PRINTER'S NO. 533
No. 509 Session of 1989
INTRODUCED BY GREENLEAF, WILT, GREENWOOD AND AFFLERBACH,
FEBRUARY 10, 1989
REFERRED TO CONSUMER PROTECTION AND PROFESSIONAL LICENSURE,
FEBRUARY 10, 1989
AN ACT
1 Providing for the promotion and sale of time shares and for
2 rights of time-share purchasers; imposing duties upon the
3 State Real Estate Commission; and prohibiting certain acts.
4 The General Assembly of the Commonwealth of Pennsylvania
5 hereby enacts as follows:
6 Section 1. Short title.
7 This act shall be known and may be cited as the Pennsylvania
8 Real Estate Time-Share Act.
9 Section 2. Definitions.
10 The following words and phrases when used in this act shall
11 have the meanings given to them in this section unless the
12 context clearly indicates otherwise:
13 "Accommodations." Any apartment, condominium or cooperative
14 unit, hotel or motel room, or campground site located on real
15 property subject to a time-share program.
16 "Acquisition agent." A person who, by means of telephone or
17 advertisement or by any other means of inducement or
18 solicitation, attempts to encourage any person to attend a sales
1 presentation for a time-share program.
2 "Advertisement." The publication or causing to be published
3 of any information offering for sale, a time-share program or
4 any information for the purpose of causing or inducing a person
5 to purchase or acquire an interest in a time-share program,
6 including a purchase contract and any photographs, drawings or
7 artist representations of the physical condition of facilities
8 by means of any of the following:
9 (1) Newspaper or periodical.
10 (2) Radio or television broadcast.
11 (3) Written, printed or photographic matter.
12 (4) Material used in connection with the disposition or
13 offer of time-share programs by radio, television, telephone
14 or any other electronic means.
15 (5) Material used to induce prospective purchasers to
16 visit a unit, including vacation certificates which require
17 the holder of such certificates to attend or submit to a
18 sales presentation.
19 "Campground memberships." An agreement evidencing a
20 purchaser's right or license to use a campground site on a
21 periodic basis.
22 "Campground site." A space on a campground designed and
23 promoted for the purpose of locating a trailer, tent, tent
24 trailer, pickup camper or other similar device used for camping.
25 "Commission." The State Real Estate Commission.
26 "Developer." A person or entity who is in the business of
27 creating or selling units in its own time-share program. The
28 term does not include a person acting solely as a sales agent.
29 "Sales agent." A person who sells or offers to sell any
30 interest in a time-share program to a purchaser.
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1 "Time-share instrument." A document, by whatever name
2 designated, creating or regulating time-share programs.
3 "Time-share program." A program by which a purchaser
4 receives the right to use and occupy for life, for a term of
5 years, annually or on some other periodic basis, a lot, parcel,
6 accommodation, unit or segment of real property, including
7 campground sites and campground memberships, where possession
8 circulates among purchasers for a period of time that has been
9 ruled the allotted use or occupancy period.
10 "Time-share use." A license or contractual membership right
11 of occupancy in a time-share program.
12 Section 3. Time-share instrument requirements.
13 (a) Mandatory provisions.--Except for instruments in
14 existence prior to the effective date of this act, time-share
15 instruments shall contain the following:
16 (1) The name of the county in which the property is
17 situated.
18 (2) A legal description, street address or other
19 description sufficient to identify the property.
20 (3) Identification of time periods or intervals
21 designated for occupancy.
22 (4) Identification of any fee, estate or other ownership
23 interest created.
24 (5) The formula, fraction or percentage of the common
25 expenses for which the purchaser is responsible and any
26 voting rights assigned to each time-share estate or use.
27 (6) Any restrictions on the use, occupancy, alteration
28 or alienation of time-share estates or their use.
29 (7) All provisions for care and replacement.
30 (8) The total number of units in the time-share program
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1 and the number and length of intervals into which each unit
2 is divided.
3 (9) The arrangements for management and operation of
4 time-share programs.
5 (10) A description of any liens, defects or encumbrances
6 on or affecting the title to the time-share use.
7 (11) Any fees or charges to be paid by the purchaser for
8 the use of any facilities related to the property.
9 (12) A statement with a provision for the signature of
10 the purchaser in ten-point boldface type containing
11 substantially the following form:
12 You, the purchaser, may cancel this transaction at any
13 time prior to midnight of the fifty business day after
14 the date of this transaction. Should you wish to cancel,
15 you shall notify the seller by returning the notice of
16 cancellation contained herein by returned receipt mail.
17 Notice of cancellation shall be effective upon being
18 postmarked by the United States Postal Service or upon
19 deposit of the notice with any bona fide means of
20 delivery which provides a receipt.
21 (13) A completed form in duplicate, captioned "NOTICE OF
22 CANCELLATION," which shall be attached to the time-share
23 instrument and be easily detachable and which shall contain
24 in ten-point boldface type substantially the following form:
25 Notice of cancellation (enter date of transaction) You
26 may cancel this transaction, without any penalty or
27 obligation, within five business days from the above
28 date. If you cancel, any payment made by you under the
29 contract and any negotiable instrument executed by you
30 shall be returned within 30 days following receipt by the
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1 seller of your cancellation notice.
2 (b) Cancellation notices.--Both copies of the notice of
3 cancellation shall be completed by the sales agent by entering
4 the name of the seller, the complete mailing address of the
5 seller's place of business, the date of the transaction and the
6 date, not earlier than the fifth business day following the date
7 of the transaction, by which the buyer may give notice of
8 cancellation. The cancellation period shall not begin to run
9 until the buyer has been informed of his right to cancel and has
10 been provided with copies of the notice of cancellation.
11 Section 4. Time-share program statement.
12 A time-share program statement shall be provided to each
13 purchaser under this act at the time of purchase and shall
14 provide for and accurately disclose the following:
15 (1) The name of the developer, the principal address of
16 the developer or owner and the name of all time-share
17 programs offered by the developer.
18 (2) If the program has not been completed, the
19 developer's schedule for commencement of construction and
20 completion of all buildings, accommodations, campsites and
21 related amenities.
22 (3) For all units offered by the developer in the same
23 time-share program:
24 (i) The type and number of units.
25 (ii) The identification of units that are subject to
26 time-share intervals.
27 (iii) The estimated number of units that may become
28 subject to time-share intervals.
29 (4) A brief description of the program.
30 (5) A statement of any services or expenses paid for by
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1 a fee due from the purchaser at closing, together with the
2 description of the purpose and method of calculating the fee.
3 (6) A description of any financing offered by or
4 available through the developer.
5 Section 5. Validity of cancellation.
6 Any valid notice of cancellation by a purchaser shall be
7 honored, and, within 30 days after the receipt of the notice,
8 the seller shall refund all payments made under the contract and
9 cancel and return any negotiable instrument, if any, executed by
10 the buyer in connection with the time-share instrument.
11 Section 6. Escrow.
12 Any deposit made in connection with the purchase or
13 reservation of a time-share use from any developer or sales
14 agent shall be placed in escrow and held in an account
15 designated solely for that purpose in an institution whose
16 accounts are insured by an agency or instrumentality of the
17 Federal Government until expiration of the time for
18 cancellation.
19 Section 7. Registration.
20 (a) Sales agents and developers.--All sales agents and
21 developers of any time-share program shall register with the
22 commission prior to selling any time-share use.
23 (b) Required information.--The registration under subsection
24 (a) shall include the following:
25 (1) The time-share program or programs that the sales
26 agent or developer is selling.
27 (2) The principal office address and telephone number of
28 the program.
29 (3) The name of the managing employer of a sales agent.
30 (4) The names of all salespersons employed by a
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1 developer.
2 (5) A list of escrow accounts set up for the deposit and
3 collection of the purchaser's funds.
4 Section 8. Illegal acts.
5 (a) Misrepresentations.--The developer of a time-share
6 program, a sales agent or other representative shall be liable
7 for material misrepresentations of which he has, or should have,
8 actual knowledge.
9 (b) Proscribed conduct.--The following acts are prohibited:
10 (1) Misrepresentation of a fact material to a
11 purchaser's decision to purchase any time-share interest.
12 (2) Prediction of specific or immediate increases in the
13 value of any time-share interest.
14 (3) Material misrepresentations relating to the
15 qualities or characteristics of a time-share program, the
16 amenities available to the occupant of that unit or use of
17 the amenities, or the length of time a time-share use and its
18 accommodations or amenities will be available to the
19 purchaser of an interest in any time share.
20 (4) Knowing misrepresentation of the conditions under
21 which a purchaser of a time-share use may exchange the right
22 of his occupancy for the right to occupy a time-share use in
23 another location.
24 (c) Required disclosure.--A sales agent, acquisition agent
25 or other person conducting a promotion in connection with the
26 offering of a time-share program shall clearly disclose the
27 following:
28 (1) The promotion is intended to aid in selling a time-
29 share interest.
30 (2) Any person whose name or address is obtained during
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1 the promotion may be solicited to purchase a time-share
2 interest.
3 (3) The name of each time-share program trying to sell a
4 time-share use through the promotion and the name of each
5 person paying for the promotion.
6 (4) The complete rules of the promotion.
7 (5) (i) The method of awarding prizes, gifts or other
8 benefits under the promotion.
9 (ii) A complete and fully detailed description,
10 including approximate retail value, of all prizes, gifts
11 or benefits under the promotion.
12 (iii) The quantity of each prize, gift or benefit to
13 be awarded or conferred.
14 (iv) The date by which each prize, gift or benefit
15 will be awarded or conferred.
16 (d) Award of prize.--If a sales agent or other person
17 represents that a prize, gift or benefit will be awarded in
18 connection with a promotion, the prize, gift or benefit must be
19 awarded or conferred in the manner represented, and on or before
20 the date provided for, in the promotion.
21 Section 9. Duties of commission.
22 (a) Administration and enforcement.--The commission shall
23 perform the following duties:
24 (1) Adopt rules and regulations in order to implement
25 and enforce the provisions of this act, including
26 establishment of filing fees and adoption of forms and
27 procedures for submitting information to the commission.
28 (2) Issue a time-share sales license to all sales agents
29 who register under this act.
30 (3) Issue a time-share certificate to each time-share
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1 developer.
2 (b) Suspension of license.--After notice and hearing, the
3 commission shall issue a notice of suspension of a time-share
4 sales license or developer's certificate if it finds any of the
5 following:
6 (1) A false or misleading representation was made in any
7 document of information filed with the commission.
8 (2) A developer or agent of a developer has engaged or
9 is engaging in any unlawful act or practice.
10 (3) A developer or agent of a developer has disseminated
11 any false or misleading promotional materials or
12 advertisements in connection with a time-share program, or a
13 developer or his agent has concealed, diverted or disposed of
14 any funds or assets of any person in a manner impairing the
15 rights of purchasers of time-share interests.
16 Section 10. Effective date.
17 This act shall take effect in 90 days.
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