2010 California Code
Business and Professions Code
Article 1. General Provisions

11210.  This chapter may be cited as the Vacation Ownership and
Time-share Act of 2004.



11211.  The purposes of this chapter are to do all of the following:
   (a) Provide full and fair disclosure to the purchasers and
prospective purchasers of time-share plans.
   (b) Require certain time-share plans offered for sale or created
and existing in this state to be subject to the provisions of this
chapter.
   (c) Recognize that the tourism industry in this state is a vital
part of the state's economy; that the sale, promotion, and use of
time-share plans is an emerging, distinct segment of the tourism
industry; that this segment of the tourism industry continues to
grow, both in volume of sales and in complexity and variety of
product structures; and that a uniform and consistent method of
regulation is necessary in order to safeguard California's tourism
industry and the state's economic well-being.
   (d) In order to protect the quality of California time-share plans
and the consumers who purchase them, it is the intent of the
Legislature that this chapter be interpreted broadly in order to
encompass all forms of time-share plans with a duration of at least
three years that are created with respect to accommodations that are
located in the state or that are offered for sale in the state,
including, but not limited to, condominiums, cooperatives, vacation
clubs, and multisite vacation plans.
   (e) It is the intent of the Legislature that this chapter not be
interpreted to preempt the application of, the enforcement of, or
alter the standards of, the general consumer protection laws of this
state set forth in Sections 17200 to 17209, inclusive, and Sections
17500 to 17539.1, inclusive, of the Business and Professions Code.



11211.5.  (a) This chapter applies to all of the following:
   (1) Time-share plans with an accommodation or component site in
this state.
   (2) Time-share plans without an accommodation or component site in
this state, if those time-share plans are sold or offered to be sold
to any individual located within this state.
   (3) Exchange programs as defined in this chapter.
   (4) Short-term products as defined in this chapter.
   (b) This chapter does not apply to any of the following:
   (1) Time-share plans, whether or not an accommodation is located
in this state, consisting of 10 or fewer time-share interests. Use of
an exchange program by owners of time-share interests to secure
access to other accommodations shall not affect this exemption.
   (2) Time-share plans, whether or not an accommodation is located
in this state, the use of which extends over any period of three
years or less.
   (3) Time-share plans, whether or not an accommodation is located
in this state, under which the prospective purchaser's total
financial obligation will be equal to or less than three thousand
dollars ($3,000) during the entire term of the time-share plan.
   (c) For purposes of determining the term of a time-share plan, the
period of any renewal or renewal option shall be included.
   (d) Single site time-share plans located outside the state and
component sites of multisite time-share plans located outside the
state, that are offered for sale or sold in this state are subject
only to Sections 11210 to 11219, inclusive, Sections 11225 to 11246,
inclusive, Sections 11250 to 11256, inclusive, paragraphs (1), (2),
(3), and (4) of subdivision (a), and subdivisions (b) and (c), of
Section 11265, subdivision (g) of Section 11266, subdivisions (a) and
(c) of Section 11267, Sections 11272 and 11273, subdivisions (b),
(c), and (d) of Section 11274, and Sections 11280 to 11287,
inclusive.


11211.7.  (a) Any time-share plan registered pursuant to this
chapter to which the Davis-Stirling Common Interest Development Act
(Chapter 1 (commencing with Section 1350) of Part 4 of Division 2 of
the Civil Code) might otherwise apply is exempt from that act, except
for Sections 1354, 1355, 1355.5, 1356, 1357, 1358, 1361, 1361.5,
1362, 1363.05, 1364, 1365.5, 1370, and 1371 of the Civil Code.
   (b) (1) To the extent that a single site time-share plan or
component site of a multisite time-share plan located in the state is
structured as a condominium or other common interest development,
and there is any inconsistency between the applicable provisions of
this chapter and the Davis-Stirling Common Interest Development Act,
the applicable provisions of this chapter shall control.
   (2) To the extent that a time-share plan is part of a mixed use
project where the time-share plan comprises a portion of a
condominium or other common interest development, the applicable
provisions of this chapter shall apply to that portion of the project
uniquely comprising the time-share plan, and the Davis-Stirling
Common Interest Development Act shall apply to the project as a
whole.
   (c) (1) The offering of any time-share plan, exchange program,
incidental benefit, or short term product in this state that is
subject to the provisions of this chapter shall be exempt from
Sections 1689.5 to 1689.14, inclusive, of the Civil Code (Home
Solicitation Sales), Sections 1689.20 to 1689.24, inclusive, of the
Civil Code (Seminar Sales), and Sections 1812.100 to 1812.129,
inclusive, of the Civil Code (Contracts for Discount Buying
Services).
   (2) A developer or exchange company that, in connection with a
time-share sales presentation or offer to arrange an exchange, offers
a purchaser the opportunity to utilize the services of an affiliate,
subsidiary, or third-party entity in connection with wholesale or
retail air or sea transportation, shall not, in and of itself, cause
the developer or exchange company to be considered a seller of travel
subject to Sections 17550 to 17550.34, inclusive, of the Business
and Professions Code, so long as the entity that actually provides or
arranges the air or sea transportation is registered as a seller of
travel with the California Attorney General's office or is otherwise
exempt under those sections.
   (d) To the extent certain sections in this chapter require
information and disclosure that by their terms only apply to real
property time-share plans, those requirements shall not apply to
personal property time-share plans.



11212.  As used in this chapter, the following definitions apply:
   (a) "Accommodation" means any apartment, condominium or
cooperative unit, cabin, lodge, hotel or motel room, or other private
or commercial structure containing toilet facilities therein that is
designed and available, pursuant to applicable law, for use and
occupancy as a residence by one or more individuals, or any unit or
berth on a commercial passenger ship, which is included in the
offering of a time-share plan.
   (b) "Advertisement" means any written, oral, or electronic
communication that is directed to or targeted to persons within the
state or such a communication made from this state or relating to a
time-share plan located in this state and contains a promotion,
inducement, or offer to sell a time-share plan, including, but not
limited to, brochures, pamphlets, radio and television scripts,
electronic media, telephone and direct mail solicitations, and other
means of promotion.
   (c) "Association" means the organized body consisting of the
purchasers of time-share interests in a time-share plan.
   (d) "Assessment" means the share of funds required for the payment
of common expenses which is assessed from time to time against each
purchaser by the managing entity.
   (e) "Commissioner" means the Real Estate Commissioner.
   (f) "Component site" means a specific geographic location where
accommodations that are part of a multisite time-share plan are
located. Separate phases of a time-share property in a specific
geographic location and under common management shall not be deemed a
component site.
   (g) "Conspicuous type" means either of the following:
   (1) Type in upper and lower case letters two point sizes larger
than the nearest nonconspicuous type, exclusive of headings, on the
page on which it appears but in at least 10-point type.
   (2) Conspicuous type may be utilized in contracts for purchase or
public permits only where required by law or as authorized by the
commissioner.
   (h) "Department" means the Department of Real Estate.
   (i) "Developer" means and includes any person who creates a
time-share plan or is in the business of selling time-share
interests, other than those employees or agents of the developer who
sell time-share interests on the developer's behalf, or employs
agents to do the same, or any person who succeeds to the interest of
a developer by sale, lease, assignment, mortgage, or other transfer,
but the term includes only those persons who offer time-share
interests for disposition in the ordinary course of business.
   (j) "Dispose" or "disposition" means a voluntary transfer or
assignment of any legal or equitable interest in a time-share plan,
other than the transfer, assignment, or release of a security
interest.
   (k) "Exchange company" means any person owning or operating, or
both owning and operating, an exchange program.
   (l) "Exchange program" means any method, arrangement, or procedure
for the voluntary exchange of time-share interests or other property
interests. The term does not include the assignment of the right to
use and occupy accommodations to owners of time-share interests
within a single site time-share plan. Any method, arrangement, or
procedure that otherwise meets this definition in which the purchaser'
s total contractual financial obligation exceeds three thousand
dollars ($3,000) per any individual, recurring time-share period,
shall be regulated as a time-share plan in accordance with this
chapter. For purposes of determining the purchaser's total
contractual financial obligation, amounts to be paid as a result of
renewals and options to renew shall be included in the term except
for the following: (1) amounts to be paid as a result of any optional
renewal that a purchaser, in his or her sole discretion may elect to
exercise, (2) amounts to be paid as a result of any automatic
renewal in which the purchaser has a right to terminate during the
renewal period at any time and receive a pro rata refund for the
remaining unexpired renewal term, or (3) amounts to be paid as a
result of an automatic renewal in which the purchaser receives a
written notice no less than 30 nor more than 90 days prior to the
date of renewal informing the purchaser of the right to terminate
prior to the date of renewal. Notwithstanding these exceptions, if
the contractual financial obligation exceeds three thousand dollars
($3,000) for any three-year period of any renewal term, amounts to be
paid as a result of that renewal shall be included in determining
the purchaser's total contractual financial obligation.
   (m) "Incidental benefit" is an accommodation, product, service,
discount, or other benefit, other than an exchange program, that is
offered to a prospective purchaser of a time-share interest prior to
the end of the rescission period set forth in Section 11238, the
continuing availability of which for the use and enjoyment of owners
of time-share interests in the time-share plan is limited to a term
of not more than three years, subject to renewal or extension. The
term shall not include an offer of the use of the accommodation,
product, service, discount, or other benefit on a free or discounted
one-time basis.
   (n) "Managing entity" means the person who undertakes the duties,
responsibilities, and obligations of the management of a time-share
plan.
   (o) "Offer" means any inducement, solicitation, or other attempt,
whether by marketing, advertisement, oral or written presentation, or
any other means, to encourage a person to acquire a time-share
interest in a time-share plan, other than as security for an
obligation.
   (p) "Person" means a natural person, corporation, limited
liability company, partnership, joint venture, association, estate,
trust, government, governmental subdivision or agency, or other legal
entity, or any combination thereof.
   (q) "Promotion" means a plan or device, including one involving
the possibility of a prospective purchaser receiving a vacation,
discount vacation, gift, or prize, used by a developer, or an agent,
independent contractor, or employee of any of the same on behalf of
the developer, in connection with the offering and sale of time-share
interests in a time-share plan.
   (r) "Public report" means a preliminary public report, conditional
public report, final public report, or other such disclosure
document authorized for use in connection with the offering of
time-share interests pursuant to this chapter.
   (s) "Purchaser" means any person, other than a developer, who by
means of a voluntary transfer for consideration acquires a legal or
equitable interest in a time-share plan other than as security for an
obligation.
   (t) "Purchase contract" means a document pursuant to which a
developer becomes legally obligated to sell, and a purchaser becomes
legally obligated to buy, a time-share interest.
   (u) "Reservation system" means the method, arrangement, or
procedure by which a purchaser, in order to reserve the use or
occupancy of any accommodation of a multisite time-share plan for one
or more time-share periods, is required to compete with other
purchasers in the same multisite time-share plan, regardless of
whether the reservation system is operated and maintained by the
multisite time-share plan managing entity, an exchange company, or
any other person. If a purchaser is required to use an exchange
program as the purchaser's principal means of obtaining the right to
use and occupy accommodations in a multisite time-share plan, that
arrangement shall be deemed a reservation system. When an exchange
company utilizes a mechanism for the exchange of use of time-share
periods among members of an exchange program, that utilization is not
a reservation system of a multisite time-share plan.
   (v) "Short-term product" means the right to use accommodations on
a one-time or recurring basis for a period or periods not to exceed
30 days per stay and for a term of three years or less, and that
includes an agreement that all or a portion of the consideration paid
by a person for the short-term product will be applied to or
credited against the price of a future purchase of a time-share
interest or that the cost of a future purchase of a time-share
interest will be fixed or locked-in at a specified price.
   (w) "Time-share instrument" means one or more documents, by
whatever name denominated, creating or governing the operation of a
time-share plan and includes the declaration dedicating
accommodations to the time-share plan.
   (x) "Time-share interest" means and includes either of the
following:
   (1) A "time-share estate," which is the right to occupy a
time-share property, coupled with a freehold estate or an estate for
years with a future interest in a time-share property or a specified
portion thereof.
   (2) A "time-share use," which is the right to occupy a time-share
property, which right is neither coupled with a freehold interest,
nor coupled with an estate for years with a future interest, in a
time-share property.
   (y) "Time-share period" means the period or periods of time when
the purchaser of a time-share plan is afforded the opportunity to use
the accommodations of a time-share plan.
   (z) "Time-share plan" means any arrangement, plan, scheme, or
similar device, other than an exchange program, whether by membership
agreement, sale, lease, deed, license, right to use agreement, or by
any other means, whereby a purchaser, in exchange for consideration,
receives ownership rights in or the right to use accommodations for
a period of time less than a full year during any given year, on a
recurring basis for more than one year, but not necessarily for
consecutive years. A time-share plan may be either of the following:
   (1) A "single site time-share plan," which is the right to use
accommodations at a single time-share property.
   (2) A "multisite time-share plan," which includes either of the
following:
   (A) A "specific time-share interest," which is the right to use
accommodations at a specific time-share property, together with use
rights in accommodations at one or more other component sites created
by or acquired through the time-share plan's reservation system.
   (B) A "nonspecific time-share interest," which is the right to use
accommodations at more than one component site created by or
acquired through the time-share plan's reservation system, but
including no specific right to use any particular accommodations.
   (aa) "Time-share property" means one or more accommodations
subject to the same time-share instrument, together with any other
property or rights to property appurtenant to those accommodations.



11213.  Each time-share estate, as specified in paragraph (1) of
subdivision (x) of Section 11212, constitutes, for purposes of title,
a separate estate or interest in real property including ownership
in real property for tax purposes.


11214.  (a) The developer shall supervise, manage, and control all
aspects of the offering of the time-share plan by or on behalf of the
developer, including, but not limited to, promotion, advertising,
contracting, and closing. The developer is responsible for each
time-share plan registered with the commissioner and for the actions
of any sales or marketing entity utilized by the developer in the
offering or selling of any registered time-share plan.
   (b) Any violation of this chapter that occurs during the offering
activities shall be deemed to be a violation by the developer as well
as by the person who actually committed the violation.




11215.  (a) The time-share instrument shall prohibit a person from
seeking or obtaining, through any legal procedures, judicial
partition of the time-share interest or sale of the time-share
interest, in lieu of partition and shall subordinate all rights that
a time-share interest owner might otherwise have as a
tenant-in-common in real property to the terms of the time-share
instrument.
   (b) Subdivision (a) shall not be deemed to prohibit a sale of an
accommodation upon termination of the time-share plan or the removal
of an accommodation from the time-share plan in accordance with
applicable provisions of the time-share instrument.




11216.  (a) An exchange program is not a part of a time-share plan
offering and, except as provided in this section and Section 11238,
shall not be subject to either this chapter or the regulations of the
commissioner adopted pursuant to this chapter.
   (b) If a developer offers a purchaser the opportunity to subscribe
to or to become a member of an exchange program, the developer shall
provide to the purchaser in writing all of the information set forth
in paragraphs (1) to (17), inclusive. If the exchange company is
offering directly to the purchaser the opportunity to subscribe to or
become a member of an exchange company, the exchange company shall
provide to the purchaser in writing all of the information set forth
in paragraphs (1) to (17), inclusive. In either case, the written
information shall be provided prior to or concurrently with the
execution of any contract or subscription for membership in the
exchange program.
   (1) The name and address of the exchange company.
   (2) The names of all officers, directors, and shareholders of the
exchange company.
   (3) Whether the exchange company or any of its officers or
directors have any legal or beneficial interest in any developer or
managing entity for any time-share plan participating in the exchange
program and, if so, the identity of the time-share plan and the
nature of the interest.
   (4) A copy of the form of the contract between the purchaser and
the exchange company, along with a statement that the purchaser's
contract with the exchange company is a contract separate and
distinct from the purchaser's contract with the seller of time-share
interests.
   (5) Whether the purchaser's participation in the exchange program
is dependent upon the continued affiliation of the applicable
time-share plan with the exchange program.
   (6) Whether the purchaser's participation in the exchange program
is voluntary.
   (7) A fair and accurate description of the terms and conditions of
the purchaser's contractual relationship with the exchange program
and the procedure by which changes thereto may be made.
   (8) A fair and accurate description of the procedures necessary to
qualify for and effectuate exchanges.
   (9) A fair and accurate description of all limitations,
restrictions, and priorities employed in the operation of the
exchange program, including, but not limited to, limitations on
exchanges based on seasonality, accommodation size, or levels of
occupancy, expressed in conspicuous type. If those limitations,
restrictions, or priorities are not uniformly applied by the exchange
company, the information shall include a clear description of the
manner in which they are applied.
   (10) Whether exchanges are arranged on a space available basis and
whether any guarantees of fulfillment of specific requests for
exchanges are made by the exchange company.
   (11) Whether and under what circumstances an owner, in dealing
with the exchange program, may lose the right to use and occupy an
accommodation of the time-share plan during a reserved use period
with respect to any properly applied for exchange without being
provided with substitute accommodations by the exchange program.
   (12) The fees or range of fees for participation by owners in the
exchange program, a statement of whether any such fees may be altered
by the exchange company and the circumstances under which
alterations may be made.
   (13) The name and address of the site of each accommodation
included within a time-share plan participating in the exchange
program.
   (14) The number of accommodations in each time-share plan that are
available for occupancy and that qualify for participation in the
exchange program, expressed within the following numerical groups:
1-5; 6-10; 11-20; 21-50; and 51 and over.
   (15) The number of currently enrolled owners for each time-share
plan participating in the exchange program, expressed within the
following numerical groups: 1-100; 101-249; 250-499; 500-999; and
1,000 and over; and a statement of the criteria used to determine
those owners who are currently enrolled with the exchange program.
   (16) The disposition made by the exchange company of use periods
deposited with the exchange program by owners enrolled in the
exchange program and not used by the exchange company in effecting
exchanges.
   (17) The following information for the preceding calendar year,
which shall be independently audited by a certified public accountant
in accordance with the standards of the Accounting Standards Board
of the American Institute of Certified Public Accountants and
reported annually no later than August 1 of each year:
   (A) The number of owners currently enrolled in the exchange
program.
   (B) The number of time-share plans that have current affiliation
agreements with the exchange program.
   (C) The percentage of confirmed exchanges, which is the number of
exchanges confirmed by the exchange program divided by the number of
exchanges properly applied for, together with a complete and accurate
statement of the criteria used to determine whether an exchange
request was properly applied for.
   (D) The number of use periods for which the exchange program has
an outstanding obligation to provide an exchange to an owner who
relinquished a use period during a particular year in exchange for a
use period in any future year.
   (E) The number of exchanges confirmed by the exchange program
during the year.
   (F) A statement in conspicuous type to the effect that the
percentage described in subparagraph (C) is a summary of the exchange
requests entered with the exchange program in the period reported
and that the percentage does not indicate the probabilities of an
owner's being confirmed to any specific choice or range of choices.
   (c) All written, visual, and electronic communications relating to
an exchange company or an exchange program shall be filed with the
commissioner upon its request.
   (d) The failure of an exchange company to observe the requirements
of this section, and the use of any unfair or deceptive act or
practice in connection with the operation of an exchange program, is
a violation of this chapter.
   (e) An exchange company may elect to deny exchange privileges to
any owner whose use of the accommodations of the owner's time-share
plan is denied, and no exchange program or exchange company shall be
liable to any of its members or any third parties on account of any
such denial of exchange privileges.



11217.  (a) The following communications shall not be deemed an
advertisement or promotion and are exempt from this chapter so long
as the communications are in compliance with Section 11245:
   (1) Any stockholder communication, such as an annual report or
interim financial report, proxy material, a registration statement, a
securities prospectus, a registration, a property report, or other
material required to be delivered to a prospective purchaser by an
agency of any state or the federal government.
   (2) Any oral or written statement disseminated by a developer to
broadcast or print media, other than paid advertising or promotional
material, regarding plans for the acquisition or development of
time-share property. However, any rebroadcast or any other
dissemination of the oral statements to a prospective purchaser by a
developer or any person in any manner, or any distribution of copies
of newspaper magazine articles or press releases, or any other
dissemination of the written statements to a prospective purchaser by
a developer or any person in any manner, shall constitute an
advertisement.
   (3) Any advertisement or promotion in any medium to the general
public if the advertisement or promotion clearly states that it is
not an offer in any jurisdiction in which any applicable registration
requirements have not been fully satisfied.
   (4) Any audio, written, or visual publication or material relating
to the availability of any accommodations for transient rental, so
long as a sales presentation is not a term or condition of the
availability of the accommodations and so long as the failure of any
transient renter to take a tour of a time-share property or attend a
sales presentation does not result in any reduction in the level of
services that would otherwise be available to the transient renter.
   (b) Any communication regarding a time-share interest that is
addressed to any person who has previously executed a contract for
the sale or purchase of that time-share interest and that does not
constitute a solicitation of a time-share interest, shall be exempt
from this chapter.



11218.  A time-share interest in a time-share plan shall be deemed
an interest in subdivided lands or a subdivision for purposes of
subdivision (f) of Section 25100 of the Corporations Code.



11219.  (a) Time-share plans registered as Qualified Resort Vacation
Club Projects under prior law shall continue to operate under that
prior law notwithstanding anything in this chapter to the contrary.
   (b) (1) All registrations of time-share plans in effect on the
effective date of this chapter shall remain in full force and effect
and shall be considered registered pursuant to this chapter.
   (2) All time-share plans included in this subdivision are subject
to Sections 11217, 11219, 11238, 11239, 11245, 11250, and 11280 to
11286, inclusive, and shall be required to comply with the other
provisions of this chapter at the time they seek amendment or renewal
of their existing registrations. When an amendment or renewal of a
time-share plan is filed with the commissioner, the existing
registration continues in full force and effect while the amendment
or renewal is pending before the commissioner.
   (c) Any existing injunction or temporary restraining order validly
obtained that prohibits unregistered practice of time-share
developers, time-share plans, or their agents shall not be
invalidated by the enactment of this chapter and shall continue to
have full force and effect on and after the effective date of this
chapter.