2023 Laws of Puerto Rico › TITLE THIRTY-ONE - Civil Code (§§ 1 — 5305) › Subtitle 2 - Property Ownership and Its Modifications (§§ 1021 — 1875) › PART II-A - Timeshare (§§ 1251 — 1269d) › Chapter 147 - Puerto Rico Timeshare and Vacation Club Act (§§ 1251 — 1269d) › Subchapter VI - Management of Timeshare Plans and Vacation Clubs; Common Expenses; Reservation Systems (§§ 1256 — 1256f) › § 1256e - Recall of managing entity

In addition to any other manner which may be provided for in the timeshare or vacation club documents, the owners may discharge the managing entity only for cause, in the manner provided for in this section:
(1) Any owner may deliver to the entity to be designated by the developer for such purpose in the bylaws referred to in § 1267 of this title, and which shall not be the managing entity, (hereinafter the “Recall Committee”) a petition containing the language of a proposed ballot affording the opportunity to indicate a preference between retaining and discharging the present managing entity. Such petition must be signed by owners holding at least ten percent (10%) of the voting power of all the owners. There shall be attached to the petition, a writing of not more than seven-hundred fifty (750) words supporting discharge of the managing entity. The Recall Committee shall cause a copy of said petition to be delivered to the managing entity within five (5) days of its receipt. Not earlier than twenty (20) days nor later than thirty (30) days after receipt of the petition, the Recall Committee shall mail to each owner:
(a) A ballot affording the opportunity to indicate a preference between retaining and discharging the managing entity;
(b) a copy of any writing properly delivered with the petition;
(c) if submitted by the managing entity, a writing of not more than seven hundred fifty (750) words in support of its position to remain as the managing entity;
(d) if it elects to do so, a writing of not more than seven-hundred fifty (750) words from the Recall Committee recommending retention or discharge of the managing entity.
(2) Within ten (10) days after the date specified for the return of the ballots, the Recall Committee shall examine the ballots that have been returned and determine the vote. The vote shall be determined to be in favor of discharge of the managing entity only if the following requirements are met:
(a) Ballots are cast representing at least fifty percent (50%) of the voting power of all the owners, and
(b) ballots representing at least thirty-three and one-third percent (33 1 / 3 %) of the voting power of all owners and sixty-six and two-thirds percent (66 2 / 3 %) of the voting power of all owners casting ballots favored discharge of the managing entity.
(3) If the vote is determined to be in favor of discharging the managing entity, the managing entity shall be discharged effective one-hundred twenty (120) days after the date specified for the return of the ballots.
(4) A managing entity discharged pursuant to this section is not entitled by reason of such discharge to any penalty or other charge payable, directly or indirectly, in whole or in part, by any owner, except to the extent that the developer is obligated under any agreement with the managing entity to pay any such charge or penalty.
(5) All costs and expenses incurred in connection with the recall process of the managing entity shall be on the account of the owners.
(6) Upon the discharge of the managing entity in accordance with the applicable provisions of this section, the developer shall be entitled to appoint the successor of the discharged managing entity, unless the developer and the discharged managing entity are the same person, in which case said appointment shall be made by the owners. The successor managing entity may not be an affiliate of the discharged managing entity.
For purposes of this section, the term “for cause” shall only be construed to mean the occurrence of any one, or a combination of the following:
(a) A gross violation, on the part of the managing entity, of any of its material obligations under this chapter.
(b) A gross violation, on the part of the managing entity, of its fiduciary duty set forth in subsection (1) of § 1256c of this title.
History —Dec. 26, 1995, No. 252, § 6-106; July 5, 1996, No. 66, § 26.