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Senate Bill 1036 |
Senate Author: Harris |
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Effective: 9-1-09 |
House Sponsor: Geren |
Senate Bill 1036 amends the Property Code to authorize the Texas Real Estate Commission to accept an abbreviated application for registration from a developer for any accommodations in a timeshare plan located outside Texas, rather than limiting the acceptance of such an application to a timeshare plan in which all the accommodations are located outside the state. The bill removes the requirement that the name and address of the person who prepared the operating budget be included in the annual budget portion of timeshare disclosure statements for a single-site or multisite timeshare plan that includes a specific timeshare interest, and for a multisite plan that offers a nonspecific timeshare interest. The bill establishes that, for the required disclosures relating to an offered timeshare interest or plan, the terms "vacation ownership interest" or "vacation ownership plan" or substantially similar terms are sufficient disclosure and may be used as an alternative term and that, in providing the full name of a developer or a marketing company, the disclosure of the entity's assumed name is sufficient disclosure and complies with state law if the entity has complied with other applicable laws relating to assumed business names. The bill removes from the information that must be included in a timeshare interest purchase contract a statement that the timeshare common properties are not mortgaged, with certain exceptions, and, in the event a timeshare interest is sold under a lease, right to use, or membership agreement where free and clear title to the accommodation is not passed to the purchaser, a statement that the timeshare is free and clear, or, if subject to a mortgage, a nondisturbance clause protecting owner rights in the event of foreclosure.
Senate Bill 1036 establishes that the developer is not entitled to the release of any funds escrowed with respect to each timeshare interest until the developer has provided to the commission satisfactory evidence that the timeshare interest and any other property or rights to property appurtenant to the timeshare interest are free and clear of any claims; the developer or any other lienor or interest holder has recorded a subordination and notice to creditors document in the local jurisdiction effectively providing that any interest holder's right, lien, or encumbrance is subordinate to the owner's rights in the timeshare interest; the developer or any other interest holder has transferred the subject accommodations or amenities or all use rights to a nonprofit corporation or owners' association, with certain requirements, and prior to the transfer has established a subordination and notice to creditors instrument; or alternative arrangements have been made that are adequate to protect the purchasers' rights and are approved by the commission. These changes apply to timeshare plans created on or after January 15, 2010, and to any developer who offers or disposes of an interest in a timeshare plan and a managing entity that manages a timeshare property on or after that date.