Bus. & Prof. Code §11245. Prohibited Representations and Nondisclosures
California Business and Professions Code > Bus. & Prof. Code §11245. Prohibited Representations and Nondisclosures
to rent or use by virtue of having acquired those rights from another owner. The developer or managing entity may, at any time, rent any inventory transferred to the developer or managing entity by another owner in exchange for hotel accommodations, future use rights, or other considerations. For any use or rental by a developer of time-share interests owned or controlled by the developer, the developer shall reimburse the association for any increased expenses for housekeeping services that exceed the amount allocated in the assessment for maintenance for the use or rental. [2004]
Bus. & Prof. Code §11246. Inventory Control System Certification
California Business and Professions Code > Bus. & Prof. Code §11246. Inventory Control System Certification
Bus. & Prof. Code §11250. Purchaser to Accommodation Ratio
California Business and Professions Code > Bus. & Prof. Code §11250. Purchaser to Accommodation Ratio
Bus. & Prof. Code §11251. Components of Time-Share Instrument
California Business and Professions Code > Bus. & Prof. Code §11251. Components of Time-Share Instrument
s state and the requirements set forth in this section, the law of the situs state shall control. If the time-share instruments provide for the matters contained in subdivision (c), the time-share instruments shall be deemed to be in compliance with the requirements of subdivision (c) and this subdivision and the developer shall not be required to make revisions in order to comply with subdivision (c) and this subdivision. [2004]
Bus. & Prof. Code §11252. Majority Assent Required to Encumber Accommodations
California Business and Professions Code > Bus. & Prof. Code §11252. Majority Assent Required to Encumber Accommodations
Bus. & Prof. Code §11240. Contents of the Estimated Operating Budget
California Business and Professions Code > Bus. & Prof. Code §11240. Contents of the Estimated Operating Budget
Bus. & Prof. Code §11242. Buy Down Subsidy; Developer Undertaking to Pay
California Business and Professions Code > Bus. & Prof. Code §11242. Buy Down Subsidy; Developer Undertaking to Pay
(a) In any time-share plan, the developer may undertake to pay a portion of the assessments otherwise payable by each purchaser (“buy down subsidy”). Any developer undertaking to pay a buy down subsidy shall do both of the following:
(1) Enter into a contract with the association that specifies in detail the obligations of the developer and the methods to be used in valuing the goods and services furnished under the time-share plan.
(2) Furnish the association with an executed copy of the subsidization contract within 10 days after closing of escrow of the first sale or lease of a time-share interest.
(b) If the developer is paying a buy down subsidy, the developer shall provide an assurance for its buy down subsidy obligation in an amount acceptable to the commissioner, but not more than the aggregate amount by which annual assessments are to be reduced, for example, the number of interests to be sold in each unit type multiplied by the amount by which the annual assessment for such unit type is to be reduced, multiplied by the number of years in the term of the buy down subsidy.
(c) For any buy down subsidy agreements entered into after July 1, 2005, the subsidy agreements shall provide that if there is a dispute between the developer and the association with respect to the question of satisfaction of the conditions for exoneration or release of the security, the issue shall, at the request of either party, be submitted to arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association or another third-party arbitration organization selected by the parties and in accordance with Title 9 (commencing with Section 1280) of Part 3 of the Code of Civil Procedure. Any fee to initiate the arbitration shall be remitted by the developer. The cost of arbitration shall ultimately be borne as determined by the arbitrator under those rules. [2019]
Bus. & Prof. Code §11242.1. Instructions for Escrow Depository
California Business and Professions Code > Bus. & Prof. Code §11242.1. Instructions for Escrow Depository
(a) The assurance specified in Section 11241 and, if applicable, the assurance specified in Section 11242, shall be delivered to the trustee or an escrow depository acceptable to the department along with an executed copy of the subsidization contract and instructions to the escrow depository signed by the developer and on behalf of the association. The instructions shall provide for both of the following:
(1) The escrow agent shall not release or exonerate the security device until it has received written notice from the association that the developer has faithfully performed all of the developer’s obligations under the subsidization contract, if applicable, and the escrow agent has received the written notices specified in paragraph (1) of subdivision (c) of Section 11241.
(2) If there is a dispute between the developer and the association with respect to the questions of satisfaction of the conditions for exoneration or release of the security, the issue or issues shall, at the request of either party, be submitted to arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association or another third-party arbitration organization selected by the parties and in accordance with Title 9 (commencing with Section 1280) of Part 3 of the Code of Civil Procedure.
(b) Any fee to initiate arbitration shall be submitted by the developer. The costs of arbitration shall be borne by the party as determined by the arbitrator.
(c) The agreement for the deficit subsidy, described in subdivision (a) of Section 11241, and the agreement for the buy down subsidy, described in subdivision (a) of Section 11242 may, at the option of the developer, be contained in one instrument. [2019]
Bus. & Prof. Code §11243. Escrow Requirements for Developer
California Business and Professions Code > Bus. & Prof. Code §11243. Escrow Requirements for Developer
*New statutes and amendments effective January 1, 2023 are shown in bold, underline italics. [ ] indicates an amendment of deleted text only.
The developer shall comply with the following escrow requirements:
(a) A developer of a time-share plan shall deposit into an escrow account in an acceptable escrow depository 100 percent of all funds that are received during the purchaser’s rescission period. An acceptable escrow depository includes, when qualified to do business in this state, escrow agents licensed by the Commissioner of Financial Protection and Innovation, banks, trust companies, savings and loan associations, title insurers, and underwritten title companies. The deposit of these funds shall be evidenced by an executed escrow agreement between the escrow agent and the developer that shall include provisions that state the following:
(1) Funds may be disbursed to the developer by the escrow agent from the escrow account only after expiration of the purchaser’s rescission period and in accordance with the purchase contract, subject to subdivision (b).
(2) If a prospective purchaser properly cancels the purchase contract pursuant to its terms, the funds shall be paid to the prospective purchaser or paid to the developer if the prospective purchaser’s funds have been previously refunded by the developer.
(b) If a developer contracts to sell a time-share interest and the construction of any property in which the time-share interest is located has not been completed, the developer, upon expiration of the rescission period, shall continue to maintain in an escrow account all funds received by or on behalf of the developer from the prospective purchaser under the purchase contract. The commissioner shall establish, by regulation, the types of documentation which shall be required for evidence of completion, including, but not limited to, a certificate of occupancy, a certificate of substantial completion, or an inspection by the State Fire Marshal designee or an equivalent public safety inspection agency in the applicable jurisdiction. Unless the developer submits financial assurances, in accordance with subdivision (c), funds shall not be released from escrow until a certificate of occupancy, or its equivalent, has been obtained and the rescission period has passed, and the time-share interest can be transferred free and clear of blanket encumbrances, including mechanics’ liens. Funds to be released from escrow shall be released as follows:
(1) If a prospective purchaser properly cancels the purchase contract pursuant to its terms, the funds shall be paid to the prospective purchaser or paid to the developer if the prospective purchaser’s funds have been previously refunded by the developer.
(2) If a prospective purchaser defaults in the performance of the prospective purchaser’s obligations under the purchase contract, the funds shall be paid to the developer.
(3) If the funds of a prospective purchaser have not been previously disbursed in accordance with the provisions of this subdivision, they may be disbursed to the developer by the escrow agent upon the issuance of acceptable evidence of completion of construction.
(c) In lieu of the provisions in subdivisions (a) and (b), the commissioner may accept from the developer a surety bond, escrow bond, irrevocable letter of credit, or other financial assurance or arrangement acceptable to the commissioner. Any acceptable financial assurance shall be in an amount equal to or in excess of the lesser of (1) the funds that would otherwise be placed in escrow, or (2) in an amount equal to the cost to complete the incomplete property in which the time-share interest is located. However, in no event shall the amount be less than the amount of funds that would otherwise be placed in escrow pursuant to paragraph (1) of subdivision (a).
(d) The developer shall provide escrow account information to the commissioner and shall execute in writing an authorization consenting to an audit or examination of the account by the commissioner on forms provided by the commissioner. The developer shall comply with the reconciliation and records requirements established by regulation by the commissioner. The developer shall make documents related to the escrow account or escrow obligation available to the commissioner upon the department’s request. The escrow agent shall maintain any disputed funds in the escrow account until either of the following occurs:
(1) Receipt of written direction agreed to by signature of all parties.
(2) Deposit of the funds with a court of competent jurisdiction in which a civil action regarding the funds has been filed. [2022]