2009 California Business and Professions Code - Section 11225-11246 :: Article 2. Registration, Sale Requirements, And Fees

BUSINESS AND PROFESSIONS CODE
SECTION 11225-11246

11225.  A person shall not be required to register a time-share plan
with the commissioner pursuant to this chapter if any of the
following applies:
   (a) The person is an owner of a time-share interest who has
acquired the time-share interest for the person's own use and
occupancy and who later offers it for resale.
   (b) The person is a managing entity or an association that is not
otherwise a developer of a time-share plan in its own right, solely
while acting as an association or under a contract with an
association to offer or sell a time-share interest transferred to the
association through foreclosure, deed in lieu of foreclosure, or
gratuitous transfer, if these acts are performed in the regular
course of, or as an incident to, the management of the association
for its own account in the time-share plan. Notwithstanding the
exemption from registration, the association or managing entity shall
provide each purchaser of a time-share interest covered by this
subdivision a copy of the time-share instruments, a copy of the
then-current budget, a written statement of the then-current
assessment amounts, and shall provide the purchaser the opportunity
to rescind the purchase within seven days after receipt of these
documents. Immediately prior to the space reserved in the contract
for the signature of the purchaser, the association or managing
entity shall disclose, in conspicuous type, substantially the
following notice of cancellation:

   YOU MAY CANCEL THIS CONTRACT WITHOUT ANY PENALTY OR OBLIGATION
WITHIN SEVEN CALENDAR DAYS OF RECEIPT OF THE PUBLIC REPORT OR AFTER
THE DATE YOU SIGN THIS CONTRACT, WHICHEVER DATE IS LATER. IF YOU
DECIDE TO CANCEL THIS CONTRACT, YOU MUST NOTIFY THE ASSOCIATION (OR
MANAGING ENTITY) IN WRITING OF YOUR INTENT TO CANCEL. YOUR NOTICE OF
CANCELLATION SHALL BE EFFECTIVE UPON THE DATE SENT AND SHALL BE SENT
TO (NAME OF ASSOCIATION OR MANAGING ENTITY) AT (ADDRESS OF
ASSOCIATION OR MANAGING ENTITY). YOUR NOTICE OF CANCELLATION MAY ALSO
BE SENT BY FACSIMILE TO (FACSIMILE NUMBER OF THE ASSOCIATION OR
MANAGING ENTITY) OR BY HAND-DELIVERY. ANY ATTEMPT TO OBTAIN A WAIVER
OF YOUR CANCELLATION RIGHT IS VOID AND OF NO EFFECT.

   (c) The person is conveyed, assigned, or transferred more than
seven time-share interests from a developer in a single voluntary or
involuntary transaction and subsequently conveys, assigns, or
transfers all of the time-share interests received from the developer
to a single purchaser in a single transaction.
   (d) (1) The developer is offering or disposing of a time-share
interest to a purchaser who has previously acquired a time-share
interest from the same developer if the developer has a time-share
plan registered under this chapter, which was originally approved by
the commissioner within the preceding seven years, and the developer
complies in all respects with the provisions of Section 11245, and,
further, provides the purchaser with (A) a cancellation period of at
least seven days, (B) all the time-share disclosure documents that
are required to be provided to purchasers as if the sale occurred in
the state or jurisdiction where the time-share property is located,
and (C) the following disclaimer in conspicuous type:

   WARNING: THE CALIFORNIA DEPARTMENT OF REAL ESTATE HAS NOT EXAMINED
THIS OFFERING, INCLUDING, BUT NOT LIMITED TO, THE CONDITION OF
TITLE, THE STATUS OF BLANKET LIENS ON THE PROJECT (IF ANY),
ARRANGEMENTS TO ASSURE PROJECT COMPLETION, ESCROW PRACTICES, CONTROL
OVER PROJECT MANAGEMENT, RACIALLY DISCRIMINATORY PRACTICES (IF ANY),
TERMS, CONDITIONS, AND PRICE OF THE OFFER, CONTROL OVER ANNUAL
ASSESSMENTS (IF ANY), OR THE AVAILABILITY OF WATER, SERVICES,
UTILITIES, OR IMPROVEMENTS. IT MAY BE ADVISABLE FOR YOU TO CONSULT AN
ATTORNEY OR OTHER KNOWLEDGEABLE PROFESSIONAL WHO IS FAMILIAR WITH
REAL ESTATE AND DEVELOPMENT LAW IN THE STATE WHERE THIS TIME-SHARE
PROPERTY IS SITUATED.

   (2) By making such an offering or disposition, the person is
deemed to consent to the jurisdiction of the commissioner in the
event of a dispute with the purchaser in connection with the offering
or disposition.
   (e) It is a single site time-share plan located outside of the
boundaries of the United States or component site of a specific
time-share interest multisite time-share plan located wholly outside
of the boundaries of the United States, or a nonspecific time-share
interest multisite time-share plan in which all component sites are
located wholly outside of the boundaries of the United States.
However, it is unlawful and a violation of this chapter for a person,
in this state, to sell or lease or offer for sale or lease a
time-share interest in such a time-share plan, located outside the
United States, unless the printed material, literature, advertising,
or invitation in this state relating to that sale, lease, or offer
clearly and conspicuously contains the following disclaimer in
capital letters of at least 10-point type:

   WARNING: THE CALIFORNIA DEPARTMENT OF REAL ESTATE HAS NOT EXAMINED
THIS OFFERING, INCLUDING, BUT NOT LIMITED TO, THE CONDITION OF
TITLE, THE STATUS OF BLANKET LIENS ON THE PROJECT (IF ANY),
ARRANGEMENTS TO ASSURE PROJECT COMPLETION, ESCROW PRACTICES, CONTROL
OVER PROJECT MANAGEMENT, RACIALLY DISCRIMINATORY PRACTICES (IF ANY),
TERMS, CONDITIONS, AND PRICE OF THE OFFER, CONTROL OVER ANNUAL
ASSESSMENTS (IF ANY), OR THE AVAILABILITY OF WATER, SERVICES,
UTILITIES, OR IMPROVEMENTS. IT MAY BE ADVISABLE FOR YOU TO CONSULT AN
ATTORNEY OR OTHER KNOWLEDGEABLE PROFESSIONAL WHO IS FAMILIAR WITH
REAL ESTATE AND DEVELOPMENT LAW IN THE COUNTRY WHERE THIS TIME-SHARE
PROPERTY IS SITUATED.

   (1) If an offer of time-share interest in a time-share plan
described in subdivision (e) is not initially made in writing, the
foregoing disclaimer shall be received by the offeree in writing
prior to a visit to a location, sales presentation, or contact with a
person representing the offeror, when the visit or contact was
scheduled or arranged by the offeror or its representative. The
deposit of the disclaimer in the United States mail, addressed to the
offeree and with first-class postage prepaid, at least five days
prior to the scheduled or arranged visit or contact, shall be deemed
to constitute delivery for purposes of this section.
   (2) If any California resident is presented with an agreement or
purchase contract to lease or purchase a time-share interest as
described in subdivision (e), where an offer to lease or purchase
that time-share interest was made to that resident in California, a
copy of the disclaimer set forth in subdivision (e) shall be inserted
in at least 10-point type at the top of the first page of that
agreement or purchase contract and shall be initialed by that
California resident.
   (3) Nothing contained in this subdivision shall be deemed to
exempt from registration in this state a nonspecific time-share
interest multisite time-share plan in which any component site in the
time-share plan is located in the United States.

11226.  (a) Any person who, to any individual located in the state,
sells, offers to sell, or attempts to solicit prospective purchasers
to purchase a time-share interest, or any person who creates a
time-share plan with an accommodation in the state, shall register
the time-share plan with the commissioner, unless the time-share plan
is otherwise exempt under this chapter.
   (b) A developer, or any of its agents, shall not sell, offer, or
dispose of a time-share interest in the state unless all necessary
registration requirements are provided and approved by the
commissioner, or the sale, offer, or disposition is otherwise
permitted by this chapter, or while an order revoking or suspending a
registration is in effect.
   (c) In registering a time-share plan, the developer shall provide
the commissioner all of the following information:
   (1) The developer's legal name, any assumed names used by the
developer, principal office street address, mailing address, primary
contact person, and telephone number.
   (2) The name of the developer's authorized or registered agent in
the state upon whom claims can be served or service of process be
had, the agent's street address in California, and telephone number.
   (3) The name, street address, mailing address, primary contact
person, and telephone number of the time-share plan being registered.
   (4) The name, street address, mailing address, and telephone
number of any managing entity of the time-share plan.
   (5) A public report that complies with the requirements of Section
11234, or for a time-share plan located outside of the state, a
public report that has been authorized for use by the situs state
regulatory agency and that contains disclosures as determined by the
commissioner upon review to be substantially equivalent to or greater
than the information required to be disclosed pursuant to Section
11234.
   (6) A description of the inventory control system that will ensure
compliance with Section 11250.
   (7) Any other information regarding the developer, time-share
plan, or managing entities as established by regulation.
   (d) An applicant for a public report for a time-share plan shall
present evidence of the following for each accommodation in each
time-share property that is, or will be, offered for sale in this
state pursuant to the registration:
   (1) That the accommodation is presently suitable for human
occupancy or that financial arrangements have been made to complete
construction or renovation of the accommodation to make it suitable
for human occupancy on or before the first date for occupancy by a
time-share interest owner.
   (2) That the accommodation is owned or leased by the developer of
the time-share plan or is the subject of an enforceable option or
contract under which the developer will build, purchase, or lease the
accommodation. Notwithstanding this subdivision, the developer shall
present evidence prior to the receipt of a final public report that
the accommodation to be sold is owned or leased by the developer and
that the accommodation is free and clear of encumbrances in
accordance with Sections 11244 and 11255.
   (e) If an accommodation in a time-share plan is located within a
local governmental jurisdiction or subdivision of real property in
which the dedication of accommodations to time-sharing is expressly
prohibited by ordinance or recorded restriction, either absolutely or
without a permit or other entitlement from the governing body, the
applicant for a public report shall present evidence of a permit or
other entitlement by the appropriate authority for the local
government or the subdivision.
   (f) (1) The developer shall amend or supplement its disclosure
documents and registration information, to reflect any material
change in any information required by this chapter or the regulations
implementing this chapter. The developer shall notify the
commissioner of the material change prior to implementation of the
change, unless the change is beyond the control of the developer; in
which event, the developer shall provide written notice to the
commissioner as soon as reasonably practicable after the occurrence
of the event necessitating the change. All amendments, supplements,
and facts relevant to the material change shall be filed with the
commissioner within 20 calendar days of the material change.
   (2) The developer may continue to sell time-share interests in the
time-share plan so long as, prior to closing, the developer provides
a notice to each purchaser that describes the material change and
provides to each purchaser the previously approved public report.
   (A) If the change is material and adverse to the purchaser, all
purchaser funds shall be held in escrow, or pursuant to alternative
assurances permitted by subdivision (c) of Section 11243, and no
closing shall occur until the amendment relating to the material and
adverse change has been approved by the commissioner. After the
amendment relating to the material and adverse change has been
approved and the amended public report has been issued, the amended
public report shall be sent to the purchaser, and an additional
seven-day rescission period shall commence. The developer shall be
required to maintain evidence of the receipt by each purchaser of the
amended public report.
   (B) If the commissioner refuses to approve the amendment relating
to the material and adverse change, all sales made using the notice
shall be subject to rescission and all funds returned.
   (3) The developer shall update the public report to reflect any
changes to the time-share plan that are not material and adverse,
including the addition of any component sites, within a reasonable
time, and may continue to sell and close time-share interests prior
to the date that the amended public report is approved.
   (g) An applicant for a public report for a multisite, time-share
plan consisting of specific time-share interests, as defined in
subparagraph (A) of paragraph (2) of subdivision (z) of Section
11212, affiliated with sites operated through the time-share plan's
reservation system, shall certify both of the following:
   (1) That a purchaser has, or will have, contractual or membership
rights to use accommodations at each affiliated site and that, if an
accommodation or promised improvement is, or may become, subject to a
blanket encumbrance, that the blanket encumbrance is, or will be,
subordinate to these rights.
   (2) That a certificate of occupancy has been issued with respect
to the accommodations at each affiliated site or that adequate
provisions exist or will exist for the completion of all such
accommodations. For any affiliated site accommodations that are not
complete, the public report shall clearly identify in conspicuous
type that those accommodations are not completed. For any
accommodations that are not complete and for which adequate
provisions for completion do not exist at the time the public report
is issued, the public report shall also provide in conspicuous type
that those accommodations might not be built, provided, however, that
a developer's failure to build the accommodations shall not relieve
the developer of any obligations created by the certification made
pursuant to this subdivision.
   (h) For purposes of subdivision (d) of this section, the
"time-share property being offered for sale in this state" shall mean
the following:
   (1) With respect to a single site time-share plan, the time-share
property being registered pursuant to this chapter.
   (2) With respect to a specific time-share interest multisite
time-share plan, the specific time-share property being registered
pursuant to this chapter.
   (3) With respect to a nonspecific time-share interest multisite
time-share plan, all time-share properties in the time-share plan.

11226.1.  Any person offering to sell or lease any interest subject
to the requirements of Section 11226 shall make a copy of each of the
following documents available for examination by a prospective
purchaser or lessee before the execution of an offer to purchase or
lease and shall give a copy of those documents to each purchaser or
lessee as soon as practicable before transfer of the interest being
acquired by the purchaser or lessee:
   (a) The declaration of covenants, conditions, and restrictions for
the time-share plan.
   (b) Articles of incorporation or association for the time-share
owners' association.
   (c) Bylaws of the owners' association.
   (d) Any other instrument that establishes or defines the common,
mutual, and reciprocal rights and responsibilities of the owners or
lessees of interest in the time-share plan as members of the owners'
association or otherwise.
   (e) The current budget and financial statements for the time-share
plan.

11227.  (a) Subject to subdivision (h), the commissioner shall issue
a final public report if all registration requirements have been met
as set forth in this chapter and if all deficiencies and substantive
inadequacies in the substantially complete application for a final
public report for the time-share plan have been corrected.
   (b) The commissioner may issue a conditional public report prior
to issuing a final public report for a time-share plan if the
requirements of subdivision (c) are met, all deficiencies and
substantive inadequacies in the substantially complete application
for a final public report for the time-share plan have been
corrected, the material elements of the offering to be made under the
authority of the conditional public report have been established,
and all requirements for the issuance of the conditional public
report have been met, except for one or more of the following
requirements, as may be applicable:
   (1) A final map has not been recorded.
   (2) A condominium plan has not been recorded.
   (3) A declaration of covenants, conditions, and restrictions has
not been recorded.
   (4) A declaration of annexation has not been recorded.
   (5) A recorded subordination of existing liens to the time-share
instruments or declaration of annexation or escrow instructions to
effect recordation prior to the first sale, are lacking.
   (6) Filed articles of incorporation are lacking.
   (7) A current preliminary report of a licensed title insurance
company issued after filing of the final map and recording of the
time-share instrument covering all time-share interests to be
included in the public report has not been provided.
   (8) Other requirements the commissioner determines are likely to
be timely satisfied by the applicant.
   (c) An applicant for a conditional public report shall submit the
following information and documents with the applicable filing fee:
   (1) A copy of the statement set forth in subdivision (e).
   (2) A sales agreement or lease to be used in any transaction
conducted under authority of the conditional public report. The sales
agreement or lease shall include all of the following provisions:
   (A) No escrow will close, funds will not be released from escrow,
and the interest contracted for will not be conveyed until a current
final public report for the time-share plan is furnished to the
purchaser.
   (B) The contract may be rescinded, in which event the entire sum
of money paid or advanced by the purchaser shall be returned if (i) a
final public report has not been issued within six months after the
date of issuance of the conditional public report if the conditional
public report is not renewed, (ii) the final public report is not
issued within 12 months after the initial conditional public report
is received if the conditional public report has been renewed for an
additional six-month period, or (iii) the purchaser or lessee is
dissatisfied with the final public report because of a material and
adverse change.
   (3) Escrow instructions to be used in any transaction conducted
under authority of the conditional public report that includes at
least the following information:
   (A) The name and address of the escrow depository.
   (B) A description of the nature of the transaction.
   (C) Provisions ensuring compliance with Section 11243.
   (D) Provisions ensuring that no escrow will close, funds will not
be released from escrow, and the interest contracted for will not be
conveyed until a current final public report for the time-share plan
is furnished to the purchaser or lessee.
   (E) Provisions for the return of money as prescribed in
subparagraph (B) of paragraph (2).
   (d) A decision by the commissioner to not issue a conditional
public report shall be noticed in writing to the applicant within
five business days after his or her decision and that notice shall
specifically state the reasons why the report is not being issued.
   (e) A person may sell or lease, or offer for sale or lease,
time-share interests in a time-share plan pursuant to a conditional
public report if, as a condition of the sale or lease or offer for
sale or lease, delivery of legal title or other interest contracted
for will not take place until issuance of a final public report and
provided that the requirements of subdivision (c) are met.
   (f) A developer, principal, or his or her agent shall provide a
prospective purchaser a copy of the conditional public report and a
written statement including all of the following information:
   (1) Specification of the information required for issuance of a
final public report.
   (2) Specification of the information required in the final public
report that is not available in the conditional public report, along
with a statement of the reasons why that information is not available
at the time of issuance of the conditional public report.
   (3) A statement that no person acting as a principal or agent
shall sell or lease, or offer for sale or lease, time-share interests
in a time-share plan for which a conditional public report has been
issued except as provided in this chapter.
   (4) Specification of the requirements of subdivision (e).
   (g) The prospective purchaser shall sign a receipt that he or she
has received and has read the conditional public report and the
written statement provided pursuant to subdivision (f).
   (h) The term of a conditional public report may not exceed six
months unless renewed pursuant to this subdivision. The conditional
public report may be renewed for one additional six-month period if
the commissioner determines that the requirements for issuance of a
final public report are likely to be satisfied during the renewal
term. The renewal of a conditional public report shall not act to
afford a purchaser who received the initial conditional public report
any additional rescission rights other than those provided to a
purchaser when a final public report is issued and a material and
adverse change has been made.
   (i) For single site time-share plans and component sites of a
multisite time-share plan located outside of the state, a disclosure
document that has been authorized for use by the state regulatory
agency in the state in which the time-share plan or component site is
located that contains the disclosures as determined by the
commissioner upon review to be substantially equivalent to or greater
than the information required to be disclosed pursuant to Section
11234, shall be accepted in lieu of a public report required pursuant
to this section. The disclosure document shall contain a cover page
issued by the commissioner certifying the approval of its use in lieu
of the public report required herein.
   (j) Notwithstanding anything in this section to the contrary, the
commissioner may grant a 12-month preliminary public report allowing
the developer to begin offering and selling time-share interests, in
a time-share plan regardless of whether the accommodations of the
time-share plan are located within or outside of the state, while the
registration is pending with the commissioner. The commissioner may
grant one additional 12-month period if the developer is actively and
diligently pursuing registration under this chapter. The preliminary
public report shall automatically terminate with respect to those
time-share interests covered by a final public report that is issued
before the scheduled termination date of the preliminary report. To
obtain a preliminary public report, the developer shall provide all
of the following:
   (1) Submit the reservation instrument to be used in a form
previously approved by the department with at least the following
provisions:
   (A) The right of both the developer and the potential purchaser to
unilaterally cancel the reservation at any time.
   (B) The payment to the potential purchaser of his or her total
deposit following cancellation of the reservation by either party.
   (C) The placing of the deposit into an interest bearing escrow
account.
   (2) Agree to provide each potential purchaser with a copy of the
preliminary public report and an executed receipt for a copy before
any money or other thing of value has been accepted by or on behalf
of the developer in connection with the reservation.
   (3) Agree to provide a copy of the reservation instrument signed
by the potential purchaser and by or on behalf of the developer to
the potential purchaser, and place any deposit taken from the
potential purchaser into a neutral escrow depository acceptable to
the commissioner.

11228.  The term of a final public report shall be limited to five
years. A renewal shall be issued if the developer, owner, or agent
makes application for renewal of any report and has submitted the
additional information that the commissioner may require.

11229.  (a) In connection with its review of the registration
application of a time-share plan, the commissioner may make an
examination of any time-share property submitted for registration
pursuant to this chapter, and shall, unless there are grounds for
denial, issue to the developer a public report authorizing the sale
or lease in this state of the time-share interests within the
time-share plan submitted pursuant to this chapter. The report shall
contain the data obtained in accordance with Section 11234.
   (b) The commissioner may deny the issuance of the public report
based on the applicant's failure to comply with any of the provisions
of this chapter or the regulations of the commissioner pertaining
thereto, including, but not limited to, all of the following:
   (1) The sale or lease would constitute misrepresentation to, or
deceit or fraud of, the purchasers or lessees.
   (2) Inability to deliver title or other interest contracted for.
   (3) Inability to demonstrate, in accordance with this chapter,
that adequate financial arrangements have been made for all offsite
improvements included in the offering.
   (4) Inability to demonstrate, in accordance with this chapter,
that adequate financial arrangements have been made for any
community, recreational, or other facilities included in the
offering.
   (5) Failure to make a showing that the parcels can be used for the
purpose for which they are offered.
   (6) Failure to provide in the contract or other writing the use or
uses for which the parcels are offered, together with any covenants
or conditions relative thereto.
   (c) Any developer objecting to the denial of a public report may,
within 30 days after receipt of the order of denial, file a written
request for a hearing. The commissioner shall hold the hearing within
20 days thereafter unless the party requesting the hearing requests
a postponement. If the hearing is not held within 20 days after
request for a hearing is received plus the period of the postponement
or if a proposed decision is not rendered within 45 days after
submission and an order adopting or rejecting the proposed decision
is not issued within 15 days thereafter, the order of denial shall be
rescinded and a public report issued.

11230.  If the time-share plan, including any accommodations, or
amenities within the common area are not completed prior to the
issuance of a final public report for the time-share plan, the
developer shall specify a reasonable date for completion and shall
comply with any one of the following conditions:
   (a) Arranges for lien and completion bond or bonds, enforceable by
the association, in an amount and subject to the terms, conditions,
and coverage necessary to assure completion of the improvements
lien-free. The bond shall not exceed 120 percent of the cost for
completion, and the bond shall provide for the reduction of the bond
amount as work is completed.
   (b) All funds from the sale of time-share interests as the
commissioner shall determine are sufficient to assure construction of
the improvement or improvements shall be bonded or impounded in a
neutral escrow depository acceptable to the commissioner until the
improvements have been completed and all applicable lien periods have
expired.
   (c) An amount sufficient to cover the costs of construction shall
be deposited in a neutral escrow depository acceptable to the
commissioner under a written escrow agreement providing for
disbursements from the escrow as work is completed.
   (d) An alternative plan that may be approved by the commissioner.

11231.  Every registration required to be filed with the
commissioner under this chapter shall be reviewed and issued the
specified public report in accordance with the following schedule:
   (a) Time-share registration. Registration shall be effective only
upon the issuance of a public report by the commissioner that shall
occur no later than 60 calendar days after the actual receipt by the
commissioner of the properly completed application. The commissioner
shall provide a list of deficiencies in the application, if any,
within 60 calendar days of receipt. This same time period applies
when amending a public report to add additional phases or component
sites of the time-share plan.
   (b) Preliminary public report registration. A preliminary public
report shall be issued within 15 calendar days of receipt, unless the
commissioner provides to the applicant a written list of
deficiencies in the application, if any, within 15 calendar days of
receipt of an application.
   (c) Amended public report where no additional phases or component
sites are added. An effective date for an amendment to a public
report should occur no more than 45 calendar days after actual
receipt by the commissioner of the amendment. The commissioner shall
provide a list of deficiencies regarding the amendments, if any,
within 45 calendar days of receipt.

11232.  (a) The commissioner may by regulation prescribe filing fees
in connection with applications to the Department of Real Estate for
a public report pursuant to the provisions of this chapter that are
lower than the maximum fees specified in subdivision (b) if the
commissioner determines that the lower fees are sufficient to offset
the costs and expenses incurred in the administration of this
chapter. The commissioner shall hold at least one hearing each
calendar year to determine if lower fees than those specified in
subdivision (b) should be prescribed.
   (b) The filing fees for an application for a public report to be
issued under authority of this chapter shall not exceed the following
for each time-share plan, location, or phase of the time-share plan
in which interests are to be offered for sale or lease:
   (1) One thousand seven hundred dollars ($1,700) plus ten dollars
($10) for each time-share interest to be offered for an original
public report application.
   (2) Six hundred dollars ($600) plus ten dollars ($10) for each
time-share plan interest to be offered that was not permitted to be
offered under the public report to be renewed for a renewal public
report or permit application.
   (3) Five hundred dollars ($500) plus ten dollars ($10) for each
time-share interest to be offered under the amended public report for
which a fee has not previously been paid for an amended public
report application.
   (4) Five hundred dollars ($500) for a conditional public report
application.
   (c) Fees collected by the commissioner under authority of this
chapter shall be deposited into the Real Estate Fund pursuant to
Chapter 6 (commencing with Section 10450) of Part 1. Fees received by
the commissioner pursuant to this article shall be deemed earned
upon receipt. No part of any fee is refundable unless the
commissioner determines that it was paid as a result of mistake or
inadvertency. This section shall remain in effect unless it is
superseded pursuant to Section 10266 or subdivision (a) of Section
10266.5, whichever is applicable.

11233.  An applicant for a public report for a time-share plan in
which the use and occupancy of the time-share interest purchased in
the time-share plan is determined according to a point system shall
include in the application the following information:
   (a) Whether additional points may be acquired by purchase or
otherwise, in the future and the manner in which future purchases of
points may be made.
   (b) The transferability of points to other persons, other years or
other time-share plans.
   (c) A copy of the then-current point value use directory, along
with rules and procedures for changes by the developer or the
association in the manner in which point values may be used.
   (1) No change exceeding 10 percent per annum in the manner in
which point values may be used may be made without the assent of at
least 25 percent of the voting power of the association other than
the developer.
   (2) No time-share interest owner shall be prevented from using a
time-share plan as a result of changes in the manner in which point
values may be used.
   (3) In the event point values are changed or adjusted, no
time-share owner shall be prevented from using his or her home resort
in the same manner as was provided for under the original purchase
contract.
   (d) Any limitations or restrictions upon the use of point values.
   (e) A description of an inventory control system that will ensure
compliance with Section 11250.

11234.  A developer shall prepare, for issuance by the commissioner,
a public report that shall fully and accurately disclose those facts
concerning the time-share developer and time-share plan that are
required by this chapter or by regulation. The developer shall
provide the public report to each purchaser of a time-share interest
in a time-share plan at the time of purchase. The public report shall
be in writing and dated and shall require the purchaser to certify
in writing the receipt thereof. The public report for a single site
time-share plan is subject to the requirements of subdivision (a).
The public report for a specific time-share interest multisite
time-share plan is subject to the requirements of both subdivisions
(a) and (b). The public report for a nonspecific time-share interest
multisite time-share plan is subject to the requirements of
subdivision (c). For time-share plans located outside of the state, a
public report that has been authorized for use by the situs state
regulatory agency and that contains disclosures as determined by the
commissioner upon review to be substantially equivalent to or greater
than the information required to be disclosed pursuant to this
section may be used by the developer to meet the requirements of this
section. A developer may, upon approval by the commissioner, submit
a public report that combines, in a manner prescribed by the
commissioner, the information required to be disclosed by the
applicable subdivisions of this section and the information required
to be disclosed in a public report issued by a regulatory agency in
one or more other states.
   (a) Public reports for a single site and those component sites of
a specific time-share interest multisite time-share plan that are
offered in this state shall include the following:
   (1) The name and address of the developer and the type of
time-share plan being offered and the name and address of the
time-share project.
   (2) A description of the existing or proposed accommodations,
including the type and number of time-share interests in the
accommodations, and if the accommodations are proposed or not yet
complete or fully functional, an estimated date of completion.
   (3) The number of accommodations and time-share interests,
expressed in periods of seven-day use availability or other time
increments applicable to the time-share plan, committed to the
multisite time-share plan, and available for use by purchasers and a
representation about the percentage of useable time authorized for
sale, and if that percentage is 100 percent, then a statement
describing how adequate periods of time for maintenance and repair
will be provided.
   (4) A description of any existing or proposed amenities of the
time-share plan and, if the amenities are proposed or not yet
complete or fully functional, the estimated date of completion.
   (5) The extent to which financial arrangements have been made for
the completion of any incomplete, promised improvements.
   (6) A description of the duration, phases, and operation of the
time-share plan.
   (7) 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.
   (8) The current annual budget as required by Section 11240, along
with the projected assessments and a description of the method for
calculating and apportioning the assessments among purchasers, all of
which shall be attached as an exhibit to the public report.
   (9) Any initial or special fee due from the purchaser at closing
together with a description of the purpose and the method of
calculating the fee.
   (10) A description of any financing offered by or available
through the developer.
   (11) A description of any liens, defects, or encumbrances on or
affecting the title to the time-share interests.
   (12) A description of any bankruptcies, pending civil or criminal
suits, adjudications, or disciplinary actions of which the developer
has knowledge, that would have a material effect on the developer's
ability to perform its obligations.
   (13) Any current or expected fees or charges to be paid by
time-share purchasers for the use of any amenities related to the
time-share plan.
   (14) A description and amount of insurance coverage provided for
the protection of the purchaser.
   (15) The extent to which a time-share interest may become subject
to a tax lien or other lien arising out of claims against purchasers
of different time-share interests.
   (16) A statement disclosing any right of first refusal or other
restraint on the transfer of all or any portion of a time-share
interest.
   (17) A statement disclosing that a deposit made in connection with
the purchase of a time-share interest shall be held by an escrow
agent until expiration of any right to cancel the contract and that a
deposit shall be returned to the purchaser if he or she elects to
exercise his or her right of cancellation. Alternatively, if the
commissioner has accepted from the developer a surety bond,
irrevocable letter of credit, or other financial assurance, each of
which shall be enforceable by the association, in lieu of placing
deposits in an escrow account: (A) a statement disclosing that the
developer has provided a surety bond, irrevocable letter of credit,
or other financial assurance in an amount equal to or in excess of
the funds that would otherwise be placed in an escrow account, (B) a
description of the type of financial assurance that has been
obtained, (C) a statement that if the purchaser elects to exercise
his or her right of cancellation as provided in the contract, the
developer shall return the deposit, and (D) a description of the
person or entity to whom the purchaser should apply for payment.
   (18) A statement that the assessments collected from the
purchasers will be kept in a segregated account separate from the
assessments collected from the purchasers of other time-share plans
managed by the same managing entity, along with a statement
identifying the location of the account and a disclosure of the
rights of owners to inspect the records pertaining to their accounts.
   (19) If the time-share 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.
   (20) Any other information that the developer, with the approval
of the commissioner, desires to include in the public report.
   (21) Any other information reasonably requested by the
commissioner.
   (b) Public reports for specific time-share interest multisite
time-share plans shall include the following additional disclosures:
   (1) A description of each component site, including the name and
address of each component site.
   (2) The number of accommodations and time-share interests,
expressed in periods of seven-day use availability or other time
increments applicable to each component site of the time-share plan,
committed to the multisite time-share plan and available for use by
purchasers and a representation about the percentage of useable time
authorized for sale, and if that percentage is 100 percent, then a
statement describing how adequate periods of time for maintenance and
repair will be provided.
   (3) Each type of accommodation in terms of the number of bedrooms,
bathrooms, and sleeping capacity, and a statement of whether or not
the accommodation contains a full kitchen. For purposes of this
description, a "full kitchen" means a kitchen having a minimum of a
dishwasher, range, sink, oven, and refrigerator.
   (4) A description of amenities available for use by the purchaser
at each component site.
   (5) A description of the reservation system, which shall include
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 and regulations governing access to and
use of the reservation system.
   (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.
   (6) The name and principal address of the managing entity for the
multisite time-share 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.
   (7) A description of any 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 time-share plan.
   (8) A description of the purchaser's liability for any fees
associated with the multisite time-share plan.
   (9) The location of each component site of the multisite
time-share plan, the historical occupancy of each component site for
the prior 12-month period, if the component site was part of the
multisite time-share plan during the 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 that time within the multisite time-share plan.
   (10) Any other information that the developer, with the approval
of the commissioner, desires to include in the time-share disclosure
statement.
   (c) Public reports for nonspecific time-share interest multisite
time-share plans shall include the following:
   (1) The name and address of the developer.
   (2) A description of the type of interest and usage rights the
purchaser will receive.
   (3) A description of the duration and operation of the time-share
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) The number of accommodations and time-share interests,
expressed in periods of seven-day use availability or other time
increments applicable to the multisite time-share plan for each
component site committed to the multisite time-share plan and
available for use by purchasers and a representation about the
percentage of useable time authorized for sale, and if that
percentage is 100 percent, then a statement describing how adequate
periods of time for maintenance and repair will be provided.
   (8) Each type of accommodation in terms of the number of bedrooms,
bathrooms, and sleeping capacity, and a statement of whether or not
the accommodation contains a full kitchen. For purposes of this
description, a "full kitchen" means a kitchen having a minimum of a
dishwasher, range, sink, oven, and refrigerator.
   (9) A description of amenities available for use by the purchaser
at each component site.
   (10) A description of any incomplete amenities at any of the
component sites along with a statement as to any assurance for
completion and the estimated date the amenities will be available.
   (11) The location of each component site of the multisite
time-share plan, the historical occupancy of each component site for
the prior 12-month period, if the component site was part of the
multisite time-share 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 that time within the multisite time-share plan.
   (12) A description of any 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 time-share plan.
   (13) 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 and regulations governing access to and
use of the reservation system.
   (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.
   (14) A description of any liens, defects, or encumbrances that
materially affect the purchaser's use rights.
   (15) The name and principal address of the managing entity for the
multisite time-share 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 a multisite time-share plan managing entity and
the managing entity of the component sites of a multisite time-share
plan, if different from the multisite time-share plan managing
entity.
   (16) The current annual budget as provided in Section 11240, along
with the projected assessments and a description of the method for
calculating and apportioning the assessments among purchasers, all of
which shall be attached as an exhibit to the public report.
   (17) Any current fees or charges to be paid by time-share
purchasers for the use of any amenities related to the time-share
plan and a statement that the fees or charges are subject to change.
   (18) Any initial or special fee due from the purchaser at closing,
together with a description of the purpose and method of calculating
the fee.
   (19) A description of any financing offered by or available
through the developer.
   (20) A description of any bankruptcies, pending civil or criminal
suits, adjudications, or disciplinary actions of which the developer
has knowledge, which would have a material effect on the developer's
ability to perform its obligations.
   (21) A statement disclosing any right of first refusal or other
restraint on the transfer of all or any portion of a time-share
interest.
   (22) A statement disclosing that a deposit made in connection with
the purchase of a time-share interest shall be held by an escrow
agent until expiration of any right to cancel the contract and that a
deposit shall be returned to the purchaser if he or she elects to
exercise his or her right of cancellation. Alternatively, if the
commissioner has accepted from the developer a surety bond,
irrevocable letter of credit, or other financial assurance in lieu of
placing deposits in an escrow account: (A) a statement disclosing
that the developer has provided a surety bond, irrevocable letter of
credit, or other financial assurance in an amount equal to or in
excess of the funds that would otherwise be placed in an escrow
account, (B) a description of the type of financial assurance that
has been arranged, (C) a statement that if the purchaser elects to
exercise his or her right of cancellation as provided in the
contract, the developer shall return the deposit, and (D) a
description of the person or entity to whom the purchaser should
apply for payment.
   (23) If the time-share 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.
   (24) Any other information that the developer, with the approval
of the commissioner, desires to include in the time-share disclosure
statement.
   (d) The commissioner may establish by regulation provisions
regarding the delivery of the public report and other required
information through alternative media forms.
   (e) The commissioner may, upon finding that the subject matter is
otherwise adequately covered or the information is unnecessary or
inapplicable, waive any requirement set forth in this section.

11235.  (a) A person who has entered into a contract to purchase a
short-term product shall have the right to rescind the contract until
midnight of the seventh calendar day, or a later time as provided in
the contract, following the day on which the contract is first made,
in which event the purchaser shall be entitled to a refund of 100
percent of the consideration paid under the contract, without
deduction.
   (b) The developer or other person who offers a short-term product
shall clearly and conspicuously disclose, in writing, to all
purchasers of a short-term product, all of the following:
   (1) The right of rescission provided for in subdivision (a).
   (2) That reservations for accommodations under the contract are
subject to availability and that there is no guarantee that a
purchaser will be able to obtain specific accommodations during a
specific time period, if applicable.
   (3) Specific blackout dates, if applicable.
   (4) That the earlier the purchaser requests a reservation, the
greater the opportunity to received a confirmed reservation.
   (5) That, if the purchaser later purchases a time-share interest,
the developer shall provide the purchaser with the then-current
public report for the time-share plan being purchased and that the
purchaser shall have until midnight of the seventh calendar day
following receipt of the public report to cancel the purchase of the
time-share interest.
   (c) If a purchaser is unable to obtain a confirmed reservation for
a specific accommodation and time period requested, the developer or
other person who offers the short-term product shall attempt to
provide the purchaser with a substantially similar alternative to the
reservation requested. If the developer or other person who offers
the short-term product is unable to provide the reservation requested
or an acceptable alternative during the initial term of the
contract, the purchaser may request and be granted an extension of
the contract for a period of 12 months.
   (d) The contract for the purchase of a short-term product shall
include the date of the contract and shall contain, in immediate
proximity to the space reserved for the signature of the purchaser, a
conspicuous statement as follows:

   "YOU HAVE THE RIGHT TO CANCEL THIS CONTRACT AT ANY TIME PRIOR TO
MIDNIGHT OF THE SEVENTH (7TH) [or later] CALENDAR DAY AFTER THE DATE
OF THIS CONTRACT AND RECEIVE A FULL REFUND. YOU MAY EXERCISE YOUR
RIGHT TO CANCEL BY SENDING A FACSIMILE, OR BY DEPOSIT, FIRST-CLASS
POSTAGE PREPAID, INTO THE UNITED STATES MAIL TO THE FOLLOWING
ADDRESS: (SPECIFIC CONTACT INFORMATION)"

   (e) A purchaser of a short-term product may exercise the right of
rescission by giving written notice to the owner of the short-term
product as specified in subdivision (b), using a preprinted form
provided by the developer. The developer or other person who offers
the short-term product shall cause any deposit given by a purchaser
who has exercised the right to rescind described in subdivision (a)
to be returned to the purchaser not later than the last to occur of
10 business days following receipt of the purchaser's written notice
of rescission, or 10 business days following the date upon which any
deposit becomes good and immediately available funds.
   (f) A developer or other person who offers a short-term product
shall do one of the following:
   (1) Place any purchase money funds received from the purchaser of
a short-term product into an independent escrow depository until the
seven-day period for rescission described in subdivision (a) has
expired.
   (2) Post a bond to secure the return of a purchaser's purchase
money funds in a form and in an amount prescribed by the
commissioner.
   (3) Make alternative arrangements satisfactory to the commissioner
to secure the owner's obligation to return the purchase money funds.
   (g) If applicable, the developer shall disclose to the purchaser
the type of alternative arrangement to be used and, in the event of a
claim, to whom the purchaser should apply for payment under the
alternative arrangement.
   (h) The developer shall compensate the association for any
services acquired from the association or for any of the association'
s property used when fulfilling a short-term product in excess of
services or use of property provided to other owners.
   (i) If the contract for a short-term product is negotiated
primarily in Spanish, Chinese, Tagalog, Vietnamese, or Korean, orally
or in writing, the developer shall provide to the prospective
purchaser prior to the commencement of the rescission period an
unexecuted translation of the contract in the language in which the
contract was negotiated. The terms of the short-term contract that is
executed in the English language shall determine the rights and
obligations of the parties.

11236.  (a) A receipt on the form specified herein shall be taken by
or on behalf of the developer from each person executing a
reservation agreement under authority of a preliminary public report
and each person who has made a written offer to purchase or lease a
time-share interest under authority of a preliminary, conditional, or
final public report.
   (b) The developer or his or her agent shall retain each receipt
for a final public report for a period of three years from the date
of the receipt and shall make the receipts available for inspection
by the commissioner or his or her designated representative during
regular business hours.
   (c) The form approved by the commissioner for the acknowledgment
of receipt of a preliminary, conditional, or final public report
shall be as follows:
                            "RECEIPT FOR PUBLIC REPORT
   The Law and Regulations of the commissioner require that you as a
prospective purchaser or lessee be afforded an opportunity to read
the public report for this time-share before you execute a contract
to purchase or lease a time-share interest or before any money or
other consideration toward purchase or lease of a time-share interest
is accepted from you.

   You must be afforded an opportunity to read the report before a
written reservation or any deposit in connection therewith is
accepted from you.

   DO NOT SIGN THIS RECEIPT UNTIL YOU HAVE RECEIVED A COPY OF THE
REPORT AND HAVE READ IT.

   I have read the commissioner's public report on ____ (File No.,
Tract No., or Name). I understand the report is not a recommendation
or endorsement of the time-share, but is for information only. The
date of the public report which I received and read is ____.

   Developer Is Required to Retain This Receipt for Three Years.

11237.  (a) If a purchaser of a time-share interest in a time-share
plan is offered the opportunity to acquire an incidental benefit in
connection with the sale of a time-share interest, the developer
shall provide the purchaser with a disclosure statement containing
all of the following information:
   (1) A general description of the incidental benefit, including the
terms and conditions governing the use of the incidental benefit.
   (2) A statement that the continued availability of the incidental
benefit is not necessary for the use and enjoyment of the purchaser's
use of any accommodation of the time-share plan.
   (3) A statement that the purchaser's use of or participation in
the incidental benefit is completely voluntary, and payment of any
fee or other cost associated with the incidental benefit is required
only upon that use or participation.
   (4) A listing of the fees, if any, that the purchaser will be
required to pay to use the incidental benefit.
   (5) A statement that no costs of acquisition, operation,
maintenance, or repair of the incidental benefit shall be passed on
to purchasers of time-share interests in the time-share plan as a
common expense of the time-share plan.
   (b) A developer shall include in its initial application for
registration, a description of any incidental benefits which may be
used by the developer. The developer may, but shall not be required
to describe the incidental benefits in the public report for the
time-share plan.
   (c) The incidental benefit disclosure is not required to be filed
with the commissioner prior to the use of the disclosure. However,
the commissioner may request and review the records of the developer
to ensure that the incidental benefit disclosure required by this
section has been given to purchasers and to ensure that the
statements required to be made in the disclosure are accurate as to
the operation of each incidental benefit offered by the developer.
The developer shall deliver the records to the commissioner within 10
business days of the commissioner's request.

11238.  (a) The purchase contract entered into by any person who has
made an offer to purchase a time-share interest or interests, any
incidental benefit, made on the same day or within seven calendar
days after the person attended a sales presentation for a time-share
interest, or any right under an exchange program, made on the same
day or within seven calendar days after the person attended a sales
presentation for a time-share interest, shall be voidable by the
purchaser, without penalty, within seven calendar days, or a longer
period as provided in the contract, after the receipt of the public
report or the execution of the purchase contract, whichever is later.
   (1) The purchase contract for the time-share interest shall
provide notice of the seven-day cancellation period, together with
the name and mailing address to which any notice of cancellation
shall be delivered.
   (2) Notice of cancellation shall be deemed timely if given not
later than midnight of the seventh calendar day.
   (b) A person who has made an offer to purchase a time-share
interest, incidental benefit, or rights under an exchange program as
described above may exercise the right of cancellation granted by
this section by giving written notification of the notice to cancel
to the developer at the place of business designated by the developer
in the purchase contract.
   (c) If the notice of cancellation is by United States mail, a
rebuttable presumption shall exist that notice was given on the date
that it is postmarked. If the notice is sent by facsimile, it shall
be considered given on the date of a confirmed transmission. If the
notice is by means of a writing sent other than by United States mail
or telegraph, it shall be considered as given at the time of
delivery at the place of business designated by the developer.
Exercising the rescission rights of the time-share interest shall
also automatically rescind any agreement for the purchase of an
incidental benefit or an enrollment into an exchange program where
the agreements were entered into in conjunction with the purchase of
the time-share interest.
   (d) Each developer shall utilize and furnish each purchaser with a
fully completed and executed copy of a contract pertaining to the
sale of a time-share interest, which contract shall include the
following information:
   (1) The actual date the contract is executed by each party.
   (2) The names and addresses of the developer and time-share plan.
   (3) The initial purchase price and any additional recurring or
nonrecurring charges, or a good faith estimate if the amount of those
charges cannot then be determined, that the purchaser will be
required to pay in connection with the purchase of the time-share
interest, including, but not limited to, the current year's annual
assessment for common expenses and financing charges.
   (4) The estimated date of completion of construction of each
accommodation promised to be completed which is not completed at the
time the contract is executed.
   (5) A brief description of the nature and duration of the
time-share interest being sold, including whether any interest in
real property is being conveyed.
   (6) The specific number of years of the term of the time-share
plan.
   (7) Immediately prior to the space reserved in the contract for
the signature of the purchaser, the developer shall disclose, in
conspicuous type, substantially the following notice of cancellation:

    You may cancel this contract without any penalty or obligation
within seven calendar days of receipt of the public report or after
the date you sign this contract, whichever date is later. If you
decide to cancel this contract, you must notify the developer in
writing of your intent to cancel. Your notice of cancellation shall
be effective upon the date sent and shall be sent to (name of
developer) at (address of developer). Your notice of cancellation may
also be sent by facsimile to (facsimile number of the developer) or
by hand-delivery. Any attempt to obtain a waiver of your cancellation
right is void and of no effect.

   (8) The purchase contract for an interest in a single site or
specific time-share interest multisite time-share plan without an
accommodation in this state shall include the following additional
disclosure in conspicuous type:

    The accommodations of this time-share plan are located outside of
California. As such, the management (including all matters relating
to the association, the association budget, and any management
contract) of this time-share plan is not governed by California law,
but by the applicable law, if any, of the jurisdiction in which the
accommodations are located as stated in the public report. You should
review the governing documents related to the association, the
association's budget, and the management of the time-share plan.

   (e) If rescission is sought by the purchaser in accordance with
this section, and a court finds the developer denied the rescission
in violation of this section, the court may also award reasonable
attorneys' fees and costs to the prevailing purchaser.

11239.  (a) To inform a purchaser of his or her right of
cancellation under Section 11238, the developer shall attach to the
face page of every copy of a public report given to a prospective
purchaser, the cancellation notice set forth in subdivision (b)
thereof printed in conspicuous type.
   (b) The form and content of the notice shall be as follows:
                NOTICE OF CANCELLATION RIGHTS

   You may cancel the purchase of the time-share interest(s) in the
time-share plan identified below without any penalty or obligation
and are legally entitled to the return of all money and other
considerations that you have given toward the purchase. If you decide
to cancel your purchase, you must notify the developer in writing of
your intent to cancel within seven calendar days of receipt of the
public report or the date you sign the purchase contract, whichever
date is later. Your notice of cancellation shall be effective upon
the date sent and shall be sent to the developer at the address or
facsimile number provided in your purchase contract. Any attempt to
obtain a waiver of your cancellation right is void and of no effect.

   (c) Each notice shall also contain the following form. The form
shall have all developer-related information completed by the
developer and may be used by a purchaser to cancel the sale of the
time-share interest:

   (Name of Developer) (Address of Developer)
   (Facsimile Number of Developer)
   (Name of Time-share Plan)
   (DRE Registration File Number)
   RE: ELECTION TO CANCEL THE SALE OF A TIME-SHARE INTEREST(S)
   I hereby elect to cancel my purchase of the time-share interest(s)
in the above-name time-share plan.

  ___________________________
             (Date)
  ___________________________ ______________________
          (Signature)              (Print Name)
  ___________________________ ______________________
          (Signature)              (Print Name)

11240.  An estimated operating budget for the time-share plan shall
be filed with the commissioner along with the other information
required to be registered pursuant to this chapter, and shall contain
the following information:
   (a) The estimated annual expenses of the time-share plan along
with the estimated revenue of the association from all sources,
including the amounts collectible from purchasers as assessments. The
estimated payments by the purchaser for assessments shall also be
stated in the estimated amounts for the times when they will be due.
Expenses shall be shown in a manner that enables the purchaser to
calculate the annual expenses associated with the time-share interest
being purchased. Expenses that are personal to purchasers that are
not uniformly incurred by all purchasers or that are not provided for
or contemplated by the time-share plan documents may be excluded
from this estimate.
   (b) (1) The estimated items of expenses of the time-share plan and
the association, except as excluded under subdivision (a),
including, but not limited to, if applicable, the following items,
that shall be stated either as association expenses collectible by
assessments or as expenses of the purchaser payable to persons other
than the association:
   (2) Expenses for the association:
   (A) Administration of the association.
   (B) Management fees.
   (C) Maintenance.
   (D) Rent for accommodations.
   (E) Taxes upon time-share property.
   (F) Taxes upon leased areas.
   (G) Insurance.
   (H) Security provisions.
   (I) Other expenses.
   (J) Operating capital.
   (K) Equitable apportionment of expenses between time-share and
non-time-share uses of the common area, if applicable.
   (L) Reserves for deferred maintenance and reserves for capital
expenditures. All reserves for any accommodations and common areas of
a time-share plan located in this state shall be based upon the
estimated life and replacement cost of accommodations and common
elements of the time-share plan. For any accommodations and common
elements of a time-share plan located outside of this state, the
developer shall disclose the amount of reserves for deferred
maintenance and capital expenditures required by the law of the situs
state, if applicable, and maintained for those accommodations and
common elements, which amount of reserves shall be based on the
estimated life and replacement cost of each reserve item. The
developer or the association shall include in the budget a reasonable
reserve accumulation plan. A plan that (i) provides for reserves to
be funded within five years at a level of 50 percent of the amount
specified in the reserve study as fully funded, and (ii) requires
those reserves collected in any given year to equal or exceed the
amount of reserve expenditures estimated for that year shall be
deemed to be a reasonable reserve accumulation plan. The funding of
reserves may be based on collection of reserve amounts in conjunction
with annual assessments, or on some alternative mechanism,
including, but not limited to, a bond, letter of credit, or similar
mechanism. Collection of required reserve amounts solely by one or
more special assessments is not reasonable. If control of the
association is in owners other than the developer, and such owners
vote not to maintain reserves or to maintain reserves at less than 50
percent, the failure to maintain the required level of reserves
shall not be cause for denying the developer a public report.
   (c) The estimated amounts shall be stated for a period of at least
12 months and may distinguish between the period prior to the time
that purchasers elect a majority of the board of administration and
the period after that date.
   (d) The budget of a phase time-share plan shall contain a note
identifying the number of time-share interests covered by the budget,
indicating the number of time-share interests, if any, estimated to
be declared as part of the time-share plan during that calendar year,
and projecting the common expenses for the time-share plan based
upon the number of time-share interests estimated to be declared as
part of the time-share plan during that calendar year.
   (e) For single site time-share plans and component sites of a
multisite time-share plan located outside of the state, the budget
shall include the subject matter set forth in subdivisions (a) to
(d), inclusive. The budget shall be in compliance with the applicable
laws of the state or jurisdiction in which the time-share property
or component site is located, and if there is a conflict between the
affirmative standards set forth in the laws of the situs state and
the requirements set forth in this section, the law of the situs
state shall control. If the budget provides for the matters contained
in subdivisions (a) to (d), inclusive, the budget shall be deemed to
be in compliance with the requirements of this section, and the
developer shall not be required to make revisions in order to comply
with this section.
   (f) The budget shall include a certification subscribed and sworn
by an expert in the preparation of time-share plan budgets, who may
be (1) an independent public accountant, (2) a certified public
accountant, who is an employee of the developer, or (3) at the
discretion of the commissioner, an individual or entity acceptable to
the commissioner to conduct the review. Acceptance of the individual
or entity shall not be considered an endorsement by the commissioner
of a proposed budget. The budget certification shall also be signed
by the developer or on behalf of the developer by an appropriate
officer, if the developer is a corporation, or the managing member,
if the developer is a limited liability company. The certification
concerning the adequacy of the budget shall be in the following form:

    On behalf of the developer of the captioned time-share plan, I/my
firm has reviewed or prepared the budget containing projections of
income and expenses for time-share operation. My/our experience in
this field includes:  [List experience.]
    I/we have reviewed the budget and investigated the facts set
forth in the budget and the facts underlying it with due diligence in
order to form a basis for this certification.
    I/we certify that the projections in the budget appear reasonable
and adequate based on present prices (adjusted to reflect continued
inflation and present levels of consumption for comparable units
similarly situated) or, for an existing project, based on historical
data for the project.
    I/we certify that the budget:
    (1) Sets forth in detail the terms of the transaction as it
relates to the budget and is complete, current, and accurate.
    (2) Affords potential purchasers an adequate basis upon which to
found their judgment.
    (3) Does not omit any material fact.
    (4) Does not contain any untrue statement of a material fact.
    (5) Does not contain any fraud, deception, concealment, or
suppression.
    (6) Does not contain any promise or representation as to the
future which is beyond reasonable expectation or unwarranted by
existing circumstances.
    (7) Does not contain any representation or statement which is
false, where I/we:
    (A) Knew the truth.
    (B) With reasonable effort could have known the truth and made no
reasonable effort to ascertain the truth.
    (C)  Did not have knowledge concerning the representation or
statement made.
    I/we understand that a copy of this certification is intended to
be incorporated into the public report so that prospective purchasers
may rely on it.
    This certification is made under the penalty of perjury for the
benefit of all persons to whom this offer is made. We understand that
violations are subject to the civil and criminal penalties of the
laws of California.

   The certification shall be dated within 90 days prior to the date
of the submission of the budget to the commissioner. The expert's
certification shall be based on experience in the management of
hotel, resort, or time-share properties and disclose the approximate
number of properties managed and length of time managed, together
with other relevant real estate experience, qualifications, and
licenses.
   (g) Any budget that is not certified by an independent certified
public accountant or an employee of the developer who is licensed as
a certified public accountant may be reviewed by the commissioner to
confirm the accuracy of the certification.
   (h) The certified budget for the time-share plan shall be prepared
and submitted by the developer to the commissioner annually for as
long as the registration is in effect. If the budget is increased
more than 20 percent in any year, the developer shall submit to the
commissioner, along with the increased budget, evidence that the
requirements of paragraph (5) of subdivision (a) of Section 11265
have been met. The budget shall be submitted at least 15 days prior
to the first day of the period that it covers. Upon the submission of
each annual budget, the exhibit to the public report specified in
paragraph (8) of subdivision (a) of, and paragraph (16) of
subdivision (c) of, Section 11234 shall be updated. The updating of
the exhibit shall not be considered to constitute an amendment of the
public report.
   (i) The audited financial statements of the association prepared
pursuant to paragraph (2) of subdivision (b) of Section 11272 shall
be delivered to the commissioner upon request.
   (j) At the time an application is submitted for renewal of the
public report or any amendment of the public report that affects the
budget for the time-share plan, the developer shall submit with the
application a copy of the most recent audited financial statement for
the time-share plan, along with a certified copy of the budget
reflecting the amendment or renewal. If the commissioner, upon
reasonable comparison of the budget and the prior year's audited
financial statements, determines that the budget is deficient, the
commissioner may subject the budget to a substantive review.

11241.  (a) The developer is obligated for the expenses associated
with unsold inventory held by the developer. The obligation can be
fulfilled in either of the following ways:
   (1) The developer shall pay the full maintenance fee for each of
the interests owned by the developer.
   (2) The developer shall enter into a subsidy agreement with the
association to cover any shortfall between expenses incurred and
assessments collected from other owners ("deficit subsidy"), and
shall furnish the association with an executed copy of the agreement
within 10 days after closing of escrow of the first sale or lease of
a time-share interest. The department will not approve a deficit
subsidy program unless provisions are made for the accumulation of
reserves for replacement and major maintenance of the time-share
property in accordance with accepted property management practices
and the transfer of the reserve fund to the association on
termination of the program.
   (b) To assure the fulfillment of the obligations of the developer
of a time-share plan to either pay assessments as an owner of
time-share interests in the time-share plan or to pay a deficit
subsidy, the commissioner shall require that the developer furnish a
surety bond, cash deposit, letter of credit, or other alternate
assurance enforceable by the association and acceptable to the
commissioner, and that assurance shall be in compliance with either
paragraph (1) or (2) of subdivision (c).
   (c) The amount of the assurance shall be in such an amount as may
be approved by the commissioner, but shall not exceed the lesser of
50 percent of the anticipated cost of operation and maintenance of
the time-share plan, including the establishment of reserves for
replacement and major repair, for an operational period of one year
or 100 percent of the assessments attributed to the total amount of
the total unsold time-share interests owned by the developer and
registered pursuant to this chapter. The security shall be delivered
to a neutral escrow depository, or to the trustee if title to the
time-share property has been delivered to the trustee, along with
instructions signed by the developer for the benefit of the
association which shall provide as follows:
   (1) Where the developer pays full maintenance fees on unsold
inventory the security shall remain available to pay any assessments
for which the developer is liable and delinquent until the depository
or trustee has received both of the following:
   (A) Written notice, from the developer that sales of 80 percent of
the time-share interest in the time-share plan have been closed.
   (B) Written notice from the association that the developer is not
delinquent in the payment of assessments for which it is obligated.
   (2) The amount of the assurance required by this section may be
adjusted annually to an amount approved by the commissioner, but
shall be not more than the smaller of 50 percent of the anticipated
cost of operation and maintenance of the time-share plan, including
the establishment of reserves for replacement and major repair, for
an operational period of one year or 100 percent of the assessments
attributed to the total amount of the total unsold time-share
interests owned by the developer and registered pursuant to this
chapter.
   (d) A deficit subsidy agreement entered into after July 1, 2005,
shall provide that if there is a dispute between the developer and
the association with respect to the question of satisfaction of the
conditions for exoneration or release of the security, the issue
shall, at the request of either party, be submitted to arbitration in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association. The fee payable to the American Arbitration
Association to initiate the arbitration shall be remitted by the
developer. The cost of arbitration shall ultimately be borne as
determined by the arbitrator under these rules.

11242.  (a) In any time-share plan , the developer may undertake to
pay a portion of the assessments otherwise payable by each purchaser
("buy down subsidy"). Any developer undertaking to pay a buy down
subsidy shall do both of the following:
   (1) Enter into a contract with the association that specifies in
detail the obligations of the developer and the methods to be used in
valuing the goods and services furnished under the time-share plan.
   (2) Furnish the association with an executed copy of the
subsidization contract within 10 days after closing of escrow of the
first sale or lease of a time-share interest.
   (b) If the developer is paying a buy down subsidy, the developer
shall provide an assurance for its buy down subsidy obligation in an
amount acceptable to the commissioner, but not more than the
aggregate amount by which annual assessments are to be reduced, for
example, the number of interests to be sold in each unit type
multiplied by the amount by which the annual assessment for such unit
type is to be reduced, multiplied by the number of years in the term
of the buy down subsidy.
   (c) For any buy down subsidy agreements entered into after July 1,
2005, the subsidy agreements shall provide that if there is a
dispute between the developer and the association with respect to the
question of satisfaction of the conditions for exoneration or
release of the security, the issue shall, at the request of either
party, be submitted to arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association. The fee
payable to the American Arbitration Association to initiate the
arbitration shall be remitted by the developer. The cost of
arbitration shall ultimately be borne as determined by the arbitrator
under those rules.

11242.1.  (a) The assurance specified in Section 11241 and, if
applicable, the assurance specified in Section 11242, shall be
delivered to the trustee or an escrow depository acceptable to the
department along with an executed copy of the subsidization contract
and instructions to the escrow depository signed by the developer and
on behalf of the association. The instructions shall provide for
both of the following:
   (1) The escrow agent shall not release or exonerate the security
device until it has received written notice from the association that
the developer has faithfully performed all of his or her obligations
under the subsidization contract, if applicable, and the escrow
agent has received the written notices specified in paragraph (1) of
subdivision (c) of Section 11241.
   (2) If there is a dispute between the developer and the
association with respect to the questions of satisfaction of the
conditions for exoneration or release of the security, the issue or
issues shall, at the request of either party, be submitted to
arbitration in accordance with the Commercial Arbitration Rules of
the American Arbitration Association.
   (b) The fee payable to the American Arbitration Association to
initiate arbitration shall be submitted by the developer. The costs
of arbitration shall be borne by the party as determined by the
arbitrator pursuant to the Commercial Arbitration Rules of the
American Arbitration Association.
   (c) The agreement for the deficit subsidy, described in
subdivision (a) of Section 11241, and the agreement for the buy down
subsidy, described in subdivision (a) of Section 11242 may, at the
option of the developer, be contained in one instrument.

11243.  The developer shall comply with the following escrow
requirements:
   (a) A developer of a time-share plan shall deposit into an escrow
account in an acceptable escrow depository 100 percent of all funds
that are received during the purchaser's rescission period. An
acceptable escrow depository includes, when qualified to do business
in this state, escrow agents licensed by the Commissioner of
Corporations, banks, trust companies, savings and loan associations,
title insurers, and underwritten title companies. The deposit of
these funds shall be evidenced by an executed escrow agreement
between the escrow agent and the developer, that shall include
provisions that state the following:
   (1) Funds may be disbursed to the developer by the escrow agent
from the escrow account only after expiration of the purchaser's
rescission period and in accordance with the purchase contract,
subject to subdivision (b).
   (2) If a prospective purchaser properly cancels the purchase
contract pursuant to its terms, the funds shall be paid to the
prospective purchaser or paid to the developer if the prospective
purchaser's funds have been previously refunded by the developer.
   (b) If a developer contracts to sell a time-share interest and the
construction of any property in which the time-share interest is
located has not been completed, the developer, upon expiration of the
rescission period, shall continue to maintain in an escrow account
all funds received by or on behalf of the developer from the
prospective purchaser under his or her purchase contract. The
commissioner shall establish, by regulation, the types of
documentation which shall be required for evidence of completion,
including, but not limited to, a certificate of occupancy, a
certificate of substantial completion, or an inspection by the State
Fire Marshal designee or an equivalent public safety inspection
agency in the applicable jurisdiction. Unless the developer submits
financial assurances, in accordance with subdivision (c), funds shall
not be released from escrow until a certificate of occupancy, or its
equivalent, has been obtained and the rescission period has passed,
and the time-share interest can be transferred free and clear of
blanket encumbrances, including mechanics' liens. Funds to be
released from escrow shall be released as follows:
   (1) If a prospective purchaser properly cancels the purchase
contract pursuant to its terms, the funds shall be paid to the
prospective purchaser or paid to the developer if the prospective
purchaser's funds have been previously refunded by the developer.
   (2) If a prospective purchaser defaults in the performance of the
prospective purchaser's obligations under the purchase contract, the
funds shall be paid to the developer.
   (3) If the funds of a prospective purchaser have not been
previously disbursed in accordance with the provisions of this
subdivision, they may be disbursed to the developer by the escrow
agent upon the issuance of acceptable evidence of completion of
construction.
   (c) In lieu of the provisions in subdivisions (a) and (b), the
commissioner may accept from the developer a surety bond, escrow
bond, irrevocable letter of credit, or other financial assurance or
arrangement acceptable to the commissioner. Any acceptable financial
assurance shall be in an amount equal to or in excess of the lesser
of (1) the funds that would otherwise be placed in escrow, or (2) in
an amount equal to the cost to complete the incomplete property in
which the time-share interest is located. However, in no event shall
the amount be less than the amount of funds that would otherwise be
placed in escrow pursuant to paragraph (1) of subdivision (a).
   (d) The developer shall provide escrow account information to the
commissioner and shall execute in writing an authorization consenting
to an audit or examination of the account by the commissioner on
forms provided by the commissioner. The developer shall comply with
the reconciliation and records requirements established by regulation
by the commissioner. The developer shall make documents related to
the escrow account or escrow obligation available to the commissioner
upon the department's request. The escrow agent shall maintain any
disputed funds in the escrow account until either of the following
occurs:
   (1) Receipt of written direction agreed to by signature of all
parties.
   (2) Deposit of the funds with a court of competent jurisdiction in
which a civil action regarding the funds has been filed.

11244.  (a) Excluding any encumbrance placed against the purchaser's
time-share interest securing the purchaser's payment of purchase
money financing for the purchase, the developer shall not be entitled
to the release of any funds escrowed under Section 11243 with
respect to each time-share interest and any other property or rights
to property appurtenant to the time-share interest, including any
amenities represented to the purchaser as being part of the
time-share plan, until the developer has provided satisfactory
evidence to the commissioner of one of the following:
   (1) The time-share interest, including, but not limited to, a
time-share interest in any component sites of a nonspecific
time-share interest multisite time-share plan, together with any
other property or rights to property appurtenant to the time-share
interest, including any amenities represented to the purchaser as
being part of the time-share plan, are free and clear of any of the
claims of the developer, any owner of the underlying fee, a
mortgagee, judgment creditor, or other lienor, or any other person
having an interest in or lien or encumbrance against the time-share
interest or appurtenant property or property rights.
   (2) The developer, any owner of the underlying fee, a mortgagee,
judgment creditor, or other lienor, or any other person having an
interest in or lien or encumbrance against the time-share interest or
appurtenant property or property rights, including any amenities
represented to the purchaser as being part of the time-share plan,
has recorded a subordination and notice to creditors document in the
appropriate public records of the jurisdiction in which the
time-share interest is located. The subordination document shall
expressly and effectively provide that the interest holder's right,
lien, or encumbrance shall not adversely affect, and shall be
subordinate to, the rights of the owners of the time-share interests
in the time-share plan regardless of the date of purchase, from and
after the effective date of the subordination document.
   (3) The developer, any owner of the underlying fee, a mortgagee,
judgment creditor, or other lienor, or any other person having an
interest in or lien or encumbrance against the time-share interest or
appurtenant property or property rights, including any amenities
represented to the purchaser as being part of the time-share plan,
has transferred the subject accommodations, amenities, or all use
rights in the amenities to a nonprofit organization or owners'
association to be held for the use and benefit of the owners of the
time-share plan, which shall act as a fiduciary to the purchasers,
the developer has transferred control of the entity to the owners or
does not exercise its voting rights in the entity with respect to the
subject accommodations or amenities. Prior to the transfer, any lien
or other encumbrance against the accommodation or facility shall be
made subject to a subordination and notice to creditors' instrument
pursuant to paragraph (2).
   (4) Alternative arrangements have been made which are adequate to
protect the rights of the purchasers of the time-share interests and
approved by the commissioner.
   (b) Nothing in this section shall prevent a developer from
accessing any escrow funds if the developer has complied with
subdivision (c) of Section 11243.
   (c) The developer shall notify the commissioner of the extent to
which an accommodation may become subject to a tax or other lien
arising out of claims against other purchasers in the same time-share
plan. The commissioner may require the developer to notify a
prospective purchaser of any such potential tax or lien that would
materially and adversely affect the prospective purchaser.

11245.  (a) No person subject to this chapter shall do any of the
following:
   (1) Make any material misrepresentation that is false or
misleading in connection with any advertisement or promotion of a
time-share plan.
   (2) Make a prediction of any increases in the resale price or
resale value of the time-share interest.
   (3) Materially misrepresent the size, nature, extent, qualities,
or characteristics of the offered time-share plan.
   (4) Materially misrepresent the conditions under which a purchaser
may exchange the right to use accommodations in one location for the
right to use accommodations in another location.
   (5) Materially misrepresent the current or future availability of
a resale or rental program offered by or on behalf of the developer.
   (6) Materially misrepresent the nature or extent of any incidental
benefit.
   (7) Fail to deliver any item offered in connection with a
promotion to a prospective purchaser upon the conclusion of the sales
presentation, or fail to deliver any item offered in connection with
a promotion to a prospective purchaser, upon request, reasonably
approximate to the conclusion of the length of time for the sales
presentation that was previously represented to the prospective
purchaser.
   (8) Fail to disclose, in a manner that meets the requirements of
Section 17537.1 or 17537.2 of the Business and Professions Code, that
a certificate, coupon, or raincheck redeemable for fulfillment for
goods or services will be provided in connection with a promotion for
the purchase of a time-share interest, if that is the case.
   (9) State that the purchase of a time-share interest constitutes a
financial investment.
   (10) Fail to clearly and conspicuously disclose, prior to the
execution of any purchase contract, the annual maintenance and
association dues or any separately billed taxes, when applicable.
   (11) Fail to clearly disclose in writing any automatic charging or
billing procedure, and fail thereafter to obtain the express written
authorization from the prospective purchaser for any purchase,
subscription, or enrollment that results in that automatic charging
or billing of initial or periodic amounts to the prospective
purchaser.
   (12) If the contract for a time-share interest is negotiated
primarily in Spanish, Chinese, Tagalog, Vietnamese, or Korean, orally
or in writing, and the developer fails to provide to the prospective
purchaser prior to the commencement of the rescission period an
unexecuted translation of the contract in the language in which the
contract was negotiated.
   (13) Fail to inform, verbally or in writing, any prospective
purchaser that he or she can take as much time as he or she requires
in order to read the public report, and any and all other documents
necessary to consummate a sale before leaving the premises or signing
a contract, and not allowing, upon request, the prospective
purchaser the time and opportunity to do so. If the prospective
purchaser requests that he or she be able to return the next calendar
day to complete the review of the documents before signing, the
developer shall accommodate such a request, and the return visit
shall not disqualify the prospective purchaser from receiving any
price reduction or other incentive for purchasing on the day of the
scheduled sales presentation. Further, it shall not be fraudulent or
misleading for a developer to honor the request even if presented as
an incentive only available on the day of the offer.
   (14) Inform prospective purchasers that they are finalists in
winning an item offered in connection with a promotion or have
already won a specific prize, unless it is true.
   (15) Offer as a promotional incentive any travel certificate or
coupon redeemable for transportation, accommodations, or other
travel-related service that does not allow the recipient to activate
or redeem the incentive without incurring any additional telephone
expenses charged by or on behalf of the developer other than the
usual toll costs imposed by the prospective purchaser's telephone
service.
   (16) Offer as a promotional incentive any travel certificate or
coupon redeemable for fixed air transportation or hotel
accommodations or other travel-related service that entitles the
prospective purchaser to a trip of a specified duration unless the
offeror states at the time of the offer that there are terms or
conditions that must be followed in order to utilize the incentive
and that the details of the terms will be sent to the consumer in
writing in time to be received by the consumer prior to leaving his
or her house to attend the scheduled sales presentation. The writing
shall include the approximate times of the air or sea transportation'
s departure and return, if applicable, and all other material
conditions, including any limitations as to the dates or times
available for use of the incentive.
   (17) Misrepresent or fail to disclose that a prospective purchaser
is required to attend a sales presentation to obtain a prize or
promotional item, if attendance is a requirement of the promotion.
   (18) Fail to inform any prospective purchaser who contacts the
developer with a request to cancel a purchase within the rescission
period provided by this chapter all of the procedures necessary to
effectively cancel the purchase.
   (19) Fail to cancel a purchase upon the receipt of a valid timely
written notice of rescission. No person may obtain from the person a
waiver or cancellation of the rescission.
   (20) Fail to provide any refund of moneys, within the required
timeframe, due to the prospective purchaser upon receipt of a valid
timely written notice of rescission.
   (21) Fail to provide a mechanism for an equitable apportionment of
expenses between the time-share owner's association and any
commercial operation on the property not operated by the time-share
owner's association.
   (b) For any time-share plan in which the managing entity is an
affiliate of the developer, neither the developer nor the managing
entity shall, during any applicable priority reservation period, hold
out for rental to the public on a given day, developer owned or
controlled time-share periods in a number greater than the total
number of time-share periods owned or controlled by the developer in
a particular season, multiplied by a fraction wherein the numerator
is the number of time-share periods owned or controlled by the
developer in that particular season, and the denominator is the total
number or time-share periods in that particular season. For example,
if the developer owns or controls 1,000 time-share periods in a
particular season, out of a total of 4,000 time-share periods
available during that season, then the developer may not hold out for
rental to the public during any applicable priority reservation
period, more than 250 time-share periods on a given day during that
season (1,000 X 1,000/4,000=250). The number of time-share interests
permitted to be rented under this subdivision shall be in addition to
any time-share interests that the developer may have the right to
rent or use by virtue of having acquired those rights from another
owner. The developer or managing entity may, at any time, rent any
inventory transferred to the developer or managing entity by another
owner in exchange for hotel accommodations, future use rights, or
other considerations. For any use or rental by a developer of
time-share interests owned or controlled by the developer, the
developer shall reimburse the association for any increased expenses
for housekeeping services that exceed the amount allocated in the
assessment for maintenance for the use or rental.

11246.  With each application for an amendment or renewal of a
public report, and with the initial submittal of an application for a
time-share plan in which sales have occurred prior to obtaining a
California public report, the developer shall submit to the
commissioner a certification by an independent third party acceptable
to the commissioner and dated not more than three months prior to
the submittal of the application, stating that the inventory control
system, described in paragraph (6) of subdivision (c) of Section
11226 functions in accordance with the description set forth in that
section. The certification shall be based on a random sampling of
transactions performed within the six months preceding the date of
the application. Inventory control systems that cover time-share
estates for which the developer offers, and the title insurance
company agrees to provide title insurance, shall not require
certification. Independent title insurance companies licensed to do
business as such in this state and independent certified public
accountants shall be deemed acceptable third parties in accordance
with this section.


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