Published: 2015-07-08
Key Benefits:
For the purposes of this title:
(a) “Membership camping operator” means any enterprise, other than one that is tax exempt under Section 501(c)(3) of the Internal Revenue Code of 1954, as amended, that has as one of its purposes the ownership or operation of campgrounds which include or may include use of camping sites, that solicits membership paid for by a fee or periodic payments, such as annual dues, and the contractual members are the primary intended users. “Membership camping operator” does not include camping or recreational trailer parks, as defined in Section 18215 of the Health and Safety Code, which are open to the general public and which contain camping sites rented for a per use fee, or a “mobilehome park,” as defined in either Section 798.4 of the Civil Code or Section 18214 of the Health and Safety Code.
As used in this title, “seller” means membership camping operator.
(b) “Membership camping contract” means an agreement offered or sold within the State of California by a membership camping operator or membership camping broker evidencing a purchaser’s right or license to use for more than 14 days in a year, the campgrounds of a membership camping operator and includes a membership which provides for this use.
(c) “Camping site” means a space designed and promoted for the purpose of locating a trailer, tent, tent trailer, pickup camper, or other similar device used for camping.
(d) “Offer” means any solicitation reasonably designed to result in entering into a membership camping contract.
(e) “Person” means any individual, corporation, partnership, limited liability company, trust, association, or other organization other than a government or a subdivision thereof.
(f) “Purchaser” means a person who enters into a membership camping contract and thereby obtains the right to use the campgrounds of a membership camping operator.
(g) “Sale” or “sell” means entering into, or other disposition, of a membership camping contract for value. The term “value” does not include a reasonable fee to offset the administrative costs of transfer of a membership camping contract.
(h) “Campground” means real property within this state owned or operated by a membership camping operator and designated in whole or in part by the membership camping operator as available for camping or outdoor recreation by purchasers of membership camping contracts.
(i) “Blanket encumbrance” means any mortgage, deed of trust, option to purchase, vendor’s lien or interest under a contract or agreement of sale, or other financing lien or encumbrance granted by the membership camping operator or affiliate which secures or evidences the obligation to pay money or to sell or convey any campgrounds made available to purchasers by the membership camping operator or any portion thereof, and which authorizes, permits, or requires the foreclosure or other disposition of the campground.
(j) “Nondisturbance agreement” means an instrument in recordable form by which the holder of a blanket encumbrance agrees to all of the following:
(1) The holder’s rights in any campground made available to purchasers, prior or subsequent to the agreement, by the membership camping operator shall be subordinate to the rights of purchasers from and after the recordation of the nondisturbance agreement.
(2) The holder and all successors and assignees of the holder, and any person who acquires the campground through foreclosure or by deed in lieu of foreclosure of the blanket encumbrance shall take the campground subject to the rights of purchasers.
(3) The holder or any successor acquiring the campground through the blanket encumbrance shall not use or cause the campground to be used in a manner which would materially prevent purchasers from using or occupying the campground in a manner contemplated by the purchasers’ membership camping contracts. However, the holder shall have no obligation to, and no liability for failure to assume the responsibilities or obligations of, the membership camping operator under the membership camping contracts.
(k) “Membership camping contract broker” means a person who, for compensation, resells or offers to resell a membership camping contract to a new purchaser on behalf of a prior purchaser. Membership camping contract broker does not include a membership camping operator or its employees or agents.
(Amended by Stats. 1994, Ch. 1010, Sec. 45. Effective January 1, 1995.)
The membership camping contracts and persons covered by this title shall be subject to Chapter 5 (commencing with Section 17200) of Part 2 of Division 7 and Article 1 (commencing with Section 17500) of Chapter 1 of Part 3 of Division 7 of the Business and Professions Code and the Unruh Act (Chapter 1 (commencing with Section 1801) of Title 2 of Part 4 of Division 3).
(Amended by Stats. 1990, Ch. 1529, Sec. 5.)
A membership camping operator shall provide to a purchaser the following written disclosures in any format which clearly communicates the following reasonably current information before the purchaser signs a membership camping contract, or gives any money or thing of value for the purchase of a membership camping contract. The written disclosures shall be included in or attached to the contract before the time the contract is signed. The following information shall be updated once a year.
(a) The name and address of the membership camping operator and any material affiliate membership camping operator.
(b) A brief description of the membership camping operator’s experience in the membership camping business, including the number of years the operator has been in the membership camping business; a brief description of the past five years’ business experience of the chairman, the president and chief executive officer, and if other than the foregoing, the person in charge of marketing of the membership camping operator, or persons in comparable positions in noncorporate operators, including the number of other membership camping operators with which the executive has been associated and the length of time with each.
(c) A brief description of the nature of the purchaser’s right or license to use the membership camping operator’s property or facilities.
(d) The location of each of the membership camping operator’s campgrounds and a brief description for each campground of the significant facilities then available for use by purchasers and those which are represented to purchasers as being planned, together with a brief description of any significant facilities that are or will be available to nonpurchasers or nonmembers.
“Significant facilities” shall include, but are not limited to, each of the following: the number of campsites, in each campground; the number of campsites in each campground with full or partial hookups; swimming pools; tennis courts; recreation buildings; restrooms and showers; laundry rooms; trading posts; or grocery stores. “Partial hookups” mean those hookups with at least one of the following connections: electricity, water, or sewer connections.
Following such description there shall appear in 10-point bold type the following disclosure:
NOTICE: PURCHASE A MEMBERSHIP CAMPING CONTRACT ONLY ON THE BASIS OF EXISTING FACILITIES. CONSTRUCTION OF PLANNED FACILITIES IS SOMETIMES DEFERRED OR REVISED FOR A VARIETY OF REASONS. SHOULD THE SALESPERSON DESCRIBE A SIGNIFICANT FACILITY WHICH IS NEITHER LISTED AS EXISTING NOR PLANNED, TELEPHONE COLLECT OR TOLL FREE DURING WEEKDAY BUSINESS HOURS TO [insert headquarter’s telephone number] TO VERIFY THE OPERATOR’S PLAN FOR SUCH A FACILITY.
(e) A brief description of the membership camping operator’s ownership of, or other right to use, the campgrounds represented to be available for use by purchasers, together with the duration and expiration date of any lease, license, franchise, or reciprocal agreement entitling the membership camping operator to use the campgrounds, and any material provisions of any agreements, land use permits, or operating licenses which could materially restrict a purchaser’s use of the campgrounds under the terms of the purchaser’s camping contract.
(f) A summary or copy of the rules, restrictions, or covenants regulating the purchaser’s use of the membership camping operator’s properties, including a statement of whether and how the rules, restrictions, or covenants may be changed.
(g) A brief description of all payments of a purchaser under a membership camping contract, including initial fees and any further fees, charges, or assessments, together with any provisions for changing the payments.
(h) A description of any restraints on the transfer of the membership camping contract.
(i) A brief description of the policies relating to the availability of camping sites and whether reservations are required.
(j) A brief description of any grounds for forfeiture of a purchaser’s membership camping contract.
(k) A copy of the membership camping contract form.
(Amended by Stats. 1990, Ch. 1529, Sec. 6.)
(a) A membership camping contract shall be written in the same language as that principally used in any oral sales presentation (e.g., Spanish). A membership camping contract shall be dated, signed by the purchaser, and contain, in immediate proximity to the space reserved for the signature of the purchaser, a conspicuous statement in a size equal to at least 10-point bold type, as follows: “You, the purchaser, may cancel this contract at any time prior to midnight of the third business day after the date of the transaction. See an explanation of this right as set forth in this contract or on the attached notice of cancellation form.” In the alternative the notice of cancellation as set forth in subdivision (b) may be placed in immediate proximity to the signature line of the contract in lieu of the foregoing statement.
(b) The contract shall be accompanied by a completed form in duplicate, captioned “Notice of Cancellation”, which shall be attached to the contract and easily detachable. In the alternative, the seller may include all of the cancellation information on the contract and provide the consumer with a carbon copy which may be retained after cancellation. Both shall contain, in type of at least 10-point, the following statement written in the same language as used in the contract:
“Notice of Cancellation” |
“You may cancel this contract, without any penalty or obligation, within three business days from the date the contract is executed. “To cancel this contract, mail or deliver a signed and dated copy of this cancellation notice or a copy of this contract if it contains the cancellation instructions, or any other written notice, or send a telegram to |
_____ (Name of seller) _____ , at _____ (Address of seller’s place of business) _____ |
not later than midnight of (Date) . |
I hereby cancel this transaction (Date) . |
(Purchaser’s signature) |
“With the notice of cancellation, or separately if a telegram is sent, you must return the original membership camping contract, membership card and all other evidence of membership to the seller. You should promptly return these documents with the notice of cancellation, or separately if a telegram is sent. Failure to send the documents promptly could delay your refund. You should retain for your records one copy of the cancellation notice, or a carbon of the contract when it provides the cancellation information, or other writing showing intent to cancel. Mailing by ordinary mail is adequate but certified mail return receipt requested is recommended.”
(c) On the date of purchase the membership camping operator shall provide the purchaser with a copy of the contract and duplicate of the notice of cancellation. The membership camping operator shall inform the purchaser orally of the right to cancel at the time the contract is executed.
(d) Within 20 days after the membership camping operator receives a notice of cancellation, the membership camping contract, the membership card and all other evidence of purchase or membership, the membership camping operator shall refund to the purchaser any sums paid as a deposit, downpayment or other payment therefor. If the purchaser does not promptly return the evidence of membership, the 20-day period shall be extended until such evidence of membership is returned.
(e) Until the membership camping operator has complied with this section, the purchaser shall have the right to cancel the contract.
(f) “Business day” means any calendar day except Sunday, or the following business holidays: New Year’s Day, Washington’s Birthday, Memorial Day, Independence Day, Labor Day, Columbus Day, Veteran’s Day, Thanksgiving Day, and Christmas Day.
(Amended by Stats. 1990, Ch. 1529, Sec. 7.)
(a) If the purchaser has not inspected at least one of the membership camping operator’s campgrounds prior to purchase of a membership camping contract, the notice shall contain the following additional language:
“If you sign this contract without having first inspected one of the membership camping operator’s campgrounds, you may also cancel this contract at any time prior to midnight of the 10th business day after date of purchase by mailing or delivering the signed and dated attached written notice of cancellation or a copy of the contract when that contains the cancellation instructions together with the original camping club contract, membership card and any other evidence of membership.”
(b) The seller shall return any payment made by the purchaser under the contract or offer to purchase, and any negotiable instrument executed by the purchaser, within 10 days of the return of evidence of membership and cancellation of the contract by the purchaser. If the purchaser does not promptly return the evidence of membership, the 10-day period shall be extended until the evidence of membership is returned.
(Amended by Stats. 1990, Ch. 1529, Sec. 8.)
The following transactions are exempt from the provisions of this title.
(a) An offer, sale or transfer by any one person of not more than one membership camping contract for any given membership camping operator in any 12-month period.
(b) An offer or sale by a government or governmental agency.
(c) A bona fide pledge of a membership camping contract.
(Added by Stats. 1983, Ch. 847, Sec. 1.)
(a) A purchaser’s remedy for errors in or omissions from the membership camping contract of any of the disclosures or requirements of Sections 1812.302 to 1812.304, inclusive, shall be limited to a right of rescission and refund. Reasonable attorney’s fees shall be awarded to the prevailing party in any action under this title. This limitation does not apply to errors or omissions from the contract, or disclosures or other requirements of this title, which are a part of a scheme to willfully misstate or omit the information required, or other requirements imposed by this title.
(b) Any failure, except a willful or material failure, to comply with any provision of Sections 1812.302 to 1812.304, inclusive, may be corrected within 30 days after receipt of written notice to the membership camping operator from the purchaser, and, if so corrected, there shall be no right of rescission. The membership camping operator or the holder shall not be subject to any penalty under this title. However, there can be no correction that increases any monthly payment, the number of payments, or the total amount due, unless concurred to, in writing, by the purchaser. “Holder” includes the seller who acquires the contract, or if the contract is purchased, a financing agency or other assignee who purchases the contract.
(Amended by Stats. 2006, Ch. 538, Sec. 51. Effective January 1, 2007.)
No membership camping operator shall withdraw from the use by purchasers of membership camping contracts any campground unless one of the following conditions is satisfied:
(a) Adequate provision is made to provide within a reasonable time, a substitute campground in the same general area that is as desirable for the purpose of camping and outdoor recreation.
(b) The campground is withdrawn from use because, despite good faith efforts by the membership camping operator, a person not affiliated with the membership camping operator has exercised a superior right to possession (such as the right of a lessor to take possession following expiration of a lease of the property) and the terms and date of the withdrawal were disclosed in writing to all purchasers at or prior to the time of any sale of a membership camping contract after the membership camping operator represented to purchasers that the campground would be available for camping or recreation purposes.
(c) The rights of all purchasers of membership camping contracts who are entitled to use the campground have expired or have been lawfully terminated.
(Added by Stats. 1990, Ch. 1529, Sec. 10.)
(a) Except in the case of a membership camping operator substituting a campground in accordance with Section 1812.307, no membership camping operator or owner of the underlying fee shall sell, lease, assign, or otherwise transfer his or her interest in a campground except by an instrument evidencing the transfer recorded in the office of the county recorder for the county in which the campground is located. The instrument shall be in recordable form and be executed by both the transferor and transferee and shall state each of the following:
(1) That the instrument is intended to protect the rights of all purchasers of membership camping contracts.
(2) That its terms may be enforced by any prior or subsequent purchaser so long as that purchaser is not in default on his or her obligations under the membership camping contract.
(3) That the transferee shall fully honor the rights of the purchasers to occupy and use the campground as provided in the purchaser’s original membership camping contracts.
(4) That the transferee shall fully honor all rights of purchasers to cancel their contracts and receive appropriate refunds.
(5) That the obligations of the transferee under the instrument will continue to exist despite any cancellation or rejection of the contracts between the membership camping operator and purchaser arising out of bankruptcy proceedings.
(b) If any transfer of the interest of the membership camping operator or owner of the underlying fee occurs in a manner which is not in compliance with this section, the terms set forth in this section shall be presumed to be a part of the transfer and shall be deemed to be included in the instrument of transfer. Notice of the transfer shall be mailed to each purchaser within 30 days of the transfer. Persons who hold blanket encumbrances on a campground shall not be considered transferees for the purposes of this section.
(Added by Stats. 1990, Ch. 1529, Sec. 12.)
(a) Campgrounds subject to this section include any campground which is offered or made available by an operator for the first time after January 1, 1991, or any campground which becomes subject to a new or refinanced blanket encumbrance after January 1, 1991. A membership camping operator shall not offer or represent that any campground subject to this section is available for use by the purchasers of its camping contracts unless one of the following conditions has been satisfied:
(1) The membership camping operator obtains and records a nondisturbance agreement from each holder of a blanket encumbrance. The nondisturbance agreement is executed by the membership camping operator and each holder of the blanket encumbrance and includes the provisions set forth in subdivision (j) of Section 1812. 300 and each of the following:
(A) The instrument may be enforced by purchasers of membership camping contracts. If the membership camping operator is not in default under its obligations to the holder of the blanket encumbrance, the agreement may be enforced by both the membership camping operator and the purchasers.
(B) The nondisturbance agreement is effective as between each purchaser and the holder of the blanket encumbrance despite any rejection or cancellation of the purchaser’s contract during any bankruptcy proceedings of the membership camping operator.
(C) The agreement is binding upon the successors in the interest of both the membership camping operator and the holder of the blanket encumbrance.
(D) A holder of the blanket encumbrance who obtains title or possession, or who causes a change in title or possession in a campground by foreclosure or otherwise, and who does not continue to operate the campground upon conditions no less favorable to members than existed prior to the change of title or possession shall either:
(i) Offer the title or possession of the campground to an association of members to operate the campground.
(ii) Obtain a commitment from another entity which obtains title or possession to undertake the responsibility of operating the campground.
(2) The membership camping operator posts a surety bond or irrevocable letter of credit with a trustee in favor of purchasers and which guarantees that the payments on the blanket encumbrance are made as they become due. A trustee shall be either a corporate trustee or an attorney licensed to practice law in this state.
(3) The membership camping operator delivers to a trustee an encumbrance trust agreement which contains each of the following provisions:
(A) The membership camping operator shall collaterally assign to the trustee all of its membership camping contracts receivable or other receivables of the membership camping operator in an amount calculated in accordance with subparagraph (B). The membership camping operator shall provide the trustee with a security interest in the receivables and all proceeds therefrom. For purposes of this section, the membership camping operator shall be credited with 100 percent of the outstanding principal balance of each receivable assigned to the trustee. All proceeds of the receivables shall be held in a trust account by the trustee subject to this section for the use and benefit of the purchasers to make the payments of principal and interest due under the blanket encumbrance. However, if the proceeds of the receivables during any calendar year exceed the amount due under the blanket encumbrance in the following calendar quarter, these excess funds shall be returned by the trustee to the membership camping operator.
(B) The amount of membership camping contracts receivable or other receivables to be collaterally assigned as described in subparagraph (A) shall be calculated based upon the maximum number of contracts per camping site to be offered on or after January 1, 1991, in connection with the campground in question, which number of contracts per camping site shall not exceed 15 multiplied by the total number of camping sites available at the campground thereby yielding the anticipated total number of contracts to be sold in connection with the campground. The outstanding balance due under the blanket encumbrance shall then be divided by the anticipated total number of contracts to arrive at the amount per contract sold to be paid over to the trustee in the form of collaterally assigned receivables as described in subparagraph (A). The membership camping operator shall make the required collateral assignments to the trustee on a quarterly basis based upon the actual sales of contracts at the campground in question during the previous calendar quarter. However, the membership camping operator’s obligation to collaterally assign receivables to the trustee shall cease when the membership camping operator has collaterally assigned to the trustee an aggregate principal amount of receivables equal to 100 percent of the aggregate principal indebtedness remaining due under the blanket encumbrance.
(C) If the outstanding balance due under the blanket encumbrance at the time of execution of the encumbrance trust agreement exceeds the anticipated gross revenue based upon the membership camping operator’s price list to be generated by the sale of the anticipated total number of contracts as calculated in subparagraph (B), the membership camping operator shall meet the conditions specified in paragraph (1), (2), or (4) of this subdivision as to the full amount of the excess.
(D) It may be terminated by the membership camping operator if the membership camping operator has satisfied the obligation secured by the blanket encumbrance in full or has complied with paragraph (1), (2), or (4) of this subdivision. Upon termination of the agreement, all receivables and proceeds thereof held by the trustee shall be immediately assigned and delivered to the membership camping operator. All costs of administering this trust, filing, and perfecting the security interest, and foreclosing the lien shall be borne by the membership camping operator.
(4) Any financial institution which has made a hypothecation loan to the membership camping operator (a “hypothecation lender”) shall have a lien on, or security interest in, the membership camping operator’s interest in the campground, and the hypothecation lender shall have executed and recorded a nondisturbance agreement at the county recorder’s office for the county in which the campground is located. Each person holding an interest in a blanket encumbrance superior to the interest held by the hypothecation lender shall execute and record at the county recorder’s office, an instrument stating that the person shall give the hypothecation lender notice of, and at least 30 days to cure, any default under the blanket encumbrance before the person commences any foreclosure action affecting the campground. For the purposes of this paragraph, a “hypothecation loan to a membership camping operator” means a loan or line of credit secured by membership camping contracts receivable arising from the sale of membership camping contracts by the membership camping operator, which exceeds in the aggregate all outstanding indebtedness secured by blanket encumbrances superior to the interest held by the hypothecation lender.
A hypothecation lender who obtains title or possession, or who causes a change in title or possession, in a campground, by foreclosure or otherwise, and who does not continue to operate the campground upon conditions no less favorable to purchasers than existed prior to the change of title or possession shall either:
(A) Offer the title or possession to an association of members to operate the campground.
(B) Obtain a commitment from another entity which obtains title to, or possession of, the campground to undertake the responsibility of operating the campground.
(b) Any membership camping operator which does not comply at all times with subdivision (a) with regard to any blanket encumbrance in connection with any campground subject to that subdivision is prohibited from offering any membership camping contracts for sale during the period of noncompliance.
(Added by Stats. 1990, Ch. 1529, Sec. 13.)
(a) All money received from the owner of a membership camping contract or the prospective purchaser thereof, by a membership camping contract broker in advance of the completion of any membership camping contract resale, including, but not limited to, listing fees, and fees for services, shall be deposited into an escrow account. The money shall not be disbursed until the transaction is complete, or until the escrow agent has received written instructions to disburse the funds signed by the owner of the membership camping contract or the prospective purchaser and the broker. For purposes of this section, a transaction is complete when ownership of the membership camping contract has been transferred from the prior purchaser to the new purchaser in the manner required by the terms of the membership camping contract, all documents necessary to complete the transfer have been fully executed, and the new purchaser has not exercised the right to cancel provided in paragraph (2) of subdivision (c).
(b) The broker shall inform the new purchaser in writing of the following:
(1) The risks of purchasing a membership camping contract without visiting at least one of the membership camping operator’s campgrounds.
(2) That the membership camping operator may have a valid reason for not transferring the contract to the new purchaser such as a default in payment on contract or annual dues, or that the new purchaser does not meet the same credit standards applied to other new purchasers.
(3) That there may have been changes in the rules or regulations concerning the rights and obligations of the membership camping operator or its members including changes with respect to annual dues, fees, assessments, use restrictions or that some campgrounds may have been withdrawn.
(4) Any material changes or risks to the purchaser known to the broker.
(c) (1) Every broker shall provide in writing the following notice of cancellation to the new purchaser:
“You may cancel your contract of purchase, without any penalty or obligation, within 10 business days from the above date of purchase by mailing notice of cancellation together with the membership camping contract, if any, any contract for transfer, membership card or other evidence of membership to
_____ (Name and address of broker) _____ , |
the membership camping operator |
_____ (Name and address of membership camping operator) _____ |
and the escrow company |
_____ (Name and address of escrow company) _____ , |
if any, not later than midnight of (Date). |
I hereby cancel this transaction _____ (Purchaser’s signature) _____ |
(Date) . |
Notice by ordinary mail is adequate but certified mail return receipt requested is recommended.”
(2) Any escrow company which receives a notice of cancellation from a purchaser shall, within 72 hours of receipt of the notice, notify the membership camping operator of the cancellation and shall refund any sums paid by the purchaser of the contract within 10 days of receipt of the notice of the cancellation and other documents. The escrow company shall incur no liability to the seller, purchaser, or broker as a result of its compliance with this section.
(Added by renumbering Section 1812.307 by Stats. 1990, Ch. 1529, Sec. 9.)
If any provision of this title or the application thereof to any person or circumstances is held invalid, the invalidity shall not affect other provisions or applications of this title which can be given effect without the invalid provision or application, and to this end the provisions of this title are severable.
(Added by renumbering Section 1812.308 by Stats. 1990, Ch. 1529, Sec. 11.)
Any waiver of the provisions of this title is contrary to public policy, and is void and unenforceable.
(Added by Stats. 2002, Ch. 815, Sec. 21. Effective January 1, 2003.)