55-373 - Termination of certain time-shares.
§ 55-373. Termination of certain time-shares.
A. This section applies to all time-share estate programs and, when providedby the time-share instrument, to time-share use programs.
B. A time-share project may be terminated in whole by the developer at anytime and for any reason if such developer is the sole owner of alltime-shares within the time-share project. Such termination shall beaccomplished by the developer executing and recording a termination documentwhere the time-share instrument is recorded. Time-shares subject to thissection also may be terminated by written agreement of the time-share ownershaving at least fifty-one percent of the time-shares, or by such largerpercentage as may otherwise be provided in the time-share instrument. Thetermination agreement shall specify a date upon which it shall become void,unless it is recorded before that date in the clerk's office of theappropriate court where the time-share project is located.
C. If the termination agreement sets forth the material terms of a contractor proposed contract under which an estate or interest in each time-shareunit equal to the sum of the time-shares therein is to be sold and designatesa trustee to effect the sale, the termination agreement becomes effectiveupon recordation, and title to that estate or interest vests upon terminationin the trustee for the benefit of the time-share owners, to be transferredpursuant to the contract. If the termination agreement does not set forth thematerial terms of a contract or proposed contract under which an estate orinterest in each time-share unit equal to the sum of the time-shares thereinis to be sold and designates a trustee to effect the sale, the terminationagreement becomes effective upon recordation, and title to an estate orinterest in each time-share unit equal to the sum of the time-shares thereinvests upon termination in the time-share owners thereof in proportion totheir respective interests as provided in subsection F, and liens on thetime-shares shall accordingly encumber those interests; and in this instance,any co-owner of that estate or interest may thereafter maintain an action forpartition or for allotment or sale in lieu of partition pursuant to the lawsof the Commonwealth.
D. Except as otherwise specified in the termination agreement, so long as theformer time-share owners or their trustee holds title to the estate orinterest equal to the sum of the time-shares, each former time-share ownerand his successor in interest have the same rights with respect to the use,enjoyment and occupancy in the former time-share unit that he would have hadif termination had not occurred, together with the same liabilities and otherobligations imposed by this act or the time-share instrument.
E. After termination of all time-shares in a time-share project and adequateprovision for payment of the claims of the creditors for time-share expenses,distribution shall be made, in proportion to their respective interests asprovided in subsection F, to the former time-share owners and theirsuccessors in interest of (i) the proceeds of any sale pursuant to thissection, (ii) the proceeds of any personalty held for the use and benefit ofthe former time-share owners, and (iii) any other funds held for the use andbenefit of the former time-share owners.
F. The time-share instrument may specify the respective fractional orpercentage interest in the estate or interest in each unit equal to the sumof the time-share therein that will be owned by each former time-share owner.Otherwise, not more than 180 days prior to the termination, an appraisalshall be made of the fair market value of each time-share by 1 or moreimpartial qualified appraisers selected either by the trustee designated inthe termination agreement, or by the managing entity if no trustee was sodesignated. The appraisal shall also state the corresponding fractional orpercentage interests calculated in proportion to those values and inaccordance with this subsection. A notice stating all of those values andcorresponding interests and the return address of the sender shall be sent bycertified or registered mail, by the managing entity or the trusteedesignated in the termination agreements, to all of the time-share owners.The appraisal governs the magnitude of each interest unless (i) at leasttwenty-five percent of the time-share owners deliver, within sixty days afterthe date the notices were mailed, written disapprovals to the return addressof the sender of the notice, or (ii) the final judgment of a court ofcompetent jurisdiction, entered during or after that period, holds that theappraisal should be set aside. The appraisal and the calculation of interestsmust be made in accordance with the following:
1. If the termination agreement sets forth the material terms of a contractor proposed contract for the sale of the estate or interests equal to the sumof the time-shares, each time-share conferring a right of occupancy during alimited number of time periods must be appraised as if the time until thedate specified for the conveyance of the property had already elapsed.Otherwise, each time-share of that kind must be appraised as if the timeuntil the date specified pursuant to subsection B had already elapsed.
2. The interest of each time-share owner is the value of the time-share heowned divided by the sum of the values of all time-shares in the unit orunits to which his time-share applies.
G. Foreclosure or enforcement of a lien or encumbrance against all of thetime-shares in a time-share project does not of itself terminate thosetime-shares.
(1981, c. 462; 1985, c. 517; 2006, c. 653.)