SB115 (2015) Detail

Relative to the resale of condominium and subdivision time shares.


SB 115-FN - AS AMENDED BY THE SENATE

03/05/2015 0506s

2015 SESSION

15-0653

05/10

SENATE BILL 115-FN

AN ACT relative to the resale of condominium and subdivision time shares.

SPONSORS: Sen. Woodburn, Dist 1; Rep. Gionet, Graf 5; Rep. Chandler, Carr 1

COMMITTEE: Commerce

ANALYSIS

This bill regulates the resale of condominium and subdivision time shares.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

03/05/2015 0506s

15-0653

05/10

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Fifteen

AN ACT relative to the resale of condominium and subdivision time shares.

Be it Enacted by the Senate and House of Representatives in General Court convened:

1 New Chapter; Time Shares. Amend RSA by inserting after chapter 356-C the following new chapter:

CHAPTER 356-D

TIME SHARES

356-D:1 Application. This chapter shall apply to all condominiums and subdivisions.

356-D:2 Definitions. In this chapter:

I. “Consumer time sharing interest” means:

(a) A time sharing interest acquired for a person’s own use and occupancy and subsequently offered for resale or rental; or

(b) Interests related to time sharing interests held in a time sharing trust being any trust instrument under the Uniform Trust Code, RSA Chapter 546, or comparable fiduciary regime established to hold title to condominium units or subdivided lands and to administer the rights and responsibilities of purchasers at a time sharing project, acquired for a person’s own use and occupancy and subsequently offered for resale or rental.

II. “Consumer reseller” means an owner of a consumer time sharing interest who offers such interest for resale or rental.

III. “Resale advertiser” means a person who offers, personally or through an agent, resale advertising services to consumer resellers for compensation or valuable consideration, regardless of whether the offer is made in person, by mail, by telephone, through the internet or by any other medium of communication; provided, however, that “resale advertiser” shall not include:

(a) A resale agent;

(b) A resale broker to the extent that resale advertising services are offered in connection with time sharing interest resale brokerage services and no fee for the resale advertising service is collected in advance;

(c) A declarant, association, or managing entity employed by a declarant or association, to the extent that a declarant, association or managing entity offers resale advertising services to owners of time sharing interests in the declarant’s, association’s or managing entity’s own time sharing interest plans;

(d) A newspaper, periodical or website owner, operator or publisher, unless the newspaper, periodical or website owner, operator or publisher derives more than 10 per cent of its gross revenue from providing resale advertising services; provided, however, that for purposes of this clause, the calculation of gross revenue derived from providing resale advertising services shall include revenue of any affiliate, parent, agent and subsidiary of the newspaper, periodical or website owner, operator or publisher, so long as the resulting percentage of gross revenue is not decreased by the inclusion of such affiliate, parent, subsidiary or agent in the calculation; or

(e) A consumer reseller who has made 5 or fewer time sharing interests available for rent or resale in the previous 12 months.

IV. “Resale advertising service” means a good or service relating to, or a promise of assistance in connection with, advertising or promoting the resale or rental of a consumer time sharing interest located or offered within the state of New Hampshire, including an offer to advertise or promote the sale or purchase of any such interest.

V. “Resale agent” means a person or an agent or employee of a person who is licensed pursuant to RSA 331-A and who offers or provides resale brokerage services to consumer resellers for compensation or valuable consideration, regardless of whether the offer is made in person, by mail, by telephone, through the Internet or by any other medium of communication.

VI. “Resale brokerage services” means, with respect to a consumer time sharing interest in a time sharing interest property located or offered within the state of New Hampshire, any activity that qualifies one as a broker or salesperson, as defined in RSA 331-A:2, III.

VII. “Resale transfer services” means a good or service relating to an offer or agreement to transfer ownership of a consumer time sharing interest or assistance with or a promise of assistance in connection with the transfer of ownership of a consumer time sharing interest; provided, however, that “resale transfer services” shall not include resale advertising services.

VIII. “Resale transfer services agreement” means a contract or other agreement to provide resale transfer services between a resale transfer services provider and a consumer reseller.

IX. “Resale transfer services provider” means a person, including an agent or employee of such person, who offers or uses telemarketing, direct mail, e-mail or any other means of communication in connection with the offering of resale transfer services to consumer resellers; provided, however, that “resale transfer services provider” shall not include:

(a) Declarants or managing entities to the extent they offer resale transfer services to owners of time sharing interests in the time sharing interest plan of a declarant, association, or manager, if the manager is engaged by the declarant or association to manage the time sharing interest plan;

(b) A consumer reseller who has made 5 or fewer time sharing interests available for

rent or resale in the previous 12 months;

(c) A resale agent who offers resale transfer services to a consumer reseller, so long as the resale agent is licensed under RSA 331-A and complies in all respects with applicable laws and regulations; or

(d) An attorney licensed to practice law in the state of New Hampshire and in good standing, a title insurer or agent of the title insurer licensed under the laws of the state of New?Hampshire and in good standing or a licensed title agent in good standing, who offers resale transfer services to a consumer reseller, so long as the total consideration paid by the consumer reseller to such person does not exceed $600 exclusive of any time sharing interest expenses, transfer fees, or monies owed with respect to the consumer time sharing interest, and exclusive of any fees owed to a governmental agency, including, but not limited to, the registry of deeds, to complete and perfect the transfer of the consumer time sharing interest.

356-D:3 Resale Advertising Services and Prohibitions.

I. Before engaging in resale advertising services, a resale advertiser shall provide to the consumer reseller:

(a) A description of any fees or costs related to such services that the consumer reseller, or any other person, is required to pay to the resale advertiser or to any third party; and

(b) A description of when such fees or costs are due.

II. A resale advertiser may not:

(a) Engage in activities that would qualify the provider as a real estate broker, as defined in RSA 331-A:2, without being the holder of a valid and current active license in accordance with RSA 331-A;

(b) State or imply that the resale advertiser will provide or assist in providing any type of direct sales or resale brokerage services other than the advertising of the consumer time sharing interest for sale or rent by the consumer reseller;

(c) State or imply to a consumer reseller that the consumer time sharing interest has a specific resale value;

(d) Engage in any resale advertising services for compensation or valuable consideration without first obtaining a written agreement to provide such services signed by the consumer reseller printed in at least 12-point type and shall contain:

(1) The name, address, telephone number and web address, if any, of the resale advertiser and a mailing address and e-mail address to which an agreement cancellation notice may be delivered at the consumer reseller’s election;

(2) A complete description of all resale advertising services to be provided, including, but not limited to, details regarding the publications, Internet sites and other media that will be used to advertise the consumer time sharing interest, the dates or time intervals for such advertising or the minimum number of times advertising will run in each specific medium,the itemized cost to

the consumer reseller of each resale advertising service to be provided, and a statement of the total cost to the consumer reseller of all resale advertising services to be provided; and

(3) A statement printed in at least 12-point boldfaced type immediately preceding the space in the agreement provided for the consumer reseller’s signature in substantially the following form:

TIME SHARING INTEREST OWNER’S RIGHT OF CANCELLATION

(Name of resale advertiser) will provide resale advertising services pursuant to this agreement. You have an unqualified right to cancel this agreement for any reason within 3 business days after the date you sign this agreement. This right to cancel may not be waived. If you decide to cancel this agreement, you must notify (name of resale advertiser) in writing of your intent to cancel. Your notice of cancellation shall be delivered in person or sent by certified or registered United States mail and sent to (resale advertiser’s physical address) and shall be effective upon the date sent. Your refund will be made within 20 days after receipt of notice of cancellation or within 5 days after receipt of funds from your cleared check, whichever is later. You are not obligated to pay (name of resale advertiser) any money unless you sign this agreement and return it to (name of resale advertiser).”

III. Failure to comply with requirements for the agreement under RSA 356-D:3, II(d) shall make the resale advertising service agreement voidable at the option of the consumer reseller for a period of one year after the date it is executed by the consumer reseller.

IV. It is the duty of a resale advertiser to supervise, manage, and control all aspects of the offering of resale advertising services by an agent or employee of the resale advertiser. A violation of this section that occurs during the offering of resale advertising services by an agent or employee of the resale advertiser shall be deemed a violation by the resale advertiser, as well as by the agent or employee actually committing the violation.

V. Providing resale advertising services with respect to a consumer time sharing interest in a time sharing interest property located or offered within the state of New Hampshire, including acting as an agent or third-party service provider for a resale advertiser, shall constitute operating, conducting, engaging in or carrying on a business or business venture in the state of New?Hampshire.

356-D:4 Transfer Services and Prohibitions.

I. In the course of offering resale transfer services, no resale transfer service provider shall:

(a) Engage in any resale transfer services for consideration, or the expectation of receiving consideration, without first obtaining a written resale transfer services agreement, signed by the consumer reseller that complies with this section.

(b) Fail to fulfill its obligations under resale transfer services agreement.

II. Each resale transfer services agreement shall contain:

(a) The name, physical address, telephone number and website address, if any, of resale transfer services provider and any other agent or third party who will provide the resale transfer services on behalf of the resale transfer services provider.

(b) The name, physical address, telephone number and email address of the escrow agent that will be used to hold funds or other property pursuant to paragraph IV.

(c) A complete description of the resale transfer services.

(d) The duration of the contract for resale transfer services expressed in days, weeks, months or years.

(e) A description of fees, costs, or other consideration to be paid to the resale transfer services provider and any other agent or third party, including, but not limited to, commissions that are paid upon the transfer of a time sharing interest.

(f) A statement that all fees, costs, or other compensation paid to a resale transfer services provider and the instrument or other legal document evidencing the transfer of ownership of or legal title to the consumer time sharing interest shall be placed in escrow and that a copy of the instrument or other legal document evidencing the transfer of ownership of or legal title to the consumer time sharing interest together with the full name, address, and other known contact information for the transferee shall be provided to the declarant, association, or managing entity at least 2 weeks prior to breaking escrow.

(g) A statement in substantially the following form in conspicuous type immediately preceding the space in the resale transfer services agreement provided for the consumer reseller’s signature.

YOUR RIGHT OF CANCELLATION

You have an unqualified right to cancel this agreement for any reason within 3 business days after the date you sign this agreement. This right to cancel may not be waived. If you decide to cancel this agreement, you must notify (name of resale transfer services provider) in writing of your intent to cancel. Your notice of cancellation shall be delivered in person or sent by certified or registered United States mail and sent to (resale transfer services provider’s mailing address) and shall be effective upon the date sent. Your refund will be made within 20 days after receipt of notice of cancellation or within 5 days after receipt of funds from your cleared check, whichever is later. You are not obligated to pay (name of resale transfer services provider) any money unless you sign this contract and return it to (name of resale transfer services provider). Before signing this agreement, you should carefully review your original time sharing interest purchase agreement and other project documents to determine whether there are any restrictions or special conditions applicable to the resale or rental of your time sharing interest.”

III. Failure to comply with requirements for the agreement under RSA 356-D:4, II shall make the resale transfer service agreement voidable at the option of the consumer reseller for a period of one year after the date it is executed by the consumer reseller.

IV. All funds or other property which is received from or on behalf of a consumer reseller pursuant to a resale transfer services agreement, including the instrument or other legal document evidencing the transfer of ownership of or legal title to the consumer time sharing interest, shall be placed in escrow in a separate account designated for this purpose; provided, however, if such funds are being held by a real estate broker or attorney licensed under the laws of this state, they may be placed in that broker’s or attorney’s regular escrow account and need not be placed in a separate designated account. Such escrow funds shall not be subject to attachment by the creditors of either the purchaser or the declarant.

V. The instrument or other legal document evidencing the transfer of ownership of or legal title to the consumer time sharing interest along with the funds or other property required to be paid to the resale transfer services provider shall only be released from escrow:

(a) To the consumer reseller:

(1) Upon written request to the escrow agent in the event the resale transfer services provider fails to provide the resale transfer services in the written agreement required by paragraph II.

(2) Upon written request to the escrow agent in the event the consumer reseller exercises its 3 day right of cancellation under subparagraph II(g); or

(3) Upon the mutual written agreement between the resale transfer services provider and the consumer reseller.

(b) To anyone other than the consumer reseller else upon delivery to escrow agent of the following:

(1) Certification from the declarant, association or managing entity that the transfer is authorized upon its determination that the transferee intends to pay all time sharing interest expenses and taxes associated with the consumer time sharing interest.

(2) An affidavit by the resale transfer services provider that all promised resale transfer services have been performed, including notification to the consumer reseller that the escrow funds are being requested to be released from escrow.

VI. The escrow agent shall retain all resale transfer services agreements, escrow account records and affidavits received pursuant to this section for 3 years.

VII. Providing resale transfer services with respect to a consumer time sharing interest located or offered within the state of New Hampshire, including acting as an agent or third-party service provider for a resale transfer services provider, shall constitute operating, conducting, engaging in or carrying on a business or business venture in the state of New Hampshire.

VIII. No person shall participate in a plan or scheme to transfer a consumer time sharing interest to a transferee that the person knows or reasonably should have known does not have the ability, means, or intent to pay all time sharing interest expenses and taxes associated with the consumer time sharing interest.

IX. This chapter shall not apply to the transfer of ownership of a consumer time sharing interest from a consumer reseller to the declarant, association, or managing entity of their time sharing interest property or to a consumer reseller who transferred 5 or fewer time sharing interests in the previous 12 months.

356-D:5 Penalties. A violation of this chapter shall constitute a violation of the consumer protection act, RSA 358-A, provided that, in addition to the penalties set forth in RSA 358-A:10, any person who violates a provision of this chapter shall be subject to a civil penalty of not more than $15,000 for each such violation.

2 Effective Date. This act shall take effect January 1, 2016.

LBAO

15-0653

Amended 03/09/15

SB 115-FN FISCAL NOTE

AN ACT relative to the resale of condominium and subdivision time shares.

FISCAL IMPACT:

    The Judicial Branch and Department of Justice state this bill, as amended by the Senate (Amendment #2015-0506s), may increase state expenditures by an indeterminable amount in FY 2016 and each year thereafter. There will be no impact on county and local expenditures, or state, county, and local revenue.

METHODOLOGY:

    The Judicial Branch states this bill will establish RSA chapter 356-D to regulate the resale of condominium and subdivision time shares. The Branch states that the Bill’s potential fiscal impact is in proposed RSA 356-D:5, which states that violations of the chapter constitute a violation of the consumer protection act (RSA chapter 358-A). Regarding potential unfair or deceptive acts under the consumer protection act, the Branch has no information on which to estimate the potential volume of cases that could arise as a result of the proposed bill. Nevertheless, the Branch states that any consumer protection act case has the potential for fiscal impact. The Branch further states that consumer protection act claims are often hard-fought and carry with them the potential for enforcement actions by the attorney general (RSA 358-A:4), criminal prosecution (RSA 358-A:6), and private actions with the potential of up to treble damages (RSA 358-A:10). Thus, the Branch states that it would not take many cases, perhaps only one, for the Branch to incur a fiscal impact of over $10,000 under the consumer protection act.

The Department of Justice states?this bill contains a penalty section that would make a violation of the new chapter a violation of the Consumer Protection Act, RSA 358-A, and provides, in addition to the criminal penalties contained in the Act, civil penalties of not more than $15,000 per violation. The Consumer Protection and Antitrust Bureau of the Attorney General’s Office enforces the Consumer Protection Act. The Department states the bill may increase the number of enforcement actions taken by the Bureau, including investigations, issuing administrative subpoenas, entering into Assurances of Discontinuance, and civil or criminal enforcement actions. Because the degree of increase cannot be estimated, the Department states the fiscal impact is indeterminable.

Links

SB115 at GenCourtMobile

Action Dates

Date Body Type

Bill Text Revisions

SB115 Revision: 28193 Date: Dec. 16, 2015, midnight

Docket