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Indicates Matter Stricken
Indicates New Matter
Indicates Matter Stricken
Indicates New Matter
AS PASSED BY THE SENATE
April 27, 2006
S. 1243
Introduced by Senators Rankin, Bryant, Peeler, Setzler, Knotts, Land, Williams, Cromer, Hutto, Elliott, Scott, Richardson, Ritchie, Short, Thomas and Ford
S. Printed 4/27/06--S. [SEC 4/28/06 2:55 PM]
Read the first time March 9, 2006.
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 27-32-260 SO AS TO PROVIDE FOR THE PREPARATION AND SUPERVISION OF THE CLOSING DOCUMENTS AND THE CLOSING OF A PURCHASE AND SALE OF AN INTEREST IN A VACATION TIME SHARING PLAN, AND TO EXEMPT THE TRANSACTION FROM THE ATTORNEY PREFERENCE REQUIREMENT IN THE CONSUMER PROTECTION CODE IF THE CLOSING DOCUMENTS CONTAIN A CONSPICUOUS DISCLOSURE TO A PARTY TO A PURCHASE AND SALE OF AN INTEREST IN A VACATION TIME SHARING PLAN OF THE NEED TO UNDERSTAND HIS RIGHTS AND OBLIGATIONS PURSUANT TO THE CLOSING DOCUMENTS; AND TO AMEND SECTION 27-32-10, AS AMENDED, RELATING TO DEFINITIONS IN CONNECTION WITH A VACATION TIME SHARING PLAN, SO AS TO REVISE THE DEFINITION OF "CONTRACT".
Amend Title To Conform
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Chapter 32, Title 27 of the 1976 Code is amended by adding:
Section 27-32-400. This article may be cited as the 'Time Sharing Transaction Procedures Act'.
Section 27-32-405. The General Assembly declares that the purposes of this article are to recognize that:
(A) timeshare estates are interests in real property and have been so created and designated by a specific act of the legislature codified in Chapter 32, Title 27 of the 1976 Code;
(B) timeshare estates are used for a vacation experience and may not be used for homestead purposes;
(C) timeshare estates, while interests in residential real property, are statutorily prohibited from being used for homestead purposes, are not offered for investment purposes, do not include many typical rights afforded owners of interests in residential real property such as rights to continuous exclusive possession and partition and are typically purchased and sold as fungible vacation commodities;
(D) timeshare estates located in South Carolina are sold primarily to non-residents;
(E) the purchaser of an interest in a vacation time sharing plan in this State is afforded significant and unique consumer protections not available to purchasers of other forms of real property;
(F) the process involved in the purchase and sale of interests in a vacation time sharing plan is unlike traditional residential real property and, due to the provisions of this act, require unique practices and procedures;
(G) as part of each sale of an interest in a vacation time sharing plan, every purchaser must be given a comprehensive disclosure document that includes the material terms and conditions of the vacation time sharing plan;
(H) purchasers of interests in a vacation time sharing plan have an unqualified five-day pre-closing right of rescission;
(I) each developer of a vacation time sharing plan must place all purchaser funds in escrow, or otherwise secure such funds, prior to the expiration of the five-day rescission period and before the time share closing can occur;
(J) the South Carolina legislature specifically established the South Carolina Vacation Time Sharing Recovery Fund in order to provide additional redress for aggrieved purchasers of interests in a vacation time sharing plan in South Carolina;
(K) prior to the sale or offering of an interest in a vacation time sharing plan in South Carolina, the vacation time sharing plan, and the documents used in connection therewith, must be submitted to the South Carolina Real Estate Commission for its review and approval;
(L) the South Carolina Real Estate Commission, as part of its regulatory mandate, scrutinizes the practices and procedures of persons developing or selling interests in vacation time sharing plans in this State; and
(M) the economic health and continued stability of the vacation time sharing industry should be subject to the clear identification of various procedures involved in the purchase and sale of an interest in a vacation time sharing plan and the time share closing itself.
Section 27-32-410. (A) The time share closing is hereby considered to occur after the last of the following events: (i) the deed and other applicable instruments are submitted for recordation, (ii) six months after the execution of an installment sales contract, if applicable, or (iii) the closing date specified in the executed documents. The documents conveying rights and interests in time share real property must not be presented to a time share purchaser before the closing of an interest in a vacation time sharing plan in this State unless the form of the document is prepared under the supervision of an attorney licensed in this State. An attorney licensed in this State shall supervise the time share closing of a sale of an interest in a vacation time sharing plan located in this State by: (i) supervising the examination of title to the interest, (ii) physically reviewing before closing the executed transaction documents including, but not limited to, the following, as applicable: the deed, installment sales contract, mortgage, and promissory note, and (iii) supervising the recording of all instruments involved in the time share closing. The time share closing is hereby deemed to occur after the last of the following events: (i) the deed and other applicable instruments are submitted for recordation, (ii) six months after the execution of an installment sales contract, if applicable, or (iii) the closing date specified in the executed documents.
(B) Notwithstanding any other provision of law, a credit sale or loan made by a seller to finance the purchase of an interest in a vacation time sharing plan located in this State must be accompanied by a conspicuous notice delivered to the purchaser at or before the time of the execution of the purchase contract for an interest in a vacation time sharing plan, which notice may be included in the purchase contract or in a separate document, substantially in the following form and in conspicuous type (meaning bold type in upper and lower case letters [but in no event in all upper case letters] two point sizes larger than the largest nonconspicuous type, exclusive of headings, on the page on which it appears but in at least 10-point type):
The South Carolina licensed attorney under whose supervision the form of the transaction documents were reviewed and prepared on behalf of seller is: [insert name, address, and telephone number]. Before the closing, you will review, approve, and sign important documents. What those documents say is important to you. They can affect any rights you might have. They can affect what you will have to do during this transaction. South Carolina's Vacation and Time Sharing Act gives you that right. You have an absolute right to consult an attorney of your choosing, at your own expense, if you have any questions or concerns about this purchase or about what those documents say. If you choose to have an attorney represent you, you must notify seller of the name of that attorney.
You have five days to cancel this contract. The details of your cancellation rights are provided for in your purchase contract.
You have the ability to waive your right to have an attorney represent you in all phases of this transaction. You can withdraw this waiver at any time prior to closing and indicate to the seller that you are withdrawing your waiver and provide the name of the attorney representing you. Your waiver must be in writing. You may indicate your waiver by signing the statement below:
I/we having been provided this notice of my/our right to have an independent South Carolina attorney represent me/us during all aspects of this transaction, knowingly and voluntarily waive such right this day of , 20 .
(C) By providing the disclosure set forth above, the transaction shall be exempt from the requirements of Section 37-10-102.
(D) The provisions of this section apply only to the purchase and sale of an interest in a vacation time sharing plan and the time share closing related to it."
SECTION 2. Section 27-32-10(3) of the 1976 Code is amended to read:
"(3) 'Contract' means any contract, promissory note, credit agreement, negotiable instrument, lease, use agreement, license, security, or other muniment conferring on the purchaser the rights, benefits, and obligations of a vacation time sharing plan 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."
SECTION 3. This act takes effect upon approval by the Governor.
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