Florida Senate - 2006 COMMITTEE AMENDMENT
Bill No. SB 2630
Barcode 622732
CHAMBER ACTION
Senate House
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11 The Committee on Regulated Industries (Posey) recommended the
12 following amendment:
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14 Senate Amendment (with title amendment)
15 Delete everything after the enacting clause
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17 and insert:
18 Section 1. Paragraph (e) of subsection (3) of section
19 721.03, Florida Statutes, is amended, and subsection (11) is
20 added to that section, to read:
21 721.03 Scope of chapter.--
22 (3) A timeshare plan which is subject to the
23 provisions of chapter 718 or chapter 719, if fully in
24 compliance with the provisions of this chapter, is exempt from
25 the following:
26 (e) Part VI of chapter 718 and part VI of chapter 719,
27 relating to conversion of existing improvements to the
28 condominium or cooperative form of ownership, respectively,
29 provided that a developer converting existing improvements to
30 a timeshare condominium or timeshare cooperative must comply
31 with ss. 718.606, 718.608, 718.61, and 718.62, or ss. 719.606,
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1 719.608, 719.61, and 719.62, if applicable, and, if the
2 existing improvements received a certificate of occupancy more
3 than 18 months before such conversion, one of the following:
4 1. The accommodations and facilities shall be
5 renovated and improved to a condition such that the remaining
6 useful life in years of the roof, plumbing, air-conditioning,
7 and any component of the structure which has a useful life
8 less than the useful life of the overall structure is equal to
9 the useful life of accommodations or facilities that would
10 exist if such accommodations and facilities were newly
11 constructed and not previously occupied.
12 2. The developer shall fund reserve accounts for
13 capital expenditures and deferred maintenance for the roof,
14 plumbing, air-conditioning, and any component of the structure
15 the useful life of which is less than the useful life of the
16 overall structure. The reserve accounts shall be funded for
17 each component in an amount equal to the product of the
18 estimated current replacement cost of such component as of the
19 date of such conversion (as disclosed and substantiated by a
20 certificate under the seal of an architect or engineer
21 authorized to practice in this state) multiplied by a
22 fraction, the numerator of which shall be the age remaining
23 life of the component in years (as disclosed and substantiated
24 by a certificate under the seal of an architect or engineer
25 authorized to practice in this state) and the denominator of
26 which shall be the total useful life of the component in years
27 (as disclosed and substantiated by a certificate under the
28 seal of an architect or engineer authorized to practice in
29 this state). Alternatively, the reserve accounts may be funded
30 for each component in an amount equal to the amount that,
31 except for the application of this subsection, would be
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Bill No. SB 2630
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1 required to be maintained pursuant to s. 718.618(1) or s.
2 719.618(1). The developer shall fund the reserve accounts
3 contemplated in this subparagraph out of the proceeds of each
4 sale of a timeshare interest, on a pro rata basis, in an
5 amount not less than a percentage of the total amount to be
6 deposited in the reserve account equal to the percentage of
7 ownership allocable to the timeshare interest sold. When an
8 owners' association makes an expenditure of reserve account
9 funds before the developer has initially sold all timeshare
10 interests, the developer shall make a deposit in the reserve
11 account if the reserve account is insufficient to pay the
12 expenditure. Such deposit shall be at least equal to that
13 portion of the expenditure which would be charged against the
14 reserve account deposit that would have been made for any such
15 timeshare interest had the timeshare interest been initially
16 sold. When a developer deposits amounts in excess of the
17 minimum reserve account funding, later deposits may be reduced
18 to the extent of the excess funding.
19 3. The developer shall provide each purchaser with a
20 warranty of fitness and merchantability pursuant to s.
21 718.618(6) or s. 719.618(6).
22 (11) A seller may offer timeshare interests in a real
23 property timeshare plan located outside of this state without
24 filing a public offering statement for such out-of-state real
25 property timeshare plan pursuant to s. 721.07 or s. 721.55,
26 provided all of the following criteria have been satisfied:
27 (a) The seller shall provide a disclosure statement to
28 each prospective purchaser of such out-of-state timeshare
29 plan. The disclosure statement shall contain information that
30 is substantively equivalent to the disclosures required to be
31 provided for similar timeshare plans pursuant to s. 721.07 or
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Bill No. SB 2630
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1 s. 721.55, whichever is applicable. The disclosure statement
2 shall also include the exhibits that are required by s.
3 721.07(5)(ff)1., 2., 3., 4., 5., 7., 8., and 20.
4 (b) With respect to any offer for an out-of-state
5 timeshare plan made pursuant to this subsection, the delivery
6 by the seller to a prospective purchaser of the disclosure
7 statement required by paragraph (a) shall be deemed to satisfy
8 any requirement of this chapter regarding a public offering
9 statement.
10 (c) The seller shall utilize and furnish to each
11 purchaser of an out-of-state timeshare plan offered pursuant
12 to this subsection a fully completed and executed copy of a
13 purchase contract that contains the statement set forth in s.
14 721.065(2)(c) in conspicuous type located immediately prior to
15 the space in the contract reserved for the purchaser's
16 signature. The contract shall also contain the initial
17 purchase price and any additional charges to which the
18 purchaser may be subject in connection with the purchase of
19 the timeshare plan, such as financing, or that will be
20 collected from the purchaser on or before closing, such as the
21 current year's annual assessment for common expenses.
22 (d) All purchase contracts for out-of-state timeshare
23 plans offered pursuant to this subsection must also contain
24 the following statements in conspicuous type:
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26 This timeshare plan has not been reviewed or
27 approved by the State of Florida.
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29 The timeshare interest you are purchasing
30 requires certain procedures to be followed in
31 order for you to use your interest. These
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1 procedures may be different from those followed
2 in other timeshare plans. You should read and
3 understand these procedures prior to
4 purchasing.
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6 (e)1. An out-of-state timeshare plan may only be
7 offered pursuant to this subsection by the seller on behalf
8 of:
9 a. The developer of a timeshare plan that has been
10 approved by the division within the preceding 7 years pursuant
11 to s. 721.07 or s. 721.55, or concerning which an amendment by
12 the developer has been approved by the division within the
13 preceding 7 years, which timeshare plan has been neither
14 terminated nor withdrawn; or
15 b. A developer under common ownership or control with
16 a developer described in sub-subparagraph a., provided that
17 any common ownership shall constitute at least a 50-percent
18 ownership interest.
19 2. An out-of-state timeshare plan may only be offered
20 pursuant to this subsection to a person who already owns a
21 timeshare interest in a timeshare plan filed by a developer
22 described in subparagraph 1.
23 (f)1. Except for ss. 721.06, 721.065, 721.07, 721.27,
24 721.55, and 721.58, any out-of-state timeshare plan offered
25 pursuant to this subsection must meet all requirements of this
26 chapter. The out-of-state timeshare plan shall also be
27 eligible for any exemptions provided by this chapter.
28 2. Any escrow account required to be established by s.
29 721.08 for any out-of-state timeshare plan offered under this
30 subsection may be maintained in the situs jurisdiction.
31 (g) Any seller of an out-of-state timeshare plan
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1 offered pursuant to this subsection shall be required to
2 provide notice of such plan to the division on a form
3 prescribed by the division, along with payment of a one-time
4 fee not to exceed $1,000 per filing.
5 Section 2. Subsection (25) of section 721.05, Florida
6 Statutes, is amended to read:
7 721.05 Definitions.--As used in this chapter, the
8 term:
9 (25) "One-to-one purchaser to accommodation ratio"
10 means the ratio of the number of purchasers eligible to use
11 the accommodations of a timeshare plan on a given day to the
12 number of accommodations available for use within the plan on
13 that day, such that the total number of purchasers eligible to
14 use the accommodations of the timeshare plan during any
15 12-month period a given calendar year never exceeds the total
16 number of accommodations available for use in the timeshare
17 plan during that 12-month period year. For purposes of
18 calculation under this subsection, each purchaser must be
19 counted at least once, and no individual timeshare unit may be
20 counted more than 365 times per 12-month period calendar year
21 (or more than 366 times per leap year). A purchaser who is
22 delinquent in the payment of timeshare plan assessments shall
23 continue to be considered eligible to use the accommodations
24 of the timeshare plan for purposes of this subsection
25 notwithstanding any application of s. 721.13(6).
26 Section 3. Paragraph (b) of subsection (1) and
27 paragraph (c) of subsection (3) of section 721.13, Florida
28 Statutes, are amended to read:
29 721.13 Management.--
30 (1)
31 (b)1. With respect to a timeshare plan which is also
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1 regulated under chapter 718 or chapter 719, or which contains
2 a mandatory owners' association, the board of administration
3 of the owners' association shall be considered the managing
4 entity of the timeshare plan.
5 2. During any period of time in which such owners'
6 association has entered into a contract with a manager or
7 management firm to provide some or all of the management
8 services to the timeshare plan, both the board of
9 administration and the manager or management firm shall be
10 considered the managing entity of the timeshare plan and shall
11 be jointly and severally responsible for the faithful
12 discharge of the duties of the managing entity.
13 3. An owners' association which is the managing entity
14 of a timeshare plan that includes condominium units or
15 cooperative units shall not be considered a condominium
16 association pursuant to the provisions of chapter 718 or a
17 cooperative association pursuant to the provisions of chapter
18 719, unless such owners' association also operates the entire
19 condominium pursuant to s. 718.111 or the entire cooperative
20 pursuant to s. 719.104.
21 4.a. Notwithstanding anything to the contrary
22 contained in chapter 718 or chapter 719, timeshare condominium
23 associations and timeshare cooperative associations created
24 after July 1, 2006, are not subject to the provisions of s.
25 718.301(1) and (2) or s. 719.301(1) and (2) unless a majority
26 of those present at a duly called meeting of the association
27 other than any developer, which majority shall constitute at
28 least 15 percent of the total voting interests other than
29 those owned by any developer, vote to hold a
30 transfer-of-control election. A meeting to decide whether to
31 have a transfer-of-control election shall be conducted upon
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1 the written request of 15 percent of the total voting
2 interests other than those owned by any developer. If a
3 transfer-of-control election is approved, that election, when
4 held, shall entitle purchasers other than a developer to elect
5 a majority of the members of the board of administration of
6 the association.
7 b. No transfer-of-control election held pursuant to
8 this subparagraph shall be held prior to the time that
9 transfer of majority control of the members of the board of
10 administration of the association would otherwise be required
11 by the provisions of s. 718.301(1) or s. 719.301(1). After
12 such time, the election approved under sub-subparagraph a.
13 shall be held with 75 days after the vote authorizing a
14 transfer-of-control election. After purchasers other than a
15 developer vote to elect a majority of the members of the board
16 of administration of the association, a developer may exercise
17 the right to vote any developer-owned timeshare interests in
18 the same manner as any purchaser except for purposes of
19 reacquiring control of the association or electing a majority
20 of the members of the board of administration.
21 (3) The duties of the managing entity include, but are
22 not limited to:
23 (c)1. Providing each year to all purchasers an
24 itemized annual budget which shall include all estimated
25 revenues and expenses. The budget shall be in the form
26 required by s. 721.07(5)(u). The budget shall be the final
27 budget adopted by the managing entity for the current fiscal
28 year. The final adopted budget is not required to be delivered
29 if the managing entity has previously delivered a proposed
30 annual budget for the current fiscal year to purchasers in
31 accordance with chapter 718 or chapter 719 and the managing
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1 entity includes a description of any changes in the adopted
2 budget with the assessment notice and a disclosure regarding
3 the purchasers' right to receive a copy of the adopted budget,
4 if desired. The budget shall contain, as a footnote or
5 otherwise, any related party transaction disclosures or notes
6 which appear in the audited financial statements of the
7 managing entity for the previous budget year as required by
8 paragraph (e). A copy of the final budget shall be filed with
9 the division for review within 30 days after the beginning of
10 each fiscal year together with a statement of the number of
11 periods of 7-day annual use availability that exist within the
12 timeshare plan, including those periods filed for sale by the
13 developer but not yet committed to the timeshare plan, for
14 which annual fees are required to be paid to the division
15 under s. 721.27.
16 2. Notwithstanding anything contained in chapter 718
17 or chapter 719 to the contrary, the board of administration of
18 an owners' association which serves as the managing entity may
19 from time to time reallocate reserves for deferred maintenance
20 and capital expenditures required by s. 721.07(5)(u)3.a.(XI)
21 from any deferred maintenance or capital expenditure reserve
22 account to any other deferred maintenance or capital
23 expenditure reserve account or accounts in its discretion
24 without the consent of purchasers of the timeshare plan. Funds
25 in any deferred maintenance or capital expenditure reserve
26 account may not be transferred to any operating account
27 without the consent of a majority of the purchasers of the
28 timeshare plan. The managing entity may from time to time
29 transfer excess funds in any operating account to any deferred
30 maintenance or capital expenditure reserve account without the
31 vote or approval of purchasers of the timeshare plan. In the
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1 event any amount of reserves for accommodations and facilities
2 of a timeshare plan containing timeshare licenses or personal
3 property timeshare interests exists at the end of the term of
4 the timeshare plan, such reserves shall be refunded to
5 purchasers on a pro rata basis.
6 3. With respect to any timeshare plan that has a
7 managing entity that is an owners' association, reserves may
8 be waived or reduced by a majority vote of those voting
9 interests that are present, in person or by proxy, at a duly
10 called meeting of the owners' association. If a meeting of the
11 purchasers has been called to determine whether to waive or
12 reduce the funding of reserves and no such result is achieved
13 or a quorum is not attained, the reserves as included in the
14 budget shall go into effect.
15 Section 4. Subsection (1) of section 721.165, Florida
16 Statutes, is amended to read:
17 721.165 Insurance.--
18 (1) The seller, initially, and thereafter the managing
19 entity, shall be responsible for obtaining insurance to
20 protect the accommodations and facilities of the timeshare
21 plan in an amount equal to the replacement cost of such
22 accommodations and facilities. Any insurance, regardless of
23 any requirement in the timeshare instrument for coverage for
24 "full insurable value," "replacement cost," or the like, may
25 include reasonable deductibles as determined initially by the
26 seller and thereafter by the managing entity. Failure to
27 obtain and maintain the insurance required by this subsection
28 during any period of developer control of the managing entity
29 shall constitute a breach of s. 721.13(2)(a) by the managing
30 entity, unless the managing entity can show that, despite such
31 failure, it exercised due diligence to obtain and maintain the
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1 insurance required by this subsection.
2 Section 5. This act shall take effect July 1, 2006.
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4
5 ================ T I T L E A M E N D M E N T ===============
6 And the title is amended as follows:
7 Delete everything before the enacting clause
8
9 and insert:
10 A bill to be entitled
11 An act relating to vacation and timeshare
12 plans; amending s. 721.03, F.S.; revising the
13 formula for funding reserve accounts;
14 authorizing a seller to offer timeshare
15 interests in timeshare plans located outside of
16 this state without filing a public offering
17 statement for such out-of-state timeshare plan;
18 providing criteria for such offers; requiring
19 certain notice; providing for a fee; amending
20 s. 721.05, F.S.; revising the definition of the
21 term "one-to-one purchaser to accommodation
22 ratio"; amending s. 721.13, F.S.; providing
23 conditions under which certain timeshare
24 condominium associations and timeshare
25 cooperative associations are subject to certain
26 provisions relating to transfer of association
27 control; authorizing funding of reserve
28 accounts to be waived or reduced; amending s.
29 721.165, F.S.; authorizing certain insurance to
30 include reasonable deductibles as determined
31 initially by the seller and thereafter by the
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1 managing entity; providing an effective date.
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