THE SENATE

S.B. NO.

2049

THIRTIETH LEGISLATURE, 2020

S.D. 1

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO TIME SHARING.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


SECTION 1. The legislature finds that under existing law the current process for time share developers to renew their registration is arduous and requires a significant amount of information. The extensive process has caused a backlog for developers to submit their annual renewals for time share registration. The legislature further finds that existing law does not authorize a developer to utilize electronic means, which further exacerbates the extensive process for renewal registration.

Accordingly, the purpose of this Act is to streamline the annual renewals for time share registration by:

(1) Amending the information required to be included in a time share disclosure statement, under certain circumstances;

(2) Amending the information required to be included on an application to renew a developer's registration;

(3) Expanding the information that developers are not required to include on an application to renew their registration;

(4) Requiring developers to submit copies of encumbrances on title using any form of electronic record acceptable;

(5) Limiting the copies of documents that developers are required to submit in an application for renewal registration; and

(6) Requiring developers to submit copies of the supplementary plan documents of the time share plan.

SECTION 2. Section 514E-1, Hawaii Revised Statutes, is amended by adding two new definitions to be appropriately inserted and to read as follows:

""Primary plan documents" means the constituent documents of the time share plan, including any time share declaration; any trust agreement; articles of incorporation and bylaws of the association, if the association is a corporation; or the operating agreement or similar organization document, if the association is a limited liability company or other entity; the rules for reserving the use of the time share units; and the rules and regulations governing the occupancy of the time share units. "Primary plan documents" does not include supplementary plan documents.

"Supplementary plan documents" means any declaration of annexation, active property declaration, notice of access, notice of conveyance, notice of activation, deed conveying property to the trustee of a time share plan or to the time share owners association, or other instruments submitting or committing property to the time share plan or removing property from the time share plan. To the extent that any such documents modify the terms and provisions of the time share plan as established in the existing primary plan documents, including but not limited to documents that establish a new class or category of time share interest that has rights that differ from existing time share interests in the time share plan, the documents constitute primary plan documents and shall not constitute supplementary plan documents."

SECTION 3. Section 514E-9, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) Any offering of a time sharing plan to the public shall disclose:

(1) The name and address of the developer and of the time share units;

(2) The name and address of the plan manager, if any, and a description of the plan manager's responsibilities and authority;

(3) A description of the time share units, including the developer's schedule for completion of all buildings, units, and amenities and dates of availability;

(4) If the time share plan is located in a condominium property regime, a description of the project, and if the purchaser will own an undivided interest in a fee or leasehold condominium unit, a brief description of any pertinent provisions of the project instruments;

(5) Any restraints on the transfer of the buyer's time share interest in the time share units or plan;

(6) Whether the time share plan is a time share ownership plan or a time share use plan, along with a description of the rights and responsibilities under said plan;

(7) A statement that there is a seven-calendar-day period of mutual rescission;

(8) A statement that pursuant to section 514E-11.3, every sale or transfer, made in violation of this chapter is voidable at the election of the purchaser;

(9) [Notice of any liens, title defects or encumbrances on or affecting the title to the units or plan;] A list of the primary plan documents of the time share plan and a statement indicating that the supplementary plan documents, or representative samples of the supplementary plan documents, are on file with the director for purchaser review;

(10) Notice of any pending or anticipated suits that are material to the time share units or plan, of which the developer has, or should have, knowledge;

(11) The total financial obligation of the purchaser, which shall consist of:

(A) A statement that the purchaser is obligated to pay the initial price stated in the purchaser's purchase agreement; and

(B) A list or description of any additional charges to which the purchaser may be subject;

(12) An estimate of the dues, maintenance fees, real property taxes, and similar periodic expenses, and the method or formula by which they are derived and apportioned;

(13) The [disclosure] statement [under] required by subsection (d), if applicable; and

(14) Other disclosures required by the director, as provided by rules adopted pursuant to chapter 91."

SECTION 4. Section 514E-10, Hawaii Revised Statutes, is amended to read as follows:

"514E-10 Registration required; developer, acquisition agent, plan manager, and exchange agent; registration renewal. (a) A developer shall not offer or dispose of a time share unit or a time share interest unless the disclosure statement required by section 514E-9 is filed with the director pursuant to the time specified in this chapter, or the development is exempt from filing, and the time share plan to be offered by the developer is accepted by the director for registration under this chapter. The director shall not accept a developer's time share plan if the developer does not possess a history of honesty, truthfulness, financial integrity, and fair dealing.

(b) An acquisition agent (including the developer if it is also the acquisition agent) shall register under this chapter by filing with the director a statement setting forth the time sharing plan for which it is providing prospective purchasers, its address, the telephone number, other information required by the director as provided by rules adopted pursuant to chapter 91, and, if the acquisition agent is not a natural person, the name of the responsible managing employee; provided that an acquisition agent licensed under chapter 467 as a real estate broker shall not be required to register under this chapter. All acquisition agents not licensed under chapter 467 shall be approved by the director. The director shall not approve any acquisition agent who is not of good character and who does not possess a reputation for honesty, truthfulness, and fair dealing. The acquisition agent shall furnish evidence that the acquisition agent is bonded as required by rules adopted by the director pursuant to chapter 91 to cover any violation by the acquisition agent of any solicitation ordinance or other regulation governing the use of the premise or premises in which the time share plan is promoted; provided that the acquisition agent shall be separately bonded for each time share plan for which it is providing prospective purchases.

(c) A plan manager (including the developer if it is also the plan manager) shall register under this chapter by filing with the director a statement setting forth the time sharing plan that it is managing, its principal office address, telephone number, and responsible managing employee. The plan manager shall furnish evidence that the plan manager is bonded as required by rules adopted by the director pursuant to chapter 91 to cover any default of the plan manager and any of its employees of their duties and responsibilities; provided that the plan manager shall be separately bonded for each time share plan under the management of the plan manager.

(d) An exchange agent (including the developer if it is also an exchange agent) shall register under this chapter by filing with the director a statement setting forth the time sharing plan for which it is offering exchange services, its principal office address and telephone number, and designate its responsible managing employee.

(e) Any plan manager or developer registration required in this section shall be renewed by December 31 of each even-numbered year, and any acquisition agent or exchange agent registration required in this section shall be renewed on December 31 of each odd-numbered year; provided that this subsection shall not relieve the person required to register from the obligation to notify the director promptly of any material change in any information submitted to the director, nor shall it relieve the developer of its obligation to promptly file amendments or supplements to the disclosure statement, and to promptly supply the amendments or supplements to purchasers of time share interests.

(f) An application for renewal of a developer registration shall be on a form prescribed by the director and shall include:

[(1) A current disclosure statement that meets the requirements of section 514E-9 and section 16-106-3, Hawaii Administrative Rules, if not already on file;

(2)] (1) A statement that is certified by the developer to be true and correct in all respects and that identifies, as appropriate:

[(A) The time share units in the time share plan registered pursuant to this chapter; the total number of time share interests registered for sale in each unit pursuant to this chapter; and the total number of time share interests that have not yet been sold as of the date specified in the developer's certification, which date shall not be more than sixty days prior to the date of the developer's certification; or

(B) The property in the time share plan registered pursuant to this chapter; the total number of points registered for sale in each property pursuant to this chapter; and the total number of points in the time share plan that have not yet been sold as of the date specified in the developer's certification, which date shall not be more than sixty days prior to the date of the developer's certification;]

(A) If points are a component part of the time share interests in the time share plan, the total number of points registered for sale as of the date of submittal; or

(B) If points are not a component part of the time share interests in the time share plan:

(i) The total number of whole time share units registered for sale as of the date of submittal; and

(ii) The total number of time share interests in the time share plan that are registered for sale as of the date of submittal and are not attributable to whole time share units included in the plan;

[(3)] (2) If the developer is a corporation, partnership, joint venture, limited liability company, or limited liability partnership, an original certificate of good standing issued by the business registration division of the department of commerce and consumer affairs not more than forty-five days before the date of submission of the renewal application; and

[(4)] (3) The biennial renewal fee.

(g) [Developers] In addition to subsection (h), developers shall not be required to include the following in an application for renewal of a developer registration of a time share plan:

(1) The current disclosure statement, or any proposed amendment to or amended disclosure statement;

(2) Except as otherwise provided in subsection (f)(1)(B), a statement describing the registered units included in the plan, number of time share interests created, and number of time share interests that have been sold or that remain unsold;

[(1)] (3) A financial statement of the developer; or

[(2)] (4) A policy of title insurance, a preliminary title report, abstract of title, or certificate of title on the units or time share interests in the time share plan.

(h) Unless requested by the director, a developer shall not be required to include copies of the following in any application for a developer registration, application to amend a developer registration, application for renewal of a developer registration, or otherwise:

(1) Copies of any federal, state, or local constitutions, charters, laws, or regulations referred to in any title report, title policy, or other evidence of title;

(2) Copies of any land court maps, subdivision maps, file plans, or any other subdivision plats or plans referred to in any title report, title policy, or other evidence of title;

(3) Copies of any land court certificates of title, land court orders, or other judicial or quasi-judicial determinations or orders referred to in any title report, title policy or other evidence of title; or

(4) Copies of such other documents as the director shall determine.

(i) A developer shall be required to submit to the director copies of the supplementary plan documents of the time share plan that is the subject of an application for registration or an application for annexation, except to the extent that the director agrees to accept representative samples of such supplementary plan documents.

(j) A developer shall submit copies of encumbrances on title to any time share unit using any form of electronic record acceptable to the director.

For the purposes of this subsection, "electronic record" has the same meaning as defined in section 489E-2."

SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 6. This Act shall take effect upon its approval.


 


 

Report Title:

Time Sharing; Time Share; Developer Applications; Disclosure Statements; Encumbrances; Annual Renewal Registration

 

Description:

Amends the information required to be in a time share disclosure statement, under certain circumstances. Amends the information required to be on a developer registration renewal application. Expands the information developers are not required to include on a developer registration renewal application. Limits the copies of documents developers are required to submit in a developer registration renewal application. Requires developers to submit copies of supplementary plan documents of the time share plan. Allows for submission of certain document in electronic form. (SD1)

 

 

 

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