Bill Text: HI SB797 | 2024 | Regular Session | Amended
Bill Title: Relating To Time Sharing Plans.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Engrossed - Dead) 2024-03-25 - Received notice of discharge of all conferees (Hse. Com. No. 457). [SB797 Detail]
Download: Hawaii-2024-SB797-Amended.html
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THE SENATE |
S.B. NO. |
797 |
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THIRTY-SECOND LEGISLATURE, 2023 |
S.D. 1 |
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STATE OF HAWAII |
H.D. 2 |
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A BILL FOR AN ACT
RELATING TO TIME SHARING PLANS.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Section 514E-9, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) Any offering of a time sharing plan to the public shall disclose:
(1) The name and address of the developer and of the time share units;
(2) The name and address of the plan manager, if any, and a description of the plan manager's responsibilities and authority;
(3) A list of the primary plan documents.
For
purposes of this paragraph:
"Primary
plan documents" means the constituent documents of the time share plan,
including any time share declaration, any trust agreement, the articles of
incorporation and bylaws of the association, if the association is a
corporation, or the operating agreement or similar organizational document, if
the association is a limited liability company or other entity, the rules for
reserving the use of the time share units, and the rules and regulations
governing the occupancy of the time share units. "Primary plan documents" does not
include supplementary plan documents.
"Supplementary
plan documents" means any declaration of annexation, active property
declaration, notice of access, notice of conveyance, notice of activation, deed
conveying property to the trustee of a time share plan or to the time share
owners association, and other instruments submitting or committing property to
the time share plan or removing property from the time share plan. To the extent that any documents modify the
terms and provisions of the time share plan as established in the existing
primary plan documents (for example, by establishing a new class or category of
time share interest having rights that differ from existing time share
interests in the time share plan), the documents shall constitute primary plan
documents and shall not constitute supplementary plan documents;
[(3)] (4) A description of the time share units,
including the developer's schedule for completion of all buildings, units, and
amenities and dates of availability;
[(4)] (5) If the time share plan is located in a
condominium property regime, a description of the project and, if the
purchaser will be a direct owner of a unit in the condominium project, a brief
description of any pertinent provisions of the project instruments;
[(5)] (6) Any restraints on the transfer of the
buyer's time share interest in the time share units or plan;
[(6)] (7) Whether the time share plan is a time
share ownership plan or a time share use plan, along with a description of the
rights and responsibilities under said plan;
[(7)] (8) A statement that there is a
seven-calendar-day period of mutual rescission;
[(8)] (9) A statement that pursuant to section
514E-11.3, every sale or transfer, made in violation of this chapter is
voidable at the election of the purchaser;
[(9)] (10) Notice of any material liens,
title defects, or encumbrances on or affecting the title to the units or
plan[;] and any other lien, title defect, or encumbrance impacting a
purchaser's utilization of the property, as the director may require. For all other liens, title defects, and
encumbrances, in lieu of listing these in the disclosure statement, a reference
may be made to a website by way of link or otherwise, wherein the items may be
listed and thereby disclosed, and be available for review along with a
statement that the developer has determined that these liens, title defects,
and encumbrances are not expected to directly, substantially, and adversely
impact utilization of the property by a purchaser;
[(10)] (11) Notice of any pending or anticipated
suits that are material to the time share units or plan, of which the developer
has, or should have, knowledge;
[(11)] (12) The total financial obligation of the
purchaser, [which] that shall consist of:
(A) A statement that the purchaser is obligated to pay the initial price stated in the purchaser's purchase agreement; and
(B) A list or description of any additional charges to which the purchaser may be subject;
[(12)] (13) An estimate of the dues, maintenance
fees, real property taxes, and similar periodic expenses, and the method or formula
by which they are derived and apportioned;
[(13)] (14) The disclosure statement under
subsection (d), if applicable; and
[(14)] (15) Other disclosures required by the
director, as provided by rules adopted pursuant to chapter 91."
SECTION 2. Section 514E-10.2, Hawaii Revised Statutes, is amended as follows:
1. By amending subsection (a) to read:
"(a)
Notwithstanding any other provision of this chapter, the director may
issue a limited permit to a developer permitting the offer or sale, in this State,
of an additional interest in a time share plan to an existing purchaser in the
same time share plan; provided that:
(1) The
developer or an affiliated entity of the developer has a time share plan
currently registered with the director; provided that the registration was
originally approved or amended within seven years from the date of the offer or
disposition, and the registration has not been terminated or withdrawn;
(2) The
developer has not, during the two-year period preceding the time of the offer,
had a time share registration suspended, restricted, or revoked in any state or
been convicted of an offense involving fraud or dishonesty. In the event the developer satisfies the
requirement of paragraph (1) [above] through an affiliated entity, the
developer has not, during the twenty-year period preceding the time of the
offer, had a time share registration suspended, restricted, or revoked in any
state or been convicted of an offense involving fraud or dishonesty;
(3) In
satisfaction of the disclosure requirements of section 514E-9, the purchaser is
provided the time share disclosure documents the purchaser would have received
if the purchase had occurred in the state or jurisdiction where the purchaser
initially purchased the time share interest;
(4) The
contract for purchase signed by the purchaser includes a notice that is the
same as or similar to the rescission notice required pursuant to section [514E-9(a)(7);]
514E-9(a)(8); provided that the rescission period shall be at least
seven days;
(5) All
funds and any negotiable instruments received during the seven-day rescission
period shall be placed in an escrow account in the State. The escrow agent shall be a bank, savings and
loan association, or trust company authorized to do business in the State under
an escrow arrangement or a corporation licensed as an escrow depository under
chapter 449. The funds or negotiable
instruments may be released from escrow; provided that the release is in
accordance with section 514E-17 or 514E-18.
Any escrow account established for any out-of-state time share plan
offered under this subsection may be maintained in the state where the time
share plan is located after the seven-day rescission period has expired;
provided that the escrow agent submits to personal jurisdiction in this State;
(6) The contract for purchase shall contain the
following statement in conspicuous type:
"THIS TIME SHARE PLAN HAS NOT BEEN REVIEWED OR APPROVED BY THE STATE OF HAWAII BECAUSE YOU ALREADY OWN AN INTEREST IN THIS TIME SHARE PLAN AND BECAUSE (DEVELOPER OR AFFILIATE'S NAME) HAS A TIME SHARE PLAN CURRENTLY REGISTERED WITH THE STATE OF HAWAII (INCLUDE REGISTRATION #). (IF APPLICABLE) (AFFILIATE) IS AN AFFILIATED ENTITY OF THE SELLER AS THE TERM IS DEFINED IN CHAPTER 514E, HAWAII REVISED STATUTES."; and
(7) The offer complies with the provisions of
sections 514E-11(2) to 514E-11(9), 514E-11(11) to 514E-11(13), and 514E-11.1."
2.
By amending subsection (c) to read:
"(c)
Notwithstanding any other provision of this
chapter, the director may issue a limited permit to a developer permitting the
offer or sale by the developer, in this State, of a time share interest in a
time share plan located outside of this State, but within the United States, to
an individual who currently owns a time share interest that was purchased from
that developer, or from an affiliated entity of that developer; provided that:
(1) The
developer or an affiliated entity of the developer has a time share plan
currently registered with the director; provided that the registration of the
developer or an affiliated entity of the developer was originally approved or
amended within seven years from the date of the offer or disposition and [which]
the registration has not been terminated or withdrawn;
(2) The
developer has not, during the two-year period preceding the time of the offer,
had a time share registration suspended, restricted, or revoked in any state or
been convicted of an offense involving fraud or dishonesty. In the event the developer satisfies the
requirement of paragraph (1) [above] through an affiliated entity, the
developer has not, during the twenty-year period preceding the time of the
offer, had a time share registration suspended, restricted, or revoked in any
state or been convicted of an offense involving fraud or dishonesty;
(3) The
developer shall provide the purchaser with all time share disclosure documents
required to be provided to purchasers as if the offer occurred in the state
where the time share plan is located;
(4) The contract for purchase shall include a
notice that is the same as or similar to the rescission notice required
pursuant to section [514E-9(a)(7);] 514E-9(a)(8); provided that
the rescission period shall be at least seven days;
(5) In satisfaction of section 514E-16, all funds
and any negotiable instruments received during the seven-day rescission period
shall be placed in an escrow account in the State. The escrow agent shall be a bank, savings and
loan association, or trust company authorized to do business in the State under
an escrow arrangement or a corporation licensed as an escrow depository under
chapter 449. The funds or negotiable
instruments may be released from escrow; provided that the release is in
accordance with section 514E-17 or 514E-18.
Any escrow account established for any out-of-state time share plan
offered under this subsection may be maintained in the state where the time
share plan is located after the seven-day rescission period has expired;
provided that the escrow agent submits to personal jurisdiction in this State;
(6) The
developer shall provide the purchaser, in writing, either in the disclosure
documents or otherwise, all of the following:
(A) A
description of the type of time share plan offered, including the duration and
operation of the time share plan;
(B) A description of the existing or proposed
accommodations and amenities in the time share plan;
(C) A description of the method and timing for
performing maintenance on the accommodations;
(D) If applicable, copies of the declaration,
association articles of incorporation, association bylaws, and association
rules and regulations; and
(E) The current annual budget for the time share
plan;
(7) The
time share plan being offered is registered in the state where the time share
plan is located; or in the event registration of the time share plan is not
required in the state where the time share plan is located, the time share plan
being offered is in compliance with the applicable laws of that state; and
(8) The
contract for purchase shall contain the following statement in conspicuous
type:
"THIS TIME SHARE PLAN
HAS NOT BEEN REVIEWED OR APPROVED BY THE STATE OF HAWAII BECAUSE YOU ALREADY
OWN AN INTEREST IN A TIME SHARE PLAN THAT YOU PURCHASED FROM
(DEVELOPER OR AFFILIATE'S NAME), AND
HAS A TIME SHARE PLAN CURRENTLY REGISTERED WITH THE STATE OF HAWAII (INCLUDE
REGISTRATION #). (IF APPLICABLE)
(AFFILIATE) IS AN AFFILIATED ENTITY OF THE SELLER AS THAT TERM IS DEFINED IN
CHAPTER 514E,
SECTION 3. Section 514E-10.5, Hawaii Revised Statutes, is amended to read as follows:
"§514E-10.5
Consultant review of developer filing. The director may contract with private
consultants in connection with the review of the filing required of time share
developers pursuant to section 514E-10(a) and [[](e)[]]. The cost of contracting private consultants
shall be borne by the developer; provided that the consultant review required
under this section shall not affect the scope of the review under section
514E-27 that the director may request for filings that encompass alternative
arrangements for purchaser protection.
The consultant shall be asked to thoroughly review the filing for the
purpose of examining its compliance with the requirements of this chapter and
any rule adopted by the director, including the documentation and other
provided materials[.]; provided that in lieu of reviewing copies of
all encumbrances on title, the consultant shall accept a certification from the
developer that the developer has reviewed all encumbrances on title and has
determined that the time share interest being sold is free and clear of blanket
liens or other material encumbrances that may directly, substantially, and
adversely impact utilization of the property by a purchaser, or if that is not
the case, identifying the blanket liens or other material encumbrances and
either specifying how those encumbrances will be addressed or what the impact
of the encumbrances may be to the purchaser. Upon completing the review, the consultant
shall provide a written analysis of the filing and an opinion of the nature and
extent to which it complies with this chapter and adopted rules. The director may adopt rules pursuant to
chapter 91 to further delineate the duties of the consultant in undertaking the
review and analysis required pursuant to this section."
SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 5. This Act shall take effect on June 30, 3000.
Report Title:
Time Share Plans; Disclosure Statement; Primary Plan Documents; Supplementary Plan Documents; Material Liens; Title Defects; Encumbrances; Contracted Private Consultant
Description:
Specifies that primary plan documents be listed in the public disclosure statement of a time share plan. Specifies when supplementary plan documents are to be considered primary plan documents subject to disclosure. Clarifies the manner in which the required disclosure of liens, title defects, or encumbrances on the titles of units may be made. Provides that a review of encumbrances by a contracted private consultant shall be waived upon the certification from the developer that the developer reviewed all encumbrances on title and determined that the time share interest is free and clear of blanket liens or that identifies all blanket liens. Effective 6/30/3000. (HD2)
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.
