Source: http://register.dls.virginia.gov/details.aspx?id=5083
Timestamp: 2019-05-26 01:47:45
Document Index: 750875126

Matched Legal Cases: ['§ 55', '§ 55', '§ 59', '§ 59', '§ 55', '§ 55', '§ 55', '§ 55', '§ 55', '§ 55']

Vol. 31 Iss. 25 (Fast-Track Regulation) 18VAC48-40, Time-Share Regulations August 10, 2015
Title of Regulation: 18VAC48-40. Time-Share Regulations (amending 18VAC48-40-20, 18VAC48-40-40; adding 18VAC48-40-25, 18VAC48-40-120 through 18VAC48-40-160).
Public Hearing Information: No public hearing is scheduled.
Public Comment Deadline: September 9, 2015.
Basis: Section 55-396 of the Code of Virginia states that the Common Interest Community Board may adopt, amend, and repeal rules and regulations and issue orders consistent with and in furtherance of the objectives of Virginia Real Estate Time-Share Act, Chapter 21 (§ 55-360 et seq.) of Title 55 of the Code of Virginia. Section 55-394.5 of the Code of Virginia states the registration requirements for time-share alternative purchases.
Purpose: An amendment to the Time-Share Regulations is necessary as a result of changes to the Virginia Real Estate Time-Share Act pursuant to Chapter 623 of the 2014 Virginia Acts of Assembly. The changes to the Time-Share Act include alternative purchase registration requirements, therefore, regulation amendment is necessary to incorporate and reflect the statutory changes and ensure full and accurate disclosure to potential and actual purchasers of alternative purchases, all to better protect the health, safety, and welfare of citizens of the Commonwealth.
Rationale for Using Fast-Track Process: The fast-track rulemaking process is being used because this amendment is a result of a statutory change. The need for a statutory change was identified during general review of the Time-Share Regulations. During that review, it was determined that the statutory requirements to register alternative purchases included the same items required of time-share project registration such as escrow bonds for deposits and lengthy disclosure statements, which would be onerous and overly burdensome for the developer. The committee involved in conducting the general review of the Time-Share Regulations included consumers, time-share developers, representation from time-share industry organizations, the American Resort Development Association (ARDA), and the Virginia Resort Development Association (VRDA). ARDA and VRDA assisted in the general review and sought the statutory change to the alternative purchase registration requirements because the statutory provisions were overly and unnecessarily burdensome to developers, and such requirements did not serve to increase protection to the public.
This amendment should not be controversial as it is more detrimental to protection of the public (including developers) by not having the process formalized in regulation in a manner that can be clearly understood by the affected parties. In order to be consistent with current industry and common interest community processes, the regulations for alternative purchase registration require a disclosure statement and yearly renewal through an annual report process. Annual reports are submitted currently by time-share projects, exchange programs, condominium project registrations, and community association registrations.
Substance: This amendment includes procedures for alternative purchase application for registration such as the filing must be in a form prescribed by the board's regulations and shall include a general description of the types of alternatives purchases; a copy of the terms and conditions applicable to the alternative purchase; the name, address, and contact information of the developer offering the alternative purchases; and such additional information as required by the board. The amendments also incorporate a fee for filing a time-share alternative purchase registration application and annual report and a directive that any material change to the standard terms and conditions applicable to an alternative purchase shall be filed with the board within 30 days.
Issues: The primary advantage to the Commonwealth and public is that the revisions will ensure consistency with current legal requirements and ensure full and accurate disclosure to potential and actual purchasers of alternative purchases, all to better protect the health, safety, and welfare of citizens of the Commonwealth. No disadvantages to the public or the Commonwealth could be identified.
Summary of the Proposed Amendments to Regulation. Pursuant to Chapter 623 of the 2014 Virginia Acts of Assembly, the Common Interest Community Board (Board) proposes to establish alternative purchase registration procedures.
Estimated Economic Impact. Virginia Code § 55-362 defines alternative purchase as:
... anything valued in excess of $100 which is offered to a potential purchaser by the developer during the developer's sales presentation and which is purchased by such potential purchaser for more than $100, even though the purchaser did not purchase a time-share. An alternative purchase is not a time-share. A membership camping contract as defined in § 59.1-313 is not an alternative purchase. An alternative purchase shall be registered with the Board unless it is otherwise registered as a travel service under the Virginia Travel Club Act (§ 59.1-445 et seq.), and shall include, without limitation, vacation packages (howsoever denominated) and exit programs (howsoever denominated).
Currently, alternative purchases are registered through the time-share registration process. Alternative purchases are typically much less complex and have significantly lower dollar values compared to time-shares.1 The proposed alternative purchase registration process will be less costly than the current process whereby alternative purchases are registered via the time-share process.
The proposed fees for the alternative purchase registration are substantially lower than the time-share registration fee: 1) $100 rather than $1,500 for initial application and registration, and 2) $100 rather than $500 for annual renewal. There are substantially fewer requirements for the alternative purchase public offering statement versus the time-share offering statement. Thus under the proposed alternative purchase registration process less staff time would be required in preparation of offering statements.
For time-share registration, Virginia Code § 55-386 requires that "The developer shall file with the Board a payment and performance bond in the sum equal to 100 percent of the estimated cost of completing all promised and incomplete units and common elements comprising the time-share project described in the time-share instrument and the public offering statement." The proposed alternative purchase registration does not require a bond. Given the lower values and nature of alternative purchases, the Board does not believe a bond is necessary for alternative purchases.
Registration for alternative purchases has value in that the public offering disclosure statements help inform consumers and help the Board and Department monitor the industry. The proposed alternative purchase registration will substantially lower costs for developers while maintaining some consumer protection. Thus the proposed amendments likely produce a net benefit.
Businesses and Entities Affected. The approximate 100 time-share projects and related developers are affected by the proposed amendments.2
Localities Particularly Affected. The proposed amendments apply throughout the Commonwealth. Time-shares and thus alternative purchases are more common in areas frequented for vacations.
Effects on the Use and Value of Private Property. In that the proposed establishment of alternative purchase registration procedures will lower the cost of offering alternative purchases, developers may be induced to offer more alternative purchases than under the status quo.
Small Businesses: Costs and Other Effects. The proposed alternative purchase registration will moderately reduce costs for small developers who choose to offer alternative purchases.
Real Estate Development Costs. The proposed amendments will moderately reduce costs for real estate developers offering alternative purchases associated with time-shares.
1Source: Department of Professional and Occupational Regulation
The amendments incorporate alternative purchase registration procedures to the Time-Share Regulations (18VAC48-40) as a result of changes to the Virginia Real Estate Time-Share Act pursuant to Chapter 623 of the 2014 Acts of Assembly, including (i) procedures for alternative purchase application for registration; (ii) a fee for filing a time-share alternative purchase registration application and an annual report; and (iii) a directive that any material change to the standard terms and conditions applicable to an alternative purchase shall be filed with the board within 30 days.
18VAC48-40-20. Application for registration of time-share projects and programs.
18VAC48-40-25. Application for registration of alternative purchase.
Application for registration of alternative purchase shall be filed with the board on an application form furnished by the board and shall contain all of the documents and information required by § 55-394.5 of the Code of Virginia.
3. The filing fee for the a time-share registration annual report filed by the developer shall be $500.
6. The filing fee for an application for registration of an alternative purchase shall be $100.
7. The filing fee for an alternative purchase registration annual report shall be $100.
18VAC48-40-120. Registration of alternative purchase required.
As required by § 55-394.5 of the Code of Virginia, a time-share developer shall register as an alternative purchase as defined in § 55-362 of the Code of Virginia.
18VAC48-40-130. Review of application for registration of an alternative purchase.
18VAC48-40-140. Annual report required for alternative purchase registration.
A. Prior to the expiration of the registration, the developer shall file an annual report in a form approved by the board for the registered alternative purchase affiliated with such time-share project registration. Such alternative purchase annual report shall be accompanied by the fee specified in 18VAC48-40-40.
C. Once the annual report has been accepted by the board, the registration shall be extended for an additional one-year period from the date of expiration of the registration. If the developer fails to complete the annual report filing within one year after the date of expiration, the registration shall not be extended and the developer must apply as a new applicant.
18VAC48-40-150. Termination of registration for an alternative purchase.
18VAC48-40-160. Reporting of changes to the alternative purchase.
In accordance with § 55-394.5 B of the Code of Virginia, any material change made or known by the developer that may affect the accuracy or completeness of the alternative purchase registration file shall be filed with the board within 30 days of the effective date of the change. The board may request additional information as necessary to ensure compliance with the Virginia Real Estate Time-Share Act (§ 55-360 et seq. of the Code of Virginia) and this chapter.
Time-Share Annual Report, A492-0515ANRPT-v3 (eff. 6/15)
Time-Share Bond/Letter of Credit Verification Form, A492-0515BOND-v1 (eff. 9/13)
Time-Share Registration Application, A492-0515REG-v1 (eff. 9/13)
Time-Share Building Status Form, A492-0515BLDST-v1 (eff. 9/13)
Time-Share Amendment Application, A492-0515AMEND-v1 (eff. 9/13)
Time-Share Exchange Company Registration Application, A492-0516REG-v1 (eff. 9/13)
Time-Share Exchange Company Annual Report, A492-0516ANRPT-v1 (eff. 9/13)
Alternative Purchase Registration Application, A492-05ALTPURREG-v1 (eff. 10/15)
Alternative Purchase Annual Report, A492-05ALTPURANRPT-v1 (eff. 10/15)
VA.R. Doc. No. R15-4212; Filed July 9, 2015, 11:14 a.m.