Reference is to the bill as introduced.
Amend the bill, as and if amended, by deleting all after the enacting words and inserting:
/ SECTION 1. Section 27-32-10 of the 1976 Code, as last amended by Act 310 of 2006, is further amended to read:
"Section 27-32-10.
For purposes of this chapter:
(1) 'Accommodations'
means any hotel or motel room, condominium
or cooperative unit, cabin, lodge, apartment, or other private
or commercial structure designed for occupancy by one or more
individuals or a recreational vehicle campsite or campground.
(2) 'Person' means any
individual, corporation, firm, association, joint venture,
partnership, trust estate, business trust, syndicate, fiduciary,
and any other group or combination.
(3) 'Contract' means
the agreement between the seller and a purchaser: (a) setting
forth the terms and conditions of the purchase and sale of an
ownership interest in a vacation time sharing ownership plan, or
(b) setting forth the terms and conditions of the purchase and
sale of a lease or other right-to-use interest in a vacation
time sharing lease plan.
(4) 'Commission' means
the South Carolina Real Estate Commission.
(5) 'Facilities' means
a structure, service, or property, whether improved or
unimproved, made available to the purchaser for recreational,
social, family, or personal use.
(6) 'Seller' means a
person who creates a vacation time sharing plan or is in the
business of selling interests in a vacation timeshare plan, or
employs agents to do the same, or a person who succeeds to the
interest of a seller by sale, lease, assignment, mortgage, or
other transfer; except that, the term includes only a person
who offers interests in vacation time sharing plans in the State
of South Carolina in the ordinary course of business. The term
'seller' does not include the following:
(a)
an owner of a time sharing interest who has acquired the
time sharing interest for his own use and occupancy and who
later offers it for resale on his own behalf or through a real
estate broker;
(b)
a managing entity or owners' association of a time sharing
plan, not otherwise a seller, that offers on the association's
behalf time sharing interests in the time sharing plan
transferred to the association through foreclosure, deed in lieu
of foreclosure, or gratuitous transfer; or
(c)
a person who owns or is conveyed, assigned, or transferred
time sharing interests, and who subsequently conveys, assigns,
or transfers all acquired time sharing interests to a single
purchaser in a single transaction, which transaction may occur
in stages.
(7) 'Vacation time
sharing ownership plan' means any arrangement, plan, or similar
devise, whether by tenancy in common, sale, term for years,
deed, or other means, in which the purchaser receives an
ownership interest in real property and the right to use
accommodations or facilities, or both, for a period or periods
of time during a given year, but not necessarily for consecutive
years, which extends for a period of more than one year. A
vacation time sharing ownership plan may be created in a
condominium established on a term for years or leasehold
interest having an original duration of thirty years or longer.
An interest in a vacation time sharing ownership plan is
recognized as an interest in real property for all purposes
pursuant to the laws of this State.
(8) 'Vacation time
sharing lease plan' means any arrangement, plan, or similar
devise, whether by membership agreement, lease, rental
agreement, license, use agreement, security, or other means, in
which the purchaser receives a right to use accommodations or
facilities, or both, but does not receive an ownership interest
in real property, for a period or periods of time during a given
year, but not necessarily for consecutive years, which extends
for a period of more than three years. These lease plans do not
include an arrangement or agreement in which a purchaser in
exchange for an advance fee and yearly dues is entitled to
select from a designated list of facilities located in more than
one state, accommodations of companies that operate nationwide
in at least nine states in the United States through franchises
or ownership, for a specified time period and at reduced rates
and under which an interest in real property is not transferred.
(9) 'Vacation time
sharing plan' means either a vacation time sharing ownership
plan or a vacation time sharing lease plan.
(10) 'Substantially
complete' means all structural components and mechanical systems
of all buildings containing or comprising facilities or
accommodations are finished in accordance with the plans or
specifications of the vacation time sharing plan, as evidenced
by a recorded certificate of completion executed by an
independent registered surveyor, architect, or engineer.
(11) 'Unit week' means
a number of consecutive days, normally seven consecutive days in
duration, which may reasonably be assigned to purchasers of
vacation time sharing plans by the seller.
(12) 'Escrow agent'
means a bank or trust company doing business in this State or a
bonded trust agent bonded in at least the amount of the trust;
except, that nothing contained in this chapter prevents
investment of funds escrowed pursuant to this chapter by the
bank, trust company, or bonded agent, with payment of all
interest and dividends to the seller of vacation time sharing
plans. For purposes of Section 27-32-55, escrow agent also
means a licensed South Carolina attorney in good standing, a
licensed South Carolina real estate broker in good standing, or
a licensed South Carolina title insurance agent in good
standing.
(13) 'Escrow account'
means funds held or maintained by an escrow agent.
(14) 'Fund' and
'recovery fund' means the South Carolina Vacation Time Sharing
Recovery Fund.
(15) 'Claim' means a
monetary loss sustained or allegedly sustained by a person due
to the wrongdoing of a registrant or licensee.
(16) 'Real estate
broker's trust account' means a demand account in a bank or
savings institution in this State held by a duly licensed South
Carolina real estate broker.
(17) 'Resale
vacation time sharing interest' means a vacation time sharing
interest, including all or substantially all ownership, rights,
or interests associated with the vacation time sharing interest
that has been previously acquired by an owner for his own use
and occupancy and is later offered or advertised for sale or
rent, or legal ownership is transferred by or with the
assistance of a resale service provider.
(18)
'Resale service provider' means any person or entity,
including any agent or employee of such person or entity, who,
directly or indirectly, offers or uses telemarketing, direct
mail, email, or any other forms of communication in connection
with offering of vacation time sharing resale services. This
term does not include the following:
(a)
a newspaper, periodical, or publisher, unless
the newspaper, periodical, or publisher derives more than ten
percent of its gross revenue from vacation time sharing resale
services. For purposes of this chapter, the calculation of gross
revenue derived from providing vacation time sharing resale
services includes revenue of any affiliate, parent, agent, and
subsidiary of the newspaper, periodical, or publisher, so long
as the resulting percentage of gross revenue is not decreased by
the inclusion of such affiliate, parent, subsidiary, or agent in
the calculation;
(b)
a seller, vacation time sharing association,
managing entity, or other person responsible for managing or
operating the vacation time sharing plan to the extent they
offer vacation time sharing resale services to owners of
vacation time sharing interests in such a vacation time sharing
plan;
(c)
a consumer vacation time sharing reseller who,
in a given calendar year, sells seven or fewer resale vacation
time sharing interests;
(d)
a licensed South Carolina attorney in good
standing providing only those services provided under Section
27-32-410; or
(e)
a licensed South Carolina real estate broker in
good standing operating within the scope of activities specified
in Chapter 57, with respect to the sale of a resale vacation
time sharing interest, as long as the real estate broker does
not collect a fee in advance. To the extent a real estate
broker is engaged in activities outside the scope of activities
specified in Chapter 57, collects an advance fee, or is an
agent, employee of, or has an affiliated business arrangement
with a party to the sale of a resale vacation time sharing
interest, this exemption does not apply.
(19)
'Vacation time sharing resale service' means:
(a)
the advertising of, or an offer to advertise,
any resale vacation time sharing interest for resale or rent;
or
(b)
the transfer or offer to assist in the transfer
of legal ownership of any resale vacation time sharing
interest.
(20)
'Vacation time sharing association' means an
association made up of all owners of vacation time sharing
interests in a vacation time sharing plan, including sellers and
owners of such vacation time sharing plan.
(21)
'Consumer vacation time sharing reseller' means an
owner of a resale vacation time sharing interest."
SECTION 2. Section 27-32-55 of the 1976 Code is amended to read:
"Section 27-32-55.
An owner of an interest in a vacation time sharing
plan may not be charged an up-front appraisal fee for the resale
of his interest but may be charged only an up-front marketing
fee or commission upon the resale of the interest in an amount
stipulated by written agreement between the owner and his sales
agent. A person violating the provisions of this section has
committed an unfair trade practice pursuant to Section 39-5-20
and is subject to all penalties and remedies provided by law for
this violation.
(A) Before
engaging in any vacation time sharing resale services, a resale
service provider must provide a written contract to the consumer
vacation time sharing reseller that includes:
(1)
The name, physical address, telephone number,
and website address, if any, of the resale service provider and
any other agent or third party who will provide any of the
vacation time sharing resale services on behalf of the resale
service provider.
(2)
The name, physical address, telephone number,
and email address of the escrow agent, if applicable, that will
be used to hold funds or other property pursuant to this
section.
(3)
A complete description of the vacation
timesharing resale services.
(4)
The duration of the contract for vacation time
sharing resale services expressed in days, weeks, months or
years.
(5)
A description of any fees, costs, or other
consideration to be paid to the resale service provider or any
agent or third party of it. These fees must include marketing
and advertising fees or commissions that are paid upon the sale
of a resale vacation time sharing interest.
(6)
A statement, if applicable, that the resale
service provider will deliver to the consumer vacation time
sharing reseller all documentation evidencing the transfer of
legal ownership of the resale vacation time sharing interest as
provided in subsection (B).
(7)
A statement, if applicable, that the consumer
time sharing reseller shall have five business days from the
date they receive the notice of right to dispute the release
funds from the escrow agent as referenced in subsection (B).
(8)
The internet addresses and telephone numbers for
both the Department of Consumer Affairs and the commission.
(9)
A statement printed in at least 12-point
boldfaced type immediately preceding the space in the contract
provided for the consumer time sharing reseller's signature in
substantially the following form:
'You have an unwaivable right to
cancel this contract for any reason within 5 business days after
the date you sign this contract. If you decide to cancel this
contract, you must notify (name of resale service provider)
in writing of your intent to cancel. Your notice of cancellation
must be effective upon the date sent and must be sent to
(resale service provider's mailing address) or to (resale
service provider's e-mail address). Your refund will be made
within 20 days after receipt of notice of cancellation or within
5 days after receipt of funds from your cleared check, whichever
is later. You are not obligated to pay (name of resale
service provider) any money unless you sign this contract and
return it to (name of resale service provider).'
'Before signing this contract, you
should carefully review your original vacation time sharing
purchase contract and other project documents to determine
whether there are any restrictions or special conditions
applicable to the resale or rental of your vacation time sharing
interest. You may also wish to contact your resort management
company or your vacation time sharing association to learn about
resale or rental options that may be available to you.'
(B) With
respect to all fees, costs and compensation paid to a resale
service provider, the following shall apply:
(1)
A consumer vacation time sharing reseller may
not be charged an appraisal fee in connection with the sale or
rental of a resale vacation time sharing interest.
(2)
A consumer vacation time sharing reseller may be
charged marketing or advertising fees prior to the sale or
rental of a resale vacation time sharing interest.
(3)
A consumer vacation time sharing reseller shall
not pay any advance fee, cost or compensation for vacation time
sharing resale services, except as provided in item (2), unless
one hundred percent of all funds are deposited into an escrow
account until the vacation time sharing resale service is
completed and all other requirements of this section have been
met.
(a)
The funds or other property required to be
escrowed hereunder may only be released from escrow to or on the
order of the person providing the vacation time sharing resale
services upon completion of all of the following:
(i)
Presentation by the
vacation time sharing resale services provider of an affidavit
by such person to the escrow agent that all promised vacation
time sharing resale services have been performed, including
delivery to both the consumer vacation time sharing reseller and
the vacation time sharing plan association or managing entity of
a copy of the recorded instrument or other legal document
evidencing the transfer of ownership or of legal title to the
resale vacation time sharing interest completed in accordance
with Section 27-32-40, to the transferee.
(ii) The escrow agent's
submission of the affidavit and a notice of right to dispute the
release of funds or property in escrow to the consumer vacation
time sharing reseller. The notice shall state the consumer
vacation time sharing reseller shall have five business days
after receipt of such affidavit to submit a written dispute to
the escrow agent that all promised vacation time sharing resale
services have in fact not been fully performed by the resale
service provider. The consumer vacation time sharing reseller
may submit the dispute by electronic mail or regular mail. The
dispute is effective upon the date sent.
(iii)
Failure of the consumer vacation time
sharing reseller to submit a dispute pursuant to subsubitem
(ii).
(iv)
Should the escrow agent receive conflicting
demands for funds or other property held in escrow, the escrow
agent must immediately notify the commission of the dispute and
either promptly submit the matter to arbitration or, by
interpleader or otherwise, seek an adjudication of the matter by
court.
(b)
The commission may audit or examine the escrow
account. The resale service provider must make available
documents relating to the escrow account or escrow obligation to
the commission upon the commission's request.
(c)
The escrow agent must retain all resale transfer
agreements, escrow account records, affidavits and notices of
dispute received pursuant to this subsection for a period of
three years.
(C) No
person shall knowingly participate, for consideration or with
the expectation of consideration, in any plan or scheme, a
purpose of which is to transfer a resale vacation time sharing
interest to a person or entity that the person knows or
reasonably should know does not have the ability, means, or
intent to pay all assessments and taxes associated with
ownership of the resale vacation time sharing interest that are
due or that come due during the transferee's ownership. Failure
to pay assessments or taxes that are due or that come due within
four years after acquisition of a resale vacation time sharing
interest by a transferee who acquires the resale vacation time
sharing interest for commercial purposes and not for personal
use and enjoyment creates a rebuttable presumption of a
violation of this subsection. It is considered a violation of
this section if there is any transfer, series of transfers, or
other action made or taken by any person for the purpose of
circumventing this section.
(D) No
individual consumer vacation timesharing reseller who sells or
transfers five or fewer resale vacation time sharing interests
owned by that consumer vacation timesharing reseller in a given
calendar year shall be subject to liability under subsection (C)
above.
(E)
Engagement in any vacation time sharing resale service,
or receipt of consideration in connection with, any vacation
time sharing resale service without an executed written contract
as provided in this section or the transfer of a resale vacation
time sharing interest to a person who the resale service
provider knows or should have known has demonstrated a pattern
of nonpayment of assessments, taxes, or fees associated with the
obligations of ownership, creates a rebuttable presumption of
this a violation of this section.
(F)
Providing vacation time sharing resale services with
respect to a consumer resale vacation time sharing interest in a
vacation time sharing property located or offered within this
State or required to be registered in this State, including
acting as an agent or third-party service provider for a resale
service provider, constitutes operating, conducting, engaging
in, or carrying on a business or business venture in this
State.
(G) A
contract for vacation time sharing resale services resulting
from conduct in violation of this section is voidable by the
consumer vacation time sharing reseller and the resale service
provider shall return all consideration received pursuant to the
contract to the consumer vacation time sharing reseller.
(H) A
person violating the provisions of this section has committed an
unfair trade practice pursuant to Title 39, Chapter 5 of the
Unfair Trade Practices Act and is subject to all civil penalties
and remedies provided by law for this violation. The criminal
penalty provisions of Title 39, Chapter 5 do not apply to this
section.
(I) The
Department of Consumer Affairs may enforce this section, and
impose penalties, including those provided in Section
27-32-120(A), a warning notice of deficiency, a cease and desist
order and a refund of fees, costs or compensation assessed
and/or received in violation of the section. A person aggrieved
by the department's final administrative order may request a
contested case hearing before the Administrative Law Court
pursuant to the court's rules of procedure. If the person fails
to timely request a contested case hearing, the department may
bring an action to enforce its order pursuant to Chapter 23,
Title 1. The criminal penalty provisions of Section
27-32-120(B) do not apply to this section."
SECTION 3. Section 27-32-130 of the 1976 Code is amended to read:
"Section 27-32-130. The Real Estate Commission is responsible for the enforcement and implementation of this chapter and the Department of Labor, Licensing and Regulation, at the request of the Real Estate Commission, shall prosecute a violation under this chapter. The commission shall promulgate regulations for the implementation of this chapter, subject to the State Administrative Procedures Act. The provisions of this section do not limit the right of a purchaser or lessee or a vacation time sharing association to bring a private action to enforce the provisions of this chapter."
SECTION 4. This act takes effect upon approval by the Governor. /
Renumber sections to conform.
Amend title to conform.