By: Haley S.B. No. 1233
73R2033 MJW-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to reports of timeshare expenses charged and collected by
1-3 managing entities of timeshare properties; providing a civil
1-4 penalty.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Section 221.002, Property Code, is amended by
1-7 adding Subdivisions (32) and (33) to read as follows:
1-8 (32) "Fee" means an amount assessed against or
1-9 collected from owners by a managing entity in a fiscal year,
1-10 regardless of the frequency with which the amount is assessed or
1-11 collected.
1-12 (33) "Owner" means a person who holds a legal or
1-13 equitable interest in a timeshare interest in timeshare property
1-14 located in this state.
1-15 SECTION 2. Section 221.071(a), Property Code, is amended to
1-16 read as follows:
1-17 (a) A seller or other person commits a false, misleading, or
1-18 deceptive act or practice within the meaning of Subsections (a) and
1-19 (b) of Section 17.46 of the Texas Deceptive Trade
1-20 Practices-Consumer Protection Act (Article 17.46 et seq., Business
1-21 & Commerce Code), by engaging in any of the following acts:
1-22 (1) failing to disclose information concerning a
1-23 timeshare interest required by Subchapter D;
1-24 (2) making false or misleading statements of fact
2-1 concerning the characteristics of accommodations or amenities
2-2 available to a consumer;
2-3 (3) predicting specific or immediate increases in the
2-4 value of a timeshare interest without a reasonable basis for such
2-5 predictions;
2-6 (4) making false or misleading statements of fact
2-7 concerning the duration that accommodations or amenities will be
2-8 available to a consumer;
2-9 (5) making false or misleading statements of fact
2-10 concerning the conditions under which a purchaser of a timeshare
2-11 interest may exchange the right to occupy a unit for the right to
2-12 occupy a unit in the same or another timeshare property; <or>
2-13 (6) representing that a prize, gift, or other benefit
2-14 will be awarded in connection with a promotion with the intent not
2-15 to award that prize, gift, or benefit in the manner represented;
2-16 (7) failing to disclose information relating to fees
2-17 under Section 221.074; or
2-18 (8) furnishing false information in a report under
2-19 Section 221.074.
2-20 SECTION 3. Chapter 221, Property Code, is amended by adding
2-21 Sections 221.074 and 221.075 to read as follows:
2-22 Sec. 221.074. REPORT RELATING TO FEES. (a) Notwithstanding
2-23 a provision of a promotional disclosure statement, project
2-24 instrument, timeshare instrument, or bylaw adopted under a
2-25 timeshare instrument, not later than the 45th day after the last
2-26 day of each fiscal year, a managing entity shall deliver to an
2-27 owner a written report that includes:
3-1 (1) a balance sheet; and
3-2 (2) an income and expense statement that complies with
3-3 generally accepted accounting principles and includes:
3-4 (A) the amount of fees collected during the
3-5 preceding fiscal year;
3-6 (B) the amount of fees disbursed by the managing
3-7 entity during the preceding fiscal year, and the name of a person
3-8 receiving payments in the aggregate of $5,000 or more;
3-9 (C) an accounting, including the source and
3-10 application, of all funds held in reserve during the preceding
3-11 fiscal year by the managing entity, or by a person under common
3-12 control or affiliated with the managing entity, naming a person or
3-13 entity receiving payments in the aggregate of $5,000 or more;
3-14 (D) the name of each owner who is delinquent in
3-15 payment of fees, and the amount due;
3-16 (E) the number of timeshare interests in the
3-17 timeshare property held by the developer or an entity under control
3-18 of the developer for which fees are not assessed or collected; and
3-19 (F) the name, address, and telephone number of
3-20 each member of the council of purchasers or board of directors of
3-21 the owners' association, if one exists, or the name, address, and
3-22 telephone number of each person who controls the managing entity.
3-23 (b) The report must be delivered in person or by mail to the
3-24 last known address of each person identified as an owner according
3-25 to the records of the managing entity on the last day of the fiscal
3-26 year for which the accounting is furnished. A delivery by mail is
3-27 timely if it is properly addressed with postage prepaid and
4-1 deposited in the mail before the deadline. The time of deposit may
4-2 be shown by a post office cancellation mark or other satisfactory
4-3 proof.
4-4 (c) On or before the last day of each fiscal year, each
4-5 managing entity shall notify each owner that the owner is entitled
4-6 to receive a written annual accounting relating to fees. The
4-7 notice must include:
4-8 (1) the date by which the report must be furnished;
4-9 (2) the name of an individual at the timeshare
4-10 property the owner may contact if the owner fails to receive the
4-11 report;
4-12 (3) the address of the commission; and
4-13 (4) a statement that the owner may complain to the
4-14 commission if the managing entity fails or refuses to furnish the
4-15 required information.
4-16 (d) A managing entity that manages more than one timeshare
4-17 property may not commingle fees collected from owners of one
4-18 timeshare property with fees collected from owners of any other
4-19 timeshare property and shall make a separate report for each
4-20 timeshare property.
4-21 (e) A managing entity, on request of an owner, shall make
4-22 available for inspection at the timeshare property the books and
4-23 records relating to fees.
4-24 (f) A managing entity, on request of an owner, shall furnish
4-25 the address of a person receiving $5,000 or more in the aggregate
4-26 during the preceding fiscal year and an explanation of the purpose
4-27 of the payment.
5-1 (g) At the owner's expense, an owner may audit the books and
5-2 records of the managing entity that relate directly or indirectly
5-3 to the timeshare property. An owner may designate another person
5-4 to conduct an audit under this subsection.
5-5 Sec. 221.075. CIVIL PENALTY FOR LATE REPORT; INJUNCTION.
5-6 (a) On a written request filed with the commission by a managing
5-7 entity before the date on which a report required by Section
5-8 221.074 must be delivered, the commission for good cause shown may
5-9 grant the managing entity an additional 30 days in which to deliver
5-10 the report.
5-11 (b) If a report required by Section 221.074 is late, and an
5-12 extension has not been granted under Subsection (a), the managing
5-13 entity required to deliver the report is liable to the state for a
5-14 civil penalty not to exceed:
5-15 (1) $1,000 per day for each of the first 10 days that
5-16 the report is late; and
5-17 (2) $2,000 per day for each day after the 10th day,
5-18 until the managing entity has complied with Section 221.074.
5-19 (c) A managing entity may not assess or collect from the
5-20 owners the amount of a penalty incurred under this section.
5-21 (d) If it appears that a managing entity has violated
5-22 Section 221.074, the attorney general may institute an action for
5-23 injunctive relief, a civil penalty, or both.
5-24 SECTION 4. This Act takes effect September 1, 1993.
5-25 SECTION 5. The importance of this legislation and the
5-26 crowded condition of the calendars in both houses create an
5-27 emergency and an imperative public necessity that the
6-1 constitutional rule requiring bills to be read on three several
6-2 days in each house be suspended, and this rule is hereby suspended.