84R2880 PMO-F
By: Villalba H.B. No. 2261
A BILL TO BE ENTITLED
AN ACT
relating to the transfer or termination of certain timeshare
interests.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 221.003(b), Property Code, is amended to
read as follows:
(b) Timeshare properties located outside this state are
subject only to Subchapters C through H and J.
SECTION 2. Chapter 221, Property Code, is amended by adding
Subchapter J to read as follows:
SUBCHAPTER J. SERVICE AGREEMENTS TO TRANSFER OR TERMINATE A
TIMESHARE INTEREST
Sec. 221.101. TRANSFER OR TERMINATION OF TIMESHARE
INTEREST. In this subchapter:
(1) "Termination" with respect to a timeshare
interest:
(A) means:
(i) the release of contractual obligations
relating to a timeshare interest by the developer, association, or
managing entity; or
(ii) the invalidation of a timeshare
interest by a judgment or court order; and
(B) does not include the cancellation of a
purchase contract governed by Subchapter E.
(2) "Transfer" with respect to a timeshare interest
means the conveyance of all or substantially all of a timeshare
interest.
Sec. 221.102. APPLICABILITY. (a) This subchapter applies
to a timeshare interest if the timeshare interest has been acquired
only for the purchaser's personal, family, or household use and:
(1) the timeshare interest is owned by a resident of
this state;
(2) the timeshare property is located in this state;
or
(3) the timeshare interest acquired is in a multisite
timeshare plan required to be registered under Subchapter C.
(b) Except as provided by Subsection (c), this subchapter
applies to a person who:
(1) is acting in the ordinary course of business; and
(2) directly or indirectly, regardless of whether
acting in person, by mail, by telephone, or by any mode of Internet
or electronic communication, offers or advertises an offer to
engage in, for consideration, the following activities:
(A) obtaining or attempting to obtain on behalf
of a timeshare interest owner:
(i) a release of the owner's timeshare
interest from any person, including the developer, association, or
managing entity; or
(ii) a judgment or court order invalidating
the owner's timeshare interest;
(B) selling, renting, listing, or advertising a
timeshare interest on behalf of a timeshare interest owner;
(C) purchasing a timeshare interest from a
timeshare interest owner; or
(D) assisting in the transfer of an owner's
timeshare interest.
(c) This subchapter does not apply to:
(1) a license holder under Chapter 1101, Occupations
Code, acting as a broker, agent, or salesperson under that person's
license in connection with the transfer or termination of a
timeshare interest;
(2) a developer, association, or managing entity for a
timeshare interest to be transferred or terminated; or
(3) an attorney, title agent, title company, or escrow
company that:
(A) provides only closing, settlement, or other
specific transaction services in connection with the transfer or
termination of a timeshare interest; and
(B) does not otherwise engage in activities
described by Subsection (b).
Sec. 221.103. GENERAL DISCLOSURES REQUIRED. A person
subject to this subchapter who enters into an agreement with a
timeshare interest owner to facilitate the transfer or termination
of a timeshare interest shall provide to the timeshare interest
owner the following written disclosures, as applicable:
(1) the name, telephone number, and physical address
of the person providing services under the agreement and any
affiliate, agent, or third-party representative of that person;
(2) a description, legally sufficient for
identification, of the timeshare interest to be transferred or
terminated;
(3) a description of the method of transfer or
termination or a copy of the instrument that will be used for
transferring or terminating the timeshare interest;
(4) a description of any interest the timeshare
interest owner retains after the transfer;
(5) a description of the scope of a power of attorney
or other delegation of authority, if any, that the timeshare
interest owner is required to give to complete the transfer of the
timeshare interest;
(6) an itemized statement of any amounts the timeshare
owner is required to pay as consideration or reimbursement for
services provided in connection with the agreement;
(7) the name of each recipient of amounts described by
Subdivision (6);
(8) the estimated date for completing all services
sufficient to transfer or terminate the timeshare interest; and
(9) a statement that, on completion of the transfer or
termination of the timeshare interest, the person will give written
notice of the transfer or termination to:
(A) the developer, association, or managing
entity, as applicable; and
(B) if applicable, the exchange company for the
timeshare interest.
Sec. 221.104. DISCLOSURE OF AUTHORIZED USE OF TIMESHARE
INTEREST. (a) A person subject to this subchapter who enters into
an agreement with a timeshare interest owner to facilitate the
transfer or termination of a timeshare interest shall disclose in
writing to the timeshare interest owner the name of any person,
other than the timeshare interest owner, who may occupy, rent,
exchange, or otherwise use the timeshare interest during the term
of the agreement.
(b) If a person is authorized to occupy, rent, exchange, or
otherwise use the timeshare interest during the term of the
agreement, the agreement must state the name of each person
receiving consideration for the occupation, rent, exchange, or use
of the timeshare interest.
Sec. 221.105. DISCLOSURES RELATING TO PAYMENT OF FEES FOR
TRANSFER SERVICES. A person subject to this subchapter who enters
into an agreement with a timeshare interest owner to facilitate the
transfer of the timeshare interest must disclose in writing to the
timeshare interest owner that the timeshare interest owner is not
required to pay any consideration or reimbursement under the
agreement until the timeshare interest owner receives:
(1) a written acknowledgement from the developer, the
association, or the managing entity that the person facilitating
the transfer under the agreement complied with all applicable
policies, if any, governing the transfer of the timeshare interest;
and
(2) a copy of the instrument transferring the
timeshare interest, recorded, if required by applicable law, in the
real property records of the county in which the timeshare property
is located.
Sec. 221.106. REQUIRED NOTICE FOR TRANSFER SERVICES. A
person subject to this subchapter who enters into an agreement with
a timeshare interest owner to facilitate the transfer of the
timeshare interest must provide to the timeshare interest owner a
statement printed in 14-point boldface type or 14-point uppercase
typewritten letters that reads substantially similar to the
following:
I (name of the person facilitating the transfer) WILL ACT IN
GOOD FAITH AND IN A COMMERCIALLY REASONABLE MANNER TO COMPLETE THE
TRANSFER OF OWNERSHIP OF YOUR TIMESHARE INTEREST NOT LATER THAN THE
180TH DAY AFTER THE DATE OF THIS AGREEMENT.
YOUR OBLIGATION TO PAY ALL COSTS AND FEES ASSOCIATED WITH
YOUR TIMESHARE INTEREST, INCLUDING ANY REGULAR OR SPECIAL
ASSESSMENTS OR REAL OR PERSONAL PROPERTY TAXES, DOES NOT CEASE BY
VIRTUE OF THE EXECUTION OF THIS AGREEMENT.
IF THE TRANSFER OF YOUR TIMESHARE INTEREST IS NOT COMPLETED
BEFORE THE 180TH DAY AFTER THE DATE OF THIS AGREEMENT, YOU WILL
CONTINUE TO BE RESPONSIBLE FOR THE PAYMENT OF ALL COSTS AND FEES
ASSOCIATED WITH YOUR TIMESHARE INTEREST, INCLUDING ANY REGULAR OR
SPECIAL ASSESSMENTS OR REAL OR PERSONAL PROPERTY TAXES.
Sec. 221.107. REQUIRED NOTICE FOR TERMINATION SERVICES. A
person subject to this subchapter who enters into an agreement with
a timeshare interest owner to facilitate the termination of the
timeshare interest must provide to the timeshare interest owner a
statement printed in 14-point boldface type or 14-point uppercase
typewritten letters that reads substantially similar to the
following:
I (name of the person facilitating the termination of the
timeshare interest) WILL ACT IN GOOD FAITH AND IN A COMMERCIALLY
REASONABLE MANNER TO COMPLETE THE TERMINATION OF YOUR TIMESHARE
INTEREST NOT LATER THAN THE 180TH DAY AFTER THE DATE OF THIS
AGREEMENT BY OBTAINING:
(1) A VALID AND ENFORCEABLE RELEASE FROM THE
DEVELOPER, ASSOCIATION, OR MANAGING ENTITY; OR
(2) A JUDGMENT OR COURT ORDER INVALIDATING THE
PURCHASE OR OWNERSHIP OF YOUR TIMESHARE INTEREST.
YOUR OBLIGATION TO PAY ALL COSTS AND FEES ASSOCIATED WITH
YOUR TIMESHARE INTEREST, INCLUDING ANY REGULAR OR SPECIAL
ASSESSMENTS OR REAL OR PERSONAL PROPERTY TAXES, DOES NOT CEASE BY
VIRTUE OF THE EXECUTION OF THIS AGREEMENT.
I CANNOT GUARANTEE THAT I WILL SUCCESSFULLY COMPLETE THE
TERMINATION OF YOUR TIMESHARE INTEREST. IF I FAIL TO COMPLETE THE
TERMINATION OF YOUR TIMESHARE INTEREST, YOU WILL CONTINUE TO BE
RESPONSIBLE FOR THE PAYMENT OF ALL COSTS AND FEES ASSOCIATED WITH
YOUR TIMESHARE INTEREST, INCLUDING ANY REGULAR OR SPECIAL
ASSESSMENTS OR REAL OR PERSONAL PROPERTY TAXES.
Sec. 221.108. RELIANCE. In making disclosures required by
this subchapter, a person facilitating the transfer or termination
of a timeshare interest may rely on written information provided by
the timeshare interest owner, the developer, the association, or
the managing entity.
Sec. 221.109. DUTY OF GOOD FAITH REGARDING TRANSFER OR
TERMINATION SERVICES. A person facilitating the transfer or
termination of a timeshare interest must act in good faith to
accomplish the transfer or termination not later than the 180th day
after the date the person enters into an agreement with the
timeshare interest owner.
Sec. 221.110. DECEPTIVE TRADE PRACTICES. A person subject
to this subchapter commits a false, misleading, or deceptive act or
practice within the meaning of Sections 17.46(a) and (b), Business &
Commerce Code, by engaging in any of the following acts:
(1) failing to disclose information as required by
this subchapter;
(2) making false or misleading statements concerning:
(A) the existence of an offer related to the
purchase or rent of a timeshare interest;
(B) the likelihood of the completion or the time
necessary to complete any sale, rental, transfer, or termination of
a timeshare interest;
(C) the value of a timeshare interest;
(D) the current or future costs, including
assessments, maintenance fees, or taxes, of owning a timeshare
interest;
(E) the method by which or source from which a
timeshare interest owner's name, address, telephone number, or
other contact information was obtained;
(F) the identity of the person providing services
to facilitate the transfer or termination of a timeshare interest
or any affiliate, agent, or third-party representative of that
person;
(G) the terms and conditions under which services
to facilitate a transfer or termination of a timeshare interest are
offered;
(H) the willingness of a developer, association,
or managing entity to:
(i) agree to the transfer or termination of
a timeshare interest; or
(ii) execute instruments necessary to
transfer or terminate the timeshare interest; or
(I) the manner in which consideration or
reimbursements paid by a timeshare interest owner will be used or
applied; or
(3) encouraging or inducing a timeshare interest owner
to stop paying the developer, the association, or the managing
entity in violation of a contract with the developer, the
association, or the managing entity before the completion of a
transfer or termination.
Sec. 221.111. SUPERVISORY DUTIES. (a) The person who
enters into an agreement to facilitate the transfer or termination
of a timeshare interest shall supervise, manage, and control all
aspects of the services provided under the agreement.
(b) Any violation of this subchapter that occurs during the
provision of services is considered a violation by the person who
enters into the agreement and any affiliate, agent, or third-party
representative of that person.
(c) Section 221.035 does not apply to a person providing
services under this subchapter.
SECTION 3. (a) The disclosure and notice requirements
provided by Subchapter J, Chapter 221, Property Code, as added by
this Act, apply only to an agreement to facilitate the transfer or
termination of a timeshare interest entered into on or after the
effective date of this Act. An agreement to facilitate the transfer
or termination of a timeshare interest entered into before the
effective date of this Act is governed by the law as it existed
immediately before the effective date of this Act, and that law is
continued in effect for that purpose.
(b) Section 221.110, Property Code, as added by this Act,
applies only to conduct that occurs on or after the effective date
of this Act. Conduct that occurs before the effective date of this
Act is governed by the law as it existed when the conduct occurred,
and the former law is continued in effect for that purpose.
SECTION 4. This Act takes effect September 1, 2015.