Rep. Norm Thurston — Voting Record

Bill

Number

H.B. 422 (2015GS)

Sponsor

Rep. Froerer, G.

Final action

House/ filed 3/12/2015

Outcome

Failed / filed without passage

Summary

What it does

• This bill:
• defines terms;
• addresses the process for obtaining a registration from the division for a development or a salesperson;
• modifies notice requirements related to a purchaser's right to cancel;
• clarifies the process and standard for obtaining an exemption from the provisions of this bill; and
• makes technical and conforming changes.

Every vote on this bill

Bill text

TIMESHARE AMENDMENTS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Gage Froerer
Senate Sponsor: 
 Stephen H. Urquhart
LONG TITLE
General Description:
This bill amends the Timeshare and Camp Resort Act.
Highlighted Provisions:
This bill:
▸ defines terms;
▸ addresses the process for obtaining a registration from the division for a
development or a salesperson;
▸ modifies notice requirements related to a purchaser's right to cancel;
▸ clarifies the process and standard for obtaining an exemption from the provisions of
this bill; and
▸ makes technical and conforming changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
57-8-3
, as last amended by Laws of Utah 2013, Chapters 95 and 152
57-8-27
, as last amended by Laws of Utah 2012, Chapter 166
57-19-2
, as last amended by Laws of Utah 2012, Chapter 166
57-19-4
, as enacted by Laws of Utah 1987, Chapter 73
57-19-5
, as last amended by Laws of Utah 2009, Chapter 352
57-19-6
, as last amended by Laws of Utah 2012, Chapter 166
57-19-7
, as enacted by Laws of Utah 1987, Chapter 73
57-19-8
, as last amended by Laws of Utah 2012, Chapter 166
57-19-9
, as last amended by Laws of Utah 2000, Chapter 86
57-19-10
, as enacted by Laws of Utah 1987, Chapter 73
57-19-11
, as last amended by Laws of Utah 1991, Chapter 165
57-19-12
, as last amended by Laws of Utah 2012, Chapter 166
57-19-13
, as last amended by Laws of Utah 2012, Chapter 166
57-19-14
, as last amended by Laws of Utah 2010, Chapter 379
57-19-15
, as last amended by Laws of Utah 2009, Chapter 352
57-19-16
, as last amended by Laws of Utah 2009, Chapter 352
57-19-21
, as enacted by Laws of Utah 1987, Chapter 73
57-19-26
, as last amended by Laws of Utah 2012, Chapter 166
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
57-8-3
 is amended to read:
57-8-3.
Definitions.
As used in this chapter:
(1) "Assessment" means any charge imposed by the association, including:
(a) common expenses on or against a unit owner pursuant to the provisions of the
declaration, bylaws, or this chapter; and
(b) an amount that an association of unit owners assesses to a unit owner under
Subsection 
57-8-43
(9)(g).
(2) "Association of unit owners" means all of the unit owners:
(a) acting as a group in accordance with the declaration and bylaws; or
(b) organized as a legal entity in accordance with the declaration.
(3) "Building" means a building, containing units, and comprising a part of the
property.
(4) "Commercial condominium project" means a condominium project that has no
residential units within the project.
(5) "Common areas and facilities" unless otherwise provided in the declaration or
lawful amendments to the declaration means:
(a) the land included within the condominium project, whether leasehold or in fee
simple;
(b) the foundations, columns, girders, beams, supports, main walls, roofs, halls,
corridors, lobbies, stairs, stairways, fire escapes, entrances, and exits of the building;
(c) the basements, yards, gardens, parking areas, and storage spaces;
(d) the premises for lodging of janitors or persons in charge of the property;
(e) installations of central services such as power, light, gas, hot and cold water,
heating, refrigeration, air conditioning, and incinerating;
(f) the elevators, tanks, pumps, motors, fans, compressors, ducts, and in general all
apparatus and installations existing for common use;
(g) such community and commercial facilities as may be provided for in the
declaration; and
(h) all other parts of the property necessary or convenient to its existence, maintenance,
and safety, or normally in common use.
(6) "Common expenses" means:
(a) all sums lawfully assessed against the unit owners;
(b) expenses of administration, maintenance, repair, or replacement of the common
areas and facilities;
(c) expenses agreed upon as common expenses by the association of unit owners; and
(d) expenses declared common expenses by this chapter, or by the declaration or the
bylaws.
(7) "Common profits," unless otherwise provided in the declaration or lawful
amendments to the declaration, means the balance of all income, rents, profits, and revenues
from the common areas and facilities remaining after the deduction of the common expenses.
(8) "Condominium" means the ownership of a single unit in a multiunit project
together with an undivided interest in common in the common areas and facilities of the
property.
(9) "Condominium plat" means a plat or plats of survey of land and units prepared in
accordance with Section 
57-8-13
.
(10) "Condominium project" means a real estate condominium project; a plan or
project whereby two or more units, whether contained in existing or proposed apartments,
commercial or industrial buildings or structures, or otherwise, are separately offered or
proposed to be offered for sale. Condominium project also means the property when the
context so requires.
(11) "Condominium unit" means a unit together with the undivided interest in the
common areas and facilities appertaining to that unit. Any reference in this chapter to a
condominium unit includes both a physical unit together with its appurtenant undivided interest
in the common areas and facilities and a time period unit together with its appurtenant
undivided interest, unless the reference is specifically limited to a time period unit.
(12) "Contractible condominium" means a condominium project from which one or
more portions of the land within the project may be withdrawn in accordance with provisions
of the declaration and of this chapter. If the withdrawal can occur only by the expiration or
termination of one or more leases, then the condominium project is not a contractible
condominium within the meaning of this chapter.
(13) "Convertible land" means a building site which is a portion of the common areas
and facilities, described by metes and bounds, within which additional units or limited common
areas and facilities may be created in accordance with this chapter.
(14) "Convertible space" means a portion of the structure within the condominium
project, which portion may be converted into one or more units or common areas and facilities,
including limited common areas and facilities in accordance with this chapter.
(15) "Declarant" means all persons who execute the declaration or on whose behalf the
declaration is executed. From the time of the recordation of any amendment to the declaration
expanding an expandable condominium, all persons who execute that amendment or on whose
behalf that amendment is executed shall also come within this definition. Any successors of
the persons referred to in this subsection who come to stand in the same relation to the
condominium project as their predecessors also come within this definition.
(16) "Declaration" means the instrument by which the property is submitted to the
provisions of this act, as it from time to time may be lawfully amended.
(17) "Expandable condominium" means a condominium project to which additional
land or an interest in it may be added in accordance with the declaration and this chapter.
(18) "Governing documents":
(a) means a written instrument by which an association of unit owners may:
(i) exercise powers; or
(ii) manage, maintain, or otherwise affect the property under the jurisdiction of the
association of unit owners; and
(b) includes:
(i) articles of incorporation;
(ii) bylaws;
(iii) a plat;
(iv) a declaration of covenants, conditions, and restrictions; and
(v) rules of the association of unit owners.
(19) "Independent third party" means a person that:
(a) is not related to the unit owner;
(b) shares no pecuniary interests with the unit owner; and
(c) purchases the unit in good faith and without the intent to defraud a current or future
lienholder.
(20) "Leasehold condominium" means a condominium project in all or any portion of
which each unit owner owns an estate for years in his unit, or in the land upon which that unit
is situated, or both, with all those leasehold interests to expire naturally at the same time. A
condominium project including leased land, or an interest in the land, upon which no units are
situated or to be situated is not a leasehold condominium within the meaning of this chapter.
(21) "Limited common areas and facilities" means those common areas and facilities
designated in the declaration as reserved for use of a certain unit or units to the exclusion of the
other units.
(22) "Majority" or "majority of the unit owners," unless otherwise provided in the
declaration or lawful amendments to the declaration, means the owners of more than 50% in
the aggregate in interest of the undivided ownership of the common areas and facilities.
(23) "Management committee" means the committee as provided in the declaration
charged with and having the responsibility and authority to make and to enforce all of the
reasonable rules covering the operation and maintenance of the property.
(24) "Mixed-use condominium project" means a condominium project that has both
residential and commercial units in the condominium project.
(25) "Par value" means a number of dollars or points assigned to each unit by the
declaration. Substantially identical units shall be assigned the same par value, but units located
at substantially different heights above the ground, or having substantially different views, or
having substantially different amenities or other characteristics that might result in differences
in market value, may be considered substantially identical within the meaning of this
subsection. If par value is stated in terms of dollars, that statement may not be considered to
reflect or control the sales price or fair market value of any unit, and no opinion, appraisal, or
fair market transaction at a different figure may affect the par value of any unit, or any
undivided interest in the common areas and facilities, voting rights in the unit owners'
association, liability for common expenses, or right to common profits, assigned on the basis
thereof.
(26) "Person" means an individual, corporation, partnership, association, trustee, or
other legal entity.
(27) "Property" means the land, whether leasehold or in fee simple, the building, if any,
all improvements and structures thereon, all easements, rights, and appurtenances belonging
thereto, and all articles of personal property intended for use in connection therewith.
(28) "Record," "recording," "recorded," and "recorder" have the meaning stated in Title
57, Chapter 3, Recording of Documents.
(29) "Size" means the number of cubic feet, or the number of square feet of ground or
floor space, within each unit as computed by reference to the record of survey map and rounded
off to a whole number. Certain spaces within the units including attic, basement, or garage
space may be omitted from the calculation or be partially discounted by the use of a ratio, if the
same basis of calculation is employed for all units in the condominium project and if that basis
is described in the declaration.
(30) "Time period unit" means an annually recurring part or parts of a year specified in
the declaration as a period for which a unit is separately owned and includes a timeshare estate
as defined in Subsection 
57-19-2
[
(19)
].
(31) "Unit" means either a separate physical part of the property intended for any type
of independent use, including one or more rooms or spaces located in one or more floors or
part or parts of floors in a building or a time period unit, as the context may require. A
convertible space shall be treated as a unit in accordance with Subsection 
57-8-13.4
(3). A
proposed condominium unit under an expandable condominium project, not constructed, is a
unit two years after the date the recording requirements of Section 
57-8-13.6
 are met.
(32) "Unit number" means the number, letter, or combination of numbers and letters
designating the unit in the declaration and in the record of survey map.
(33) "Unit owner" means the person or persons owning a unit in fee simple and an
undivided interest in the fee simple estate of the common areas and facilities in the percentage
specified and established in the declaration or, in the case of a leasehold condominium project,
the person or persons whose leasehold interest or interests in the condominium unit extend for
the entire balance of the unexpired term or terms.
Section 2. Section 
57-8-27
 is amended to read:
57-8-27.
Separate taxation.
(1) Each unit and its percentage of undivided interest in the common or community
areas and facilities shall be considered to be a parcel and shall be subject to separate
assessment and taxation by each assessing unit, local district, and special service district for all
types of taxes authorized by law, including ad valorem levies and special assessments. Neither
the building or buildings, the property, nor any of the common areas and facilities may be
considered a parcel.
(2) In the event any of the interests in real property made subject to this chapter by the
declaration are leasehold interests, if the lease creating these interests is of record in the office
of the county recorder, if the balance of the term remaining under the lease is at least 40 years
at the time the leasehold interest is made subject to this chapter, if units are situated or are to be
situated on or within the real property covered by the lease, and if the lease provides that the
lessee shall pay all taxes and assessments imposed by governmental authority, then until 10
years prior to the date that the leasehold is to expire or until the lease is terminated, whichever
first occurs, all taxes and assessments on the real property covered by the lease shall be levied
against the owner of the lessee's interest. If the owner of the reversion under the lease has
executed the declaration and condominium plat, until 10 years prior to the date that the
leasehold is to expire, or until the lease is terminated, whichever first occurs, all taxes and
assessments on the real property covered by the lease shall be separately levied against the unit
owners having an interest in the lease, with each unit owner for taxation purposes being
considered the owner of a parcel consisting of his undivided condominium interest in the fee of
the real property affected by the lease.
(3) No forfeiture or sale of the improvements or the property as a whole for delinquent
real estate taxes, special assessments, or charges shall divest or in anywise affect the title to an
individual unit if the real estate taxes or duly levied share of the assessments and charges on the
individual unit are currently paid.
(4) Any exemption from taxes that may exist on real property or the ownership of the
property may not be denied by virtue of the submission of the property to this chapter.
(5) Timeshare interests and timeshare estates, as defined in Subsection 
57-19-2
[
(19)
],
may not be separately taxed but shall be valued, assessed, and taxed at the unit level. The
value of timeshare interests and timeshare estates, for purposes of ad valorem taxation, shall be
determined by valuing the real property interest associated with the timeshare interest or
timeshare estate, exclusive of the value of any intangible property and rights associated with
the acquisition, operation, ownership, and use of the timeshare interest or timeshare estate,
including the fees and costs associated with the sale of timeshare interests and timeshare estates
that exceed those fees and costs normally incurred in the sale of other similar properties, the
fees and costs associated with the operation, ownership, and use of timeshare interests and
timeshare estates, vacation exchange rights, vacation conveniences and services, club
memberships, and any other intangible rights and benefits available to a timeshare unit owner. 
Nothing in this section shall be construed as requiring the assessment of any real property
interest associated with a timeshare interest or timeshare estate at less than its fair market
value. Notice of assessment, delinquency, sale, or any other purpose required by law is
considered sufficient for all purposes if the notice is given to the management committee.
Section 3. Section 
57-19-2
 is amended to read:
57-19-2.
Definitions.
As used in this chapter[
, unless the context clearly requires otherwise
]:
(1) [
"Accommodations" includes
] 
"Accommodation" means:
(a) a
 hotel or motel [
rooms,
] 
room;
(b) a
 condominium or cooperative [
units, cabins, lodges, apartments, and
] 
unit;
(c) a cabin;
(d) a lodge;
(e) an apartment; or
(f) a
 private or commercial [
structures
] 
structure
 designed for 
overnight
 occupancy by
one or more individuals.
(2) "Advertisement" means a written, printed, 
oral,
 audio, 
electronic,
 or visual offer
that:
(a) is
 made by 
direct or
 general solicitation[
.
] 
to one or more individuals; and
(b) (i) contains an offer to sell an interest; or
(ii) contains a solicitation to visit or obtain additional information about a
development.
(3) "Amendment" means a change to an approved registration that is required under
Section 
57-19-9
 or by a division rule made under this chapter.
[
(3)
] 
(4)
 "Association" means an organized body consisting solely of owners of
timeshare interests in a timeshare development [
that has been registered with the division
]
,
including developers or purchasers
.
[
(4)
] 
(5)
 "Business day" means a day other than a Saturday, Sunday, or state or federal
holiday.
[
(7)
] 
(6)
 "Camping site" means a space designed or promoted for the purpose of
locating a trailer, tent, tent trailer, 
recreational vehicle,
 pickup camper, 
motor home,
 or other
similar device used for land-based portable housing.
[
(5)
] 
(7)
 "Camp resort" means [
any
] 
an
 enterprise that has as its primary purpose the
offering of a camp resort interest.
[
(6)
] 
(8)
 "Camp resort interest" means the right to use and occupy a camping site.
(9) "Consolidation" means the registration of one or more additional sites or interests
in a development after the division approves the development's registration.
[
(8)
] 
(10)
 "Developer" means a person [
who
] 
that
:
(a) establishes, [
promotes,
] owns, 
offers, sells,
 or operates a timeshare development or
camp resort; or
(b) engages one or more other persons to establish, [
promote
] 
own, offer, sell
, or
operate a timeshare development or camp resort on the person's behalf.
(11) (a) "Development" means an enterprise with the primary purpose of offering an
interest in a camp resort or timeshare development.
(b) "Development" includes:
(i) a single-site development; or
(ii) a multiple-site development.
[
(9)
] 
(12)
 "Director" means the director of the division.
(13) "Direct sales presentation" means an in-person, telephonic, or Internet-based
communication that presents an offer to purchase an interest in a development to one or more
prospective purchasers.
[
(10)
] 
(14)
 "Division" means the Division of Real Estate of the Department of
Commerce.
[
(11)
] 
(15)
 "Executive director" means the executive director of the Department of
Commerce.
[
(12)
] 
(16) (a)
 "Interest" means [
a camp resort interest or a timeshare interest.
] 
a right
that a purchaser receives in exchange for consideration to use and occupy a camping site or an
accommodation in a development:
(i) on a recurring basis; and
(ii) for a period of time that is less than one year during any given year, regardless of
whether the time is determined in advance.
(b) "Interest" includes a membership agreement, sale, lease, deed, license, or
right-to-use agreement.
[
(13)
] 
(17)
 "Offer" means a solicitation 
solely
 intended to result in a person purchasing
an interest in a [
project
] 
development
.
[
(14) "Project" means a camp resort or timeshare development.
]
(18) "Property report" means the form of a written disclosure described in Section
57-19-11
.
[
(15)
] 
(19)
 "Purchaser" means a person who purchases an interest in a [
project
]
development
.
(20) "Registration" means:
(a) for a development, an approved application for registration described in Section
57-19-5
; or
(b) for a salesperson, an approved application for registration described in Section
57-19-15
.
(21) "Renewal" or "renew" means extending a development's or a salesperson's
registration for an additional period on or before the registration's expiration date.
[
(16)
] 
(22) (a)
 "Sale" or "sell" means selling an interest in a [
project
] 
development
 for
value. [
It
]
(b) "Sale" or "sell"
 does not include charging a reasonable fee to offset the
administrative costs of transferring an interest in a [
project
] 
development
.
[
(17)
] 
(23) (a)
 "Salesperson" means an individual who, for compensation and as agent
for another, is engaged in obtaining commitments of persons to purchase an interest in a
[
project
] 
development
 by making direct sales presentations to those persons. [
It
]
(b) "Salesperson"
 does not include [
purchasers
] 
a purchaser
 or [
members
] 
an owner of
a timeshare interest
 engaged in the referral of persons without making a direct sales
presentation [
to them
].
(24) (a) "Site" means a geographic location where one or more camping sites or
accommodations are located.
(b) "Site" includes a geographic location where one or more camping sites or
accommodations are located that is constructed in phases and is under common management.
[
(18)
] 
(25)
 "Timeshare development" means [
any
] 
an
 enterprise [
that has as its
] 
with
the
 primary purpose [
the
] 
of
 offering [
of
] a timeshare interest, including [
a project in which the
purchase of
] an interest 
that
 gives the purchaser the right to use and occupy an accommodation
at [
one specific site or more than one site
] 
a single or multiple-site development
.
(26) "Timeshare estate" means a small, undivided fractional fee interest in real property
by which the purchaser does not receive any right to use an accommodation except as provided
by contract, declaration, or other instrument defining a legal right.
[
(19)
] 
(27) (a)
 "Timeshare interest" means a right to occupy fixed or variable
accommodations during three or more separate fixed or variable time periods over a period of
at least three years, including renewal options, whether or not coupled with an estate in land.
[
It
]
(b) "Timeshare interest"
 includes [
what is commonly known as a "
] 
a
 timeshare
estate[
," which is a small undivided fractional fee interest in real property by which the
purchaser does not receive any right to use accommodations except as provided by contract,
declaration, or other instrument defining a legal right
].
Section 4. Section 
57-19-4
 is amended to read:
57-19-4.
Unregistered sales prohibited.
Except [
for transactions exempt under
] 
as provided in
 Section 
57-19-26
, it is unlawful
for [
any
] 
a
 person to offer or sell in this state an interest in a [
project
] 
development
 unless the
[
project
] 
development
 is registered under this chapter 
or holds a temporary permit described in
Section 
57-19-6
.
Section 5. Section 
57-19-5
 is amended to read:
57-19-5.
Registration -- Filing application.
(1) A person may apply for registration of a [
project
] 
development
 by filing with the
[
director
] 
division
:
(a) an application in the form prescribed by the director;
(b) the written disclosure [
required to be furnished to prospective purchasers by
]
described in
 Section 
57-19-11
; and
(c) financial statements and other information that the director may by rule 
made in
accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
 require as being
reasonably necessary to determine whether the requirements of this chapter have been met and
whether any of the events specified in Subsection 
57-19-13
(1)(g) have occurred.
(2) [
Interests
] 
An interest
 in a [
project which are
] 
development that is
 encumbered by
[
liens, mortgages, or other encumbrances
] 
a lien, mortgage, or other encumbrance
 may not be
accepted for registration or offered [
for disposition
] to the public unless:
(a) adequate release or nondisturbance clauses are contained in the encumbering
instruments to reasonably assure that the purchaser's interest in the [
project
] 
development
 will
not be defeated; or
(b) the division [
has accepted
] 
accepts
 other equivalent assurances [
which
] 
that
, in the
division's
 opinion [
of the division
], meet the purposes of this Subsection (2).
(3) (a) [
Each application
] 
A person who applies
 for 
a development
 registration [
of a
project shall be accompanied by: (i)
] 
shall include with the application
 a filing fee of $500 for
up to 100 interests, plus an additional $3 per interest for each interest over 100, up to a
maximum of $2,500 for each application[
; and
]
.
[
(ii) subject to Subsection (3)(b), a deposit of $300 to cover all on-site inspection costs
and expenses incurred by the division.
]
[
(b) (i) If the $300 deposit is insufficient to meet the estimated costs and expenses of
the on-site inspection, the applicant shall make an additional deposit sufficient to cover the
estimated costs and expenses before the division will inspect the subdivided lands.
]
[
(ii) The deposit shall be refunded to the extent it is not used, together with an itemized
statement from the division of all amounts it has used.
]
(b) If the division determines that an on-site inspection of the development is
necessary, the development shall pay the division the actual amount of the costs and expenses
incurred by the division in performing the on-site inspection.
[
(4) If a person registers additional interests to be offered for disposition, the person
may consolidate the subsequent registration with any earlier registration offering interests for
disposition in the same project
]
(4) A person may add an additional site or interest to an approved development
registration
 by
:
(a)
 filing an application for consolidation accompanied by an additional fee of $200
plus $3 for each additional interest, up to a maximum of $1,250 for each application[
, if at the
time the person makes the application all of
]
; and
(b) providing
 the information required [
by
] 
under
 Subsection (1) [
has been brought
current and covers the additional interests
] 
for each additional site or interest
.
Section 6. Section 
57-19-6
 is amended to read:
57-19-6.
Effective date of application.
(1) An application for registration filed pursuant to Section 
57-19-5
 is effective upon
the expiration of 30 business days following its filing with the director, unless:
(a) an order denying the application pursuant to Section 
57-19-13
 is in effect;
(b) a prior effective date has been ordered by the director; or
(c) the director has, [
prior to
] 
before
 that date, notified the applicant of a defect in the
registration application.
(2) An applicant [
may
] 
shall
 consent to the delay of effectiveness until the director by
order declares the registration to be effective.
(3) (a) Notwithstanding Section 
57-19-4
, the division may grant 
a developer
 a
temporary permit [
allowing the developer to begin a sales and marketing program while the
registration is in process.
] 
that allows a developer to advertise, offer, or sell an interest:
(i) before the developer's application for registration is approved; and
(ii) for a period of 30 days or less.
(b) To obtain a temporary permit, the developer shall:
(i) submit an application to the division for a temporary permit in the form required by
the division;
(ii) submit a substantially complete application for registration to the division,
including all appropriate fees and exhibits required under Section 
57-19-5
, plus a temporary
permit fee of $100;
(iii) provide evidence acceptable to the division that all funds received by the
developer or marketing agent will be placed into an independent escrow with instructions that
funds will not be released until a final registration has been granted;
(iv) give to each purchaser and potential purchaser a copy of the proposed property
report that the developer has submitted to the division with the initial application; and
(v) give to each purchaser the opportunity to cancel the purchase in accordance with
Section 
57-19-12
.
(c) [
A
] 
Upon the issuance of an approved registration, a
 purchaser shall have an
additional opportunity to cancel [
upon the issuance of an approved
] 
the
 registration if the
division determines that there is a substantial difference in the disclosures contained in the final
property report and those given to the purchaser in the proposed property report.
(4) (a) Notwithstanding Section 
57-19-4
, a developer or a person acting on behalf of a
developer may market and accept a reservation and deposit from a prospective purchaser before
submitting to the division [
a
] 
an application for
 registration or 
a
 temporary permit [
application
for a project
] if:
(i) the deposit is placed in a non-interest bearing escrow account with a licensed real
estate broker, a title company, or another escrow that the division approves in advance; and
(ii) the deposit is guaranteed to be fully refundable at any time at the request of the
prospective purchaser.
(b) A deposit that a prospective purchaser tenders under Subsection (4)(a) may not be
released to the developer until after:
(i) the division approves the [
project
] 
development's
 registration; and
(ii) the prospective purchaser executes a written purchase contract creating a binding
obligation to purchase.
Section 7. Section 
57-19-7
 is amended to read:
57-19-7.
Prior permits.
Any permit to market a [
project
] 
development
 issued by the division [
prior to
] 
before
April 27, 1987, is considered to be an effective registration, but is subject to the renewal
provisions of this chapter upon the anniversary date of the issuance of the original permit.
Section 8. Section 
57-19-8
 is amended to read:
57-19-8.
Filing proposed documents.
(1) Every developer shall file with the director at least five business days [
prior to
]
before
 using any of the following in this state:
(a) the proposed form of [
its
] 
the developer's
 sales contracts; and
(b) [
copies
] 
a copy
 or the text of any supplements to the written disclosure required [
to
be furnished to prospective purchasers pursuant to
] 
under
 Section 
57-19-11
.
(2) If the text, rather than [
copies
] 
a copy
, of the materials [
specified
] 
described
 in
Subsection (1) [
are
] 
is
 filed, [
copies
] 
the developer shall file the copy, including an electronic
version,
 of [
these
] 
the
 materials [
shall be filed
] with the director within five business days
[
following the date
] 
after the day on which
 the materials are first used.
(3) [
The
] 
A
 developer shall notify the division within five [
working
] 
business
 days if
[
he
] 
the developer
 is convicted in any court of a crime involving fraud, deception, false
pretenses, misrepresentation, false advertising, or dishonest dealing in real estate transactions,
or has been subject to any injunction or administrative order restraining a false or misleading
promotional plan involving land dispositions.
(4) The developer must notify the division within five [
working
] 
business
 days if the
developer files a petition in bankruptcy or if any other event occurs [
which
] 
that
 may have a
material adverse effect on the [
subdivision
] 
development
.
(5) (a) If any suit by or against a developer [
of a camp resort or timeshare
development
] results in a court finding that the developer engaged in fraud, deception, false
pretenses, misrepresentation, false advertising, or dishonest dealing in a real estate transaction,
the developer shall promptly [
furnish
] 
give
 the division a copy of the final order, settlement
agreement, consent agreement, or other document evidencing resolution of the case at the trial
level, whether or not an appeal is anticipated.
(b) A developer's failure to comply with Subsection (5)(a) may, in the discretion of the
division, constitute grounds for the division withholding any approval [
required by
] 
under
 this
chapter.
Section 9. Section 
57-19-9
 is amended to read:
57-19-9.
Duration of registration -- Amendment and renewal -- Supplemental
disclosure -- Notice of amendment.
(1) Registration of a [
project
] 
development
 is effective for a period of one year and
may, upon application, be renewed for successive periods of one year each.
(2) 
(a)
 A registration may be amended at any time, for any reason, by filing an
amended application for registration[
, which
]
.
(b) The
 amended registration shall become effective in [
the manner provided in
]
accordance with
 Section 
57-19-6
.
[
(3) The written disclosure required to be furnished to prospective purchasers pursuant
to Section 
57-19-11
]
(3) (a) The developer
 shall [
be supplemented
] 
supplement the property report
 as often
as is necessary to keep the required information reasonably current. [
These
]
(b) The
 supplements 
described in Subsection (3)(a)
 shall be filed with the director [
as
provided
] in 
accordance with
 Section 
57-19-8
.
(4) [
Every
] 
(a) A
 developer shall provide timely notice [
sent
] to the director of any
event [
which has occurred which
] 
that occurs that
 may have a material adverse effect on the
conduct of the operation of the [
project
] 
development
.
(b)
 In addition to [
this
] 
the
 notification 
described in Subsection (4)(a)
, the developer
shall, within 30 days [
of the occurrence of that
] 
after the day on which an
 event 
described in
Subsection (4)(a) occurs
, file an amendment to the registration disclosing the information
previously provided.
(5) Each application for renewal of a registration and each supplementary filing [
as
provided
] 
described
 in this section shall be accompanied by a fee of $200.
Section 10. Section 
57-19-10
 is amended to read:
57-19-10.
Effect of application or registration -- Misleading statements to
prospective purchasers a misdemeanor.
(1)
 Neither the fact that an application for registration or the written disclosures
required by this chapter have been filed, nor the fact that a [
project
] 
development
 has been
effectively registered or exempted, constitutes a finding by the director that the offering or any
document filed under this chapter is true, complete, and not misleading, nor does either of these
facts mean that the director has determined in any way the merits or qualifications of, or
recommended or given approval to, any person, developer, or transaction involving an interest
in a [
project
] 
development
.
(2)
 It is a class A misdemeanor to make or cause to be made to any purchaser or
prospective purchaser any offering or document filed under this chapter which is untrue,
incomplete, or misleading.
Section 11. Section 
57-19-11
 is amended to read:
57-19-11.
Disclosure required.
(1)
 Except [
in a transaction exempt under
] 
as provided in
 Section 
57-19-26
, any person
who sells or offers to sell an interest in a [
project
] 
development
 located in this state, or who
sells or offers to sell in this state an interest in a [
project
] 
development
 located outside of this
state, shall provide to [
the
] 
a
 prospective purchaser, before the prospective purchaser signs an
agreement to purchase an interest in [
a project
] 
the development
 or gives any item of value for
the purchase of an interest in [
a project
] 
the development
, a written statement [
which
] 
that
provides a full and fair disclosure of information regarding the [
project
] 
development
 and the
purchaser's rights and obligations associated with the purchase of an interest in [
a project
] 
the
development
.
(2)
 The written disclosure 
described in Subsection (1):
(a) may include electronic files; and
(b)
 shall
:
(i)
 be on the property report form required by the division
;
 and [
shall
]
(ii)
 include:
[
(1)
] 
(A)
 the name and address of the developer;
[
(2)
] 
(B)
 a statement 
regarding
 whether [
or not
] the developer has ever been[
: (a)
]
convicted of a felony[
,
] or any misdemeanor involving theft, fraud, or dishonesty[
;
]
,
 or [
(b)
]
enjoined from, assessed any civil penalty for, or found to have engaged in the violation of any
law designed to protect consumers;
[
(3)
] 
(C)
 a brief description of the developer's experience in timeshare, camp resort, or
any other real estate development;
[
(4)
] 
(D)
 a brief description of the interest [
which
] 
that
 is being offered in the [
project
]
development
;
[
(5)
] 
(E)
 a description of any provisions to protect the purchaser's interest from loss
due to foreclosure on any underlying financial obligation of the [
project
] 
development
;
[
(6)
] 
(F)
 a statement [
of the maximum number of interests in the project to be
marketed, and a commitment that this maximum number will not be exceeded unless disclosed
by filing an amendment to the registration as provided in Section 
57-19-9
 prior to the
amendment becoming effective
] 
that the development will not issue more interests during a 12
month period than the development can accommodate during the 12 month period
;
[
(7)
] 
(G)
 any event [
which
] 
that
 has occurred [
as of
] 
since
 the date of the offer [
which
]
that
 may have a material adverse effect on the operation of the [
project
] 
development
; and
[
(8)
] 
(H)
 any other information the director considers necessary for the protection of
purchasers.
Section 12. Section 
57-19-12
 is amended to read:
57-19-12.
Purchaser's right to cancel.
(1) (a) An agreement to purchase an interest in a [
project
] 
development
 may be
cancelled, at the option of the purchaser, if:
(i) the purchaser [
provides
] 
delivers a written notice of cancellation
 to the developer[
,
]
at the developer's business address
 by
:
(A)
 hand [
delivery
]
;
 or
(B)
 certified mail, [
written notice of the cancellation
] 
return receipt requested, or a
delivery service that provides proof of delivery
; and
(ii) the notice is delivered or postmarked not later than midnight of the fifth business
day [
following
] 
after
 the day on which the agreement is signed.
(b) In computing the number of business days for purposes of this section, the day on
which the agreement was signed is not included.
(c) Within 30 days after [
receipt of
] 
the day on which the developer receives a
 timely
notice of cancellation, the developer shall refund any money or other consideration paid by the
purchaser.
(2) Every agreement to purchase an interest in a [
project which
] 
development that
 is
subject to this chapter shall include the following statement in at least 10-point bold upper-case
type, immediately preceding the space for the purchaser's signature:
"PURCHASER'S RIGHT TO CANCEL: YOU MAY CANCEL THIS AGREEMENT
WITHOUT ANY CANCELLATION FEE OR OTHER PENALTY BY HAND DELIVERING
OR SENDING BY CERTIFIED MAIL
, RETURN RECEIPT REQUESTED, OR A
DELIVERY SERVICE THAT PROVIDES PROOF OF DELIVERY,
 WRITTEN NOTICE OF
CANCELLATION TO: (NAME AND ADDRESS OF DEVELOPER). THE NOTICE MUST
BE DELIVERED OR POSTMARKED BY MIDNIGHT OF THE FIFTH BUSINESS DAY
FOLLOWING THE DAY ON WHICH THE AGREEMENT IS SIGNED. IN COMPUTING
THE NUMBER OF BUSINESS DAYS, THE DAY ON WHICH THE CONTRACT IS
SIGNED IS NOT INCLUDED."
Section 13. Section 
57-19-13
 is amended to read:
57-19-13.
Suspension, revocation, or denial of registration -- Fine.
(1) Subject to Section 
57-19-17
, [
an application for registration of a project may be
denied, an existing registration may be suspended or revoked, or a fine of not more than $500
may be imposed by the director, if the director finds that:
] 
if the director finds that an applicant
or developer has engaged in an act described in Subsection (2), the director may:
(a) deny an application for registration of a development;
(b) suspend or revoke an existing registration; or
(c) except as provided in Subsection (3), impose a fine of not more than $500.
(2) Subsection (1) applies if the director finds that:
(a) the developer's advertising or sales techniques or trade practices have been or are
deceptive, false, or misleading;
(b) the developer [
has failed
] 
fails
 to file [
copies
] 
a copy
 of [
its
] 
the developer's
 sales
contract forms as required [
by
] 
under
 Section 
57-19-8
;
(c) the developer [
has failed
] 
fails
 to comply with any provision of this chapter or [
the
rules
] 
any rule
 adopted under this chapter that materially [
affect
] 
affects
 or would affect the
rights of [
purchasers or prospective purchasers
] 
a purchaser or prospective purchaser
 of an
interest in a [
project
] 
development
, or that materially [
affect
] 
affects
 the administration of this
chapter;
(d) the [
developer's offering
] 
developer makes a fraudulent offer
 of an interest in a
[
project has worked or would work a fraud upon purchasers or prospective purchasers of such
an
] 
development to a purchaser or prospective purchaser of the
 interest;
(e) the developer's application or any amendment to an application is incomplete in any
material respect;
(f) the developer's application or any amendment to an application contains material
misrepresentations or omissions of material fact [
which
] 
that
 are necessary to make the
statements contained in the application or amendment not misleading;
(g) the developer or any officer or director of the developer has been:
(i) convicted of a felony, or any misdemeanor involving theft, fraud, or dishonesty;
(ii) enjoined from, assessed a civil penalty for, or found to have engaged in [
the
] 
a
violation of any law designed to protect consumers; or
(iii) engaged in dishonest practices in any industry involving sales to consumers;
(h) the developer has represented or is representing to purchasers in connection with
the offer or sale of an interest in a [
project
] 
development
 that any accommodations, related
facilities, or amenities are planned, without reasonable grounds to believe that they will be
completed within a reasonable time;
(i) the developer [
has disposed of, concealed, or diverted
] 
disposes, conceals, or diverts
any funds or assets so as to defeat the rights of purchasers;
(j) the developer [
has failed
] 
fails
 to provide to [
purchasers copies
] 
a purchaser a copy
of the written disclosure required by Section 
57-19-11
; or
(k) the developer, the developer's successor in interest, or a managing association
discloses a purchaser's name, address, or email address to an unaffiliated entity without first
obtaining written consent from the purchaser, unless the disclosure is in response to a subpoena
or an order of a court or administrative tribunal.
[
(2)
] 
(3)
 The authority to impose [
fines as provided in
] 
a fine under
 this section does
not apply to Subsection [
(1)
] 
(2)
(e).
[
(3)
] 
(4)
 Notwithstanding Subsection [
(1)
] 
(2)
(k), a developer shall, upon request by
the division, provide the division a list of [
all purchasers' names, addresses, and email
addresses
] 
each purchaser's name, address, and email address
.
Section 14. Section 
57-19-14
 is amended to read:
57-19-14.
Registration of salesperson.
[
(1) Unless the transaction is exempt under
] 
Except as provided in
 Section 
57-19-26
, it
is unlawful for [
any
] 
a
 person to act as a salesperson [
marketing
] 
and market
 a [
project
]
development
 in this state without first registering under this chapter as a salesperson.
[
(2) The fee for registration as a salesperson is waived by the division for persons
licensed by the division under Title 61, Chapter 2f, Real Estate Licensing and Practices Act.
]
Section 15. Section 
57-19-15
 is amended to read:
57-19-15.
Application for registration of salesperson.
(1) A person may apply for registration as a salesperson under this chapter by filing
with the director an application in the form prescribed by the director, including:
(a) a statement [
of
] 
regarding
 whether [
or not
] the applicant has ever been:
(i) convicted of:
(A) a felony; or
(B) a misdemeanor involving theft, fraud, or dishonesty; or
(ii) enjoined from, assessed a civil penalty for, or found to have engaged in the
violation of a law designed to protect a consumer;
(b) (i) a statement describing the applicant's employment history for the five years
immediately preceding the day on which the application is filed; and
(ii) a statement [
of
] 
regarding
 whether [
or not
] a termination of employment during the
period described in Subsection (1)(b)(i) is [
as
] a result of theft, fraud, or an act of dishonesty;
[
and
]
(c) evidence of the applicant's honesty, integrity, truthfulness, and reputation; and
[
(c)
] 
(d)
 any other information that the director, by rule 
made in accordance with Title
63G, Chapter 3, Utah Administrative Rulemaking Act
, considers necessary to protect [
the
interests of a purchaser
] 
a purchaser's interests
.
(2) 
(a)
 Notwithstanding the requirements for a regulatory fee under Section 
63J-1-504
,
at the time an applicant files an application, the applicant shall pay to the division a fee of
$100.
(b) The fee for registration described in Subsection (2)(a) is waived for a person
licensed by the division under Title 61, Chapter 2f, Real Estate Licensing and Practices Act.
(3) (a) Registration as a salesperson is effective for [
a period for
] two years 
after the
day on which the registration is approved by the director
, unless the director specifies
otherwise.
(b) To renew a registration
,
 a salesperson shall:
(i) file a form prescribed by the director for that purpose; and
(ii) pay a renewal fee of $100.
Section 16. Section 
57-19-16
 is amended to read:
57-19-16.
Denial, revocation, or suspension of registration of salesperson -- Fine.
(1) Subject to Section 
57-19-17
, if the [
director
] 
division
 finds that an applicant or
salesperson has engaged in an act described in Subsection (2), the [
director
] 
division
 may:
(a) deny an application for registration as a salesperson;
(b) suspend or revoke an existing registration; or
(c) impose a civil penalty not to exceed $500.
(2) Subsection (1) applies if the [
director
] 
division
 finds that the applicant or
salesperson:
(a) files, or causes to be filed, with the [
director
] 
division
 a document that contains [
an
]
untrue or misleading information;
(b) makes an untrue or misleading statement of material fact;
(c) fails to state a material fact that is necessary in order to make the statements made
not misleading in light of the circumstances under which the statements are made;
(d) employs a device, scheme, or artifice to defraud, or engages in an act, practice, or
course of business that operates or would operate as a fraud or deceit upon a person;
(e) subsequent to the effective date of registration as a salesperson, is:
(i) convicted of:
(A) a felony; or
(B) a misdemeanor involving theft, fraud, or dishonesty; or
(ii) enjoined from, assessed a civil penalty for, or found to have engaged in a violation
of any law designed to protect consumers;
(f) violates this chapter;
(g) engages in an activity that constitutes dishonest dealing; or
(h) engages in unprofessional conduct as defined by statute or rule made by the
director.
Section 17. Section 
57-19-21
 is amended to read:
57-19-21.
Voidable agreements.
(1)
 Any agreement to purchase an interest in a [
project entered into in violation of
]
development that violates
 Section 
57-19-4
 or 
57-19-14
 may, at the option of the purchaser, be
voided and the purchaser's entire consideration recovered together with interest at the legal rate,
costs, and reasonable [
attorney's
] 
attorney
 fees. [
However, no
]
(2) No
 suit under this section may be brought more than two years after:
[
(1)
] 
(a)
 the [
date
] 
day on which
 the agreement is signed; or
[
(2)
] 
(b)
 the [
date
] 
day on which
 the purchaser knew or reasonably should have known
of the violation.
Section 18. Section 
57-19-26
 is amended to read:
57-19-26.
Exemptions.
(1) Unless entered into for the purpose of evading the provisions of this chapter, the
following transactions are exempt from registration:
(a) 
an
 isolated [
transactions
] 
transaction
 by an owner of an interest in a [
project
]
development
 or by a person holding [
such an
] 
the
 owner's executed power of attorney;
(b) an offer or sale by a governmental entity; and
(c) [
the
] 
a
 resale of an interest that is:
(i) acquired:
(A) by the developer who initially registered the [
project
] 
development
 or by the
managing association of the [
project
] 
development
; and
(B) through a foreclosure, quitclaim deed, deed in lieu of foreclosure, or equivalent
[
transfer
] 
means
;
(ii) not offered as part of a [
project
] 
development
 that includes one or more interests
that are unregistered or have been registered by a different developer or as part of a different
[
project
] 
development
; and
(iii) closed after the developer or managing association provides a purchaser the
disclosures required by Section 
57-19-11
 and the right to rescind required by Section 
57-19-12
.
(2) After a resale by a developer or managing association that is claimed to be exempt
under Subsection (1)(c), the division retains jurisdiction to:
(a) investigate a complaint regarding the resale; and
(b) if applicable, take an administrative action against the developer or managing
association on the basis of unprofessional conduct, [
as provided
] 
described
 in Section
57-19-13
.
(3) (a) The director may, by rule 
made in accordance with Title 63G, Chapter 3, Utah
Administrative Rulemaking Act,
 or 
by
 order, exempt any person from any [
or all requirements
]
requirement
 of this chapter if the director finds that the offering of an interest in a [
project
]
development
 is essentially noncommercial.
(b) The offering of [
one or more interests
] 
an interest
 in a [
project
] 
development
 that
has [
a maximum of
] 10 
or fewer
 interests is considered essentially noncommercial.
(c) A person who does not meet the requirements described in Subsection (3)(b), but
believes that a proposed offering of more than 10 interests in a development is essentially
noncommercial, may request an order of exemption from the director.
(d) To request an order of exemption under this section, a person shall submit to the
director a request for agency action in accordance with Section 
63G-4-201
.
Legislative Review Note
 as of 2-25-15 10:33 AM
Office of Legislative Research and General Counsel