2009 Texas Code
PROPERTY CODE
TITLE 12. MISCELLANEOUS SHARED REAL PROPERTY INTERESTS
CHAPTER 221. TEXAS TIMESHARE ACT
PROPERTY CODE
TITLE 12. MISCELLANEOUS SHARED REAL PROPERTY INTERESTS
CHAPTER 221. TEXAS TIMESHARE ACT
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 221.001. SHORT TITLE. This chapter shall be known and may
be cited as the Texas Timeshare Act.
Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,
1987. Renumbered from Sec. 201.001 by Acts 1989, 71st Leg., ch.
2, Sec. 13.03(b), eff. Aug. 28, 1989.
Sec. 221.002. DEFINITIONS. As used in this chapter:
(1) "Accommodation" means any apartment, condominium or
cooperative unit, hotel or motel room, cabin, lodge, or other
private or commercial structure that:
(A) is affixed to real property;
(B) is designed for occupancy or use by one or more individuals;
and
(C) is part of a timeshare plan.
(2) "Advertisement" means any written, oral, or electronic
communication that is directed to or targeted at individuals in
this state and contains a promotion, inducement, or offer to sell
a timeshare interest, including a promotion, inducement, or offer
to sell:
(A) contained in a brochure, pamphlet, or radio or television
transcript;
(B) communicated by electronic media or telephone; or
(C) solicited through direct mail.
(3) "Amenities" means all common areas and includes recreational
and maintenance facilities of the timeshare plan.
(4) "Assessment" means an amount assessed against or collected
from a purchaser by an association or its managing entity in a
fiscal year, regardless of the frequency with which the amount is
assessed or collected, to cover expenditures, charges, reserves,
or liabilities related to the operation of a timeshare plan or
timeshare properties managed by the same managing entity.
(5) "Association" means a council or association composed of all
persons who have purchased a timeshare interest.
(6) "Commission" means the Texas Real Estate Commission.
(7) "Component site" means a specific geographic location where
accommodations that are part of a multisite timeshare plan are
located. Separate phases of a single timeshare property in a
specific geographic location and under common management are a
single component site.
(8) "Developer" means:
(A) any person, excluding a sales agent, who creates a timeshare
plan or is in the business of selling timeshare interests or
employs a sales agent to sell timeshare interests; or
(B) any person who succeeds in the developer's interest by sale,
lease, assignment, mortgage, or other transfer if the person:
(i) offers at least 12 timeshare interests in a particular
timeshare plan; and
(ii) is in the business of selling timeshare interests or
employs a sales agent to sell timeshare interests.
(9) "Dispose" or "disposition" means a voluntary transfer of any
legal or equitable timeshare interest but does not include the
transfer or release of a real estate lien or of a security
interest.
(10) "Escrow agent" means a bonded escrow company, a financial
institution whose accounts are insured by a governmental agency
or instrumentality, or an attorney or title insurance agent
licensed in this state who is responsible for the receipt and
disbursement of funds in accordance with this chapter.
(11) "Exchange company" means any person who owns or operates an
exchange program.
(12) "Exchange disclosure statement" means a written statement
that includes the information required by Section 221.033.
(13) "Exchange program" means any method, arrangement, or
procedure for the voluntary exchange of timeshare interests among
purchasers or owners.
(14) "Incidental use right" means the right to use
accommodations and amenities at one or more timeshare properties
that is not guaranteed and is administered by the managing entity
of the timeshare properties that makes vacant accommodations at
the timeshare properties available to owners of timeshare
interests in the timeshare properties.
(15) "Managing entity" means the person responsible for
operating and maintaining a timeshare property.
(16) "Multisite timeshare plan" means a plan in which a
timeshare purchaser has:
(A) a specific timeshare interest, which is the right to use and
occupy accommodations at a specific timeshare property and the
right to use and occupy accommodations at one or more other
component sites created by or acquired solely through the
reservation system of the timeshare plan; or
(B) a nonspecific timeshare interest, which is the right to use
and occupy accommodations at more than one component site created
by or acquired solely through the reservation system of the
timeshare plan but which does not include a right to use and
occupy a particular accommodation.
(17) "Offering" or "offer" means any advertisement, inducement,
or solicitation and includes any attempt to encourage a person to
purchase a timeshare interest other than as a security for an
obligation.
(18) "Project instrument" means a timeshare instrument or one or
more recordable documents, by whatever name denominated, applying
to the whole of a timeshare project and containing restrictions
or covenants regulating the use, occupancy, or disposition of
units in a project, including a declaration for a condominium,
association articles of incorporation, association bylaws, and
rules for a condominium in which a timeshare plan is created.
(19) "Promotion" means any program, activity, contest, or gift,
prize, or other item of value used to induce any person to attend
a timeshare sales presentation.
(20) "Purchaser" means any person, other than a developer, who
by means of a voluntary transfer acquires a legal or equitable
interest in a timeshare interest other than as a security for an
obligation.
(21) "Reservation system" means the method, arrangement, or
procedure by which a purchaser, in order to reserve the use and
occupancy of an accommodation of a multisite timeshare plan for
one or more timeshare periods, is required to compete with other
purchasers in the same multisite timeshare plan, regardless of
whether the reservation system is operated and maintained by the
multisite timeshare plan, a 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 the accommodations and facilities of
the plan, the arrangement is considered a reservation system. If
the exchange company uses a mechanism to exchange timeshare
periods among members of the exchange program, the use of the
mechanism is not considered a reservation system of the multisite
timeshare plan.
(22) "Single-site timeshare plan" means a timeshare plan in
which a timeshare purchaser's right to use and occupy
accommodations is limited to a single timeshare property. A
single-site timeshare plan that includes an incidental use right
or a program under which the owner of a timeshare interest at a
specific timeshare property may exchange a timeshare period for
another timeshare period at the same or another timeshare
property under common management does not transform the
single-site timeshare plan into a multisite timeshare plan.
(23) "Timeshare disclosure statement" means a written statement
that includes the information required by Section 221.032.
(24) "Timeshare estate" means an arrangement under which the
purchaser receives a right to occupy a timeshare property and an
estate interest in the real property.
(25) "Timeshare interest" means a timeshare estate or timeshare
use.
(26) "Timeshare instrument" means a master deed, master lease,
declaration, or any other instrument used in the creation of a
timeshare plan.
(27) "Timeshare period" means the period within which the
purchaser of a timeshare interest is entitled to the exclusive
possession, occupancy, and use of an accommodation.
(28) "Timeshare plan" means any arrangement, plan, scheme, or
similar method, excluding an exchange program but including a
membership agreement, sale, lease, deed, license, or right-to-use
agreement, by which a purchaser, in exchange for consideration,
receives an ownership right in or the right to use accommodations
for a period of time less than a year during a given year, but
not necessarily consecutive years.
(29) "Timeshare property" means:
(A) one or more accommodations and any related amenities subject
to the same timeshare instrument; and
(B) any other property or property rights appurtenant to the
accommodations and amenities.
(30) "Timeshare use" means any arrangement under which the
purchaser receives a right to occupy a timeshare property, but
under which the purchaser does not receive an estate interest in
the timeshare property.
Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,
1987. Renumbered from Sec. 201.002 by Acts 1989, 71st Leg., ch.
2, Sec. 13.03(b), eff. Aug. 28, 1989. Amended by Acts 1993, 73rd
Leg., ch. 443, Sec. 1, eff. Sept. 1, 1993.
Amended by:
Acts 2005, 79th Leg., Ch.
539, Sec. 1, eff. January 15, 2006.
Sec. 221.003. APPLICABILITY. (a) This chapter applies to all
timeshare properties that are located in this state or offered
for sale in this state.
(b) Timeshare properties located outside this state are subject
only to Subchapters C through H.
(c) This chapter applies to any timeshare property in existence
on or after August 26, 1985, but does not affect a timeshare
contract in existence before that date.
(d) A timeshare property subject to this chapter is not subject
to Chapter 209 unless an individual timeshare owner continuously
occupies a single timeshare property as the owner's primary
residence 12 months of the year.
(e) If a person with a specific program that might otherwise be
subject to this chapter received from the commission, before
January 31, 2005, a written determination that the program is
exempt from this chapter as the chapter existed when the
determination was made, the program remains exempt from this
chapter if:
(1) the program does not vary materially from the terms on which
the exemption was granted; or
(2) the program varies materially from the terms on which the
exemption was granted, but the person receives from the
commission a new written determination that the program is exempt
from this chapter.
Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,
1987. Renumbered from Sec. 201.003 by Acts 1989, 71st Leg., ch.
2, Sec. 13.03(b), eff. Aug. 28, 1989.
Amended by:
Acts 2005, 79th Leg., Ch.
539, Sec. 2, eff. January 15, 2006.
SUBCHAPTER B. CREATION OF TIMESHARE REGIME
Sec. 221.011. DECLARATION. (a) The developer of a timeshare
plan any part of which is located in this state must record the
timeshare instrument in this state. When a person expressly
declares an intent to subject the property to a timeshare plan
through the recordation of a timeshare instrument that sets forth
the information provided in Subsections (b) and (c), that
property shall be established thenceforth as a timeshare plan.
(b) The declaration made in a timeshare instrument recorded
under this section must include:
(1) a legal description of the timeshare property, including a
ground plan indicating the location of each existing or proposed
building included in the timeshare plan;
(2) a description of each existing or proposed accommodation,
including the location and square footage of each unit and an
interior floor plan of each existing or proposed building;
(3) a description of any amenities furnished or to be furnished
to the purchaser;
(4) a statement of the fractional or percentage part that each
timeshare interest bears to the entire timeshare plan;
(5) if applicable, a statement that the timeshare property is
part of a multisite timeshare plan; and
(6) any additional provisions that are consistent with this
section.
(c) Any timeshare interest created under this section is subject
to Section 1101.002(5), Occupations Code, but Sections
1101.351(a)(1) and (c), Occupations Code, do not apply to the
acts of an exchange company in exchanging timeshare periods.
Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,
1987. Renumbered from Sec. 201.011 by Acts 1989, 71st Leg., ch.
2, Sec. 13.03(b), eff. Aug. 28, 1989. Amended by Acts 1993, 73rd
Leg., ch. 443, Sec. 2, eff. Sept. 1, 1993; Acts 2003, 78th Leg.,
ch. 1276, Sec. 14A.809, eff. Sept. 1, 2003.
Amended by:
Acts 2005, 79th Leg., Ch.
539, Sec. 3, eff. January 15, 2006.
Sec. 221.012. CONVEYANCE AND ENCUMBRANCE. Once the property is
established as a timeshare plan, each timeshare interest may be
individually conveyed or encumbered and shall be entirely
independent of all other timeshare interests in the same
timeshare property. Any title or interest in a timeshare
interest may be recorded.
Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,
1987. Renumbered from Sec. 201.012 by Acts 1989, 71st Leg., ch.
2, Sec. 13.03(b), eff. Aug. 28, 1989.
Amended by:
Acts 2005, 79th Leg., Ch.
539, Sec. 3, eff. January 15, 2006.
Sec. 221.013. COMMON OWNERSHIP. (a) Any timeshare interest may
be jointly or commonly owned by more than one person.
(b) A timeshare estate may be jointly or commonly owned in the
same manner as any other real property interest in this state.
Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,
1987. Renumbered from Sec. 201.013 by Acts 1989, 71st Leg., ch.
2, Sec. 13.03(b) eff. Aug. 28, 1989.
Amended by:
Acts 2005, 79th Leg., Ch.
539, Sec. 3, eff. January 15, 2006.
Sec. 221.014. PARTITION. An action for partition of a timeshare
interest may not be maintained during the term of a timeshare
plan.
Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,
1987. Renumbered from Sec. 201.014 by Acts 1989, 71st Leg., ch.
2, Sec. 13.03(b), eff. Aug. 28, 1989.
Amended by:
Acts 2005, 79th Leg., Ch.
539, Sec. 3, eff. January 15, 2006.
SUBCHAPTER C. REGISTRATION
Sec. 221.021. REGISTRATION REQUIRED. (a) Except as provided by
Subsection (b) or (d) of this section or another provision of
this chapter, a person may not offer or dispose of a timeshare
interest unless the timeshare plan is registered with the
commission.
(b) Before a registration application for a timeshare plan is
submitted or completed, a developer or any person acting on the
developer's behalf may accept a reservation and a deposit from a
prospective purchaser if the deposit is placed in a segregated
escrow account with an independent escrow agent and if the
deposit is fully refundable at any time at the request of the
purchaser. The deposit may not be forfeited unless the purchaser
affirmatively creates a binding obligation by a subsequent
written instrument.
(c) A developer or any person acting on the developer's behalf
may not offer or dispose of a timeshare interest during any
period within which there is in effect an order by the commission
or by any court of competent jurisdiction revoking or suspending
the registration of the timeshare plan of which such timeshare
interest is a part.
(d) At the developer's request, the commission may authorize the
developer to conduct presales before a timeshare plan is
registered if the registration application is administratively
complete, as determined by the commission or as established by
commission rule. The authorization for presales permits the
developer to offer and dispose of timeshare interests during the
period the application is in process. To obtain a presales
authorization, the developer must:
(1) submit a written request to the commission for an
authorization to conduct presales;
(2) submit an administratively complete application for
registration, including appropriate fees and exhibits required by
the commission; and
(3) provide evidence acceptable to the commission that all funds
received by the developer will be placed with an escrow agent
with instructions requiring the funds to be retained until a
registration application is complete as determined by the
commission.
(e) During the presales authorization period, the developer
must:
(1) provide to each purchaser and prospective purchaser a copy
of the proposed timeshare disclosure statement that the developer
submitted to the commission with the initial registration
application; and
(2) offer each purchaser the opportunity to cancel the purchase
contract as provided by Section 221.041.
(f) After the final timeshare disclosure statement is approved
by the commission, the developer must:
(1) give each purchaser and prospective purchaser a copy of the
final timeshare disclosure statement; and
(2) if the commission determines that a materially adverse
change exists between the disclosures contained in the proposed
timeshare disclosure statement and the final timeshare disclosure
statement, provide the purchaser a second opportunity to cancel
the purchase contract as provided by Section 221.041.
(g) The requirements of this subchapter remain in effect during
the period the developer offers or disposes of timeshare
interests of the timeshare plan registered with the commission.
The developer must notify the commission in writing when all of
the timeshare interests of a timeshare plan have been disposed
of.
Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,
1987. Renumbered from Sec. 201.021 by Acts 1989, 71st Leg., ch.
2, Sec. 13.03(b), eff. Aug. 28, 1989.
Amended by:
Acts 2005, 79th Leg., Ch.
539, Sec. 4, eff. January 15, 2006.
Sec. 221.022. APPLICATION FOR REGISTRATION. (a) An application
for registration filed under this section must include a
timeshare disclosure statement and any required exchange
disclosure statement required by Section 221.033, recorded copies
of all timeshare instruments, and other information as may be
required by the commission. If the timeshare property is a newly
developed property, recorded copies of the timeshare instruments
must be provided promptly after recorded copies are available
from the entity with which the instruments are recorded. If
existing or proposed accommodations are in a condominium, an
applicant who complies with this section is not required to
prepare or deliver a condominium information statement or a
resale certificate as described by Chapter 82.
(b) If existing or proposed accommodations are in a condominium
or similar development, the application for registration must
contain the project instruments of that development and
affirmatively indicate that the creation and disposition of
timeshare interests are not prohibited by those instruments. If
the project instruments do not expressly authorize the creation
and disposition of timeshare interests, the application must
contain evidence that existing owners of the condominium
development were provided written notice, at least 60 days before
the application for registration, that timeshare interests would
be created and sold. If the project instruments prohibit the
creation or disposition of timeshare interests, the application
must contain a certification by the authorized representative of
all existing owners that the project instruments have been
properly amended to permit that creation and disposition.
(c) The commission may accept an abbreviated registration
application from a developer of a timeshare plan for any
accommodations in the plan located outside this state. The
developer must file written notice of the intent to register
under this section not later than the 15th day before the date
the abbreviated application is submitted.
(d) A developer of a timeshare plan with any accommodation
located in this state may not file an abbreviated application
unless:
(1) the developer is a:
(A) successor in interest after a merger or acquisition; or
(B) joint venture in which the previous developer or its
affiliate is a partner or a member; and
(2) the previous developer registered the timeshare plan in this
state preceding the merger, acquisition, or joint venture.
(e) A developer filing an abbreviated application must provide:
(1) the legal name and any assumed names and the principal
office location, mailing address, telephone number, and primary
contact person of the developer;
(2) the name, location, mailing address, telephone number, and
primary contact person of the timeshare plan;
(3) the name and address of the developer's authorized or
registered agent for service of process in this state;
(4) the name, primary office location, mailing address, and
telephone number of the managing entity of the timeshare plan;
(5) the certificate or other evidence of registration from any
jurisdiction in which the timeshare plan is approved or accepted;
(6) the certificate or other evidence of registration from the
appropriate regulatory agency of any other jurisdiction in the
United States in which some or all of the accommodations are
located;
(7) a declaration stating whether the timeshare plan is a
single-site timeshare plan or a multisite timeshare plan;
(8) if the plan is a multisite timeshare plan, a declaration
stating whether the plan consists of specific timeshare interests
or nonspecific timeshare interests;
(9) a disclosure of each jurisdiction in which the developer has
applied for registration of the timeshare plan and whether the
timeshare plan, the developer, or the managing entity used were
denied registration or, during the five-year period before the
registration application date, were the subject of a final
adverse disposition in a disciplinary proceeding;
(10) if requested by the commission, copies of any disclosure
documents required to be provided to purchasers or filed with any
jurisdiction that approved or accepted the timeshare plan;
(11) the appropriate filing fee; and
(12) any other information reasonably requested by the
commission or required by commission rule.
(f) A foreign jurisdiction providing evidence of registration as
provided by Subsection (e)(6) must have registration and
disclosure requirements that are substantially similar to or
stricter than the requirements of this chapter.
(g) The commission shall investigate all matters relating to the
application and may in its discretion require a personal
inspection of the proposed timeshare property by any persons
designated by it. All direct expenses incurred by the commission
in inspecting the property shall be borne by the applicant. The
commission may require the applicant to pay an advance deposit
sufficient to cover those expenses.
Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,
1987. Renumbered from Sec. 201.022 by Acts 1989, 71st Leg., ch.
2, Sec. 13.03(b), eff. Aug. 28, 1989.
Amended by:
Acts 2005, 79th Leg., Ch.
539, Sec. 4, eff. January 15, 2006.
Acts 2009, 81st Leg., R.S., Ch.
279, Sec. 1, eff. September 1, 2009.
Sec. 221.023. AMENDMENT OF REGISTRATION. The developer shall
file amendments to the registration reporting to the commission
any materially adverse change in any document contained in the
registration not later than the 30th day after the date the
developer knows or reasonably should know of the change. The
developer may continue to offer and dispose of timeshare
interests under the existing registration pending review of the
amendments by the commission if the materially adverse change is
disclosed to prospective purchasers.
Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,
1987. Renumbered from Sec. 201.023 by Acts 1989, 71st Leg., ch.
2, Sec. 13.03(b), eff. Aug. 28, 1989.
Amended by:
Acts 2005, 79th Leg., Ch.
539, Sec. 4, eff. January 15, 2006.
Sec. 221.024. POWERS OF COMMISSION. (a) The commission may
prescribe and publish forms and adopt rules necessary to carry
out the provisions of this chapter and may suspend or revoke the
registration of any developer, place on probation the
registration of a developer that has been suspended or revoked,
reprimand a developer, impose an administrative penalty of not
more than $10,000, or take any other disciplinary action
authorized by this chapter if, after notice and hearing, the
commission determines that a developer has materially violated
this chapter, the Deceptive Trade Practices-Consumer Protection
Act (Subchapter E, Chapter 17, Business & Commerce Code), or
the Contest and Gift Giveaway Act (Chapter 621, Business &
Commerce Code).
(b) The commission:
(1) shall authorize the State Office of Administrative Hearings
to conduct hearings in contested cases; and
(2) may establish reasonable fees for forms and documents it
provides to the public and for the filing or registration of
documents required by this chapter.
(c) If the commission initiates a disciplinary proceeding under
this chapter, the person is entitled to a hearing before the
State Office of Administrative Hearings. The commission by rule
shall adopt procedures to permit an appeal to the commission from
a determination made by the State Office of Administrative
Hearings in a disciplinary action.
(d) The commission shall set the time and place of the hearing.
(e) A disciplinary procedure under this chapter is governed by
the contested case procedures of Chapter 2001, Government Code.
(f) The commission may file a suit in a district court of Travis
County to prevent a violation of this chapter or for any other
appropriate relief.
(g) Judicial review of a commission order imposing an
administrative penalty is:
(1) instituted by filing a petition as provided by Subchapter G,
Chapter 2001, Government Code; and
(2) by trial de novo.
Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,
1987. Renumbered from Sec. 201.024 by Acts 1989, 71st Leg., ch.
2, Sec. 13.03(b), eff. Aug. 28, 1989. Amended by Acts 1989, 71st
Leg., ch. 381, Sec. 1, eff. June 14, 1989; Acts 1999, 76th Leg.,
ch. 62, Sec. 7.87, eff. Sept. 1, 1999.
Amended by:
Acts 2005, 79th Leg., Ch.
539, Sec. 4, eff. January 15, 2006.
Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 2.34, eff. April 1, 2009.
Acts 2009, 81st Leg., R.S., Ch.
23, Sec. 8, eff. May 12, 2009.
Sec. 221.025. EFFECT OF REGISTRATION ON OTHER LAWS: EXEMPTION
FROM CERTAIN LAWS. (a) A developer's compliance with this
chapter exempts the developer's offer and disposition of
timeshare interests subject to this chapter from securities and
dealer registration under The Securities Act (Article 581-1 et
seq., Vernon's Texas Civil Statutes).
(b) A timeshare plan created as a condominium regime before
January 1, 1994, that complies with this chapter is exempt from
the requirements of Section 81.112 relating to club membership.
(c) A timeshare plan subject to Chapter 82 that complies with
this chapter is exempt from the requirements of Section 82.0675
relating to club membership.
(d) A developer's compliance with this chapter as to any
timeshare plan exempts any company, as defined by Chapter 181,
Finance Code (Texas Trust Company Act), that holds title to the
timeshare interests in the timeshare plan from compliance with
the Texas Trust Company Act as to the company's activities
relating to the holding of that title.
Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,
1987. Renumbered from Sec. 201.025 by Acts 1989, 71st Leg., ch.
2, Sec. 13.03(b), eff. Aug. 28, 1989.
Amended by:
Acts 2005, 79th Leg., Ch.
539, Sec. 4, eff. January 15, 2006.
Sec. 221.026. ISSUANCE AND RENEWAL OF REGISTRATION. (a) The
commission by rule shall adopt requirements for the issuance and
renewal of a developer's registration under this chapter,
including:
(1) the form required for application for registration or a
renewal of registration; and
(2) any supporting documentation required for registration or
renewal of registration.
(b) The commission shall issue or renew a registration under
this chapter for a period not to exceed 24 months.
(c) The commission may assess and collect a fee for the issuance
or renewal of a registration under this chapter.
(d) The commission may assess and collect a late fee if the
commission has not received the fee or any supporting
documentation required before the 61st day after the date a
registration is issued or renewed under this section.
(e) Failure to pay a renewal fee or late fee is a violation of
this chapter.
Added by Acts 2005, 79th Leg., Ch.
539, Sec. 4, eff. January 15, 2006.
Sec. 221.027. TEMPORARY SUSPENSION. (a) The presiding officer
of the commission shall appoint a disciplinary panel consisting
of three commission members to determine whether the registration
for a timeshare plan under this chapter should be temporarily
suspended.
(b) If the disciplinary panel determines from the information
presented to the panel that a timeshare plan registered under
this chapter would, by the continued disposition of the timeshare
property, constitute a continuing threat to the public welfare,
the panel shall temporarily suspend the registration of the
timeshare plan.
(c) A registration may be suspended under this section without
notice or hearing on the complaint if:
(1) institution of proceedings for a hearing before the State
Office of Administrative Hearings is initiated simultaneously
with the temporary suspension; and
(2) a hearing is held under Chapter 2001, Government Code, and
this chapter as soon as possible.
(d) Notwithstanding Chapter 551, Government Code, the
disciplinary panel may hold a meeting by telephone conference
call if immediate action is required and convening the panel at
one location is inconvenient for any member of the panel.
Added by Acts 2007, 80th Leg., R.S., Ch.
1411, Sec. 58, eff. September 1, 2007.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
23, Sec. 9, eff. May 12, 2009.
SUBCHAPTER D. DISCLOSURE
Sec. 221.031. ADVERTISEMENTS AND PROMOTIONS. (a) At any time,
the commission may request a developer to file for review by the
commission any advertisement used in this state by the developer
in connection with offering a timeshare interest. The developer
shall provide the advertisement not later than the 15th day after
the date the commission makes the request. If the commission
determines that the advertisement violates this chapter or
Chapter 621, Business & Commerce Code, the commission shall
notify the developer in writing, stating the specific grounds for
the commission's determination not later than the 15th day after
the date the commission makes its determination. The commission
may grant the developer provisional approval for the
advertisement if the developer agrees to correct the deficiencies
identified by the commission. A developer, on its own
initiative, may submit any proposed advertisement to the
commission for review and approval by the commission.
(b) Any advertisement that contains a promotion in connection
with the offering of a timeshare interest must comply with
Chapter 621, Business & Commerce Code.
(c) As provided by Subsections (d) and (e), an advertisement
that contains a promotion in connection with the offering of a
timeshare interest must include, in addition to any disclosures
required under Chapter 621, Business & Commerce Code, the
following:
(1) a statement to the effect that the promotion is intended to
solicit purchasers of timeshare interests;
(2) if applicable, a statement to the effect that any person
whose name is obtained during the promotion may be solicited to
purchase a timeshare interest;
(3) the full name of the developer of the timeshare property;
and
(4) if applicable, the full name and address of any marketing
company involved in the promotion of the timeshare property,
excluding the developer or an affiliate or subsidiary of the
developer.
(d) An advertisement containing the disclosures required by
Chapter 621, Business & Commerce Code, and Subsection (c)
must be provided in writing or electronically:
(1) at least once before a scheduled sales presentation; and
(2) in a reasonable period before the scheduled sales
presentation to ensure that the recipient receives the
disclosures before leaving to attend the sales presentation.
(e) The developer is not required to provide the disclosures
required by this section in every advertisement or other written,
oral, or electronic communication provided or made to a recipient
before a scheduled sales presentation.
Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,
1987. Renumbered from Sec. 201.031 by Acts 1989, 71st Leg., ch.
2, Sec. 13.03(b), eff. Aug. 28, 1989. Amended by Acts 1989, 71st
Leg., ch. 381, Sec. 2, eff. June 14, 1989.
Amended by:
Acts 2005, 79th Leg., Ch.
539, Sec. 5, eff. January 15, 2006.
Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 2.35, eff. April 1, 2009.
Sec. 221.032. TIMESHARE DISCLOSURE STATEMENT. (a) Before the
signing of any agreement to acquire a timeshare interest, the
developer shall provide a timeshare disclosure statement to the
prospective purchaser and shall obtain from the purchaser a
written acknowledgement of receipt of the timeshare disclosure
statement.
(b) The timeshare disclosure statement for a single-site
timeshare plan or a multisite timeshare plan that includes a
specific timeshare interest must include:
(1) the type of timeshare plan offered and the name and address
of:
(A) the developer; and
(B) the single site or specific site offered for the multisite
timeshare plan;
(2) a description of the duration and operation of the timeshare
plan;
(3) a description of the existing or proposed accommodations,
including the type and number of timeshare interests in the
accommodations expressed in periods of seven-day use availability
or other time increment applicable to the timeshare plan. The
description of each type of accommodation included in the
timeshare plan shall be categorized by the number of bedrooms,
the number of bathrooms, and sleeping capacity, and shall include
a statement indicating whether the accommodation contains a full
kitchen, which means a kitchen that has a minimum of a
dishwasher, range, sink, oven, and refrigerator. If the
accommodations are proposed or incomplete, a schedule for
commencement, completion, and availability of the accommodations
shall be provided;
(4) a description of any existing or proposed amenities of the
timeshare plan and, if the amenities are proposed or incomplete,
a schedule for commencement, completion, and availability of the
amenities;
(5) the extent to which financial arrangements have been
provided for the completion of all promised accommodations and
amenities that are committed to be built;
(6) a description of the method and timing for performing
maintenance of the accommodations;
(7) a statement indicating that, on an annual basis, the sum of
the nights that purchasers are entitled to use the accommodations
does not exceed the number of nights the accommodations are
available for use by the purchasers;
(8) a description of the method by which purchasers' use of the
accommodations is scheduled;
(9) a statement that an association exists or is expected to be
created or that such an association does not exist and is not
expected to be created and, if such an association exists or is
reasonably contemplated, a description of its powers and
responsibilities;
(10) relating to the single-site timeshare plan or the specific
timeshare interest of a multisite timeshare plan, copies of the
following documents, if applicable, including any amendments to
the documents, unless separately provided to the purchaser
simultaneously with the timeshare disclosure statement:
(A) the declaration;
(B) the association articles of incorporation;
(C) the association bylaws;
(D) the association rules; and
(E) any lease or contract, excluding the purchase contract and
other loan documents required to be signed by the purchaser at
closing;
(11) 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;
(12) the current annual budget, if available, or the projected
annual budget for the timeshare plan or timeshare properties
managed by the same managing entity if assessments are deposited
in a common account. The budget must include:
(A) a statement of the amount reserved or budgeted for repairs,
replacements, and refurbishment;
(B) the projected common expense liability, if any, by category
of expenditure for the timeshare plan or timeshare properties
managed by the same managing entity; and
(C) the assumptions on which the operating budget is based;
(13) the projected assessments and a description of the method
for calculating and apportioning those assessments among
purchasers;
(14) any initial fee or special fee due from the purchaser at
closing, together with a description of the purpose and method of
calculating the fee;
(15) a description of any lien, defect, or encumbrance on or
affecting title to the timeshare interest and, if applicable, a
copy of each written warranty provided by the developer;
(16) a description of any bankruptcy that is pending or that has
occurred within the past five years, pending civil or criminal
suit, adjudication, or disciplinary actions material to the
timeshare plan of which the developer has knowledge;
(17) a description of any financing offered by or available
through the developer;
(18) any current or anticipated fees or charges to be paid by
timeshare purchasers for the use of any accommodations or
amenities related to the timeshare plan, and a statement that the
fees or charges are subject to change;
(19) a description and amount of insurance coverage provided for
the protection of the purchaser;
(20) the extent to which a timeshare interest may become subject
to a tax lien or other lien arising out of claims against
purchasers of different timeshare interests;
(21) a description of those matters required by Section 221.041;
(22) a statement disclosing any right of first refusal or other
restraint on the transfer of all or any portion of a timeshare
interest;
(23) a statement disclosing that any deposit made in connection
with the purchase of a timeshare interest must be held by an
escrow agent until expiration of any right to cancel the contract
and that any deposit must be returned to the purchaser if the
purchaser elects to exercise the right of cancellation; or, if
the commission accepts from the developer a surety bond,
irrevocable letter of credit, or other form of financial
assurance instead of an escrow deposit, a statement disclosing
that the developer has provided a surety bond, irrevocable letter
of credit, or other form of financial assurance in an amount
equal to or in excess of the funds that would otherwise be held
by an escrow agent and that the deposit must be returned if the
purchaser elects to exercise the right of cancellation;
(24) if applicable, a statement that the assessments collected
from the purchasers may be placed in a common account with the
assessments collected from the purchasers of other timeshare
properties managed by the same managing entity;
(25) if the timeshare 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; and
(26) any other information the commission determines is
necessary to protect prospective purchasers or to implement the
purpose of this chapter.
(c) A developer who offers a specific timeshare interest in a
multisite timeshare plan also must fully disclose the following
information in written, graphic, or tabular form:
(1) a description of each component site, including the name and
address of each component site;
(2) a description of each type of accommodation in each
component site, categorized by the number of bedrooms, the number
of bathrooms, and sleeping capacity, and a statement indicating
whether the accommodation contains a full kitchen, which means a
kitchen that has a minimum of a dishwasher, range, sink, oven,
and refrigerator;
(3) a description of the amenities at each component site
available for use by the purchasers;
(4) a description of the reservation system, which must include:
(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 or the rules governing access to and use of the
reservation system; and
(C) the existence of and 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;
(5) the name and principal address of the managing entity for
the multisite timeshare 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;
(6) a description of any right to make additions to,
substitutions in, or deletions from accommodations, amenities, or
component sites, and a description of the basis on which
accommodations, amenities, or component sites may be added to,
substituted in, or deleted from the multisite timeshare plan;
(7) a description of the purchaser's liability for any fees
associated with the multisite timeshare plan;
(8) the location of each component site of the multisite
timeshare plan, the historical occupancy of each component site
for the prior 12-month period, if the component site was part of
the multisite timeshare 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 the time within the multisite
timeshare plan; and
(9) any other information the commission determines is necessary
to protect prospective purchasers or to implement the purpose of
this chapter.
(d) A developer who offers a nonspecific timeshare interest in a
multisite timeshare plan must disclose the following information
in written, graphic, or tabular form:
(1) the name and address of the developer;
(2) a description of the type of interest and the usage rights
the purchaser will receive;
(3) a description of the duration and operation of the timeshare
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) a description of the existing or proposed accommodations,
expressed in periods of seven-day use availability or any other
time increment applicable to the timeshare plan. The description
of each type of accommodation included in the timeshare plan
shall be categorized by the number of bedrooms, the number of
bathrooms, and sleeping capacity, and shall include a statement
indicating whether the accommodation contains a full kitchen,
which means a kitchen that has a minimum of a dishwasher, range,
sink, oven, and refrigerator. If the accommodations are proposed
or incomplete, a schedule for commencement, completion, and
availability of the accommodations shall be provided;
(8) a statement that an association exists or is expected to be
created or that such an association does not exist and is not
expected to be created and, if such an association exists or is
reasonably contemplated, a description of its powers and
responsibilities;
(9) if applicable, copies of the following documents applicable
to the multisite timeshare plan, including any amendments to the
documents, unless separately provided to the purchaser
simultaneously with the timeshare disclosure statement:
(A) the declaration;
(B) the association articles of incorporation;
(C) the association bylaws;
(D) the association rules; and
(E) any lease or contract, excluding the purchase contract and
other loan documents required to be signed by the purchaser at
closing;
(10) a description of the method and timing for performing
maintenance of the accommodations;
(11) a statement indicating that, on an annual basis, the sum of
the nights that purchasers are entitled to use the accommodations
does not exceed the number of nights the accommodations are
available for use by the purchasers;
(12) a description of each type of accommodation included in the
timeshare plan, categorized by the number of bedrooms, the number
of bathrooms, and sleeping capacity, and a statement indicating
whether the accommodation contains a full kitchen, which means a
kitchen that has a minimum of a dishwasher, range, sink, oven,
and refrigerator;
(13) a description of amenities available for use by the
purchaser at each component site;
(14) the location of each component site of the multisite
timeshare plan, the historical occupancy of each component site
for the prior 12-month period, if the component site was part of
the multisite timeshare 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 the time within the multisite
timeshare plan;
(15) a description of the 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 timeshare plan;
(16) 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 governing access to and use of the
reservation system; and
(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;
(17) the name and principal address of the managing entity for
the multisite timeshare 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 the multisite timeshare
plan managing entity and the managing entity of the component
sites of the multisite timeshare plan, if different from the
multisite timeshare plan managing entity;
(18) the current annual budget of the multisite timeshare plan,
if available, or the projected annual budget for the multisite
timeshare plan, which must include:
(A) a statement of the amount reserved or budgeted for repairs,
replacements, and refurbishment;
(B) the projected common expense liability, if any, by category
of expenditure for the multisite timeshare plan; and
(C) the assumptions on which the operating budget is based;
(19) the projected assessments and a description of the method
for calculating and apportioning those assessments among
purchasers of the multisite timeshare plan;
(20) if applicable, a statement that the assessments collected
from the purchasers may be placed in a common account with the
assessments collected from the purchasers of other timeshare
properties managed by the same managing entity;
(21) any current fees or charges to be paid by timeshare
purchasers for the use of any amenities related to the timeshare
plan and a statement that the fees or charges are subject to
change;
(22) any initial or special fee due from the purchaser at
closing, together with a description of the purpose of and method
of calculating the fee;
(23) a description of the purchaser's liability for any fees
associated with the multisite timeshare plan;
(24) a description of any lien, defect, or encumbrance on or
affecting title to the timeshare interest and, if applicable, a
copy of each written warranty provided by the developer;
(25) the extent to which a timeshare interest may become subject
to a tax lien or other lien arising out of claims against
purchasers of different timeshare interests;
(26) a description of those matters required by Section 221.041;
(27) a description of any financing offered by or available
through the developer;
(28) a description of any bankruptcy that is pending or that has
occurred within the past five years, pending civil or criminal
suits, adjudications, or disciplinary actions material to the
timeshare plan of which the developer has knowledge;
(29) a statement disclosing any right of first refusal or other
restraint on the transfer of all or a portion of a timeshare
interest;
(30) a statement disclosing that any deposit made in connection
with the purchase of a timeshare interest must be held by an
escrow agent until expiration of any right to cancel the contract
and that any deposit must be returned to the purchaser if the
purchaser elects to exercise the right of cancellation; or, if
the commission accepts from the developer a surety bond,
irrevocable letter of credit, or other form of financial
assurance instead of an escrow deposit, a statement disclosing
that the developer has provided a surety bond, irrevocable letter
of credit, or other form of financial assurance in an amount
equal to or in excess of the funds that would otherwise be held
by an escrow agent and that the deposit must be returned if the
purchaser elects to exercise the right of cancellation;
(31) if the timeshare 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; and
(32) any other information the commission determines is
necessary to protect prospective purchasers or to implement the
purpose of this chapter.
(e) A developer may include any other information in a timeshare
disclosure statement required by this section on approval by the
commission.
(f) If a timeshare plan is located wholly outside this state,
the commission may permit the developer to submit a timeshare
disclosure statement the developer is currently providing
purchasers or an equivalent timeshare disclosure statement filed
for the timeshare plan in another state if the current statement
or the equivalent statement substantially complies with the
requirements of this subchapter. This subsection does not exempt
the developer from other requirements of this chapter.
Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,
1987. Renumbered from Sec. 201.032 by Acts 1989, 71st Leg., ch.
2, Sec. 13.03(b), eff. Aug. 28, 1989. Amended by Acts 1993, 73rd
Leg., ch. 443, Sec. 3, eff. Sept. 1, 1993.
Amended by:
Acts 2005, 79th Leg., Ch.
539, Sec. 5, eff. January 15, 2006.
Acts 2009, 81st Leg., R.S., Ch.
279, Sec. 2, eff. September 1, 2009.
Sec. 221.033. EXCHANGE DISCLOSURE STATEMENT. (a) Before the
signing of any agreement to purchase a timeshare interest in
which a prospective purchaser is also offered participation in
any exchange program, the developer shall also deliver to the
prospective purchaser the exchange disclosure statement of any
exchange company whose service is advertised or offered by the
developer or other person in connection with the disposition.
(b) If participation in an exchange program is offered for the
first time after a disposition has occurred, any person offering
that participation shall also deliver an exchange disclosure
statement to the purchaser before the execution by the purchaser
of any instrument relating to participation in the exchange
program.
(c) In all cases, the person offering participation in the
exchange program shall obtain from the purchaser a written
acknowledgement of receipt of the exchange disclosure statement.
(d) The exchange disclosure statement must include the following
information:
(1) the name and address of the exchange company;
(2) if the exchange company is not the developer, a statement
describing the legal relationship, if any, between the exchange
company and the developer;
(3) a statement indicating the conditions under which the
exchange program might terminate or become unavailable;
(4) whether membership or participation or both in the exchange
program is voluntary or mandatory;
(5) a complete description of the required procedure for
executing an exchange of timeshare periods;
(6) the fee required for membership or participation or both in
the program and whether the fee is subject to change;
(7) a statement to the effect that participation in the exchange
program is conditioned on compliance with the terms of a contract
between the exchange company and the purchaser;
(8) a statement in conspicuous and bold-faced print to the
effect that all exchanges are arranged on a space-available basis
and that neither the developer nor the exchange company
guarantees that a particular timeshare period can be exchanged;
and
(9) a description of seasonal demand and unit occupancy
restrictions employed in the exchange program.
Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,
1987. Renumbered from Sec. 201.033 by Acts 1989, 71st Leg., ch.
2, Sec. 13.03(b), eff. Aug. 28, 1989.
Amended by:
Acts 2005, 79th Leg., Ch.
539, Sec. 6, eff. January 15, 2006.
Sec. 221.034. EXEMPT OFFERINGS AND DISPOSITIONS; COMMUNICATIONS.
(a) An offering or disposition is exempt from this chapter if
it is:
(1) a gratuitous offering or disposition of a timeshare
interest;
(2) a disposition pursuant to a court order;
(3) a disposition by a governmental agency;
(4) a disposition by foreclosure or deed in lieu of foreclosure;
(5) an offering or disposition by an association of its own
timeshare interest acquired through foreclosure, deed in lieu of
foreclosure, or gratuitous transfer;
(6) an offering or disposition of all timeshare interests in a
timeshare plan to not more than five persons;
(7) an offering or disposition of a timeshare interest in a
timeshare property situated wholly outside this state under a
contract executed wholly outside this state, if there has been no
offering to the purchaser within this state;
(8) an offering or disposition of a timeshare interest to a
purchaser who is not a resident of this state under a contract
executed wholly outside this state, if there has been no offering
to the purchaser within this state;
(9) the offering or redisposition of a timeshare interest by a
purchaser who acquired the interest for the purchaser's personal
use; or
(10) the offering or disposition of a rental of an accommodation
for a period of three years or less.
(b) If a developer has a timeshare plan registered under this
chapter and is subject to Section 221.024, the developer may
offer or dispose of an interest in a timeshare plan that is not
registered under this chapter to a person who is the owner of a
timeshare interest in a timeshare plan created by the developer.
A developer under this subsection is exempt from Sections
221.021, 221.022, 221.023, 221.032, 221.041, 221.042, 221.043,
221.061, 221.071(a)(1) and (8), 221.074, and 221.075 if the
developer:
(1) permits the purchaser to cancel the purchase contract before
the sixth day after the date the contract is signed; and
(2) provides the purchaser all timeshare disclosure documents
required by law to be provided in the jurisdiction in which the
timeshare property is located.
(c) The following communications are not advertisements under
this chapter:
(1) any stockholder communication, including an annual report or
interim financial report, proxy material, registration statement,
securities prospectus, timeshare disclosure statement, or other
material required to be delivered to a prospective purchaser by a
state or federal governmental entity;
(2) any oral or written statement disseminated by a developer to
broadcast or print media, excluding:
(A) paid advertising or promotional material relating to plans
for acquiring or developing timeshare property; and
(B) the rebroadcast or other dissemination of any oral
statements by a developer to a prospective purchaser or the
distribution or other dissemination of written statements,
including newspaper or magazine articles or press releases, by a
developer to prospective purchasers;
(3) the offering of a timeshare interest in a national
publication or by electronic media that is not directed to or
targeted at any individual located in this state;
(4) any audio, written, or visual publication or material
relating to the availability of any accommodations for transient
rental if:
(A) a sales presentation is not a term or condition of the
availability of the accommodations; and
(B) the failure of the transient renter to take a tour of the
timeshare property or attend a sales presentation does not result
in a reduction in the level of services or an increase in the
rental price that would otherwise be available to the renter; or
(5) any follow-up communication with a person relating to a
promotion if the person previously received an advertisement
relating to the promotion that complied with Section 221.031.
(d) The following communications are exempt from this chapter if
they are delivered to a person who has previously executed a
contract for the purchase of or is an owner of a timeshare
interest in a timeshare plan:
(1) any communication addressed to and relating to the account
of the person; or
(2) any audio, written, or visual publication or material
relating to an exchange company or program if the person is a
member of that exchange company or program.
Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,
1987. Renumbered from Sec. 201.034 by Acts 1989, 71st Leg., ch.
2, Sec. 13.03(b), eff. Aug. 28, 1989.
Amended by:
Acts 2005, 79th Leg., Ch.
539, Sec. 7, eff. January 15, 2006.
Sec. 221.035. SUPERVISORY DUTIES OF DEVELOPER. Notwithstanding
obligations placed upon any other persons by this chapter, the
developer shall supervise, manage, and control all aspects of the
offering of a timeshare interest, including but not limited to
promotion, advertising, contracting, and closing. Any violation
of this chapter which occurs during such offering activities is
considered to be a violation by the developer as well as by the
person actually committing the violation.
Added by Acts 1989, 71st Leg., ch. 381, Sec. 3, eff. June 14,
1989.
Sec. 221.036. DEVELOPER PREPARATION AND COMPLETION OF DOCUMENTS.
(a) A developer may charge a reasonable fee for completion of a
contract form, closing document, or disclosure document required
for the sale, exchange, option, lease, or rental of a timeshare
interest.
(b) The action of a developer under Subsection (a) does not
constitute the unauthorized or illegal practice of law in this
state if the contract or document has been:
(1) accepted by the commission for use in the particular type of
transaction involved; or
(2) prepared by an attorney licensed to practice law in this
state for use in the particular type of transaction involved.
Added by Acts 2003, 78th Leg., ch. 1244, Sec. 1, eff. June 20,
2003.
Sec. 221.037. ALTERNATIVE TERMINOLOGY OR NAME. (a) In
providing the disclosures required by this chapter, the use of
the terms "vacation ownership interest" or "vacation ownership
plan" to refer to the timeshare interest or plan offered by the
developer, or the use of other terms that are substantially
similar and that are regularly used by the developer to denote a
timeshare interest or plan, is sufficient and complies with the
requirements of this chapter.
(b) In providing the full name of a developer or a marketing
company as required by this chapter, the disclosure of an assumed
name of the developer or the marketing company, if the entity has
complied with the requirements of the applicable assumed business
names statutes or other laws regarding the use of the assumed
name, is sufficient and complies with this chapter.
Added by Acts 2009, 81st Leg., R.S., Ch.
279, Sec. 3, eff. September 1, 2009.
SUBCHAPTER E. CANCELLATION OF PURCHASE CONTRACT
Sec. 221.041. PURCHASER'S RIGHT TO CANCEL. (a) A purchaser may
cancel a purchase contract before the sixth day after the date
the purchaser signs and receives a copy of the purchase contract
or receives the required timeshare disclosure statement,
whichever is later.
(b) A purchaser may not waive the right of cancellation under
this section. A contract containing a waiver is voidable by the
purchaser.
Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,
1987. Renumbered from Sec. 201.041 by Acts 1989, 71st Leg., ch.
2, Sec. 13.03(b), eff. Aug. 28, 1989. Amended by Acts 1989, 71st
Leg., ch. 381, Sec. 4, eff. June 14, 1989; Acts 1993, 73rd Leg.,
ch. 443, Sec. 4, eff. Sept. 1, 1993.
Amended by:
Acts 2005, 79th Leg., Ch.
539, Sec. 8, eff. January 15, 2006.
Sec. 221.042. NOTICE; REFUND. (a) If a purchaser elects to
cancel a purchase contract under Section 221.041, the purchaser
may do so by hand-delivering notice of cancellation to the
developer, by mailing notice by prepaid United States mail to the
developer or to the developer's agent for service of process, or
by providing notice by overnight common carrier delivery service
to the developer or the developer's agent for service of process.
(b) Cancellation is without penalty, and all payments made by
the purchaser before cancellation must be refunded on or before
the 30th day after the date on which the developer receives a
timely notice of cancellation or on or before the fifth day after
the date the developer receives good funds from the purchaser,
whichever is later.
Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,
1987. Renumbered from Sec. 201.042 by Acts 1989, 71st Leg., ch.
2, Sec. 13.03(b), eff. Aug. 28, 1989.
Amended by:
Acts 2005, 79th Leg., Ch.
539, Sec. 8, eff. January 15, 2006.
Sec. 221.043. CONTRACT REQUIREMENTS. (a) Each purchase
contract shall contain the following information. The statements
required by this subsection and Subsection (c)(8) shall be
provided in a conspicuous manner and in the exact language set
forth in this section with the developer's name and address, the
date of the last day of the fiscal year, and the address of the
managing entity inserted where indicated:
"PURCHASER'S RIGHT TO CANCEL.
"(1) BY SIGNING THIS CONTRACT YOU ARE INCURRING AN OBLIGATION TO
PURCHASE A TIMESHARE INTEREST. YOU MAY, HOWEVER, CANCEL THIS
CONTRACT WITHOUT PENALTY OR OBLIGATION BEFORE THE SIXTH DAY AFTER
THE DATE YOU SIGN AND RECEIVE A COPY OF THE PURCHASE CONTRACT, OR
RECEIVE THE REQUIRED TIMESHARE DISCLOSURE STATEMENT, WHICHEVER IS
LATER.
"(2) IF YOU DECIDE TO CANCEL THIS CONTRACT, YOU MAY DO SO BY
EITHER HAND-DELIVERING NOTICE OF CANCELLATION TO THE DEVELOPER,
BY MAILING NOTICE BY PREPAID UNITED STATES MAIL TO THE DEVELOPER
OR THE DEVELOPER'S AGENT FOR SERVICE OF PROCESS, OR BY PROVIDING
NOTICE BY OVERNIGHT COMMON CARRIER DELIVERY SERVICE TO THE
DEVELOPER OR THE DEVELOPER'S AGENT FOR SERVICE OF PROCESS. YOUR
NOTICE OF CANCELLATION IS EFFECTIVE ON THE DATE SENT OR DELIVERED
TO (INSERT NAME OF DEVELOPER) AT (INSERT ADDRESS OF DEVELOPER).
FOR YOUR PROTECTION, SHOULD YOU DECIDE TO CANCEL YOU SHOULD
EITHER SEND YOUR NOTICE OF CANCELLATION BY CERTIFIED MAIL WITH A
RETURN RECEIPT REQUESTED OR OBTAIN A SIGNED AND DATED RECEIPT IF
DELIVERING IT IN PERSON OR BY OVERNIGHT COMMON CARRIER.
"(3) A PURCHASER SHOULD NOT RELY ON STATEMENTS OTHER THAN THOSE
INCLUDED IN THIS CONTRACT AND THE DISCLOSURE STATEMENT."
(b) Immediately following the required statements in Subsection
(a) shall be a space reserved for the signature of the purchaser.
(c) The purchase contract must also include the following:
(1) the name and address of the developer and the address of the
timeshare property or the address of any available timeshare
interest being offered;
(2) an agreement describing the cancellation policy prescribed
by Section 221.041;
(3) the name of the person or persons primarily involved in the
sales presentation on behalf of the developer;
(4) a statement disclosing the amount of the periodic
assessments currently assessed against or collected from the
purchasers of the timeshare interest, immediately followed by a
statement providing that collected assessments will be used by
the managing entity to pay for expenditures, charges, reserves,
or liabilities relating to the operation of the timeshare plan or
timeshare properties managed by the managing entity;
(5) the date the purchaser signs the contract; and
(6) the following statement:
"AS A TIMESHARE OWNER, YOU HAVE A RIGHT TO REQUEST A WRITTEN
ANNUAL TIMESHARE FEE AND EXPENSE STATEMENT. THIS STATEMENT IS
PREPARED ANNUALLY BY THE MANAGING ENTITY AND WILL BE AVAILABLE
NOT LATER THAN FIVE MONTHS AFTER (INSERT THE DATE OF THE LAST DAY
OF THE FISCAL YEAR). YOU MAY REQUEST THE STATEMENT BY WRITING TO
(INSERT NAME AND ADDRESS OF THE MANAGING ENTITY)."
(d) The information required to be provided by this section may
be provided in the purchase contract or in an exhibit to the
purchase contract, or it may be provided in part in both if all
of the information is provided.
Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,
1987. Renumbered from Sec. 201.043 by Acts 1989, 71st Leg., ch.
2, Sec. 13.03(b), eff. Aug. 28, 1989. Amended by Acts 1989, 71st
Leg., ch. 381, Sec. 5, eff. June 14, 1989; Acts 1993, 73rd Leg.,
ch. 443, Sec. 5, eff. Sept. 1, 1993.
Amended by:
Acts 2005, 79th Leg., Ch.
539, Sec. 8, eff. January 15, 2006.
Acts 2009, 81st Leg., R.S., Ch.
279, Sec. 4, eff. September 1, 2009.
SUBCHAPTER F. EXCHANGE PROGRAM
Sec. 221.051. OPERATION REQUIREMENT. An exchange company shall
employ seasonal demand and unit occupancy restrictions in the
operation of its exchange program.
Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,
1987. Renumbered from Sec. 201.051 by Acts 1989, 71st Leg., ch.
2, Sec. 13.03(b), eff. Aug. 28, 1989.
Sec. 221.052. LIABILITY OF DEVELOPER AND EXCHANGE COMPANY. (a)
A developer does not incur any liability arising out of the use,
delivery, or publication to a purchaser of written information or
audio-visual materials provided to it by the exchange company in
accordance with Subchapter D, unless the developer knows or has
reason to know that the materials are inaccurate or false.
(b) No exchange company shall have any liability with respect to
any violation under this chapter arising out of the use by a
developer of information relating to an exchange program other
than that provided to the developer by the exchange company.
(c) An exchange company that denies exchange privileges to an
owner whose use of accommodations in the owner's timeshare plan
is denied is not liable to any member of the exchange company or
exchange program or any third party because of the denial of the
owner's exchange privileges.
Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,
1987. Renumbered from Sec. 201.052 by Acts 1989, 71st Leg., ch.
2, Sec. 13.03(b), eff. Aug. 28, 1989.
Amended by:
Acts 2005, 79th Leg., Ch.
539, Sec. 9, eff. January 15, 2006.
Sec. 221.053. EXCHANGE COMPANY LIABILITY. Except for written
information or audio-visual materials provided to a developer by
an exchange company, an exchange company does not incur liability
as a result of:
(1) a representation made by a developer that relates to any
exchange program or exchange company; or
(2) the use, delivery, or publication by a developer of
information that relates to an exchange program or exchange
company.
Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,
1987. Renumbered from Sec. 201.053 by Acts 1989, 71st Leg., ch.
2, Sec. 13.03(b), eff. Aug. 28, 1989.
SUBCHAPTER G. ESCROW DEPOSITS
Sec. 221.061. ESCROW OR TRUST ACCOUNT REQUIRED. (a) A
developer or escrow agent of a timeshare plan shall deposit in an
escrow or trust account in a federally insured depository 100
percent of all funds received during the purchaser's cancellation
period.
(b) An escrow agent owes the purchaser a fiduciary duty.
(c) The escrow agent and the developer shall execute an
agreement that includes a statement providing that:
(1) funds may be disbursed to the developer from the escrow or
trust account by the agent only:
(A) after the purchaser's cancellation period has expired; and
(B) as provided by the purchase contract, subject to this
subchapter; and
(2) if the purchaser cancels the purchase contract as provided
by the contract, the funds must be paid to:
(A) the purchaser; or
(B) the developer if the purchaser's funds have been refunded
previously by the developer.
(d) If a developer contracts to sell a timeshare interest and
the construction of the building in which the timeshare interest
is located has not been completed when the cancellation period
expires, the developer shall continue to maintain all funds
received from the purchaser under the purchase agreement in the
escrow or trust account until construction of the building is
completed. The documentation required for evidence of completion
of construction includes:
(1) a certificate of occupancy;
(2) a certificate of substantial completion;
(3) evidence of a public safety inspection equivalent to
Subdivision (1) or (2) from a government agency in the applicable
jurisdiction; or
(4) any other evidence acceptable to the commission.
Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,
1987. Renumbered from Sec. 201.061 by Acts 1989, 71st Leg., ch.
2, Sec. 13.03(b), eff. Aug. 28, 1989.
Amended by:
Acts 2005, 79th Leg., Ch.
539, Sec. 10, eff. January 15, 2006.
Sec. 221.062. RELEASE OF ESCROW. (a) The funds or property
constituting the escrow or trust deposit may be released from
escrow only in accordance with this section.
(b) If the purchaser cancels the purchase contract as provided
by the contract, the funds shall be paid to:
(1) the purchaser; or
(2) the developer if the purchaser's funds have been refunded
previously by the developer.
(c) If the purchaser defaults in the performance of obligations
under the terms of the purchase contract, the funds shall be paid
to the developer.
(d) If the developer defaults in the performance of obligations
under the purchase contract, the funds shall be paid to the
purchaser.
(e) If the funds of the purchaser have not been disbursed
previously as provided by Subsections (a)-(d), the funds may be
disbursed to the developer by the escrow or trust agent if
acceptable evidence of completion of construction is provided.
(f) If there is a dispute relating to the funds in the escrow or
trust account, the agent shall maintain the funds in the account
until:
(1) the agent receives written directions agreed to and signed
by all parties; or
(2) a civil action relating to the disputed funds is filed.
(g) If a civil action is filed under Subsection (f)(2), the
escrow or trust account agent shall deposit the funds with the
court in which the action is filed.
(h) Excluding any encumbrance placed against the purchaser's
timeshare interest that secures the purchaser's payment of
purchase money financing for the purchase, the developer is not
entitled to the release of any funds escrowed with respect to
each timeshare interest until the developer has provided the
commission with satisfactory evidence that:
(1) the timeshare interest and any other property or rights to
property appurtenant to the timeshare interest, including any
amenities represented to the purchaser as being part of the
timeshare 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 timeshare 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 timeshare interest
or appurtenant property or property rights, including any
amenities represented to the purchaser as being part of the
timeshare plan, has recorded a subordination and notice to
creditors document in the jurisdiction in which the timeshare
interest is located that expressly and effectively provides that
the interest holder's right, lien, or encumbrance does not
adversely affect and is subordinate to the rights of the owners
of the timeshare interests in the timeshare plan, regardless of
the date of purchase, on 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 timeshare interest
or appurtenant property or property rights, including any
amenities represented to the purchaser as being part of the
timeshare plan, has transferred the subject accommodations or
amenities or all use rights therein to a nonprofit organization
or an owners' association to be held for the use and benefit of
the purchasers of the timeshare plan, which entity shall act as a
fiduciary to the purchasers, provided that the developer has
transferred control of that entity to the purchasers or does not
exercise its voting rights in that entity with respect to the
subject accommodations or amenities and, prior to the transfer,
any lien or other encumbrance against the accommodation or
facility is subject to a subordination and notice to creditors
instrument pursuant to this subsection; or
(4) alternative arrangements have been made that are adequate to
protect the rights of the purchasers of the timeshare interests
and are approved by the commission.
Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,
1987. Renumbered from Sec. 201.062 by Acts 1989, 71st Leg., ch.
2, Sec. 13.03(b), eff. Aug. 28, 1989.
Amended by:
Acts 2005, 79th Leg., Ch.
539, Sec. 10, eff. January 15, 2006.
Acts 2009, 81st Leg., R.S., Ch.
279, Sec. 5, eff. September 1, 2009.
Sec. 221.063. ALTERNATIVE TO ESCROW OR TRUST ACCOUNT: FINANCIAL
ASSURANCE. (a) Instead of the deposit of funds in an escrow or
trust account as provided by Section 221.061, the commission may
accept from the developer a surety bond, irrevocable letter of
credit, or other form of financial assurance, including financial
assurance posted in another state or jurisdiction.
(b) The amount of the financial assurance provided under this
section must be an amount equal to or more than the amount of
funds that would otherwise be placed in an escrow or trust
account under Section 221.061(a).
(c) The amount of the financial assurance provided under this
section for timeshare property under construction as provided by
Section 221.061(d) must be the lesser of:
(1) an amount equal to or more than the amount of funds that
would otherwise be placed in an escrow or trust account under
that subsection; or
(2) the amount necessary to assure completion of the building in
which the timeshare interest is located.
Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,
1987. Renumbered from Sec. 201.063 by Acts 1989, 71st Leg., ch.
2, Sec. 13.03(b), eff. Aug. 28, 1989.
Amended by:
Acts 2005, 79th Leg., Ch.
539, Sec. 10, eff. January 15, 2006.
Sec. 221.064. DOCUMENTATION REQUIRED. The escrow or trust
account agent or developer shall make documents related to the
escrow or trust account or the financial assurance provided
available to the commission at the commission's request.
Added by Acts 2005, 79th Leg., Ch.
539, Sec. 10, eff. January 15, 2006.
SUBCHAPTER H. MISCELLANEOUS PROVISIONS
Sec. 221.071. DECEPTIVE TRADE PRACTICES. (a) A developer or
other person commits a false, misleading, or deceptive act or
practice within the meaning of Subsections (a) and (b) of Section
17.46 of the Texas Deceptive Trade Practices-Consumer Protection
Act (Article 17.46 et seq., Business & Commerce Code), by
engaging in any of the following acts:
(1) failing to disclose information concerning a timeshare
interest required by Subchapter D;
(2) making false or misleading statements of fact concerning the
characteristics of accommodations or amenities available to a
consumer;
(3) predicting specific or immediate increases in the value of a
timeshare interest without a reasonable basis for such
predictions;
(4) making false or misleading statements of fact concerning the
duration that accommodations or amenities will be available to a
consumer;
(5) making false or misleading statements of fact concerning the
conditions under which a purchaser of a timeshare interest may
exchange the right to occupy a unit for the right to occupy a
unit in the same or another timeshare property;
(6) representing that a prize, gift, or other benefit will be
awarded in connection with a promotion with the intent not to
award that prize, gift, or benefit in the manner represented;
(7) failing to provide a copy of the purchase contract to the
purchaser at the time the contract is signed by the purchaser;
(8) failing to provide the annual statement as required by
Section 221.074(a); or
(9) exceeding a one-to-one purchaser-to-accommodation ratio for
a timeshare plan during a consecutive 12-month period, as
determined under Subsection (c).
(b) The provisions of this section are not exclusive and are in
addition to provisions provided for in any other law.
(c) A developer complies with the one-to-one
purchaser-to-accommodation ratio referred to in Subsection (a)(9)
if the total number of purchasers eligible to use the
accommodations of the timeshare plan during a consecutive
12-month period never exceeds the total number of accommodations
available for use in the timeshare plan during that same period.
A purchaser-to-accommodation ratio is computed by dividing the
number of purchasers eligible to use an accommodation in a
timeshare plan on any given day by the number of accommodations
within the plan available for use on that day. For purposes of
computing the purchaser-to-accommodation ratio:
(1) each purchaser is counted at least once each consecutive
12-month period;
(2) each accommodation is counted not more than 365 times each
consecutive 12-month period, excluding a leap year, in which each
accommodation may be counted 366 times; and
(3) a purchaser who is delinquent in paying timeshare
assessments is considered eligible to use timeshare plan
accommodations.
(d) If a developer has substantially complied with this chapter
in good faith, a nonmaterial error or omission is not actionable.
Any nonmaterial error or omission is not sufficient to permit a
purchaser to cancel a purchase contract after the period provided
for cancellation expires under this chapter.
Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,
1987. Renumbered from Sec. 201.071 by Acts 1989, 71st Leg., ch.
2, Sec. 13.03(b), eff. Aug. 28, 1989. Amended by Acts 1993, 73rd
Leg., ch. 443, Sec. 6, eff. Sept. 1, 1993.
Amended by:
Acts 2005, 79th Leg., Ch.
539, Sec. 11, eff. January 15, 2006.
Sec. 221.072. INSURANCE. Before the disposition of any
timeshare interest, the developer or managing entity shall
maintain the following insurance with respect to the timeshare
property:
(1) property insurance on the timeshare property and any
personal property for use by purchasers, other than personal
property separately owned by a purchaser, insuring against all
risks of direct physical loss commonly insured against, in a
total amount, after application of deductibles, of the full
replacement cost of the accommodations and amenities of the
timeshare property; and
(2) liability insurance covering all occurrences commonly
insured against for death, bodily injury, and property damage
arising out of or in connection with the use, ownership, and
maintenance of the timeshare property.
Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,
1987. Renumbered from Sec. 201.072 by Acts 1989, 71st Leg., ch.
2, Sec. 13.03(b), eff. Aug. 28, 1989.
Amended by:
Acts 2005, 79th Leg., Ch.
539, Sec. 12, eff. January 15, 2006.
Sec. 221.073. PENALTY. (a) A developer subject to this chapter
commits an offense if the developer offers or disposes of a
timeshare interest in a timeshare property which has not been
registered with the commission.
(b) It is not a violation of this section for a developer
subject to this chapter to accept reservations and deposits from
prospective purchasers in accordance with Section 221.021(b) or
(d).
(c) An offense under this section is a Class A misdemeanor. A
person may not be prosecuted for more than one offense involving
the same promotion, even if mailed or distributed to more than
one person.
Added by Acts 1989, 71st Leg., ch. 381, Sec. 6, eff. June 14,
1989. Amended by Acts 1999, 76th Leg., ch. 1382, Sec. 9, eff.
June 19, 1999.
Amended by:
Acts 2005, 79th Leg., Ch.
539, Sec. 13, eff. January 15, 2006.
Sec. 221.074. ANNUAL TIMESHARE FEE AND EXPENSE STATEMENT. (a)
Notwithstanding any contrary provision of the required timeshare
disclosure statement, project instrument, timeshare instrument,
or bylaws adopted pursuant to a timeshare instrument, the
managing entity shall make a written annual accounting of the
operation of the timeshare properties managed by the managing
entity to each purchaser who requests an accounting not later
than five months after the last day of each fiscal year. The
statement shall fairly and accurately represent the collection
and expenditure of assessments and include:
(1) a balance sheet;
(2) an income and expense statement;
(3) the current budget for the timeshare property, timeshare
properties managed by the same managing entity, or multisite
timeshare plan required by Section 221.032(b)(12); and
(4) the name, address, and telephone number of a designated
representative of the managing entity.
(b) On the request of an owner, the managing entity of the
timeshare plan shall provide the owner with the name and address
of each member of the board of directors of the owners'
association, if one exists.
(c) A developer or managing entity shall have an annual
independent audit of the financial statements of the timeshare
plan or timeshare properties managed by the managing entity
performed by a certified public accountant or an accounting firm.
The audit must be:
(1) conducted in accordance with generally accepted auditing
standards as prescribed by the American Institute of Certified
Public Accountants, the Governmental Accounting Standards Board,
the United States General Accounting Office, or other
professionally recognized entities that prescribe auditing
standards; and
(2) completed not later than five months after the last day of
the fiscal year of the timeshare plan or timeshare property.
(d) Knowingly furnishing false information in the annual
timeshare fee and expense statement is a violation of the
Deceptive Trade Practices-Consumer Protection Act (Section 17.41
et seq., Business & Commerce Code).
(e) The managing entity of any accommodation located in this
state shall post prominently in the registration area of the
accommodations the following notice, with the date of the last
day of the current fiscal year and the address of the managing
entity inserted where indicated:
"AS A TIMESHARE OWNER YOU HAVE A RIGHT TO REQUEST A WRITTEN
ANNUAL TIMESHARE FEE AND EXPENSE STATEMENT. THIS STATEMENT IS
PREPARED ANNUALLY BY THE MANAGING ENTITY AND WILL BE AVAILABLE NO
LATER THAN FIVE MONTHS FOLLOWING (INSERT THE DATE OF THE LAST DAY
OF THE CURRENT FISCAL YEAR). YOU MAY REQUEST THE STATEMENT, BY
WRITING TO (INSERT ADDRESS OF THE MANAGING ENTITY)."
Added by Acts 1993, 73rd Leg., ch. 443, Sec. 7, eff. Jan. 1,
1995.
Amended by:
Acts 2005, 79th Leg., Ch.
539, Sec. 14, eff. January 15, 2006.
Sec. 221.075. CIVIL PENALTY FOR LATE STATEMENT; INJUNCTION. (a)
On receipt of a written request filed with the commission by a
managing entity before the date on which the statement required
by Section 221.074 must be made available, the commission for
good cause shown may grant the managing entity an extension of no
more than 30 days in which to provide the statement.
(b) If the statement required by Section 221.074 is late and an
extension has not been granted under Subsection (a), the managing
entity required to provide the statement is liable to the state
for a civil penalty not to exceed:
(1) $500 per day for each of the first 10 days that the
statement is late; and
(2) $1,500 per day for each day after the 10th day, until the
managing entity has complied with Section 221.074.
(c) In no event shall the civil penalties exceed $30,000 for any
one statement period.
(d) A managing entity may not assess against or collect from the
purchasers of a timeshare property the amount of a penalty
incurred under this section.
(e) If it appears that a managing entity has violated Section
221.074, the attorney general may institute an action for
injunctive relief, a civil penalty, or both.
Added by Acts 1993, 73rd Leg., ch. 443, Sec. 7, eff. Jan. 1,
1995. Amended by Acts 1999, 76th Leg., ch. 1382, Sec. 10, eff.
June 19, 1999.
Amended by:
Acts 2005, 79th Leg., Ch.
539, Sec. 15, eff. January 15, 2006.
Sec. 221.076. MANAGING ENTITIES THAT MANAGE MORE THAN ONE
TIMESHARE PROPERTY. (a) A managing entity that manages two or
more single-site timeshare plans may commingle the assessments
collected from purchasers of one timeshare plan with the
assessments collected from purchasers of any other single-site
plan for which it is the managing entity only if the practice is
disclosed in the timeshare disclosure statement for each
timeshare property and the appropriate statement is included in
the declaration for each timeshare property as required by
Subchapter B.
(b) A managing entity which manages a multisite timeshare plan
may deposit assessments collected from purchasers of one
timeshare property into a common account with assessments
collected from purchasers of other timeshare properties
participating in the same multisite timeshare plan only if the
practice is disclosed in the timeshare disclosure statement for
each timeshare property in the multisite timeshare plan and the
appropriate statement is included in the declaration for each
timeshare plan as required by Subchapter B.
(c) Nothing in this section shall be construed to allow a
managing entity to commingle assessments of a multisite timeshare
plan with the assessments of a separate multisite timeshare plan
or a timeshare plan that is not a part of the multisite timeshare
plan.
Added by Acts 1993, 73rd Leg., ch. 443, Sec. 8, eff. Sept. 1,
1993.
Amended by:
Acts 2005, 79th Leg., Ch.
539, Sec. 16, eff. January 15, 2006.
Sec. 221.077. AVAILABILITY OF BOOKS AND RECORDS; RECORDS
RETENTION. (a) A developer or managing entity, on written
request of an owner, shall make available for examination at its
registered office or principal place of business and at any
reasonable time or times the relevant books and records relating
to the collection and expenditure of assessments.
(b) A developer or managing entity shall maintain in its records
a copy of each purchase contract for an accommodation sold by the
developer for a timeshare period unless the contract has been
canceled. If a sale of the timeshare estate is pending, the
developer shall retain a copy of the contract until a deed of
conveyance, agreement for deed, or lease is recorded in the real
property records of the county in which the timeshare property is
located.
Added by Acts 1993, 73rd Leg., ch. 443, Sec. 8, eff. Sept. 1,
1993.
Amended by:
Acts 2005, 79th Leg., Ch.
539, Sec. 16, eff. January 15, 2006.
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