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Senate Bill 0626

Florida Senate - 1998 SB 626 By Senators Silver and Dyer 38-311-98 1 A bill to be entitled 2 An act relating to timeshare plans; amending s. 3 721.03, F.S.; revising language with respect to 4 the scope of the chapter; providing for certain 5 rules; amending s. 721.06, F.S.; revising 6 language with respect to contracts for the 7 purchase of timeshare periods; amending s. 8 721.07, F.S.; revising language with respect to 9 public offering statements; providing a time 10 period for amendments that add a new component 11 site to an approved multisite timeshare plan; 12 amending s. 721.075, F.S.; deleting language 13 with respect to certain incidental benefits 14 offered by a developer; amending s. 721.09, 15 F.S.; revising language with respect to 16 reservation agreements; providing for 17 cancellation of such agreements under certain 18 circumstances; amending s. 721.13, F.S.; 19 revising language with respect to management; 20 amending s. 721.15, F.S.; revising language 21 with respect to assessments for common 22 expenses; amending s. 721.18, F.S.; revising a 23 time period with respect to the filing of 24 certain information concerning exchange 25 programs; amending s. 721.26, F.S.; authorizing 26 the imposition of penalties with respect to 27 certain rules; creating part III of chapter 28 721, F.S.; creating the "Timeshare Lien 29 Foreclosure Act"; providing legislative 30 purpose; providing definitions; providing 31 qualifications of trustees and appointment of 1 CODING: Words stricken are deletions; words underlined are additions. Florida Senate - 1998 SB 626 38-311-98 1 successor trustees; providing for disclosure 2 and acknowledgment; providing for conditions to 3 the exercise of the power of sale by a trustee; 4 providing for the manner of delivery of notice 5 of default and intent to sell; providing for 6 notice of sale; providing for publication of 7 notice of sale; providing for trustee's 8 certificate of compliance; providing for the 9 manner of sale; providing for the effect of the 10 trustee's sale; providing for the issuance of a 11 trustee's deed; providing for the disposition 12 of the proceeds of sale; providing for the form 13 and effect of the trustee's deed; providing for 14 the application of the part; providing an 15 effective date. 16 17 Be It Enacted by the Legislature of the State of Florida: 18 19 Section 1. Paragraphs (b) and (c) of subsection (1) of 20 section 721.03, Florida Statutes, are amended to read: 21 721.03 Scope of chapter.-- 22 (1) This chapter applies to all timeshare plans 23 consisting of more than seven timeshare periods over a period 24 of at least 3 years in which the accommodations or facilities 25 are located within this state; provided that: 26 (b) With respect to timeshare plans containing 27 accommodations or facilities located in this state which are 28 offered for sale outside the jurisdictional limits of the 29 United States, such offers shall be exempt from the 30 requirements of this chapter so long as the seller files the 31 information required by s. 721.07 or s. 721.55 with, and 2 CODING: Words stricken are deletions; words underlined are additions. Florida Senate - 1998 SB 626 38-311-98 1 obtains the approval of, the division complies with the 2 provisions of this paragraph. This exemption becomes effective 3 upon the filing of such information with the division, if 4 approval is obtained within 6 months after the initial filing 5 at which time the exemption will expire unless the division 6 stipulates otherwise or approves the filing. The fees set 7 forth in s. 721.07(4) apply to all filings made hereunder. 8 Each purchase contract utilized in any offer of a timeshare 9 plan that occurs outside the jurisdictional limits of the 10 United States shall contain the following disclosure in 11 conspicuous type immediately above the space provided for the 12 purchaser's signature: 13 14 The offering of this timeshare plan outside the jurisdictional 15 limits of the United States of America is exempt from 16 regulation under Florida law, and any such purchase is not 17 protected by the State of Florida. However, the management 18 and operation of any accommodations or facilities located in 19 Florida is subject to Florida law and may give rise to 20 enforcement action regardless of the location of any offer. 21 22 Purchaser should note that (name of developer or other person 23 or entity) at (address) has a (describe developer's or other 24 person's or entity's actual interest) in the accommodations 25 and facilities of the timeshare plan. 26 27 (c) The exemption provided in paragraph (a) shall not 28 apply unless and until a claim of exemption from regulation 29 containing the information required by paragraph (a) and s. 30 721.51(3)(b) and accompanied by the fee required by s. 31 721.51(3)(b) is filed with and approved by the division. The 3 CODING: Words stricken are deletions; words underlined are additions. Florida Senate - 1998 SB 626 38-311-98 1 division may adopt rules designating those provisions of ss. 2 721.07 and 721.55 which need not be addressed in the filings 3 required in paragraph (b). The exemption provided in paragraph 4 (b) shall only apply to accommodations or facilities which 5 have first been filed with and approved by the division 6 pursuant to s. 721.07 or s. 721.55. 7 Section 2. Paragraph (f) of subsection (1) of section 8 721.06, Florida Statutes, is amended to read: 9 721.06 Contracts for purchase of timeshare periods.-- 10 (1) Each seller shall utilize, and furnish each 11 purchaser a fully completed and executed copy of, a contract 12 pertaining to the sale, which contract shall include the 13 following information: 14 (f) Immediately prior to the space reserved in the 15 contract for the signature of the purchaser, in conspicuous 16 type, substantially the following statements: 17 18 You may cancel this contract without any penalty or 19 obligation within 10 calendar days after from the date you 20 sign this contract, and within until 10 calendar days after 21 the date you receive the approved public offering statement, 22 whichever is later. 23 If you decide to cancel this contract, you must notify 24 the developer in writing of your intent to cancel. Your 25 notice of cancellation shall be effective upon the date sent 26 and shall be sent to ...(Name of Developer)... at ...(Address 27 of Developer).... Any attempt to obtain a waiver of your 28 cancellation right is unlawful. While you may execute all 29 closing documents in advance, the closing, as evidenced by 30 delivery of the deed or other document, before expiration of 31 your 10-day cancellation period, is prohibited. 4 CODING: Words stricken are deletions; words underlined are additions. Florida Senate - 1998 SB 626 38-311-98 1 Section 3. Paragraph (a) of subsection (3) of section 2 721.07, Florida Statutes, is amended to read: 3 721.07 Public offering statement.--Prior to offering 4 any timeshare plan, the developer must file a public offering 5 statement with the division for approval as prescribed by s. 6 721.03, s. 721.55, or this section. Until the division 7 approves such filing, any contract regarding the sale of the 8 timeshare plan which is the subject of the public offering 9 statement is voidable by the purchaser. 10 (3)(a)1. Any change to an approved filing shall be 11 filed with the division for approval as an amendment prior to 12 becoming effective. The division shall have 20 days after 13 receipt of a proposed amendment to approve or cite 14 deficiencies in the proposed amendment. If the division fails 15 to act within 20 days, the amendment will be deemed approved. 16 If the proposed amendment adds a new component site to an 17 approved multisite timeshare plan, the division's initial 18 period in which to approve or cite deficiencies is 45 days. If 19 the developer fails to adequately respond to any deficiency 20 notice within 30 days, the division may reject the amendment. 21 Subsequent to such rejection, a new filing fee pursuant to 22 subsection (4) and a new division initial review period 23 pursuant to this paragraph shall apply to any refiling or 24 further review of the rejected amendment. 25 2. For filings only subject to this part, each 26 approved amendment, other than an amendment made only for the 27 purpose of the addition of a phase or phases to the timeshare 28 plan in the manner described in the timeshare instrument, 29 shall be delivered to a purchaser no later than 10 days prior 30 to closing. For filings made under part II, each approved 31 amendment to the multisite timeshare plan public offering 5 CODING: Words stricken are deletions; words underlined are additions. Florida Senate - 1998 SB 626 38-311-98 1 statement, other than an amendment made only for the purpose 2 of the addition, substitution, or deletion of a component site 3 pursuant to part II or the addition of a phase or phases to a 4 component site of a multisite timeshare plan in the manner 5 described in the timeshare instrument, shall be delivered to a 6 purchaser no later than 10 days prior to closing. 7 3. Amendments made to a timeshare instrument for a 8 component site located in this state shall only be delivered 9 to those purchasers who will receive a timeshare estate or a 10 specific timeshare license in that component site. Amendments 11 made to a timeshare instrument for a component site not 12 located in this state are not required to be delivered to 13 purchasers. 14 Section 4. Subsections (4) and (5) of section 721.075, 15 Florida Statutes, are amended to read: 16 721.075 Incidental benefits.--Incidental benefits 17 shall be offered only as provided in this section. 18 (4) If the aggregate represented value of all 19 incidental benefits offered by a developer to a purchaser 20 exceeds 5 percent of the purchase price paid by that 21 purchaser, then, prior to offering the incidental benefits, 22 the developer must file an irrevocable letter of credit, 23 surety bond, or other assurance acceptable to the director of 24 the division that will reasonably assure the delivery of the 25 promised incidental benefits to the purchaser; provided, 26 however, that the maximum amount of such assurance shall equal 27 the portion of the aggregate represented value of the offered 28 incidental benefits which exceeds 5 percent of the purchase 29 price contracted for by that purchaser. Proceeds from any 30 assurance accepted by the division shall be used to provide 31 refunds to purchasers pursuant to this section. If the 6 CODING: Words stricken are deletions; words underlined are additions. Florida Senate - 1998 SB 626 38-311-98 1 aggregate represented value of all incidental benefits offered 2 by a developer to a purchaser is equal to or less than 5 3 percent of the purchase price paid by that purchaser, no 4 assurance shall be required from the developer prior to 5 offering any incidental benefit. 6 (4)(5) All purchaser remedies pursuant to s. 721.21 7 shall be available for any violation of the provisions of this 8 section. 9 Section 5. Subsection (1) of section 721.09, Florida 10 Statutes, is amended to read: 11 721.09 Reservation agreements; escrows.-- 12 (1)(a) Prior to filing the public offering statement 13 with the division, a seller shall not offer a timeshare plan 14 for sale but may accept reservation deposits and advertise the 15 reservation deposit program upon approval by the division of a 16 fully executed escrow agreement and reservation agreement 17 properly filed with the division. 18 (b) Reservations shall not be taken on a timeshare 19 plan unless the seller has an ownership interest or leasehold 20 interest, of a duration at least equal to the duration of the 21 proposed timeshare plan, in the land upon which the timeshare 22 plan is to be developed. 23 (c) If the timeshare plan subject to the reservation 24 agreement has not been filed with the division under s. 25 721.07(5) or s. 721.55 within 90 days after the date the 26 division approves the reservation agreement filing, the seller 27 must immediately cancel all outstanding reservation 28 agreements, refund all escrowed funds to prospective 29 purchasers, and discontinue accepting reservation deposits or 30 advertising the availability of reservation agreements. 31 7 CODING: Words stricken are deletions; words underlined are additions. Florida Senate - 1998 SB 626 38-311-98 1 (d) A seller who has filed a reservation agreement and 2 an escrow agreement under this section may advertise the 3 reservation agreement program if the advertising material 4 meets the following requirements: 5 1. The seller complies with the provisions of s. 6 721.11 with respect to such advertising material. 7 2. The advertising material is limited to a general 8 description of the proposed timeshare plan, including, but not 9 limited to, a general description of the type, number, and 10 size of accommodations and facilities and the name of the 11 proposed timeshare plan. 12 3. The advertising material contains a statement that 13 the advertising material is being distributed in connection 14 with an approved reservation agreement filing only and that 15 the seller cannot offer an interest in the timeshare plan for 16 sale until a public offering statement has been filed with the 17 division under this chapter. 18 Section 6. Paragraphs (c), (e), and (i) of subsection 19 (3) and subsection (4) of section 721.13, Florida Statutes, 20 are amended to read: 21 721.13 Management.-- 22 (3) The duties of the managing entity include, but are 23 not limited to: 24 (c)1. Providing each year to all purchasers an 25 itemized annual budget which shall include all estimated 26 revenues and expenses. The budget shall be in the form 27 required by s. 721.07(5)(x) and shall be the final budget 28 adopted by the managing entity for the current fiscal year. 29 The budget shall contain, as a footnote or otherwise, any 30 related party transaction disclosures or notes which appear in 31 the audited financial statements of the managing entity for 8 CODING: Words stricken are deletions; words underlined are additions. Florida Senate - 1998 SB 626 38-311-98 1 the previous budget year as required by paragraph (e). A copy 2 of the final budget shall be filed with the division within 30 3 days after its adoption by the managing entity together with a 4 statement of the number of periods of 7-day annual use 5 availability that exist within the timeshare plan, including 6 those periods filed for sale by the developer but not yet 7 committed to the timeshare plan, for which annual fees are 8 required to be paid to the division under s. 721.27. 9 2. Notwithstanding anything contained in chapter 718 10 or chapter 719 to the contrary, the board of administration of 11 an owners' association which serves as managing entity may 12 from time to time reallocate reserves for deferred maintenance 13 and capital expenditures required by s. 721.07(5)(x)3.a.(XI) 14 from any deferred maintenance or capital expenditure reserve 15 account to any other deferred maintenance or capital 16 expenditure reserve account or accounts in its discretion 17 without the consent of purchasers of the timeshare plan. 18 Funds in any deferred maintenance or capital expenditure 19 reserve account may not be transferred to any operating 20 account without the consent of a majority of the purchasers of 21 the timeshare plan. 22 (e) Arranging for an annual independent audit of the 23 financial statements all the books and financial records of 24 the timeshare plan by a certified public accountant licensed 25 by the Board of Accountancy of the Department of Business and 26 Professional Regulation, in accordance with generally accepted 27 auditing standards as defined by the rules of the Board of 28 Accountancy of the Department of Business and Professional 29 Regulation. The financial statements required by this section 30 must be prepared on an accrual basis using fund accounting, 31 and must be presented in accordance with generally accepted 9 CODING: Words stricken are deletions; words underlined are additions. Florida Senate - 1998 SB 626 38-311-98 1 accounting principles. A copy of the audited financial 2 statements audit must shall be filed with the division and 3 forwarded to the board of directors and officers of the 4 owners' association, or, if one exists, no later than 5 5 calendar months after the end of the timeshare plan's fiscal 6 year. If no owners' association exists, the owner of each 7 purchaser timeshare period must shall be notified, no later 8 than 5 months after the end of the timeshare plan's fiscal 9 year, that a copy of the audited financial statements such 10 audit is available upon request to the managing entity. 11 Notwithstanding any requirement of s. 718.111(13) or (14), the 12 audited financial statements required by this section are the 13 only annual financial reporting requirements for timeshare 14 condominiums. 15 (i) Submitting to the division the statement of 16 receipts and disbursements regarding the ad valorem tax escrow 17 account as required by s. 192.037(6)(e). The statement of 18 receipts and disbursements must also include a statement 19 disclosing that all ad valorem taxes have been paid in full to 20 the tax collector through the current assessment year, or, if 21 all such ad valorem taxes have not been paid in full to the 22 tax collector, a statement disclosing those assessment years 23 for which there are outstanding ad valorem taxes due and the 24 total amount of all delinquent taxes, interest, and penalties 25 for each such assessment year as of the date of the statement 26 of receipts and disbursements. 27 (4) The managing entity shall maintain among its 28 records and provide to the division upon request a complete 29 list of the names and addresses of all purchasers and owners 30 of timeshare units in the timeshare plan. The managing entity 31 shall update this list no less frequently than quarterly. 10 CODING: Words stricken are deletions; words underlined are additions. Florida Senate - 1998 SB 626 38-311-98 1 Pursuant to paragraph (3)(d), the managing entity may not 2 publish this owner's list or provide a copy of it to any 3 purchaser or to any third party other than the division. 4 However, if the managing entity includes a condominium 5 association subject to the provisions of chapter 718 or a 6 cooperative association subject to the provisions of chapter 7 719, the managing entity shall initiate a mailing to those 8 persons listed on the owner's list upon the written request of 9 any purchaser if the purpose of the mailing is to advance 10 legitimate association business, such as a proxy solicitation 11 for any purpose, including the recall of one or more board 12 members or the discharge of the manager or management firm. 13 The use of any proxies solicited in this manner must comply 14 with the provisions of the timeshare instrument and this 15 chapter. The board of administration of the association shall 16 be responsible for determining the appropriateness of any 17 mailing requested pursuant to this subsection, and it shall be 18 a violation of this chapter and of part VIII of chapter 468 19 for the board of administration and/or the manager or 20 management firm to refuse to initiate any mailing requested 21 for the purpose of advancing legitimate association business. 22 The purchaser who requests the mailing must reimburse the 23 association in advance for the association's actual costs in 24 performing the mailing. 25 Section 7. Subsection (1) of section 721.15, Florida 26 Statutes, is amended to read: 27 721.15 Assessments for common expenses.-- 28 (1)(a) Until a managing entity is created or provided 29 pursuant to s. 721.13, the developer shall pay all common 30 expenses. The timeshare instrument shall provide for the 31 allocation of common expenses among all timeshare units or 11 CODING: Words stricken are deletions; words underlined are additions. Florida Senate - 1998 SB 626 38-311-98 1 timeshare periods on a reasonable basis, as appropriate, 2 including timeshare periods owned or not yet sold by the 3 developer. The timeshare instrument may provide that the 4 common expenses allocated may differ between those units that 5 are part of the timeshare plan and those units that are not 6 part of the timeshare plan; however, the different proportion 7 of expenses must be based upon reasonable differences in the 8 benefit provided to each. The timeshare instrument shall 9 allocate common expenses to timeshare periods owned or not yet 10 sold by the developer on the same basis that common expenses 11 are allocated to similar or equivalent timeshare periods sold 12 to purchasers. Timeshare plans that are also governed by 13 chapter 718 or chapter 719 shall allocate common expenses 14 among the timeshare units in the manner required by those 15 chapters. 16 (b) Notwithstanding any provision of chapter 718 or 17 chapter 719 to the contrary, the allocation of total common 18 expenses for a condominium or a cooperative timeshare plan may 19 vary on any reasonable basis including, but not limited to, 20 unit size, unit type, unit location, specific identification, 21 or a combination of these factors, if the percentage interest 22 in the common elements attributable to each timeshare 23 condominium parcel or timeshare cooperative parcel equals the 24 share of the total common expenses allocable to that parcel. 25 The share of a timeshare interest in the common expenses 26 allocable to the timeshare condominium parcel or the timeshare 27 cooperative parcel containing such interest may vary on any 28 reasonable basis if the timeshare interest's share of its 29 parcel's common expense allocation is equal to that timeshare 30 interest's share of the percentage interest in common elements 31 attributable to such parcel. 12 CODING: Words stricken are deletions; words underlined are additions. Florida Senate - 1998 SB 626 38-311-98 1 (c) The division may adopt rules, under chapter 120, 2 necessary to implement, enforce, and interpret this 3 subsection. 4 Section 8. Subsection (2) of section 721.18, Florida 5 Statutes, is amended to read: 6 721.18 Exchange programs; filing of information and 7 other materials; filing fees; unlawful acts in connection with 8 an exchange program.-- 9 (2) Each exchange company offering an exchange program 10 to purchasers in this state shall file the information 11 specified in subsection (1) and the audit specified in 12 subsection (1) on or before June 1 at least 20 days prior to 13 July 1 of each year. However, an exchange company shall make 14 its initial filing at least 20 days prior to offering an 15 exchange program to any purchaser in this state. Each filing 16 shall be accompanied by an annual filing fee of $500. Within 17 20 days of receipt of such filing, the division shall 18 determine whether the filing is adequate to meet the 19 requirements of this section and shall notify the exchange 20 company in writing that the division has either approved the 21 filing or found specified deficiencies in the filing. If the 22 division fails to respond within 20 days, the filing shall be 23 deemed approved. The exchange company may correct the 24 deficiencies; and, within 10 days after receipt of corrections 25 from the exchange company, the division shall notify the 26 exchange company in writing that the division has either 27 approved the filing or found additional specified deficiencies 28 in the filing. If at any time the division determines that any 29 of such information supplied by an exchange company fails to 30 meet the requirements of this section, the division may 31 13 CODING: Words stricken are deletions; words underlined are additions. Florida Senate - 1998 SB 626 38-311-98 1 undertake enforcement action against the exchange company in 2 accordance with the provision of s. 721.26. 3 Section 9. Section 721.26, Florida Statutes, is 4 amended to read: 5 721.26 Regulation by division.--The division has the 6 power to enforce and ensure compliance with the provisions of 7 this chapter, except for part III, using the powers provided 8 in this chapter, as well as the powers prescribed in chapters 9 498, 718, and 719. In performing its duties, the division 10 shall have the following powers and duties: 11 (1) To aid in the enforcement of this chapter, or any 12 division rule or order promulgated or issued pursuant to this 13 chapter, the division may make necessary public or private 14 investigations within or outside this state to determine 15 whether any person has violated or is about to violate this 16 chapter, or any division rule or order promulgated or issued 17 pursuant to this chapter. 18 (2) The division may require or permit any person to 19 file a written statement under oath or otherwise, as the 20 division determines, as to the facts and circumstances 21 concerning a matter under investigation. 22 (3) For the purpose of any investigation under this 23 chapter, the director of the division or any officer or 24 employee designated by the director may administer oaths or 25 affirmations, subpoena witnesses and compel their attendance, 26 take evidence, and require the production of any matter which 27 is relevant to the investigation, including the identity, 28 existence, description, nature, custody, condition, and 29 location of any books, documents, or other tangible things and 30 the identity and location of persons having knowledge of 31 relevant facts or any other matter reasonably calculated to 14 CODING: Words stricken are deletions; words underlined are additions. Florida Senate - 1998 SB 626 38-311-98 1 lead to the discovery of material evidence. Failure to obey a 2 subpoena or to answer questions propounded by the 3 investigating officer and upon reasonable notice to all 4 persons affected thereby shall be a violation of this chapter. 5 In addition to the other enforcement powers authorized in this 6 subsection, the division may, at its discretion, apply to the 7 circuit court for an order compelling compliance. 8 (4) The division may prepare and disseminate a 9 prospectus and other information to assist prospective 10 purchasers, sellers, and managing entities of timeshare plans 11 in assessing the rights, privileges, and duties pertaining 12 thereto. 13 (5) Notwithstanding any remedies available to 14 purchasers, if the division has reasonable cause to believe 15 that a violation of this chapter, or of any division rule or 16 order promulgated or issued pursuant to this chapter, has 17 occurred, the division may institute enforcement proceedings 18 in its own name against any regulated party, as such term is 19 defined in this subsection: 20 (a)1. "Regulated party," for purposes of this section, 21 means any developer, exchange company, seller, managing 22 entity, association, association director, association 23 officer, management firm, escrow agent, trustee, any 24 respective assignees or agents, or any other person having 25 duties or obligations pursuant to this chapter. 26 2. Any person who materially participates in any offer 27 or disposition of any interest in, or the management or 28 operation of, a timeshare plan in violation of this chapter or 29 relevant rules involving fraud, deception, false pretenses, 30 misrepresentation, or false advertising or the disbursement, 31 concealment, or diversion of any funds or assets, which 15 CODING: Words stricken are deletions; words underlined are additions. Florida Senate - 1998 SB 626 38-311-98 1 conduct adversely affects the interests of a purchaser, and 2 which person directly or indirectly controls a regulated party 3 or is a general partner, officer, director, agent, or employee 4 of such regulated party, shall be jointly and severally liable 5 under this subsection with such regulated party, unless such 6 person did not know, and in the exercise of reasonable care 7 could not have known, of the existence of the facts giving 8 rise to the violation of this chapter. A right of 9 contribution shall exist among jointly and severally liable 10 persons pursuant to this paragraph. 11 (b) The division may permit any person whose conduct 12 or actions may be under investigation to waive formal 13 proceedings and enter into a consent proceeding whereby an 14 order, rule, or letter of censure or warning, whether formal 15 or informal, may be entered against that person. 16 (c) The division may issue an order requiring a 17 regulated party to cease and desist from an unlawful practice 18 under this chapter and take such affirmative action as in the 19 judgment of the division will carry out the purposes of this 20 chapter. 21 (d)1. The division may bring an action in circuit 22 court for declaratory or injunctive relief or for other 23 appropriate relief, including restitution. 24 2. The division shall have broad authority and 25 discretion to petition the circuit court to appoint a receiver 26 with respect to any managing entity which fails to perform its 27 duties and obligations under this chapter with respect to the 28 operation of a timeshare plan. The circumstances giving rise 29 to an appropriate petition for receivership under this 30 subparagraph include, but are not limited to: 31 16 CODING: Words stricken are deletions; words underlined are additions. Florida Senate - 1998 SB 626 38-311-98 1 a. Damage to or destruction of any of the 2 accommodations or facilities of a timeshare plan, where the 3 managing entity has failed to repair or reconstruct same. 4 b. A breach of fiduciary duty by the managing entity, 5 including, but not limited to, undisclosed self-dealing or 6 failure to timely assess, collect, or disburse the common 7 expenses of the timeshare plan. 8 c. Failure of the managing entity to operate the 9 timeshare plan in accordance with the timeshare instrument and 10 this chapter. 11 12 If, under the circumstances, it appears that the events giving 13 rise to the petition for receivership cannot be reasonably and 14 timely corrected in a cost-effective manner consistent with 15 the timeshare instrument, the receiver may petition the 16 circuit court to implement such amendments or revisions to the 17 timeshare instrument as may be necessary to enable the 18 managing entity to resume effective operation of the timeshare 19 plan, or to enter an order terminating the timeshare plan, or 20 to enter such further orders regarding the disposition of the 21 timeshare property as the court deems appropriate. All 22 reasonable costs and fees of the receiver relating to the 23 receivership shall become common expenses of the timeshare 24 plan upon order of the court. 25 3. The division may revoke its approval of any filing 26 for any timeshare plan for which a petition for receivership 27 has been filed pursuant to this paragraph. 28 (e)1. The division may impose a penalty against any 29 regulated party for a violation of this chapter or any rule 30 adopted thereunder. A penalty may be imposed on the basis of 31 each day of continuing violation, but in no event may the 17 CODING: Words stricken are deletions; words underlined are additions. Florida Senate - 1998 SB 626 38-311-98 1 penalty for any offense exceed $10,000. All accounts 2 collected shall be deposited with the Treasurer to the credit 3 of the Division of Florida Land Sales, Condominiums, and 4 Mobile Homes Trust Fund. 5 2.a. If a regulated party fails to pay a penalty, the 6 division shall thereupon issue an order directing that such 7 regulated party cease and desist from further operation until 8 such time as the penalty is paid; or the division may pursue 9 enforcement of the penalty in a court of competent 10 jurisdiction. 11 b. If an association or managing entity fails to pay a 12 civil penalty, the division may pursue enforcement in a court 13 of competent jurisdiction. 14 (f) In order to permit the regulated party an 15 opportunity either to appeal such decision administratively or 16 to seek relief in a court of competent jurisdiction, the order 17 imposing the penalty or the cease and desist order shall not 18 become effective until 20 days after the date of such order. 19 (g) Any action commenced by the division shall be 20 brought in the county in which the division has its executive 21 offices or in the county where the violation occurred. 22 (h) Notice to any regulated party shall be complete 23 when delivered by United States mail, return receipt 24 requested, to the party's address currently on file with the 25 division or to such other address at which the division is 26 able to locate the party. Every regulated party has an 27 affirmative duty to notify the division of any change of 28 address at least 5 business days prior to such change. 29 (6) The division is authorized to adopt, amend, or 30 repeal rules pursuant to chapter 120 as necessary to 31 implement, enforce, and interpret this chapter. 18 CODING: Words stricken are deletions; words underlined are additions. Florida Senate - 1998 SB 626 38-311-98 1 (7)(a) The use of any unfair or deceptive act or 2 practice by any person in connection with the sales or other 3 operations of an exchange program or timeshare plan is a 4 violation of this chapter. 5 (b) Any violation of the Florida Deceptive and Unfair 6 Trade Practices Act, ss. 501.201 et seq., relating to the 7 creation, promotion, sale, operation, or management of any 8 timeshare plan shall also be a violation of this chapter. 9 (c) The division is authorized to institute 10 proceedings against any such person and take any appropriate 11 action authorized in this section in connection therewith, 12 notwithstanding any remedies available to purchasers. 13 (8) The failure of any person to comply with any order 14 of the division is a violation of this chapter. 15 Section 10. Part III of chapter 721, Florida Statutes, 16 consisting of ss. 721.80, 721.81, 721.82, 721.83, 721.84, 17 721.85, 721.86, 721.87, 721.88, 721.89, 721.90, 721.91, 18 721.92, 721.93, 721.94, and 721.95, Florida Statutes, is 19 created to read: 20 PART III 21 FORECLOSURE OF LIENS ON TIMESHARE ESTATES 22 721.80 Short title.--This part may be cited as the 23 "Timeshare Lien Foreclosure Act." 24 721.81 Legislative purpose.--The purposes of this part 25 are to: 26 (1) Give statutory recognition to timeshare estates as 27 parcels of real property used for vacation experience rather 28 than for homestead purposes. 29 (2) Recognize that the economic health and efficient 30 operation of the vacation ownership industry are in part 31 19 CODING: Words stricken are deletions; words underlined are additions. Florida Senate - 1998 SB 626 38-311-98 1 dependent upon the availability of an efficient and economical 2 process for foreclosure. 3 (3) Establish streamlined procedures for the 4 foreclosure of any and all assessment liens and mortgage liens 5 against a timeshare estate. 6 (4) Recognize the need to assist vacation ownership 7 resort owners' associations by simplifying and expediting the 8 process of foreclosure of assessment liens and mortgage liens. 9 (5) Give statutory recognition to the right of persons 10 to privately contract for a power of sale as their remedy in 11 lieu of a judicial remedy to foreclose liens on timeshare 12 estates. 13 721.82 Definitions.--As used in this part, the term: 14 (1) "Assessment lien" means: 15 (a) A lien for delinquent assessments as provided in 16 ss. 721.16 and 718.116 as to timeshare condominiums; or 17 (b) A lien for unpaid taxes and special assessments as 18 provided in s. 192.037(8). 19 (2) "Claim of lien" means a claim of an assessment 20 lien recorded as provided in ss. 721.16 and 718.116 as to 21 timeshare condominiums. 22 (3) "Junior interestholder" means any person who has a 23 lien or interest of record prior to the recording of the 24 notice of sale under s. 721.85(8) against a timeshare estate 25 in the county in which the timeshare estate is located which 26 is inferior to the mortgage lien or assessment lien being 27 foreclosed under this part. 28 (4) "Lienholder" means a holder of an assessment lien 29 or a holder of a mortgage lien, as applicable. A receiver 30 appointed under s. 721.26 must be considered a lienholder for 31 purposes of this part. 20 CODING: Words stricken are deletions; words underlined are additions. Florida Senate - 1998 SB 626 38-311-98 1 (5) "Mortgage" means a mortgage as defined in s. 2 697.01. 3 (6) "Mortgage lien" means a security interest in a 4 timeshare estate created by a mortgage encumbering the 5 timeshare estate. 6 (7) "Mortgagee" means a person holding a mortgage 7 lien. 8 (8) "Mortgagor" means a person granting a mortgage 9 lien. 10 (9) "Notice address" means: 11 (a) As to an assessment lien, the address of the 12 current owner of a timeshare estate as reflected by the books 13 and records of the timeshare plan under ss. 721.13(4) and 14 721.15(7); 15 (b) As to a mortgage lien: 16 1. The address of the mortgagor as set forth in the 17 mortgage, the promissory note or a separate document executed 18 by the mortgagor at the time the mortgage lien was created, or 19 the most current address of the mortgagor according to the 20 records of the mortgagee; and 21 2. The address of the current owner of the timeshare 22 estate as reflected by the books and records of the timeshare 23 plan under ss. 721.13(4) and 721.15(7); or 24 (c) As to a junior interestholder, the address as set 25 forth in the recorded instrument creating the junior interest 26 or lien, or any recorded supplement thereto changing the 27 address and written notification by the junior interestholder 28 to the foreclosing lienholder of such change in address. 29 (10) "Obligor" means either the mortgagor, the person 30 obligated under a claim of lien, or the record owner of the 31 timeshare estate, as the context requires. 21 CODING: Words stricken are deletions; words underlined are additions. Florida Senate - 1998 SB 626 38-311-98 1 (11) "Power of sale" means: 2 (a) An express written agreement in a mortgage 3 identifying the mortgagor, the mortgagee, and the trustee; or 4 (b) An express written provision in a timeshare 5 instrument identifying the managing entity and the trustee, 6 which authorizes the trustee to sell the timeshare estate 7 without judicial action at a foreclosure sale regularly 8 conducted and duly held in accordance with this part. 9 10 However, as to assessment liens only, no written agreement may 11 be required for a receiver appointed under s. 721.26 for the 12 association to sell a timeshare estate without judicial action 13 at a foreclosure sale regularly conducted and duly held in 14 accordance with this part. 15 (12) "Trustee" means any person entitled to exercise a 16 power of sale. The lienholder may not serve as the trustee. 17 721.83 Qualifications of trustees and appointment of 18 successor trustees.-- 19 (1) A trustee is: 20 (a) An attorney who is an active licensed member of 21 The Florida Bar in good standing or a law firm whose members 22 include such an attorney; or 23 (b) A title insurance company, title insurance agent 24 that is licensed under s. 626.8417, or title insurance agency 25 that is licensed under s. 626.8418. 26 (2) An attorney who is a trustee under paragraph 27 (1)(a) may represent the lienholder foreclosing under this 28 part in addition to performing the duties of a trustee under a 29 power of sale. 30 (3) Successor trustees may be appointed by a 31 lienholder at any time by recording a notice of substitution 22 CODING: Words stricken are deletions; words underlined are additions. Florida Senate - 1998 SB 626 38-311-98 1 of trustee in the public records for the county in which the 2 timeshare estate is located. From the time the substitution of 3 trustee is recorded, the successor trustee succeeds to all the 4 powers, duties, and authority of the original trustee and 5 successor trustees, if any. 6 (4) The recorded notice of substitution of trustee 7 must identify: 8 (a) The mortgage or timeshare instrument. 9 (b) The names of the original parties to the mortgage 10 or timeshare instrument. 11 (c) The date of recordation of the mortgage or 12 timeshare instrument. 13 (d) The official record book and page number where the 14 mortgage or timeshare instrument is recorded. 15 (e) The name of the successor trustee. 16 (f) The name of the trustee being replaced. 17 18 The notice must recite acceptance by the successor trustee of 19 his or her duties and must be dated, signed, and acknowledged 20 by the lienholder and the successor trustee. Such notice of 21 substitution of trustee is validly made when completed in 22 accordance with this subsection and recorded in accordance 23 herewith. No resignation of the original trustee is required. 24 721.84 Disclosure and acknowledgment.-- 25 (1) To foreclose a mortgage lien under this part, the 26 following conditions must be met: 27 (a) The mortgage recorded in the public records of the 28 county in which the timeshare estate being foreclosed is 29 located must contain a statement in conspicuous type in 30 substantially the following form: 31 23 CODING: Words stricken are deletions; words underlined are additions. Florida Senate - 1998 SB 626 38-311-98 1 "There is a mortgage lien against your timeshare estate 2 which must be repaid in accordance with this mortgage. Your 3 failure to make the payments required by this mortgage may 4 result in foreclosure of the mortgage lien. 5 Mortgagor acknowledges that if the obligations 6 established by this mortgage are not satisfied and mortgagor 7 does not cure such default in accordance with the terms 8 hereof, then the mortgage lien created by this mortgage can be 9 foreclosed through a nonjudicial procedure in accordance with 10 part III of chapter 721, Florida Statutes. Mortgagor 11 understands that he or she will not be subject to a deficiency 12 judgment or personal liability resulting from a nonjudicial 13 foreclosure procedure, even if the sale of his or her 14 timeshare estate resulting from the foreclosure is 15 insufficient to satisfy the amount of the debt. Mortgagor 16 further acknowledges that trustee will send the notice 17 required by such procedure to the mortgagor's notice address 18 and mortgagor agrees to inform mortgagee of address changes. 19 Mortgagor consents to notification by certified or registered 20 mail and agrees that any person at the mortgagor's notice 21 address may acknowledge receipt of any correspondence received 22 in connection with such procedure. Mortgagor understands that 23 trustee may notify mortgagor of the commencement of the 24 procedure by publication if delivery of the notice is not 25 accepted at the notice address. If mortgagor sends trustee a 26 written objection to the nonjudicial procedure stating the 27 reasons for such objection, the matter will be transferred to 28 a judicial procedure but mortgagor understands and agrees that 29 in the judicial foreclosure procedure, he or she may be 30 subject to a deficiency judgment or personal liability if the 31 sale of his or her timeshare estate resulting from the 24 CODING: Words stricken are deletions; words underlined are additions. Florida Senate - 1998 SB 626 38-311-98 1 foreclosure is insufficient to satisfy the amount of the debt. 2 Mortgagor further understands and agrees that in the judicial 3 procedure if the court finds that there is a complete absence 4 of a justiciable issue of either law or fact raised by the 5 objection or defense, then mortgagor may be personally liable 6 for the costs and attorney's fees incurred by the lienholder 7 in the judicial foreclosure." 8 (b) The mortgage, promissory note, or a separate 9 instrument signed by the mortgagor must contain the 10 mortgagor's notice address. 11 (2) To foreclose an assessment lien under this part, 12 the following conditions must be met: 13 (a) The timeshare instrument recorded in the public 14 records of the county in which the timeshare estate being 15 foreclosed is located must contain a statement in conspicuous 16 type in substantially the following form: 17 "Each owner understands that if the obligations owed 18 for assessments of the association and for ad valorem taxes 19 and special assessments are not satisfied and owner does not 20 timely cure such default, then the lien securing the payment 21 of such obligations can be foreclosed through a nonjudicial 22 procedure in accordance with part III of chapter 721, Florida 23 Statutes. Owner understands that he or she will not be subject 24 to a deficiency judgment or personal liability resulting from 25 a nonjudicial foreclosure procedure, even if the sale of his 26 or her timeshare estate resulting from the foreclosure is 27 insufficient to offset the amount of the default. Owner 28 acknowledges trustee will send the notice required by such 29 procedure to the owner's notice address and owner agrees to 30 inform the managing entity of address changes. Owner consents 31 to notification by certified or registered mail and agrees 25 CODING: Words stricken are deletions; words underlined are additions. Florida Senate - 1998 SB 626 38-311-98 1 that any person at the owner's notice address may acknowledge 2 receipt of any correspondence received in connection with such 3 procedure. Owner understands that trustee may notify owner of 4 the commencement of the procedure by publication if delivery 5 of the notice is not accepted at the notice address. If owner 6 sends the trustee a written objection to the nonjudicial 7 procedure stating the reasons for such objection, the matter 8 will be transferred to a judicial procedure but owner 9 understands and agrees that in the judicial foreclosure 10 procedure, the owner may be subject to a deficiency judgment 11 or personal liability if the sale of his or her timeshare 12 estate resulting from the foreclosure is insufficient to 13 offset the amount of the default. Owner further understands 14 and agrees that in the judicial procedure if the court finds 15 that there is a complete absence of a justiciable issue of 16 either law or fact raised by the owner's objection or defense, 17 then owner may be personally liable for the costs and 18 attorney's fees incurred by the lienholder in the judicial 19 foreclosure." 20 (b) The public offering statement text must contain a 21 statement in conspicuous type in substantially the following 22 form: 23 "There is a lien or lien right against each timeshare 24 estate to secure the payment of assessments or other amounts 25 due from owners to the association in accordance with the 26 operating budget and special assessments and to secure payment 27 of assessments for ad valorem real estate taxes. A purchaser's 28 failure to make such required payments may result in 29 foreclosure of an assessment lien. 30 Assessment liens may be foreclosed in accordance with 31 the judicial procedure established by Florida law or a 26 CODING: Words stricken are deletions; words underlined are additions. Florida Senate - 1998 SB 626 38-311-98 1 nonjudicial procedure established by part III of chapter 721, 2 Florida Statutes. By purchasing a timeshare estate in the 3 timeshare plan described in this public offering statement, 4 purchaser acknowledges and agrees that any assessment lien 5 against the timeshare estate owned by purchaser may be 6 foreclosed by such nonjudicial procedure and agrees that the 7 notice of such procedure may be made by the use of certified 8 or registered mail. Purchaser is required to provide an 9 address for the delivery of all such notices and to inform the 10 managing entity of any changes in the purchaser's notice 11 address." 12 (c) As to any timeshare instrument recorded prior to 13 the effective date of this part, an amendment to the timeshare 14 instrument must have been made to include the notice required 15 by paragraph (a), and upon approval of the amendment to the 16 timeshare instrument, a copy of such amendment must be sent by 17 the managing entity to each timeshare estate owner. The 18 amendment must be approved by the association by the vote 19 required for amendments of this type as provided in the 20 timeshare instrument or, if there is no such provision, on the 21 affirmative vote of a majority of the owners of the 22 association. If such amendment is adopted, the notice required 23 under paragraph (b) is not required to be given to existing 24 owners. 25 (3) Notwithstanding anything to the contrary in this 26 part, a receiver for the association may exercise a power of 27 sale as to assessment liens regardless of whether the notices 28 or the acknowledgment required by subsection (2) have been 29 given. 30 31 27 CODING: Words stricken are deletions; words underlined are additions. Florida Senate - 1998 SB 626 38-311-98 1 721.85 Conditions to exercise of power of sale by 2 trustee.--A trustee may exercise a power of sale provided 3 that: 4 (1) The requirements of s. 721.84 have been met, and 5 any substitution of trustee is filed for record in the public 6 records of the county in which the timeshare estate is 7 located. 8 (2) There is a default by the obligor under the 9 mortgage, the timeshare instrument, or applicable law, the 10 performance of which is secured by the mortgage or required 11 under the timeshare instrument, or applicable law, with 12 respect to any provision in the mortgage, the timeshare 13 instrument, or applicable law, which authorizes foreclosure in 14 the event of default of such provision. 15 (3) There exists no pending lis pendens recorded 16 regarding a judicial action for foreclosure of the mortgage 17 lien or the assessment lien against the same timeshare estate, 18 and the trustee has not been served notice of the filing of 19 any action to enjoin the power of sale procedure. 20 (4) A claim of lien, together with all amendments and 21 assignments, if any, is recorded in the public records of the 22 county in which the timeshare estate is located under s. 23 721.16 or, if applicable, s. 718.116 when an assessment lien 24 is to be foreclosed. 25 (5) The trustee has sent written notice of default and 26 intent to sell the timeshare estate to the obligor's and 27 junior interestholder's notice addresses as required by s. 28 721.86 with a statement in conspicuous type in substantially 29 the following form: 30 "If you fail to cure the default or take other 31 appropriate action with regard to this matter within 30 28 CODING: Words stricken are deletions; words underlined are additions. Florida Senate - 1998 SB 626 38-311-98 1 calendar days after the date of this notice, you will risk 2 losing your interest in this timeshare estate through a 3 nonjudicial foreclosure procedure. However, under this 4 nonjudicial procedure, you will not be subject to a deficiency 5 judgment or personal liability, even if the sale of your 6 timeshare estate resulting from the nonjudicial foreclosure is 7 insufficient to satisfy the amount in which you are in debt. 8 You may object to the sale of your timeshare estate through 9 the nonjudicial foreclosure procedure and require foreclosure 10 of your timeshare interest to proceed through the judicial 11 process. Such an objection must be made in writing and 12 received by the trustee before the end of the 30-day time 13 period. You must state the reason for your objection and 14 include your address on the written objection. In a judicial 15 foreclosure proceeding that results from your objection, you 16 may be subject to a deficiency judgment and personal liability 17 if the sale of your timeshare estate resulting from the 18 judicial foreclosure is insufficient to satisfy the amount in 19 which you are in debt. You may also be subject to a personal 20 money judgment for the costs and attorney's fees incurred by 21 your mortgagee or by the managing entity, as applicable, in 22 the judicial foreclosure proceeding if the court finds that 23 there is a complete absence of a justiciable issue of either 24 law or fact raised by your objections or defenses. You have 25 the right to cure your default at any time before the sale of 26 your timeshare estate by payment of all past due loan payments 27 or assessments, accrued interest, late fees, taxes, and all 28 fees and costs incurred by the lienholder and trustee, 29 including attorney's fees and costs, in connection with the 30 default." 31 29 CODING: Words stricken are deletions; words underlined are additions. Florida Senate - 1998 SB 626 38-311-98 1 (6) A period of at least 30 calendar days has elapsed 2 since the sending of the notice of default and intent to sell 3 by the trustee without receipt by the trustee of a written 4 objection to the sale. 5 (7) If the trustee receives a written objection to the 6 sale from the obligor setting forth a specific objection to a 7 sale of the timeshare estate by the trustee, the trustee must 8 not proceed under this part, but the lienholder must file a 9 foreclosure action as provided in chapter 702. If the court 10 determines that there was a complete absence of justiciable 11 issues of either law or fact raised by the objection received 12 by the trustee under this subsection, or the defenses raised 13 in the subsequent judicial foreclosure proceeding, the 14 lienholder is entitled to entry of a separate personal 15 judgment against the obligor for reasonable attorney's fees 16 and costs incurred by the mortgagee or managing entity, as 17 applicable, in the judicial foreclosure action. 18 (8) The notice of sale required under s. 721.87 has 19 been recorded in the public records of the county in which the 20 timeshare estate is located. 21 721.86 Manner of delivery of notice of default and 22 intent to sell.-- 23 (1) In any foreclosure proceeding under this part, the 24 trustee shall notify the obligor, including persons in this 25 state, outside of this state, or in foreign countries, by 26 delivering a written notice of default and intent to sell 27 under s. 721.85, to the notice addresses of the obligor and 28 junior interestholder, as applicable, by certified or 29 registered mail as follows: 30 (a) The trustee shall place a copy of the notice of 31 default and intent to sell in a sealed envelope with adequate 30 CODING: Words stricken are deletions; words underlined are additions. Florida Senate - 1998 SB 626 38-311-98 1 postage addressed to the obligor, including the record owner 2 of the timeshare estate, if different, and the junior 3 interestholder. 4 (b) The envelope must be placed in the mail as 5 certified or registered mail, return receipt requested. 6 (c) Notice under this subsection is considered 7 perfected upon the signing of the return receipt by a person 8 at the notice address. 9 (2) If the certified or registered mail that is sent 10 as provided in subsection (1) is returned with an endorsement 11 or stamp showing "refused," the trustee may send the notice by 12 first-class mail to the notice address. The failure to claim 13 certified or registered mail is not refusal of notice within 14 the meaning of this subsection. Notice under this subsection 15 must be delivered as follows: 16 (a) The trustee shall place a copy of the notice of 17 default and intent to sell in a sealed envelope with adequate 18 postage addressed to the obligor and junior interestholder. 19 (b) The envelope must be mailed by first-class mail 20 with the return address of the trustee on the envelope. 21 (c) Notice under this subsection is considered 22 perfected upon the mailing of the envelope. 23 (3) If notice is perfected under subsection (1), the 24 trustee must file an affidavit setting forth the manner of 25 notice as part of the certificate of compliance specified in 26 s. 721.89. The affidavit must state the nature of the process; 27 the date on which the process was mailed by certified or 28 registered mail; the name and address on the envelope 29 containing the notice; the fact that the notice was mailed 30 certified or registered mail, return receipt requested; and 31 the name of the person who signed the return receipt, if 31 CODING: Words stricken are deletions; words underlined are additions. Florida Senate - 1998 SB 626 38-311-98 1 known, and the basis for that knowledge. The return receipt 2 from the certified or registered mail must be attached to the 3 affidavit. 4 (4) If notice is perfected under subsection (2), the 5 trustee must file an affidavit setting forth the manner of 6 notice as part of the certificate of compliance specified in 7 s. 721.89. The affidavit must state the nature of the notice; 8 the date on which the notice was mailed by certified or 9 registered mail; the name and address on the envelope 10 containing the notice; the fact that the notice was mailed 11 certified or registered mail and was returned with the 12 endorsement or stamp "refused"; the date, if known, on which 13 the notice was "refused"; the date on which the notice was 14 mailed by first-class mail; the name and address on the 15 envelope containing the notice that was mailed by first-class 16 mail; and the fact that the notice was mailed by first-class 17 mail with the return address of the trustee on the envelope. 18 The return envelope from the attempt to mail notice by 19 certified or registered mail and the return envelope, if any, 20 from the attempt to mail the envelope by first-class mail must 21 be attached to the affidavit. 22 (5) If the trustee is unable to perfect notice under 23 either subsection (1) or subsection (2) because the copy of 24 the notice mailed by certified or registered mail is returned 25 by the United States Post Office as undeliverable or for any 26 other reason, and if by a diligent search and inquiry the 27 trustee cannot obtain a different address for the obligor with 28 which the trustee shall repeat the mailing required by 29 subsection (1), the trustee may perfect notice by publication, 30 in a newspaper of general circulation in the county in which 31 the timeshare estate is located, once a week for 2 successive 32 CODING: Words stricken are deletions; words underlined are additions. Florida Senate - 1998 SB 626 38-311-98 1 weeks and by delivery of a copy of the notice to the obligor 2 by first class mail to the notice address of the obligor and 3 to any other address of the obligor obtained through the 4 trustee's diligent search and inquiry. If notice is perfected 5 by publication under this subsection, the trustee must attach 6 an affidavit of publication to the certificate of compliance 7 set forth in s. 721.89 and state that the notice was perfected 8 by publication after diligent search and inquiry was made for 9 the obligor's address, attaching the returned envelope with 10 the notation from the United States Post Office. No other 11 action of the trustee is necessary to perfect notice. If the 12 diligent search and inquiry has produced a different address 13 than the notice address, such address must then be used in 14 lieu of the notice address of the obligor for subsequent 15 mailings required under this part. 16 721.87 Notice of sale.-- 17 (1) The notice of sale must state: 18 (a) The names and notice addresses of the obligor, 19 including the record owner of the timeshare estate, if 20 different, and the junior interestholders. 21 (b) The name and address of the trustee. 22 (c) A description of the existence of a default under 23 the mortgage, the timeshare instrument, or applicable law. 24 (d) The official record book and page numbers where 25 the mortgage or the claim of lien is recorded. 26 (e) The legal description of the timeshare estate. 27 (f) The amount secured by the mortgage or the 28 assessment lien; accrued interest and late charges as of the 29 date of notice of sale and including a per diem amount to 30 account for further accrual of interest and late charges; 31 advances for the payment of taxes, insurance, and maintenance 33 CODING: Words stricken are deletions; words underlined are additions. Florida Senate - 1998 SB 626 38-311-98 1 of the timeshare estate; and costs of the sale, including a 2 title search fee and reasonable trustee's and attorney's fees 3 and costs. 4 (g) The trustee's intention to sell the timeshare 5 estate to satisfy the obligation. 6 (h) The date, time, and place of sale, which is to be 7 held after 9 a.m. and before 4 p.m. on a regular business day 8 not fewer than 30 days after the recording of the notice of 9 sale. 10 (i) The right of the obligor to cure the default or 11 the right of the junior interestholder to redeem its interest 12 up to the date the trustee issues the certificate of sale in 13 accordance with s. 721.90. 14 (2) The trustee shall send a copy of the notice of 15 sale on the date it is submitted for recording, by first class 16 mail, postage prepaid, to the notice addresses of the obligor 17 and the junior interestholder. In addition, a copy of the 18 notice of sale must be sent by certified or registered mail to 19 the lienholder. 20 (3) Except as provided in this part, notice need not 21 be given to any person claiming an interest subsequent to the 22 recording of the notice of sale. The recording of the notice 23 of sale has the same effect as the filing of a lis pendens in 24 a judicial proceeding under s. 48.23. 25 721.88 Publication of notice of sale.--The trustee 26 shall publish the notice of sale, in a newspaper of general 27 circulation in the county in which the sale is to be held, 28 once a week for 2 consecutive weeks prior to the date of the 29 sale. The last publication must occur at least 5 days before 30 the sale. 31 721.89 Trustees' certificate of compliance.-- 34 CODING: Words stricken are deletions; words underlined are additions. Florida Senate - 1998 SB 626 38-311-98 1 (1) On the date the trustee conducts a sale, the 2 trustee must execute a duly acknowledged certificate of 3 compliance and shall record the certificate of compliance in 4 the public records of the county in which the timeshare estate 5 is located. 6 (2) In the certificate of compliance the trustee must: 7 (a) Set forth the manner of delivery of the notice of 8 default and intent to sell under s. 721.86 with the required 9 affidavit, state that the notice contained the conspicuous 10 language required by s. 721.85(5), state that the default was 11 not cured and the timeshare estate was not redeemed, and state 12 that the trustee did not receive any written objection within 13 the period required under s. 721.85(6). 14 (b) Confirm that the notice of sale was published as 15 required by s. 721.88 and attach an affidavit of publication 16 for the notice of sale. 17 (c) Confirm that the notice of sale was mailed as 18 required by s. 721.87(2), together with a list of the parties 19 to whom the notice of sale was mailed and the address used for 20 each such party. 21 (3) In furtherance of the execution and recording of 22 the certificate of compliance required under this section, the 23 trustee may rely upon an affidavit or certification from the 24 lienholder as to the facts and circumstances of default and 25 failure to cure the default. 26 721.90 Manner of sale.-- 27 (1) The sale of a timeshare estate by public auction 28 must be held on the date and at the time and place designated 29 in the notice of sale. The auction must take place in the 30 county in which the timeshare estate is located. 31 35 CODING: Words stricken are deletions; words underlined are additions. Florida Senate - 1998 SB 626 38-311-98 1 (2) Any person, including the lienholder may bid at 2 the sale. The trustee may bid for the lienholder but not for 3 himself or herself. The attorney for the trustee may conduct 4 the sale and may act at the sale as the auctioneer for the 5 trustee. 6 (3) The person conducting the sale may postpone the 7 sale from time to time. In every such case, notice of 8 postponement must be given by oral public proclamation thereof 9 by such person at the time and place last appointed for the 10 sale. The notice of sale regarding the postponed sale must be 11 mailed and recorded under s. 721.87(1) and published under s. 12 721.88. The effective date of the initial notice of sale for 13 purposes of s. 721.87(3) is not affected by a postponed sale. 14 (4) The buyer shall pay in cash or certified funds on 15 the day of sale the price bid to the trustee or to the 16 attorney for the trustee acting as the auctioneer. The 17 lienholder must receive a credit on its bid for the amount set 18 forth in the notice of sale as required by s. 721.87(1)(f). 19 (5) Upon the issuance of the trustee's deed the buyer 20 at the sale is entitled to possession and use of the timeshare 21 estate in accordance with the timeshare instrument. Any other 22 person thereafter claiming possession of the timeshare estate 23 is considered a tenant at sufferance, and the buyer is 24 entitled, upon application to a court of competent 25 jurisdiction, to a writ of possession. 26 (6) On the date of the sale, and upon receipt of the 27 amount bid, the trustee shall issue to the buyer a certificate 28 of sale stating that a sale conforming to the requirements of 29 this part has occurred and including the following 30 information: the time, place, and date of the sale; the 31 amount of the mortgage lien or the assessment lien, as 36 CODING: Words stricken are deletions; words underlined are additions. Florida Senate - 1998 SB 626 38-311-98 1 applicable; the amount of the purchase price; and the name and 2 address of the successful bidder. A copy of the certificate 3 of sale must be mailed by certified or registered mail, 4 postage prepaid, to all persons entitled to receive a notice 5 of sale under s. 721.86. 6 721.91 Effect of trustee's sale.-- 7 (1) A sale conducted by a trustee or the attorney for 8 the trustee forecloses and terminates all interest in the 9 timeshare estate of all persons to whom notice is given under 10 ss. 721.85(5) and 721.87(2) and of any other person claiming 11 an interest by, through, or under such person. The assessment 12 lien or mortgage lien does not merge into the trustee's deed 13 to any extent that a subsequent judicial foreclosure or 14 reforeclosure of the assessment lien or mortgage lien under 15 this part becomes necessary or is required. A failure to give 16 notice to any person entitled to notice does not affect the 17 validity of the sale as to persons notified. A person 18 entitled to notice but not given notice has the rights of a 19 person not made a defendant in a judicial foreclosure. Any 20 subsequent foreclosure required by failure to notify a party 21 under s. 721.87(2) may be conducted under this part. 22 (2) On the issuance of a certificate of sale under s. 23 721.90(6), all rights of redemption foreclosed under this part 24 terminate. 25 (3) The lienholder has no right to any deficiency 26 judgment against the obligor after a sale of the obligor's 27 timeshare estate under this part as to the obligation 28 foreclosed on. 29 (4) The validity of the sale is presumed upon the 30 recording of the certificate of compliance and issuance of the 31 certificate of sale. 37 CODING: Words stricken are deletions; words underlined are additions. Florida Senate - 1998 SB 626 38-311-98 1 721.92 Issuance of trustee's deed.--Ten days after a 2 sale, absent the filing and service on the trustee of a 3 judicial action to enjoin issuance of the trustee's deed to 4 the timeshare estate or objecting to the sale on the grounds 5 that the requirements of this part were not met by the 6 trustee, the trustee shall issue a trustee's deed to the 7 purchaser at the sale. Such deed must be recorded in the 8 public records of the county in which the timeshare estate is 9 located. 10 721.93 Disposition of proceeds of sale.-- 11 (1) The trustee shall apply the proceeds of the sale 12 as follows: 13 (a) To the expenses of the sale, including 14 compensation of the trustee and a reasonable fee by the 15 trustee's attorney, if applicable. 16 (b) To the amounts owed and specified by s. 17 721.87(1)(f). 18 (c) To all junior interestholders as their liens or 19 interests may appear of record in the order of priority. 20 (d) To an obligor entitled to the surplus, if any. 21 (2) In disposing of the proceeds of sale, the trustee 22 may rely on the information provided in the public records as 23 to the claims of junior interestholders and, in the event of a 24 dispute or uncertainty over such claims, the trustee may 25 submit the matter to adjudication by court, by interpleader, 26 or otherwise. All costs and fees, including attorney's fees 27 and costs, of adjudication must be paid out of the proceeds of 28 sale after payment of the amounts specified in paragraphs 29 (1)(a) and (b). 30 721.94 Form and effect of trustee's deed.-- 31 38 CODING: Words stricken are deletions; words underlined are additions. Florida Senate - 1998 SB 626 38-311-98 1 (1) The trustee's deed must include the name and 2 address of the trustee, the name and address of the buyer, the 3 name of the obligor, including the owner of the timeshare 4 estate on the date of the recordation of the notice of sale, 5 and the name and address of the preparer of the trustee's 6 deed. The trustee's deed must recite that the certificate of 7 compliance was recorded and the regular conduct of a sale, and 8 must contain no warranties of title from the trustee. 9 (2) Upon the recording of the trustee's deed, the 10 certificate of compliance and trustee's deed together 11 constitute conclusive evidence of the truth of the matters set 12 forth therein. 13 (3) The trustee's deed conveys to the purchaser all 14 right, title, and interest in the timeshare estate that the 15 owner had, or had the power to convey, at the time of the 16 execution of the mortgage or recording of the claim of lien, 17 together with all right, title, and interest of the owner or 18 his successors in interest acquired after the execution of the 19 mortgage or recording of the claim of lien. 20 (4) If an action is filed based on any claim that the 21 trustee failed to follow the procedures in this part or that 22 the sale was otherwise improper, it is presumed that the 23 trustee was acting solely as the agent of the lienholder, and 24 any liability resulting therefrom is the sole responsibility 25 of the mortgagee or managing entity and not the trustee. 26 721.95 Miscellaneous provisions.-- 27 (1) The procedures set forth in this part do not 28 impair or otherwise affect the continuing right to bring a 29 judicial action to foreclose a mortgage lien or claim of lien 30 regardless of whether such mortgage or the timeshare 31 39 CODING: Words stricken are deletions; words underlined are additions. Florida Senate - 1998 SB 626 38-311-98 1 instrument, as the case may be, provides a trustee with a 2 power of sale. 3 (2) Nothing in this part impairs the right of any 4 person to assert his or her legal and equitable rights in a 5 court of competent jurisdiction; however, no such action may 6 be pursued to set aside a sale or void a trustee's deed 7 subsequent to the recordation of the trustee's deed. 8 (3) The procedures in this part must be given effect 9 in the context of any reference to judicial foreclosure 10 proceedings or procedures set forth in this chapter or chapter 11 718. 12 (4) If any provision of this part or the application 13 thereof to any person or circumstances is held invalid, such 14 invalidity does not affect other provisions or applications of 15 this part which can be given effect without the invalid 16 provision or application, and to this end, the provisions of 17 this part are declared severable. 18 (5) The division has no authority to regulate, 19 enforce, or ensure compliance with any provision of this part. 20 (6) Notwithstanding s. 721.13, a managing entity shall 21 release the address of the owner of a timeshare estate to a 22 lienholder who can demonstrate that the timeshare estate is 23 subject to an assessment lien or a mortgage lien held by such 24 lienholder. Such information may be used by the lienholder 25 solely for purposes of complying with the foreclosure 26 procedures described in this part. 27 Section 11. This act shall take effect upon becoming a 28 law; however, with respect to any timeshare plan filing 29 approved by the division prior to the date this act becomes a 30 law, the amendment to s. 721.06(1)(f), Florida Statutes, shall 31 not apply to such filing until January 1, 1999, unless and 40 CODING: Words stricken are deletions; words underlined are additions. Florida Senate - 1998 SB 626 38-311-98 1 only to the extent that the developer otherwise voluntarily 2 agrees to comply with all or a portion of such provisions. 3 4 ***************************************** 5 LEGISLATIVE SUMMARY 6 Revises various provisions of law relating to timeshare 7 plans to: 1. Authorize the adoption of described rules with 8 respect to exemptions from chapter 721, F.S. 2. Provide that, if a proposed amendment to an 9 approved multisite timeshare plan adds a new component site, the initial period to approve or cite deficiencies 10 shall be 45 days. 3. Delete a provision with respect to incidental 11 benefits which requires the developer to file an irrevocable letter of credit, surety bond, or other 12 assurance to guarantee the delivery of the incidental benefits to the purchaser. 13 4. Revise provisions with respect to reservation agreements. 14 5. Revise provisions relating to the duties of the managing entity. 15 6. Revise provisions with respect to assessments for common expenses to provide that timeshare plans may 16 vary with respect to common expenses irrespective of the provisions of chapters 718 and 719, F.S. 17 18 Creates the "Timeshare Lien Foreclosure Act" to: 1. Give statutory recognition to timeshare estates 19 as parcels of real property used for vacation experience rather than for homestead purposes. 20 2. Recognize that the economic health and efficient operation of the vacation ownership industry are in part 21 dependent upon the availability of an efficient and economical process for foreclosure. 22 3. Establish streamlined procedures for the foreclosure of any and all assessment liens and mortgage 23 liens against a timeshare estate. 4. Recognize the need to assist vacation ownership 24 resort owners' associations by simplifying and expediting the process of foreclosure of assessment liens and 25 mortgage liens. 26 (See bill for details.) 27 28 29 30 31 41