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[Utah Code Table of Contents]
[TITLE 57. Table of Contents]
57-19-1 Short title.
This chapter is known and may be cited as the "Timeshare
and Camp Resort Act."
1987
57-19-2 Definitions.
As used in this chapter, unless the context clearly requires otherwise:
(1) "Accommodations" includes hotel or motel rooms, condominium or cooperative units, cabins, lodges, apartments, and private or commercial structures designed for occupancy by one or more individuals.
(2) "Advertisement" means a written, printed, audio, or visual offer made by general solicitation.
(3) "Camp resort" means any enterprise that has as its primary purpose the offering of a camp resort interest.
(4) "Camp resort interest" means the right to use and occupy a camping site.
(5) "Camping site" means a space designed or promoted for the purpose of locating a trailer, tent, tent trailer, pickup camper, or other similar device used for land-based portable housing.
(6) "Developer" means a person who establishes, promotes, owns, or operates a timeshare development or camp resort.
(7) "Director" means the director of the division.
(8) "Division" means the Division of Real Estate of the Department of Commerce.
(9) "Executive director" means the executive director of the Department of Commerce.
(10) "Interest" means a camp resort interest or a timeshare interest.
(11) "Offer" means a solicitation intended to result in a person purchasing an interest in a project.
(12) "Project" means a camp resort or timeshare development.
(13) "Purchaser" means a person who purchases an interest in a project.
(14) "Sale" or "sell" means selling an interest in a project for value. It does not include charging a reasonable fee to offset the administrative costs of transferring an interest in a project.
(15) "Salesperson" means an individual who, for compensation and as agent for another, is engaged in obtaining commitments of persons to purchase an interest in a project by making direct sales presentations to those persons. It does not include purchasers or members engaged in the referral of persons without making a direct sales presentation to them.
(16) "Timeshare development" means any enterprise that has as its primary purpose the offering of a timeshare interest.
(17) "Timeshare interest" means a right to occupy accommodations
during three or more separate time periods over a period
of at least three years, including renewal options, whether
or not coupled with an estate in land. It includes what is
commonly known as a "timeshare estate," which is a small
undivided fractional fee interest in real property by which
the purchaser does not receive any right to use accommodations
except as provided by contract, declaration, or other instrument
defining a legal right.
1989
57-19-3 Rules.
The director may make, amend, and repeal rules, forms,
and orders when necessary to carry out the provisions of
this chapter.
1987
57-19-4 Unregistered sales prohibited.
Except for transactions exempt under Section
57-19-26
, it is unlawful for any person to offer or
sell in this state an interest in a project unless the project
is registered under this chapter.
1987
57-19-5 Registration - Filing application.
(1) A person may apply for registration of a project by filing with the director:
(a) an application in the form prescribed by the director;
(b) the written disclosure required to be furnished to prospective purchasers by Section 57-19-11 ; and
(c) financial statements and other information that the director may by rule require as being reasonably necessary to determine whether the requirements of this chapter have been met and whether any of the events specified in Subsection 57-19-13 (1)(g) have occurred.
(2) Interests in a project which are encumbered by liens, mortgages, or other encumbrances may not be accepted for registration or offered for disposition to the public unless:
(a) adequate release or nondisturbance clauses are contained in the encumbering instruments to reasonably assure that the purchaser's interest in the project will not be defeated; or
(b) the division has accepted other equivalent assurances which, in the opinion of the division, meet the purposes of this subsection.
(3) Each application for registration of a project shall be accompanied by:
(a) a filing fee of $500 for up to 100 interests, plus an additional $3 per interest for each interest over 100, up to a maximum of $2,500 for each application; and
(b) a deposit of $300 to cover all on-site inspection costs and expenses incurred by the division. If the $300 deposit is insufficient to meet the estimated costs and expenses of the on-site inspection, the applicant shall make an additional deposit sufficient to cover the estimated costs and expenses before the division will inspect the subdivided lands. The deposit shall be refunded to the extent it is not used, together with an itemized statement from the division of all amounts it has used.
(4) If a person registers additional interests to be offered
for disposition, he may consolidate the subsequent registration
with any earlier registration offering interests for disposition
in the same project by filing an application for consolidation
accompanied by an additional fee of $200 plus $3 for each
additional interest, up to a maximum of $1,250 for each application,
if at the time the person makes the application all of the
information required by Subsection (1) has been brought current
and covers the additional interests.
1990
57-19-6 Effective date of application.
(1) An application for registration filed pursuant to Section 57-19-5 is effective upon the expiration of 30 business days following its filing with the director, unless:
(a) an order denying the application pursuant to Section 57-19-13 is in effect;
(b) a prior effective date has been ordered by the director; or
(c) the director has, prior to that date, notified the applicant of a defect in the registration application.
(2) An applicant may consent to the delay of effectiveness until the director by order declares the registration to be effective.
(3) Notwithstanding Section 57-19-4 , the division may grant a temporary permit allowing the developer to begin a sales program while the registration is in process. To obtain a temporary permit, the developer shall:
(a) submit an application to the division for a temporary permit in the form required by the division;
(b) submit a substantially complete application for registration to the division, including all appropriate fees and exhibits required under Section 57-19-5 , plus a temporary permit fee of $100;
(c) provide evidence acceptable to the division that all funds received by the developer or marketing agent will be placed into an independent escrow with instructions that funds will not be released until a final registration has been granted;
(d) give to each purchaser and potential purchaser a copy of the proposed property report that the developer has submitted to the division with the initial application; and
(e) give to each purchaser the opportunity to cancel the
purchase in accordance with Section
57-19-12
. The purchaser shall have an additional opportunity
to cancel upon the issuance of an approved registration if
the division determines that there is a substantial difference
in the disclosures contained in the final property report
and those given to the purchase in the proposed property
report.
2000
57-19-7 Prior permits.
Any permit to market a project issued by the division
prior to April 27, 1987, is considered to be an effective
registration, but is subject to the renewal provisions of
this chapter upon the anniversary date of the issuance of
the original permit.
1987
57-19-8 Filing proposed documents.
(1) Every developer shall file with the director at least five business days prior to using any of the following in this state:
(a) copies or the proposed text of all advertisements and sales promotion literature;
(b) the proposed form of its sales contracts; and
(c) copies or the text of any supplements to the written disclosure required to be furnished to prospective purchasers pursuant to Section 57-19-11 .
(2) If the text, rather than copies, of the materials specified in Subsection (1) are filed, copies of these materials shall be filed with the director within five business days following the date the materials are first used.
(3) The developer shall notify the division within five working days if he is convicted in any court of a crime involving fraud, deception, false pretenses, misrepresentation, false advertising, or dishonest dealing in real estate transactions, or has been subject to any injunction or administrative order restraining a false or misleading promotional plan involving land dispositions.
(4) The developer must notify the division within five working days if the developer files a petition in bankruptcy or if any other event occurs which may have a material adverse effect on the subdivision.
(5) In any suit by or against the developer involving
camp resorts or timeshare developments, the developer promptly
shall furnish the division notice of the suit and copies
of all pleadings. Failure to provide notice may, in the discretion
of the division, constitute grounds for the division withholding
any approval required by this act.
1991
57-19-9 Duration of registration - Amendment and renewal - Supplemental disclosure - Notice of amendment.
(1) Registration of a project is effective for a period of one year and may, upon application, be renewed for successive periods of one year each.
(2) A registration may be amended at any time, for any reason, by filing an amended application for registration, which amended registration shall become effective in the manner provided in Section 57-19-6 .
(3) The written disclosure required to be furnished to prospective purchasers pursuant to Section 57-19-11 shall be supplemented as often as is necessary to keep the required information reasonably current. These supplements shall be filed with the director as provided in Section 57-19-8 .
(4) Every developer shall provide timely notice sent to the director of any event which has occurred which may have a material adverse effect on the conduct of the operation of the project. In addition to this notification, the developer shall, within 30 days of the occurrence of that event, file an amendment to the registration disclosing the information previously provided.
(5) Each application for renewal of a registration and
each supplementary filing as provided in this section shall
be accompanied by a fee of $200.
2000
57-19-10 Effect of application or registration - Misleading statements to prospective purchasers a misdemeanor.
Neither the fact that an application for registration
or the written disclosures required by this chapter have
been filed, nor the fact that a project has been effectively
registered or exempted, constitutes a finding by the director
that the offering or any document filed under this chapter
is true, complete, and not misleading, nor does either of
these facts mean that the director has determined in any
way the merits or qualifications of, or recommended or given
approval to, any person, developer, or transaction involving
an interest in a project. It is a class A misdemeanor to
make or cause to be made to any purchaser or prospective
purchaser any offering or document filed under this chapter
which is untrue, incomplete, or misleading.
1987
57-19-11 Disclosure required.
Except in a transaction exempt under Section 57-19-26 , any person who sells or offers to sell an interest in a project located in this state, or who sells or offers to sell in this state an interest in a project located outside of this state, shall provide to the prospective purchaser, before the prospective purchaser signs an agreement to purchase an interest in a project or gives any item of value for the purchase of an interest in a project, a written statement which provides a full and fair disclosure of information regarding the project and the purchaser's rights and obligations associated with the purchase of an interest in a project. The written disclosure shall be on the property report form required by the division and shall include:
(1) the name and address of the developer;
(2) a statement whether or not the developer has ever been:
(a) convicted of a felony, or any misdemeanor involving theft, fraud, or dishonesty; or
(b) enjoined from, assessed any civil penalty for, or found to have engaged in the violation of any law designed to protect consumers;
(3) a brief description of the developer's experience in timeshare, camp resort, or any other real estate development;
(4) a brief description of the interest which is being offered in the project;
(5) a description of any provisions to protect the purchaser's interest from loss due to foreclosure on any underlying financial obligation of the project;
(6) a statement of the maximum number of interests in the project to be marketed, and a commitment that this maximum number will not be exceeded unless disclosed by filing an amendment to the registration as provided in Section 57-19-9 prior to the amendment becoming effective;
(7) any event which has occurred as of the date of the offer which may have a material adverse effect on the operation of the project; and
(8) any other information the director considers necessary
for the protection of purchasers.
1991
57-19-12 Purchaser's right to cancel.
(1) (a) An agreement to purchase an interest in a project may be cancelled, at the option of the purchaser, if:
(i) the purchaser provides to the developer, by hand delivery or certified mail, written notice of the cancellation; and
(ii) the notice is delivered or postmarked not later than midnight of the fifth calendar day following the day on which the agreement is signed.
(b) In computing the number of calendar days for purposes of this section, the day on which the agreement was signed and legal holidays are not included as "calendar days."
(c) Within 30 days after receipt of timely notice of cancellation, the developer shall refund any money or other consideration paid by the purchaser.
(2) Every agreement to purchase an interest in a project which is subject to this chapter shall include the following statement in at least ten point bold upper-case type, immediately preceding the space for the purchaser's signature:
"PURCHASER'S RIGHT TO CANCEL: YOU MAY CANCEL THIS AGREEMENT
WITHOUT ANY CANCELLATION FEE OR OTHER PENALTY BY HAND DELIVERING
OR SENDING BY CERTIFIED MAIL WRITTEN NOTICE OF CANCELLATION
TO: (NAME AND ADDRESS OF DEVELOPER). THE NOTICE MUST BE DELIVERED
OR POSTMARKED BY MIDNIGHT OF THE FIFTH CALENDAR DAY FOLLOWING
THE DAY ON WHICH THE AGREEMENT IS SIGNED. IN COMPUTING THE
NUMBER OF CALENDAR DAYS, THE DAY ON WHICH THE CONTRACT IS
SIGNED AND LEGAL HOLIDAYS ARE NOT INCLUDED."
1987
57-19-13 Suspension, revocation, or denial of registration - Fine.
(1) Subject to Section 57-19-17 , an application for registration of a project may be denied, an existing registration may be suspended or revoked, or a fine of not more than $500 may be imposed by the director, if he finds that:
(a) the developer's advertising or sales techniques or trade practices have been or are deceptive, false, or misleading;
(b) the developer has failed to file copies of its advertisements, promotion literature, or sales contract forms as required by Section 57-19-8 ;
(c) the developer has failed to comply with any provision of this chapter or the rules adopted under this chapter that materially affect or would affect the rights of purchasers or prospective purchasers of an interest in a project, or that materially affect the administration of this chapter;
(d) the developer's offering of an interest in a project has worked or would work a fraud upon purchasers or prospective purchasers of such an interest;
(e) the developer's application or any amendment to an application is incomplete in any material respect;
(f) the developer's application or any amendment to an application contains material misrepresentations or omissions of material fact which are necessary to make the statements contained in the application or amendment not misleading;
(g) the developer or any officer or director of the developer has been:
(i) convicted of a felony, or any misdemeanor involving theft, fraud, or dishonesty;
(ii) enjoined from, assessed a civil penalty for, or found to have engaged in the violation of any law designed to protect consumers; or
(iii) engaged in dishonest practices in any industry involving sales to consumers;
(h) the developer has represented or is representing to purchasers in connection with the offer or sale of an interest in a project that any accommodations, related facilities, or amenities are planned, without reasonable grounds to believe that they will be completed within a reasonable time;
(i) the developer has disposed of, concealed, or diverted any funds or assets so as to defeat the rights of purchasers; or
(j) the developer has failed to provide to purchasers copies of the written disclosure required by Section 57-19-11 .
(2) The authority to impose fines as provided in this
section does not apply to Subsection (1) (e).
1987
57-19-14 Registration of salesperson.
(1) Unless the transaction is exempt under Section 57-19-26 , it is unlawful for any person to act as a salesperson marketing a project in this state without first registering under this chapter as a salesperson.
(2) The fee for registration as a salesperson is waived
by the division for persons licensed by the division under
Title 61, Chapter 2.
1990
57-19-15 Application for registration of salesperson.
(1) A person may apply for registration as a salesperson under this chapter by filing with the director an application in the form prescribed by the director, including, but not limited to:
(a) a statement whether or not the applicant has ever been:
(i) convicted of a felony, or any misdemeanor involving theft, fraud, or dishonesty; or
(ii) enjoined from, assessed a civil penalty for, or found to have engaged in the violation of any law designed to protect consumers;
(b) a statement describing the applicant's employment history for the previous five years and whether or not any termination of employment during that period was occasioned by any theft, fraud, or act of dishonesty; and
(c) any other information that the director, by rule, considers necessary to protect the interests of purchasers.
(2) The application shall be accompanied by a fee of $50.
(3) Registration as a salesperson is effective for a period
for one year, unless the director specifies otherwise. Registration
as a salesperson may be renewed by the filing of a form prescribed
by the director for that purpose and the payment of a renewal
fee of $50.
1990
57-19-16 Denial, revocation, or suspension of registration of salesperson - Fine.
Subject to Section 57-19-17 , an application for registration as a salesperson may be denied, an existing registration may be revoked or suspended, or a fine not to exceed $500 may be imposed by the director, if he finds that the applicant or salesperson has:
(1) filed, or caused to be filed, with the director any document which contains any untrue or misleading information;
(2) made any untrue or misleading statement of material fact, or failed to state a material fact which is necessary in order to make the statements made not misleading in light of the circumstances under which they are made;
(3) employed any device, scheme, or artifice to defraud, or engaged in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person;
(4) subsequent to the effective date of registration as a salesperson, has been:
(a) convicted of a felony, or any misdemeanor involving theft, fraud, or dishonesty; or
(b) enjoined from, assessed a civil penalty for, or found to have engaged in any violation of any law designed to protect consumers;
(5) violated any provision of this chapter; or
(6) engaged in any activity which constitutes dishonest
dealing.
1987
57-19-17 Administrative procedures.
(1) The director may summarily deny an application for registration under any of the provisions of Section 57-19-13 or 57-19-16 . If a registration is denied, the applicant may, within ten days after receipt of notice of the denial, request a hearing before an administrative law judge. The director shall schedule the hearing within 30 days after receipt of the applicant's request and give notice of the hearing in writing to the applicant, specifying the reasons for denial of the registration. If, as a result of the hearing, it is determined that the applicant is qualified to be registered, the registration shall be issued.
(2) Before an existing registration is suspended or revoked, or a fine imposed, the director shall schedule a hearing before an administrative law judge and give notice in writing to the affected person as prescribed in Title 13, Chapter 1, and the rules of procedure for hearings before the Department of Commerce. If, as a result of the hearing, the administrative law judge finds that there has been a violation of this chapter, the registration shall be suspended or revoked, or a fine imposed, by written order of the director in concurrence with the executive director.
(3) The developer or salesperson has the right to appear at the hearing, in person or by counsel, to be heard and to examine witnesses appearing in connection with the complaint. At the hearing, all witnesses shall be sworn by the administrative law judge, and stenographic notes or a tape recording of the proceeding shall be taken and filed as a part of the record in the case. Any party to the proceeding shall be furnished a copy of the stenographic notes or tape recording at a reasonable cost. The administrative law judge shall render a decision within 60 days after the completion of the hearing. The executive director and the director shall concurrently make the final decision and promptly notify the parties to the proceedings, in writing, of the ruling, order, or decision.
(4) The developer or salesperson, or any person aggrieved,
may appeal any adverse ruling, order, or decision of the
executive director and the director to the district court
for the county in which the hearing was held, within 30 days
from the date of service of notice of the ruling, order,
or decision upon him. At the time of filing the notice of
appeal, the appellant shall file with the notice a bond for
costs on appeal in the amount of $200, conditioned to secure
the payment of costs if the appeal is dismissed or the judgment
affirmed.
1989
57-19-18 Investigation - Publication.
(1) The director may make any investigations or requests for information, within or outside of this state, that he considers necessary:
(a) to determine whether any registration under this chapter should be granted, denied, or revoked;
(b) to determine whether any person has violated or is about to violate any of the provisions of this chapter or any rule or order under this chapter; or
(c) to aid in the enforcement of this chapter.
(2) The director may publish information concerning any
violation of this chapter or any rule or order under this
chapter.
1987
57-19-19 Subpoenas - Evidence.
(1) For the purposes of any investigation or proceeding under this chapter, the director, or any officer designated by him, may administer oaths and affirmations, subpoena witnesses, compel their attendance, take evidence, and require the production of any books, papers, correspondence, memoranda, agreements, or other documents or records which the director considers relevant or material to the inquiry.
(2) A person who disobeys any subpoena lawfully issued
by the director, or who refuses to testify to any matters
regarding which he may be lawfully interrogated, is subject
to the provisions of Section
78-32-15
.
1987
57-19-20 Injunctive relief - Cease and desist order.
(1) Whenever it appears to the director that any person has engaged or is about to engage in any act or practice constituting a violation of any provision of this chapter, and that it would be in the public interest to stop those acts or practices, the director may either:
(a) seek injunctive relief as provided in Rule 65A, Utah Rules of Civil Procedure; or
(b) issue an administrative cease and desist order.
(2) If an administrative cease and desist order is issued pursuant to Subsection (1), the person upon whom the order is served may, within ten days after receiving the order, request that a hearing be held before an administrative law judge. If a request for a hearing is made, the division shall follow the procedures and requirements of Title 63, Chapter 46b, Administrative Procedures Act. Pending the hearing, the order remains in effect.
(3) If, at the hearing, a finding is made that there has been a violation of this chapter, the director, with the concurrence of the executive director, may issue an order making the cease and desist order permanent. If no hearing is requested, and if the person fails to cease the act or practice, or after discontinuing the act or practice again commences it, the director shall file suit in the district court of the county in which the act or practice occurred, or where the person resides or carries on business, to enjoin and restrain the person from violating this chapter.
(4) Whether or not the director has issued a cease and
desist order, the attorney general, in the name of the state
or of the director, may bring an action in any court of competent
jurisdiction to enjoin any act or practice constituting a
violation of any provision of this chapter, and to enforce
compliance with this chapter or any rule or order under this
chapter. Upon a proper showing, a permanent or temporary
injunction, restraining order, or writ of mandamus shall
be granted.
1991
57-19-21 Voidable agreements.
Any agreement to purchase an interest in a project entered into in violation of Section 57-19-4 or 57-19-14 may, at the option of the purchaser, be voided and the purchaser's entire consideration recovered together with interest at the legal rate, costs, and reasonable attorney's fees. However, no suit under this section may be brought more than two years after:
(1) the date the agreement is signed; or
(2) the date the purchaser knew or reasonably should have
known of the violation.
1987
57-19-22 Violation a misdemeanor.
Any person who willfully violates any provision of this
chapter is guilty of a class B misdemeanor.
1991
57-19-23 Prosecution.
The director may refer any available evidence concerning
violations of this chapter or of any rule or order under
this chapter to the attorney general or the proper prosecuting
attorney, who may, in his discretion, with or without such
a referral, institute the appropriate civil or criminal proceedings
under this chapter.
1987
57-19-24 Violation of Consumer Sales Practice Act.
For purposes of applying Title 13, Chapter 11, the Consumer
Sales Practices Act, any material violation of the provisions
of this chapter constitutes an unfair or deceptive act or
practice or unfair method of competition in the conduct of
trade or commerce.
1987
57-19-25 Remedies nonexclusive.
The remedies provided in this chapter are cumulative and
nonexclusive, and do not affect any other remedy available
at law.
1987
57-19-26 Exemptions.
(1) Unless entered into for the purpose of evading the provisions of this chapter, the following transactions are exempt from registration:
(a) isolated transactions by an owner of an interest in a project or by a person holding such an owner's executed power of attorney;
(b) an offer or sale by a governmental entity; and
(c) a bona fide pledge of interest in a project.
(2) The director may, by rule or order, exempt any person
from any or all requirements of this chapter if the director
finds that the offering of an interest in a project is essentially
noncommercial. For purposes of this subsection, the offering
of fewer than ten interests in a project is considered essentially
noncommercial.
1987
