CODING: Words stricken are deletions; words underlined are additions.Senate Bill 0626
Florida Senate - 1998 SB 626
By Senators Silver and Dyer
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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
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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
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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
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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.
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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
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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
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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
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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
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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
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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.
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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
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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.
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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
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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
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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
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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
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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
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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.
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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
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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.
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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.
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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.--
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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
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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
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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.
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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
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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
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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
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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
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