subchapter 58b – time shares
section .0100 – time share project registration
21 NCAC 58B .0101 APPLICATION FOR REGISTRATION
(a) Every application for time share project registration
shall be filed at the Commission's office upon a form prescribed by the
Commission. Every such application shall contain or have appended thereto:
(1) information concerning the developer's
title or right to use the real property on which the project is located,
including a title opinion provided by an independent attorney performed within
30 days preceding the date of application;
(2) information concerning owners of time
shares at the project other than the developer;
(3) a description of the improvements and
amenities located at the project, including a description of the number and
type of time share units;
(4) a description of the time share estate to
be sold or conveyed to purchasers;
(5) information concerning the developer and
his or her financial ability to develop the project (including the developer's
most recent audited financial statement, any loan commitments for completion of
the proposed time share project, a projected budget for the construction,
marketing and operation of the time share project until control by purchasers
is asserted, and details of any source of funding for the time share project
other than consumer sales proceeds), and information concerning the marketing
and managing entities and their relationship to the developer;
(6) the developer's name and address, past real
estate development experience and such other information necessary to determine
the moral character of those selling and managing the project;
(7) copies of all documents to be distributed
to time share purchasers at the point of sale or immediately thereafter; and
(8) such information as may be required by G.S.
93A‑52.
The form shall also describe the standards for its proper
completion and submission.
(b) In accordance with G.S. 93A‑52, an application
for time share registration shall be considered to be properly completed when it
is wholly and accurately filled out and when all required documents are
appended to it and appear to be in compliance with the provisions of the Time
Share Act, and, where the project is a condominium, the Condominium Act or Unit
Ownership Act.
(c) An entity which owns time shares at a time share
project where there are one or more existing registered developers may also
apply to the Commission for registration of its time shares, provided that the
entity does not control a registered developer, is not controlled by a
registered developer, and is not in common control of the project with a
registered developer.
History Note: Authority G.S. 47A; 47C; 93A‑51;
93A‑52(a);
Eff. March 1, 1984;
Amended Eff. July 1, 2000; August 2, 1993; February 1,
1989; April 1, 1987.
21 NCAC 58B .0102 REGISTRATION FEE
(a) Every application for time share project registration
must be accompanied by a certified check made payable to the North Carolina
Real Estate Commission. For the initial registration or subsequent
registration of a time share project by a developer proposing to sell or
develop 16 or more time shares, the fee is one thousand dollars ($1,000). For
an initial or subsequent registration of a time share project in which the
developer proposes to sell 15 or fewer time shares, the fee is seven hundred
dollars ($700.00). For any time share registration by a homeowner association
for the purpose of re-selling time shares in its own project which it has
acquired in satisfaction of unpaid assessments by prior owners, the fee is four
hundred fifty dollars ($450.00).
(b) Applications for registration not accompanied by the
appropriate fee shall not be considered by the Commission.
(c) In the event a properly completed application filed
with the Commission is denied for any reason, or if an incomplete application
is denied by the Commission or abandoned by the developer prior to a final
decision by the Commission, the amount of two hundred fifty dollars ($250.00)
shall be retained by the Commission from the application fee and the balance
refunded to the applicant developer.
History Note: Authority G.S. 93A‑51; 93A‑52;
Eff. March 1, 1984;
Amended Eff. April 1, 2013; July 1, 2000.
21 NCAC 58B .0103 RENEWAL OF TIME SHARE PROJECT
REGISTRATION
(a) Every developer desiring the renewal of a time share
project registration shall apply for the same in writing upon a form provided by
the Commission during the month of June. Every such renewal application shall
be accompanied by a certified check made payable to the North Carolina Real Estate
Commission in the amount of eight hundred dollars ($800.00). To renew
the time share project registration, the properly completed renewal application
accompanied by the prescribed fee must be received at the Commission's office
prior to the expiration of the certificate of registration.
(b) Applications for the renewal of a time share project
registration shall be signed by the developer, by two executive officers of the
developer, or by the developer's attorney at law and shall certify that the
information contained in the registration filed with the Commission is accurate
and current on the date of the renewal application. Making a false
certification on a time share project registration renewal application shall be
grounds for disciplinary action by the Commission.
History Note: Authority G.S. 93A‑51; 93A‑52(d);
Eff. March 1, 1984;
Temporary Amendment Eff. May 23, 1985;
Amended Eff. April 1, 2013; February 1, 1989; September
1, 1985.
21 NCAC 58B .0104 AMENDMENTS TO TIME SHARE PROJECT
REGISTRATION
(a) A developer shall notify the Commission immediately,
but in no event later than 15 days, after any material change in the
information contained in the time share project registration.
(b) A material change shall be any change which reflects a
difference in:
(1) the nature, quality or availability of the
purchaser's ownership or right to use the time share;
(2) the nature, quality or availability of any
amenity at the project;
(3) the developer's title, control or right to
use the real property on which the project is located;
(4) the information concerning the developer,
the managing or marketing entities, or persons connected therewith, previously
filed with the Commission;
(5) the purchaser's right to exchange his or
her unit; however, a change in the information required to be disclosed to a
purchaser by G.S. 93A‑48 shall not be a material change; or
(6) the project or time share as originally
registered which would be significant to a reasonable purchaser.
(c) Amendments to time share project registrations shall be
submitted in the form of substitute pages for material previously filed with
the Commission. New or changed information shall be conspicuously indicated by
underlining in red ink. Every amendment submitted shall be accompanied by a
cover letter signed by the developer or the developer's attorney containing a
summary of the amendment and a statement of reasons for which the amendment has
been made. The cover letter shall state:
(1) the name and address of the project and its
registration number;
(2) the name and address of the developer;
(3) the document or documents to which the
amendment applies;
(4) whether or not the changes represented by
the amendment required the assent of the time share owners and, if so, how the
assent of the time share owners was obtained; and
(5) the recording reference in the office of
the register of deeds for the changes, if applicable.
Developers of multiple projects must submit separate amendments
and cover letters for each project for which amendments are submitted.
(d) The Commission may, in its discretion, require the
developer to file a new time share project registration application in the
place of an amendment form. Such refiling shall be without fee.
History Note: Authority G.S. 93A‑51;
Eff. March 1, 1984;
Amended Eff. October 1, 2000; February 1, 1989; April 1,
1987.
21 NCAC 58B .0105 NOTICE OF TERMINATION
(a) A developer of a registered time share project which,
for any reason, terminates its interest, rights, ownership or control of the
project or any significant part thereof shall immediately notify the Commission
in writing on a form prescribed by the Commission for that purpose. Notice of
termination to the Commission shall include the date of termination, the
reasons therefor, the identity of the developer's successor, if any, and a
report on the status of time share sales to purchasers on the date of
termination.
(b) Upon receipt of a properly executed notice of
termination of the developer's interest in a time share project, the Commission
shall enter a notation of cancellation of registration in the file of the
project, and shall notify the developer of cancellation. A developer's failure
to give notice of termination as provided herein shall not prevent cancellation
of the project's registration under G.S. 93A‑52.
History Note: Authority G.S. 93A‑51; 93A‑52(a);
Eff. April 1, 1987.
SECTION .0200 ‑ PUBLIC OFFERING STATEMENT
21 NCAC 58B .0201 GENERAL PROVISIONS
(a) Information contained in a public offering statement
shall be accurate on the day it is supplied to a purchaser. Before any public
offering statement is supplied to a purchaser, the developer shall file a copy
of the statement with the Commission.
(b) In addition to the information required to be contained
in a public offering statement by G.S. 93A-44, every public offering statement
shall disclose to the purchaser of a time share complete and accurate
information concerning:
(1) the real property type of the time share
program, whether tenancy‑in‑common, condominium or other, and a
description of the estate the purchaser will own, the term of that estate and
the remainder interest, if any, once the term has expired;
(2) the document creating the time share
program, a statement that it is the document which governs the program and a
reference to the location where the purchaser may obtain or examine a copy of
the document;
(3) whether or not the property is being
converted to a time share from some other use and, if so, a statement to that
effect and disclosure of the prior use of the property;
(4) the maximum number of time shares in the
project, each recreational and other commonly used facility offered, and who or
what will own each facility, if the project is to be completed in one
development or construction phase;
(5) if the project is planned in phased
construction or development, the complete plan of phased offerings, including
the maximum number of time shares which may be in the project, each
recreational and other commonly used facility, who or what will own each
facility, and the developer's representations regarding his or her commitment
to build out the project;
(6) the association of owners or other entity
which will ultimately be responsible for managing the time share program, the
first date or event when the entity will convene or commence to conduct
business, each owner's voting right, if any, and whether and for how long the
developer, as time share owner, will control the entity;
(7) the location where owners may inspect the
articles and bylaws of the owners association, or other organizational
documents of the entity and the books and records it produces;
(8) whether the entity has lien rights against
time share owners for failure to pay assessments;
(9) whether or not the developer has entered
into a management contract on behalf of the managing entity, the extent to
which the managing entity's powers are delegated to the manager and the
location where a copy of the management contract may be examined;
(10) whether or not the developer will pay
assessments for time shares which it owns and a statement that the amount of
assessments due the managing entity from owners will change over time, as
circumstances may change;
(11) whether or not the developer sponsors or
will sponsor a rental or resale program and, if so, a summary of the program or
programs; and
(12) the developer's role at the project, if the
developer is a separate entity from any other registered developer of the time
share project.
(c) The inclusion of false or misleading statements in a
public offering statement shall be grounds for disciplinary action by the
Commission.
History Note: Authority G.S. 93A-44(8); 93A-51;
Eff. March 1, 1984;
Amended Eff. October 1, 2000; August 2, 1993; February 1,
1989; April 1, 1987.
21 NCAC 58B .0202 PUBLIC OFFERING STATEMENT SUMMARY
Every public offering statement shall contain a one page
cover prescribed by the Commission and completed by the developer entitled
Public Offering Statement Summary. The Public Offering Statement Summary shall
read as follows:
PUBLIC OFFERING STATEMENT
SUMMARY
NAME OF PROJECT:
NAME AND REAL ESTATE LICENSE NUMBER OF BROKER:
This Public Offering Statement contains information which
deserves your careful study, as you decide whether or not to purchase a time
share.
The Public Offering Statement includes general information
about the real estate type, the term, and the size of this time share project.
It also includes a general description of the recreational and other facilities
existing now, or to be provided in the future. The Public Offering Statement
will tell you how maintenance and management of the project will be provided
and how the costs of these services will be charged to purchasers. From the
Public Offering Statement, you will also learn how the project will be governed
and whether purchasers will have a voice in that government. You will also
learn that a time share instrument will be recorded to protect your real estate
interest in your time share.
The Public Offering Statement contains important
information, but is not a substitute for the detailed information contained in
the contract of purchase and the legal documents which create and affect the
time share program at this project.
Please study this Public Offering Statement carefully.
Satisfy yourself that any questions you may have are answered before you decide
to purchase. If a salesperson or other representative of the developer has
made a representation which concerns you, and you cannot find that
representation in writing, ask that it be pointed out to you.
NOTICE
UNDER NORTH CAROLINA LAW, YOU MAY CANCEL YOUR TIME SHARE
PURCHASE WITHOUT PENALTY WITHIN FIVE DAYS AFTER SIGNING YOUR CONTRACT. TO
CANCEL YOUR TIME SHARE PURCHASE, YOU MUST MAIL OR HAND DELIVER WRITTEN NOTICE
OF YOUR DESIRE TO CANCEL YOUR PURCHASE TO (name and address of project). IF
YOU CHOOSE TO MAIL YOUR CANCELLATION NOTICE, THE NORTH CAROLINA REAL ESTATE
COMMISSION RECOMMENDS THAT YOU USE REGISTERED OR CERTIFIED MAIL AND THAT YOU
RETAIN YOUR POSTAL RECEIPT AS PROOF OF THE DATE YOUR NOTICE WAS MAILED. UPON
CANCELLATION, ALL PAYMENTS WILL BE REFUNDED TO YOU.
History Note: Authority G.S. 93A‑44; 93A‑51;
Eff. March 1, 1984;
Amended Eff. April 1, 2006; October 1, 2000; February 1,
1989; April 1, 1987.
21 NCAC 58B .0203 RECEIPT FOR PUBLIC OFFERING STATEMENT
(a) Prior to the execution of any contract to purchase a
time share, a time share developer or a time share salesperson shall obtain
from the purchaser a written receipt for the public offering statement, which
shall display, directly over the buyer signature line in type in all capital
letters, no smaller than the largest type on the page on which it appears, the
following statement: DO NOT SIGN THIS RECEIPT UNLESS YOU HAVE RECEIVED A
COMPLETE COPY OF THE PUBLIC OFFERING STATEMENT TO TAKE WITH YOU.
(b) Receipts for public offering statements shall be
maintained as part of the records of the sales transaction.
History Note: Authority G.S. 93A‑45(a); 93A‑51;
Eff. February 1, 1988;
Amended Eff. October 1, 2000.
SECTION .0300 ‑ CANCELLATION
21 NCAC 58B .0301 PROOF OF CANCELLATION
(a) The postmark date affixed to any written notice of a
purchaser's intent to cancel his or her time share purchase shall be presumed
by the Commission to be the date the notice was mailed to the developer.
Evidence tending to rebut this presumption shall be admissible at a hearing
before the Commission.
(b) Upon receipt of a purchaser's written notice of his or
her intent to cancel his or her time share purchase, the developer, or his or
her agent or representative, shall retain the notice and any enclosure,
envelope or other cover in the developer's files at the project, and shall
produce the file upon the Commission's request.
(c) When there is more than one registered developer at a
time share project and a purchaser gives written notice of his or her intent to
cancel his or her time share purchase that is received by a developer or sales
staff other than the one from whom his or her time share was purchased, the
developer or sales staff receiving such notice shall promptly deliver it to the
proper developer who shall then honor the notice if it was timely sent by the
purchaser.
History Note: Authority G.S. 93A‑51; 93A‑54(d);
Eff. September 1, 1984;
Amended Eff. October 1, 2000; August 2, 1993; February 1,
1989.
SECTION .0400 - TIME SHARE SALES OPERATION
21 NCAC 58B .0401 RETENTION OF TIME SHARE RECORDS
A time share developer and a time share salesperson shall
retain or cause to be retained for a period of three years complete records of
every time share sale, rental, or exchange transaction made by or on behalf of
the developer. Records required to be retained shall include but not be
limited to offers, applications and contracts to purchase, rent or exchange
time shares; records of the deposit, maintenance and disbursement of funds
required to be held in trust; receipts; notices of cancellation and their
covers if mailed; records regarding compensation of salespersons; public
offering statements; and any other records pertaining to time share
transactions. Such records shall be made available to the Commission and its
representatives upon request.
History Note: Authority G.S. 93A‑51; 93A‑54(d);
Eff. September 1, 1984;
Amended Eff. October 1, 2000.
21 NCAC 58B .0402 TIME SHARE AGENCY AGREEMENTS AND
DISCLOSURE
Time share sales transactions conducted by licensees on
behalf of a time share developer are subject to 21 NCAC 58A .0104.
History Note: Authority G.S. 93A-3(c); 93A-51;
Eff. August 1, 1998.
SECTION .0500 – handling and accounting of funds
21 NCAC 58B .0501 TIME SHARE TRUST FUNDS
(a) Except as otherwise permitted by G.S. 93A-45(c), all
monies received by a time share developer or a time share salesperson in
connection with a time share sales transaction shall be deposited into a trust
or escrow account not later than three banking days following receipt and shall
remain in such account for ten days from the date of sale or until cancellation
by the purchaser, whichever first occurs.
(b) All monies received by a person licensed as a broker in
connection with a time share transaction shall be delivered immediately to his
or her project broker.
(c) When a time share purchaser timely cancels his or her
time share purchase, the developer shall refund to the purchaser all monies
paid by the purchaser in connection with the purchase. The refund shall be
made no later than 30 days following the date of execution of the contract.
Amounts paid by the purchaser with a bankcard or a credit card shall be
refunded by a cash payment or by issuing a credit voucher to the purchaser
within the 30-day period.
(d) Every project broker shall obtain and keep a written
representation from the developer as to whether or not lien-free or
lien-subordinated time share instruments can be recorded within 45 days of the
purchaser's execution of the time share purchase agreement. When a lien-free
or lien-subordinated instrument cannot be recorded within said time period, on
the business day following the expiration of the ten day time share payment
escrow period, a project broker shall transfer from his or her trust account
all purchase deposit funds or other payments received from a purchaser who has
not cancelled his or her purchase agreement, to the independent escrow agent in
a check made payable to the independent escrow agent. Alternatively, the check
may be made payable to the developer with a restrictive endorsement placed on
the back of the check providing "For deposit to the account of the
independent escrow agent for the (name of time share project) only."
History Note: Authority G.S. 93A-42(c); 93A-51;
Eff. September 1, 1984;
Amended Eff. April 1, 2006; October 1, 2000; February 1,
1989; July 1, 1988; February 1, 1988.
SECTION .0600 ‑ PROJECT BROKER
21 NCAC 58B .0601 DESIGNATION OF PROJECT BROKER
The developer of a registered timeshare project shall
designate for each project subject to the developer's control a project broker
by filing with the Commission an affidavit on the form prescribed. The
developer may from time to time change the designated project broker by filing
a new designation form with the Commission within 10 days following the
change. A broker licensed under the provisions of Section .1800 of Subchapter
58A shall not be designated as a project broker. Provisional brokers shall not
be designated as a project broker.
History Note: Authority G.S. 93A‑41(7a); 93A‑51;
93A‑58(c); 93A-9;
Eff. February 1, 1998;
Amended Eff. April 1, 2006; July 1, 2004.
21 NCAC 58B .0602 DUTIES OF THE PROJECT BROKER
(a) The broker designated by the developer of a time share
project to be project broker shall assume responsibility for:
(1) The display of the time share project
certificate registration and the license certificates of the real estate
brokers associated with or engaged on behalf of the developer at the project;
(2) The determination of whether each licensee
employed has complied with Rules .0503 and .0506 of Subchapter 58A;
(3) The notification to the commission of any
change in the identity or address of the project or in the identity or address
of the developer or marketing or managing entities at the project;
(4) The deposit and maintenance of time share
purchase or rental monies in a trust or escrow account until proper
disbursement is made; and
(5) The proper maintenance of accurate records
at the project including all records relating to the handling of trust monies
at the project, records relating to time share sales and rental transactions
and the project registration and renewal.
(b) The project broker shall review all contracts, public
offering statements and other documents distributed to the purchasers of time
shares at the project to ensure that the documents comport with the
requirements of the Time Share Act and the rules adopted by the commission, and
to ensure that true and accurate documents have been given to the purchasers.
(c) The project broker shall not permit time share sales to
be conducted by any person not licensed as a broker and shall not delegate or
assign his or her supervisory responsibilities to any other person, nor accept
control of his or her supervisory responsibilities by any other person.
(d) The project broker shall notify the commission in
writing of any change in his or her status as project broker within ten days
following the change.
History Note: Authority G.S. 93A-51; 93A-58(c);
Eff. February 1, 1988;
Amended Eff. April 1, 2006; October 1, 2000; February 1,
1989.
SECTION .0700 ‑ TIME SHARE FORMS
21 NCAC 58B .0701 FORMS FOR TIME SHARE PROJECTS
The following forms are required by the Commission for use
in filing and submitting information with respect to applications for time
share project registration, renewal and termination:
(1) Application for Time Share Project Registration;
(2) Affidavit of Time Share Project Broker;
(3) Affidavit of Time Share Registrar;
(4) Affidavit of Independent Escrow Agent;
(5) Developer Designation of Time Share Project Broker,
Registrar and Independent Escrow Agent;
(6) Application for Time Share Project Renewal;
(7) Notice of Developer Termination of Time Share
Project Registration;
(8) Consent to Service of Process and Pleadings.
History Note: Authority G.S. 93A‑51; 150B‑11(1);
Eff. July 1, 1989.
