section .0100 – time share project registration

Link to law: http://reports.oah.state.nc.us/ncac/title 21 - occupational licensing boards and commissions/chapter 58 - real estate commission/subchapter b/subchapter b rules.html
Published: 2015

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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.