchange program shall obtain from the purchaser a written
acknowledgement of receipt of the exchange disclosure statement.
(d) The exchange disclosure statement must include the following
information:
(1) the name and address of the exchange company;
(2) if the exchange company is not the developer, a statement
describing the legal relationship, if any, between the exchange
company and the developer;
(3) a statement indicating the conditions under which the
exchange program might terminate or become unavailable;
(4) whether membership or participation or both in the exchange
program is voluntary or mandatory;
(5) a complete description of the required procedure for
executing an exchange of timeshare periods;
(6) the fee required for membership or participation or both in
the program and whether the fee is subject to change;
(7) a statement to the effect that participation in the exchange
program is conditioned on compliance with the terms of a contract
between the exchange company and the purchaser;
(8) a statement in conspicuous and bold-faced print to the
effect that all exchanges are arranged on a space-available basis
and that neither the developer nor the exchange company
guarantees that a particular timeshare period can be exchanged;
and
(9) a description of seasonal demand and unit occupancy
restrictions employed in the exchange program.
Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,
1987. Renumbered from Sec. 201.033 by Acts 1989, 71st Leg., ch.
2, Sec. 13.03(b), eff. Aug. 28, 1989.
Amended by:
Acts 2005, 79th Leg., Ch.
539, Sec. 6, eff. January 15, 2006.
Sec. 221.034. EXEMPT OFFERINGS AND DISPOSITIONS; COMMUNICATIONS.
(a) An offering or disposition is exempt from this chapter if
it is:
(1) a gratuitous offering or disposition of a timeshare
interest;
(2) a disposition pursuant to a court order;
(3) a disposition by a governmental agency;
(4) a disposition by foreclosure or deed in lieu of foreclosure;
(5) an offering or disposition by an association of its own
timeshare interest acquired through foreclosure, deed in lieu of
foreclosure, or gratuitous transfer;
(6) an offering or disposition of all timeshare interests in a
timeshare plan to not more than five persons;
(7) an offering or disposition of a timeshare interest in a
timeshare property situated wholly outside this state under a
contract executed wholly outside this state, if there has been no
offering to the purchaser within this state;
(8) an offering or disposition of a timeshare interest to a
purchaser who is not a resident of this state under a contract
executed wholly outside this state, if there has been no offering
to the purchaser within this state;
(9) the offering or redisposition of a timeshare interest by a
purchaser who acquired the interest for the purchaser's personal
use; or
(10) the offering or disposition of a rental of an accommodation
for a period of three years or less.
(b) If a developer has a timeshare plan registered under this
chapter and is subject to Section 221.024, the developer may
offer or dispose of an interest in a timeshare plan that is not
registered under this chapter to a person who is the owner of a
timeshare interest in a timeshare plan created by the developer.
A developer under this subsection is exempt from Sections
221.021, 221.022, 221.023, 221.032, 221.041, 221.042, 221.043,
221.061, 221.071(a)(1) and (8), 221.074, and 221.075 if the
developer:
(1) permits the purchaser to cancel the purchase contract before
the sixth day after the date the contract is signed; and
(2) provides the purchaser all timeshare disclosure documents
required by law to be provided in the jurisdiction in which the
timeshare property is located.
(c) The following communications are not advertisements under
this chapter:
(1) any stockholder communication, including an annual report or
interim financial report, proxy material, registration statement,
securities prospectus, timeshare disclosure statement, or other
material required to be delivered to a prospective purchaser by a
state or federal governmental entity;
(2) any oral or written statement disseminated by a developer to
broadcast or print media, excluding:
(A) paid advertising or promotional material relating to plans
for acquiring or developing timeshare property; and
(B) the rebroadcast or other dissemination of any oral
statements by a developer to a prospective purchaser or the
distribution or other dissemination of written statements,
including newspaper or magazine articles or press releases, by a
developer to prospective purchasers;
(3) the offering of a timeshare interest in a national
publication or by electronic media that is not directed to or
targeted at any individual located in this state;
(4) any audio, written, or visual publication or material
relating to the availability of any accommodations for transient
rental if:
(A) a sales presentation is not a term or condition of the
availability of the accommodations; and
(B) the failure of the transient renter to take a tour of the
timeshare property or attend a sales presentation does not result
in a reduction in the level of services or an increase in the
rental price that would otherwise be available to the renter; or
(5) any follow-up communication with a person relating to a
promotion if the person previously received an advertisement
relating to the promotion that complied with Section 221.031.
(d) The following communications are exempt from this chapter if
they are delivered to a person who has previously executed a
contract for the purchase of or is an owner of a timeshare
interest in a timeshare plan:
(1) any communication addressed to and relating to the account
of the person; or
(2) any audio, written, or visual publication or material
relating to an exchange company or program if the person is a
member of that exchange company or program.
Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,
1987. Renumbered from Sec. 201.034 by Acts 1989, 71st Leg., ch.
2, Sec. 13.03(b), eff. Aug. 28, 1989.
Amended by:
Acts 2005, 79th Leg., Ch.
539, Sec. 7, eff. January 15, 2006.
Sec. 221.035. SUPERVISORY DUTIES OF DEVELOPER. Notwithstanding
obligations placed upon any other persons by this chapter, the
developer shall supervise, manage, and control all aspects of the
offering of a timeshare interest, including but not limited to
promotion, advertising, contracting, and closing. Any violation
of this chapter which occurs during such offering activities is
considered to be a violation by the developer as well as by the
person actually committing the violation.
Added by Acts 1989, 71st Leg., ch. 381, Sec. 3, eff. June 14,
1989.
Sec. 221.036. DEVELOPER PREPARATION AND COMPLETION OF DOCUMENTS.
(a) A developer may charge a reasonable fee for completion of a
contract form, closing document, or disclosure document required
for the sale, exchange, option, lease, or rental of a timeshare
interest.
(b) The action of a developer under Subsection (a) does not
constitute the unauthorized or illegal practice of law in this<