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91_HB1113ham001
LRB9103102KSgcam04
1 AMENDMENT TO HOUSE BILL 1113
2 AMENDMENT NO. . Amend House Bill 1113 by replacing
3 the title with the following:
4 "AN ACT concerning real estate timeshare interests and
5 repealing a named Act."; and
6 by replacing everything after the enacting clause with the
7 following:
8 "Article 1. General Provisions
9 Section 1-1. Short title. This Act may be cited as the
10 Real Estate Timeshare Act of 1999.
11 Section 1-5. Intent. The intent of the General Assembly
12 in enacting this Act is to regulate the business of timeshare
13 plans, exchange programs, and resale agents for the
14 protection of the public.
15 Section 1-10. Scope of Act.
16 (a) This Act applies to all of the following:
17 (1) Timeshare plans with an accommodation or
18 component site in Illinois.
19 (2) Timeshare plans without an accommodation or
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1 component site in Illinois, if those timeshare plans are
2 sold or offered to be sold to any individual located
3 within Illinois.
4 (3) Exchange programs as defined in this Act.
5 (4) Resale agents as defined in this Act.
6 (b) Exemptions. This Act does not apply to the
7 following:
8 (1) Timeshare plans, whether or not an
9 accommodation is located in Illinois, consisting of 7 or
10 fewer timeshare periods, the use of which extends over
11 any period of less than 3 years.
12 (2) Timeshare plans, whether or not an
13 accommodation is located in Illinois, under which the
14 prospective purchaser's total financial obligation will
15 be less than $1,500 during the entire term of the
16 timeshare plan.
17 Section 1-15. Definitions. In this Act, unless the
18 context otherwise requires:
19 "Accommodation" means any apartment, condominium or
20 cooperative unit, cabin, lodge, hotel or motel room, or other
21 private or commercial structure containing toilet facilities
22 therein that is designed and available, pursuant to
23 applicable law, for use and occupancy as a residence by one
24 or more individuals, or any unit or berth on a commercial
25 cruise line ship, which is included in the offering of a
26 timeshare plan.
27 "Acquisition agent" means a person who, directly or
28 through the person's employees, agents, or independent
29 contractors, induces or attempts to induce by means of a
30 promotion or an advertisement any individual located within
31 the State of Illinois to attend a sales presentation for a
32 timeshare plan.
33 "Advertisement" means any written, oral, or electronic
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1 communication that is directed to or targeted to persons
2 within the State of Illinois and contains a promotion,
3 inducement, or offer to sell a timeshare plan, including but
4 not limited to brochures, pamphlets, radio and television
5 scripts, electronic media, telephone and direct mail
6 solicitations, and other means of promotion.
7 "Association" means the organized body consisting of the
8 purchasers of interests in a timeshare plan.
9 "Assessment" means the share of funds required for the
10 payment of common expenses which is assessed from time to
11 time against each purchaser by the managing entity.
12 "Commissioner" means the Commissioner of Banks and Real
13 Estate, or a natural person authorized by the Commissioner,
14 the Office of Banks and Real Estate Act, or this Act to act
15 in the Commissioner's stead.
16 "Component site" means a specific geographic location
17 where accommodations which are part of a multi-site timeshare
18 plan are located. Separate phases of a single timeshare
19 property in a specific geographic location and under common
20 management shall be deemed a single component site.
21 "Developer" means and includes any person or entity,
22 other than a sales agent, acquisition agent, or resale agent,
23 who creates a timeshare plan or is in the business of selling
24 timeshare interests, or employs agents to do the same, or any
25 person or entity who succeeds to the interest of a developer
26 by sale, lease, assignment, mortgage, or other transfer, but
27 the term includes only those persons who offer timeshare
28 interests for disposition in the ordinary course of
29 business.
30 "Dispose" or "disposition" means a voluntary transfer or
31 assignment of any legal or equitable interest in a timeshare
32 plan, other than the transfer, assignment, or release of a
33 security interest.
34 "Exchange company" means any person owning or operating,
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1 or both owning and operating, an exchange program.
2 "Exchange program" means any method, arrangement, or
3 procedure for the voluntary exchange of timeshare interests
4 or other property interests. The term does not include the
5 assignment of the right to use and occupy accommodations to
6 owners of timeshare interests within a single-site timeshare
7 plan. Any method, arrangement, or procedure that otherwise
8 meets this definition, wherein the purchaser's total
9 contractual financial obligation exceeds $3,000 per any
10 individual, recurring timeshare period, shall be regulated as
11 a timeshare plan in accordance with this Act.
12 "Managing entity" means the person who undertakes the
13 duties, responsibilities, and obligations of the management
14 of a timeshare plan.
15 "Offer" means any inducement, solicitation, or other
16 attempt, whether by marketing, advertisement, oral or written
17 presentation, or any other means, to encourage a person to
18 acquire a timeshare interest in a timeshare plan, other than
19 as security for an obligation.
20 "Person" means a natural person, corporation, limited
21 liability company, partnership, joint venture, association,
22 estate, trust, government, governmental subdivision or
23 agency, or other legal entity, or any combination thereof.
24 "Promotion" means a plan or device, including one
25 involving the possibility of a prospective purchaser
26 receiving a vacation, discount vacation, gift, or prize, used
27 by a developer, or an agent, independent contractor, or
28 employee of any of the same on behalf of the developer, in
29 connection with the offering and sale of timeshare interests
30 in a timeshare plan.
31 "Purchaser" means any person, other than a developer, who
32 by means of a voluntary transfer acquires a legal or
33 equitable interest in a timeshare plan other than as security
34 for an obligation.
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1 "Purchase contract" means a document pursuant to which a
2 person becomes legally obligated to sell, and a purchaser
3 becomes legally obligated to buy, a timeshare interest.
4 "Resale agent" means a person who, directly or through
5 the person's employees or agents, sells or offers to sell a
6 timeshare interest previously sold to a purchaser or solicits
7 an owner of a timeshare interest to list the owner's
8 timeshare interest for sale.
9 "Reservation system" means the method, arrangement, or
10 procedure by which a purchaser, in order to reserve the use
11 or occupancy of any accommodation of a multi-site timeshare
12 plan for one or more timeshare periods, is required to
13 compete with other purchasers in the same multi-site
14 timeshare plan, regardless of whether the reservation system
15 is operated and maintained by the multi-site timeshare plan
16 managing entity, an exchange company, or any other person.
17 In the event that a purchaser is required to use an exchange
18 program as the purchaser's principal means of obtaining the
19 right to use and occupy accommodations, that arrangement
20 shall be deemed a reservation system. When an exchange
21 company utilizes a mechanism for the exchange of use of
22 timeshare periods among members of an exchange program, that
23 utilization is not a reservation system of a multi-site
24 timeshare plan.
25 "Sales agent" means a person, other than a resale agent,
26 who, directly or through the person's employees, agents, or
27 independent contractors, sells or offers to sell timeshare
28 interests in a timeshare plan to any individual located in
29 the State of Illinois.
30 "Timeshare instrument" means one or more documents, by
31 whatever name denominated, creating or governing the
32 operation of a timeshare plan.
33 "Timeshare interest" means and includes either:
34 (1) a "timeshare estate", which is the right to
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1 occupy a timeshare property, coupled with a freehold
2 estate or an estate for years with a future interest in a
3 timeshare property or a specified portion thereof; or
4 (2) a "timeshare use", which is the right to
5 occupy a timeshare property, which right is neither
6 coupled with a freehold interest, nor coupled with an
7 estate for years with a future interest, in a timeshare
8 property.
9 "Timeshare period" means the period or periods of time
10 when the purchaser of a timeshare plan is afforded the
11 opportunity to use the accommodations of a timeshare plan.
12 "Timeshare plan" means any arrangement, plan, scheme, or
13 similar device, other than an exchange program, whether by
14 membership agreement, sale, lease, deed, license, or
15 right-to-use agreement or by any other means, whereby a
16 purchaser, in exchange for consideration, receives ownership
17 rights in or the right to use accommodations for a period of
18 time less than a full year during any given year, but not
19 necessarily for consecutive years. A timeshare plan may be:
20 (1) a "single-site timeshare plan", which is the
21 right to use accommodations at a single timeshare
22 property; or
23 (2) a "multi-site timeshare plan", which includes:
24 (A) a "specific timeshare interest", which is
25 the right to use accommodations at a specific
26 timeshare property, together with use rights in
27 accommodations at one or more other component sites
28 created by or acquired through the timeshare plan's
29 reservation system; or
30 (B) a "non-specific timeshare interest", which
31 is the right to use accommodations at more than one
32 component site created by or acquired through the
33 timeshare plan's reservation system, but including
34 no specific right to use any particular
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1 accommodations.
2 "Timeshare property" means one or more accommodations
3 subject to the same timeshare instrument, together with any
4 other property or rights to property appurtenant to those
5 accommodations.
6 Section 1-20. Estates and interests in property.
7 Each timeshare estate constitutes, for purposes of title, a
8 separate estate or interest in property except for real
9 property tax purposes.
10 Section 1-25. Local powers; construction.
11 (a) Except as specifically provided in this Section, the
12 regulation of timeshare plans and exchange programs is an
13 exclusive power and function of the State. A unit of local
14 government, including a home rule unit, may not regulate
15 timeshare plans and exchange programs. This subsection is a
16 denial and limitation of home rule powers and functions under
17 subsection (h) of Section 6 of Article VII of the Illinois
18 Constitution.
19 (b) Notwithstanding subsection (a), no provision of this
20 Act invalidates or modifies any provision of any zoning,
21 subdivision, or building code or other real estate use law,
22 ordinance, or regulation.
23 Further, nothing in this Act shall be construed to affect
24 or impair the validity of Section 11-11.1-1 of the Illinois
25 Municipal Code or to deny to the corporate authorities of any
26 municipality the powers granted in that Code to enact
27 ordinances (i) prescribing fair housing practices, (ii)
28 defining unfair housing practices, (iii) establishing fair
29 housing or human relations commissions and standards for the
30 operation of such commissions in the administration and
31 enforcement of such ordinances, (iv) prohibiting
32 discrimination based on age, ancestry, color, creed, mental
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1 or physical handicap, national origin, race, religion, or sex
2 in the listing, sale, assignment, exchange, transfer, lease,
3 rental, or financing of real property for the purpose of the
4 residential occupancy thereof, and (v) prescribing penalties
5 for violations of such ordinances.
6 Section 1-30. Creation of timeshare plans. A timeshare
7 plan may be created in any accommodation unless otherwise
8 prohibited. All timeshare plans must maintain a one-to-one
9 purchaser-to-accommodation ratio, which means the ratio of
10 the number of purchasers eligible to use the accommodations
11 of a timeshare plan on a given day to the number of
12 accommodations available for use within the plan on that day,
13 such that the total number of purchasers eligible to use the
14 accommodations of the timeshare plan during a given calendar
15 year never exceeds the total number of accommodations
16 available for use in the timeshare plan during that year. For
17 purposes of the calculation under this Section, each
18 purchaser must be counted at least once, and no individual
19 accommodation may be counted more than 365 times per calendar
20 year (or more than 366 times per leap year). A purchaser who
21 is delinquent in the payment of timeshare plan assessments
22 shall continue to be considered eligible to use the
23 accommodations of the timeshare plan for purposes of
24 calculating the one-to-one purchaser-to-accommodation ratio.
25 Article 5. Registration Requirements and Fees
26 Section 5-5. Exemptions from developer registration. A
27 person shall not be required to register as a developer under
28 this Act if:
29 (1) the person is an owner of a timeshare interest
30 who has acquired the timeshare interest for the person's
31 own use and occupancy and who later offers it for resale;
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1 or
2 (2) the person is a managing entity or an
3 association that is not otherwise a developer of a
4 timeshare plan in its own right, solely while acting as
5 an association or under a contract with an association to
6 offer or sell a timeshare interest transferred to the
7 association through foreclosure, deed in lieu of
8 foreclosure, or gratuitous transfer, if such acts are
9 performed in the regular course of, or as an incident to,
10 the management of the association for its own account in
11 the timeshare plan; or
12 (3) the person offers a timeshare plan in a
13 national publication or by electronic media, as
14 determined by the Office of Banks and Real Estate and
15 provided by rule, which is not directed to or targeted to
16 any individual located in Illinois; or
17 (4) the person is conveyed, assigned, or transferred
18 more than 7 timeshare periods from a developer in a
19 single voluntary or involuntary transaction and
20 subsequently conveys, assigns, or transfers all of the
21 timeshare interests received from the developer to a
22 single purchaser in a single transaction.
23 Section 5-10. Exempt communications. Provided they are
24 delivered after the expiration of the rescission period when
25 applicable, the following communications are exempt from the
26 provisions of this Act:
27 (1) Any stockholder communication such as an annual
28 report or interim financial report, proxy material, a
29 registration statement, a securities prospectus, a
30 registration, a property report, or other material
31 required to be delivered to a prospective purchaser by an
32 agency of any state or the federal government.
33 (2) Any communication addressed to and relating to
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1 the account of any person who has previously executed a
2 contract for the sale or purchase of a timeshare period
3 in a timeshare plan to which the communication relates.
4 (3) Any audio, written, or visual publication or
5 material relating to an exchange company or exchange
6 program.
7 (4) Any audio, written, or visual publication or
8 material relating to the promotion of the availability of
9 any accommodations for transient rental, so long as a
10 mandatory sales presentation is not a term or condition
11 of the availability of such accommodations and so long as
12 the failure of any transient renter to take a tour of a
13 timeshare property or attend a sales presentation does
14 not result in any reduction in the level of services
15 which would otherwise be available to such transient
16 renter.
17 (5) Any oral or written statement disseminated by a
18 developer to broadcast or print media, other than paid
19 advertising or promotional material, regarding plans for
20 the acquisition or development of timeshare property.
21 However, any rebroadcast or any other dissemination of
22 such oral statements to a prospective purchaser by a
23 seller in any manner, or any distribution of copies of
24 newspaper magazine articles or press releases, or any
25 other dissemination of such written statements to a
26 prospective purchaser by a seller in any manner, shall
27 constitute an advertisement.
28 (6) Any advertisement or promotion in any medium to
29 the general public if such advertisement or promotion
30 clearly states that it is not an offer in any
31 jurisdiction in which any applicable registration
32 requirements have not been fully satisfied.
33 (7) Any communication by a developer to encourage a
34 person who has previously acquired a timeshare interest
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1 from the developer to acquire additional use or occupancy
2 rights or benefits, or additional timeshare interests,
3 offered by the same developer.
4 Section 5-15. Developer registration requirements.
5 (a) Registration required. Any person who, to any
6 individual located in Illinois, sells, offers to sell, or
7 attempts to solicit prospective purchasers to purchase a
8 timeshare interest, or any person who creates a timeshare
9 plan with an accommodation in the State of Illinois, shall
10 register as a developer with the Office of Banks and Real
11 Estate and shall comply with the provisions of subsection (c)
12 of this Section.
13 (b) Items to be registered. A developer shall be
14 responsible for registering with the Office of Banks and Real
15 Estate, on forms provided by the Office of Banks and Real
16 Estate, the following:
17 (1) All timeshare plans which have accommodations
18 located in Illinois or which are sold or offered for sale
19 to any individual located in Illinois.
20 (2) All sales agents who sell or offer to sell any
21 timeshare interests in any timeshare plan offered by the
22 developer to any individual located in Illinois.
23 (3) All acquisition agents who, by means of
24 inducement, promotion, or advertisement, attempt to
25 encourage or procure prospective purchasers located in
26 Illinois to attend a sales presentation for any timeshare
27 plan offered by the developer.
28 (4) All managing entities who manage any timeshare
29 plan offered or sold by the developer to any individual
30 located in Illinois, without limitation as to whether the
31 location of the accommodation site managed is within
32 Illinois.
33 (c) Escrow. The developer shall comply with the
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1 following escrow requirements:
2 (1) A developer of a timeshare plan shall deposit
3 into an escrow account in a federally insured depository
4 100% of all funds which are received during the
5 purchaser's rescission period. The deposit of such funds
6 shall be evidenced by an executed escrow agreement
7 between the escrow agent and the developer, which shall
8 include provisions that:
9 (A) funds may be disbursed to the developer by
10 the escrow agent from the escrow account only after
11 expiration of the purchaser's rescission period and
12 in accordance with the purchase contract, subject to
13 paragraph (2) of this subsection; and
14 (B) if a purchaser properly cancels the
15 purchase contract pursuant to its terms, the funds
16 shall be paid to the purchaser or paid to the
17 developer if the purchaser's funds have been
18 previously refunded by the developer.
19 (2) If a developer contracts to sell a timeshare
20 interest and the construction of any property in which
21 the timeshare interest is located has not been completed,
22 the developer, upon expiration of the rescission period,
23 shall continue to maintain in an escrow account all funds
24 received by or on behalf of the developer from the
25 purchaser under his or her purchase contract. The
26 Office of Banks and Real Estate shall establish, by rule,
27 the types of documentation which shall be required for
28 evidence of completion, including but not limited to a
29 certificate of occupancy, a certificate of substantial
30 completion, or an inspection by the Office of the State
31 Fire Marshal or the State Fire Marshal's designee or an
32 equivalent public safety inspection agency in the
33 applicable jurisdiction. Funds shall be released from
34 escrow as follows:
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1 (A) If a purchaser properly cancels the
2 purchase contract pursuant to its terms, the funds
3 shall be paid to the purchaser or paid to the
4 developer if the purchaser's funds have been
5 previously refunded by the developer.
6 (B) If a purchaser defaults in the performance
7 of the purchaser's obligations under the purchase
8 contract, the funds shall be paid to the developer.
9 (C) If the funds of a purchaser have not been
10 previously disbursed in accordance with the
11 provisions of this paragraph (2), they may be
12 disbursed to the developer by the escrow agent upon
13 the issuance of acceptable evidence of completion of
14 construction as provided herein.
15 (3) In lieu of the provisions in paragraphs (1) and
16 (2), the Office of Banks and Real Estate may accept from
17 the developer a surety bond, irrevocable letter of
18 credit, or other financial assurance acceptable to the
19 Office of Banks and Real Estate, as provided by rule.
20 Any acceptable financial assurance must be in an amount
21 equal to or in excess of the funds which would otherwise
22 be placed in escrow, or in an amount equal to the cost to
23 complete the incomplete property in which the timeshare
24 interest is located.
25 (4) The developer shall provide escrow account
26 information to the Office of Banks and Real Estate and
27 shall execute in writing an authorization consenting to
28 an audit or examination of the account by the Office of
29 Banks and Real Estate on forms provided by the Office of
30 Banks and Real Estate. The developer shall comply with
31 the reconciliation and records requirements established
32 by rule by the Office of Banks and Real Estate. The
33 developer shall make documents related to the escrow
34 account or escrow obligation available to the Office of
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1 Banks and Real Estate upon the Office's request. The
2 developer shall maintain any disputed funds in the escrow
3 account until either:
4 (A) receipt of written direction agreed to by
5 signature of all parties; or
6 (B) deposit of the funds with a court of
7 competent jurisdiction in which a civil action
8 regarding the funds has been filed.
9 (d) Comprehensive registration. In registering a
10 timeshare plan, the developer shall be responsible for
11 providing information on the following:
12 (1) The developer's legal name, any assumed names
13 used by the developer, principal office street address,
14 mailing address, primary contact person, and telephone
15 number;
16 (2) The name of the developer's authorized or
17 registered agent in the State of Illinois upon whom
18 claims can be served or service of process be had, the
19 agent's street address in Illinois, and telephone number;
20 (3) The name, street address, mailing address,
21 primary contact person, and telephone number of any
22 timeshare plan being registered;
23 (4) The name, street address, mailing address and
24 telephone number of any sales agent and acquisition agent
25 utilized by the developer, and any managing entity of the
26 timeshare plan;
27 (5) A public offering statement which complies with
28 the requirements of Sections 5-25; and
29 (6) Any other information regarding the developer,
30 timeshare plan, sales agents, acquisition agents, or
31 managing entities as reasonably required by the Office of
32 Banks and Real Estate and established by rule.
33 (e) Abbreviated registration. The Office of Banks and
34 Real Estate may accept, as provided for by rule, an
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1 abbreviated registration application of a developer of a
2 timeshare plan in which all accommodations are located
3 outside of the State of Illinois. The developer shall file a
4 written notice of intent to register under this Section at
5 least 15 days prior to submission. A developer of a
6 timeshare plan with any accommodation located in the State of
7 Illinois may not file an abbreviated filing, with the
8 exception of a succeeding developer after a merger or
9 acquisition when all of the developers' timeshare plans were
10 registered in Illinois immediately preceding the merger or
11 acquisition.
12 The developer shall provide a certificate of registration
13 or other evidence of registration from the appropriate
14 regulatory agency of any other jurisdiction within the United
15 States in which some or all of such accommodations are
16 located. The other jurisdiction must have disclosure
17 requirements that are substantially equivalent to or greater
18 than the information required to be disclosed to purchasers
19 by the State of Illinois. A developer filing an abbreviated
20 registration application shall provide the following:
21 (1) The developer's legal name, any assumed names
22 used by the developer, and the developer's principal
23 office location, mailing address, primary contact person,
24 and telephone number.
25 (2) The name, location, mailing address, primary
26 contact person, and telephone number of the timeshare
27 plan.
28 (3) The name of the authorized agent or registered
29 agent in Illinois upon whom claims can be served or
30 service of process can be had, and the address in
31 Illinois of the authorized agent or registered agent.
32 (4) The names of any sales agent, acquisition
33 agent, and managing entity, and their principal office
34 location, mailing address, and telephone number.
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1 (5) The certificate of registration or other
2 evidence of registration from any jurisdiction in which
3 the timeshare plan is approved or accepted.
4 (6) A declaration as to whether the timeshare plan
5 is a single-site timeshare plan or a multi-site
6 timeshare plan and, if a multi-site timeshare plan,
7 whether it consists of specific timeshare interests or
8 non-specific timeshare interests.
9 (7) Disclosure of each jurisdiction in which the
10 developer has applied for registration of the timeshare
11 plan, and whether the timeshare plan, its developer, or
12 any of its acquisition agents, sales agents, or managing
13 entities utilized were denied registration or were the
14 subject of any disciplinary proceeding.
15 (8) Copies of any disclosure documents required to
16 be given to purchasers or required to be filed with the
17 jurisdiction in which the timeshare plan is approved or
18 accepted as may be requested by the Office of Banks and
19 Real Estate.
20 (9) The appropriate fee.
21 (10) Such other information reasonably required by
22 the Office of Banks and Real Estate and established by
23 rule.
24 (f) Preliminary permits. Notwithstanding anything in
25 this Section to the contrary, the Office of Banks and Real
26 Estate may grant a 6-month preliminary permit, as established
27 by rule, allowing the developer to begin offering and selling
28 timeshare interests while the registration is in process. To
29 obtain a preliminary permit, the developer shall do all of
30 the following:
31 (1) Submit a formal written request to the Office
32 of Banks and Real Estate for a preliminary permit.
33 (2) Submit a substantially complete application for
34 registration to the Office of Banks and Real Estate,
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1 including all appropriate fees and exhibits required
2 under this Article.
3 (3) Provide evidence acceptable to the Office of
4 Banks and Real Estate that all funds received by the
5 developer will be placed into an independent escrow
6 account with instructions that funds will not be released
7 until a final registration has been granted.
8 (4) Give to each purchaser and potential purchaser a
9 copy of the proposed public offering statement that the
10 developer has submitted to the Office of Banks and Real
11 Estate with the initial application.
12 (5) Give to each purchaser the opportunity to cancel
13 the purchase contract in accordance with Section 10-10.
14 The purchaser shall have an additional opportunity to
15 cancel upon the issuance of an approved registration if
16 the Office of Banks and Real Estate determines that there
17 is a substantial difference in the disclosures contained
18 in the final public offering statement and those given to
19 the purchaser in the proposed public offering statement.
20 (g) Alternative registration; letter of credit or other
21 assurance; recovery.
22 (1) Notwithstanding anything in this Act to the
23 contrary, the Office of Banks and Real Estate may accept,
24 as established by rule, a registration from a developer
25 for a timeshare plan if the developer provides all of the
26 following:
27 (A) A written notice of intent to register
28 under this Section at least 15 days prior to
29 submission of the alternative registration.
30 (B) An irrevocable letter of credit or other
31 acceptable assurance, as established by rule, in an
32 amount of $1,000,000, from which an Illinois
33 purchaser aggrieved by any act, representation,
34 transaction, or conduct of a duly registered
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1 developer or his or her acquisition agent, sales
2 agent, managing entity, or employee, which violates
3 any provision of this Act or the rules promulgated
4 under this Act, or which constitutes embezzlement
5 of money or property or results in money or property
6 being unlawfully obtained from any person by false
7 pretenses, artifice, trickery, or forgery or by
8 reason of any fraud, misrepresentation,
9 discrimination, or deceit by or on the part of any
10 developer or agent or employee of the developer and
11 which results in actual monetary loss as opposed to
12 a loss in market value, may recover.
13 (C) The developer's legal name, any assumed
14 names used by the developer, and the developer's
15 principal office location, mailing address, main
16 contact person, and telephone number.
17 (D) The name, location, mailing address, main
18 contact person, and telephone number of the
19 timeshare plan included in the filing.
20 (E) The name of the authorized agent or
21 registered agent in Illinois upon whom claims can be
22 served or service of process can be had, and the
23 address in Illinois of the authorized agent or
24 registered agent.
25 (F) The names of any sales agent, acquisition
26 agent, and managing entity, and their principal
27 office location, mailing address, and telephone
28 number.
29 (G) A declaration as to whether the timeshare
30 plan is a single-site timeshare plan or a multi-site
31 timeshare plan and, if a multi-site timeshare plan,
32 whether it consists of specific timeshare interests
33 or non-specific timeshare interests.
34 (H) Disclosure of each jurisdiction in which
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1 the developer has applied for registration of the
2 timeshare plan, and whether the timeshare plan, its
3 developer, or any of its acquisition agents, sales
4 agents, or managing entities utilized were denied
5 registration or were the subject of any disciplinary
6 proceeding.
7 (I) The required fee.
8 (J) Such other information reasonably required
9 by the Office of Banks and Real Estate and
10 established by rule.
11 (2) Any letter of credit or other acceptable
12 assurance shall remain in effect with the Office of Banks
13 and Real Estate for a period of 12 months after the date
14 the developer does not renew or otherwise cancel his or
15 her registration with the State of Illinois or 12 months
16 after the Office of Banks and Real Estate revokes,
17 suspends, or otherwise disciplines such registration,
18 provided there is no pending litigation alleging a
19 violation of any provision of this Act known by the
20 Office of Banks and Real Estate and certified by the
21 developer.
22 (3) The Office of Banks and Real Estate shall
23 establish procedures, by rule, to satisfy claims by any
24 Illinois purchaser pursuant to this Section.
25 (4) The Office of Banks and Real Estate shall
26 automatically suspend the registration of any developer
27 pursuant to Section 15-25 of this Act in the event the
28 Office authorizes or directs payment to an Illinois
29 purchaser from the letter of credit or other acceptable
30 assurance pursuant to this Section and as established by
31 rule.
32 (h) A developer who registers a timeshare plan pursuant
33 to this Act shall provide the purchaser with a public
34 offering statement that complies with Section 5-25 and any
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1 disclosures or other written information required by this
2 Act.
3 (i) Nothing contained in this Section shall affect the
4 Office of Banks and Real Estate's ability to initiate any
5 disciplinary action against a developer in accordance with
6 this Act.
7 (j) For purposes of this Section, "Illinois purchaser"
8 means a person who, within the State of Illinois, is
9 solicited, offered, or sold a timeshare interest in a
10 timeshare plan registered pursuant to this Section.
11 Section 5-20. Developer supervisory duties. The
12 developer shall have the duty to supervise, manage, and
13 control all aspects of the offering of the timeshare plan,
14 including, but not limited to, promotion, advertising,
15 contracting, and closing. The developer shall have
16 responsibility for each timeshare plan registered with the
17 Office of Banks and Real Estate and for the actions of any
18 sales agent, managing entity, and acquisition agent utilized
19 by the developer in the offering or selling of any registered
20 timeshare plan. Any violation of this Act which occurs
21 during the offering activities shall be deemed to be a
22 violation by the developer as well as by the acquisition
23 agent, sales agent, or managing entity who actually committed
24 such violation. Notwithstanding anything to the contrary in
25 this Act, the developer shall be responsible for the actions
26 of the association and managing entity only while they are
27 subject to the developer's control.
28 Section 5-25. Timeshare plan public offering statement
29 requirements.
30 (a) A developer shall prepare a public offering
31 statement, shall provide the statement to each purchaser of a
32 timeshare interest in any timeshare plan at the time of
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1 purchase, and shall fully and accurately disclose those facts
2 concerning the timeshare developer and timeshare plan that
3 are required by this Act or by rule. The public offering
4 statement shall be in writing and dated and shall require the
5 purchaser to certify in writing the receipt thereof.
6 (b) With regard to timeshare interests offered in a
7 timeshare plan, a public offering statement shall fully and
8 accurately disclose the following:
9 (1) The name of the developer and the principal
10 address of the developer.
11 (2) A description of the type of timeshare
12 interests being offered.
13 (3) A general description of the existing and
14 proposed accommodations and amenities of the timeshare
15 plan, including their type and number, personal property
16 furnishing the accommodation, any use restrictions, and
17 any required fees for use.
18 (4) A description of any accommodations and
19 amenities that are committed to be built, including,
20 without limitation:
21 (A) the developer's schedule of commencement
22 and completion of all accommodations and amenities;
23 and
24 (B) the estimated number of accommodations per
25 site that may become subject to the timeshare plan.
26 (5) A brief description of the duration, phases,
27 and operation of the timeshare plan.
28 (6) The current annual budget, if available, or the
29 projected annual budget for the timeshare plan. The
30 budget shall include, without limitation:
31 (A) a statement of the amount, or a statement
32 that there is no amount, included in the budget as a
33 reserve for repairs and replacement;
34 (B) the projected common expense liability, if
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1 any, by category of expenditures for the timeshare
2 plan; and
3 (C) a statement of any services or expenses
4 not reflected in the budget that the developer
5 provides or pays.
6 (7) Any initial or special fee due from the
7 purchaser at closing, together with a description of the
8 purpose and method of calculating the fee.
9 (8) A description of any liens, defects, or
10 encumbrances on or affecting the title to the timeshare
11 interests.
12 (9) A description of any financing offered by or
13 available through the developer.
14 (10) A statement that within 5 calendar days after
15 receipt of the public offering statement or after
16 execution of the purchase contract, whichever is later, a
17 purchaser may cancel any purchase contract for a
18 timeshare interest from a developer together with a
19 statement providing the name and street address to which
20 the purchaser should mail any notice of cancellation.
21 However, if by agreement of the parties by and through
22 the purchase contract, the purchase contract allows for
23 cancellation of the purchase contract for a period of
24 time exceeding 5 calendar days, then the public offering
25 statement shall include a statement that the cancellation
26 of the purchase contract is allowed for that period of
27 time exceeding 5 calendar days.
28 (11) A statement of any pending suits,
29 adjudications, or disciplinary actions material to the
30 timeshare interests of which the developer has knowledge.
31 (12) Any restrictions on alienation of any number
32 or portion of any timeshare interests.
33 (13) A statement describing liability and casualty
34 insurance for the timeshare property.
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1 (14) Any current or expected fees or charges to be
2 paid by timeshare purchasers for the use of any amenities
3 related to the timeshare property.
4 (15) The extent to which financial arrangements
5 have been provided for completion of all promised
6 improvements.
7 (16) The developer or managing entity must notify
8 the Office of Banks and Real Estate of the extent to
9 which an accommodation may become subject to a tax or
10 other lien arising out of claims against other purchasers
11 in the same timeshare plan. The Office of Banks and Real
12 Estate may require the developer or managing entity to
13 notify a prospective purchaser of any such potential tax
14 or lien which would materially and adversely affect the
15 prospective purchaser.
16 (17) A statement indicating that the developer and
17 timeshare plan are registered with the State of Illinois.
18 (18) If the timeshare plan provides purchasers with
19 the opportunity to participate in an exchange program, a
20 description of the name and address of the exchange
21 company and the method by which a purchaser accesses the
22 exchange program.
23 (19) Such other information reasonably required by
24 the Office of Banks and Real Estate and established by
25 administrative rule necessary for the protection of
26 purchasers of timeshare interests in timeshare plans.
27 (20) Any other information that the developer, with
28 the approval of the Office of Banks and Real Estate,
29 desires to include in the public offering statement.
30 (c) A developer offering a multi-site timeshare plan
31 shall also fully and accurately disclose the following
32 information, which may be disclosed in a written, graphic, or
33 tabular form:
34 (1) A description of each component site, including
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1 the name and address of each component site.
2 (2) The number of accommodations and timeshare
3 periods, expressed in periods of 7-day use availability,
4 committed to the multi-site timeshare plan and available
5 for use by purchasers.
6 (3) Each type of accommodation in terms of the
7 number of bedrooms, bathrooms, and sleeping capacity, and
8 a statement of whether or not the accommodation contains
9 a full kitchen. For purposes of this description, a
10 "full kitchen" means a kitchen having a minimum of a
11 dishwasher, range, sink, oven, and refrigerator.
12 (4) A description of amenities available for use by
13 the purchaser at each component site.
14 (5) A description of the reservation system, which
15 shall include the following:
16 (A) The entity responsible for operating the
17 reservation system.
18 (B) A summary of the rules and regulations
19 governing access to and use of the reservation
20 system.
21 (C) The existence of and an explanation
22 regarding any priority reservation features that
23 affect a purchaser's ability to make reservations
24 for the use of a given accommodation on a
25 first-come, first-served basis.
26 (6) A description of any right to make any
27 additions, substitutions, or deletions of accommodations
28 or amenities, and a description of the basis upon which
29 accommodations and amenities may be added to, substituted
30 in, or deleted from the multi-site timeshare plan.
31 (7) A description of the purchaser's liability for
32 any fees associated with the multi-site timeshare plan.
33 (8) The location and the anticipated relative use
34 demand of each component site in a multi-site timeshare
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1 plan, as well as any periodic adjustment or amendment to
2 the reservation system which may be needed in order to
3 respond to actual purchaser use patterns and changes in
4 purchaser use demand for the accommodations existing at
5 that time within the multi-site timeshare plan.
6 (9) Such other information reasonably required by
7 the Office of Banks and Real Estate and established by
8 administrative rule necessary for the protection of
9 purchasers of timeshare interests in timeshare plans.
10 (10) Any other information that the developer, with
11 the approval of the Office of Banks and Real Estate,
12 desires to include in the public offering statement.
13 (d) If a developer offers a non-specific timeshare
14 interest in a multi-site timeshare plan, the developer shall
15 disclose the information set forth in subsection (b) as to
16 each component site.
17 Section 5-30. Exchange company registration and
18 disclosure requirements.
19 (a) Each exchange company offering an exchange program
20 to purchasers in this State shall register with the Office of
21 Banks and Real Estate by July 1 of each year. The
22 registration shall consist of the information specified in
23 this Section. However, an exchange company shall make its
24 initial registration at least 20 calendar days prior to
25 offering membership in an exchange program to any purchaser
26 in this State.
27 (b) If a purchaser is offered the opportunity to become
28 a member of an exchange program, the developer shall deliver
29 to the purchaser, together with the public offering statement
30 and any other materials required to be furnished under this
31 Section, and prior to the offering or execution of any
32 contract between the purchaser and the exchange company
33 offering membership in the exchange program, or, if the
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1 exchange company is dealing directly with the purchaser, the
2 developer or the exchange company shall deliver to the
3 purchaser, prior to the initial offering or execution of any
4 contract between the purchaser and the exchange company, the
5 following written information regarding the exchange program,
6 the form and substance of which shall first be approved by
7 the Office of Banks and Real Estate in accordance with this
8 Section:
9 (1) The name and address of the exchange company.
10 (2) The names of all officers, directors, and
11 shareholders of the exchange company.
12 (3) Whether the exchange company or any of its
13 officers or directors have any legal or beneficial
14 interest in any developer, seller, or managing entity for
15 any timeshare plan participating in the exchange program
16 and, if so, the identity of the timeshare plan and the
17 nature of the interest.
18 (4) Unless otherwise stated, a statement that the
19 purchaser's contract with the exchange company is a
20 contract separate and distinct from the purchaser's
21 contract with the seller of timeshare interests.
22 (5) Whether the purchaser's participation in the
23 exchange program is dependent upon the continued
24 affiliation of the applicable timeshare plan with the
25 exchange program.
26 (6) A statement that the purchaser's participation
27 in the exchange program is voluntary.
28 (7) A complete and accurate description of the
29 terms and conditions of the purchaser's contractual
30 relationship with the exchange program and the procedure
31 by which changes thereto may be made.
32 (8) A complete and accurate description of the
33 procedures necessary to qualify for and effectuate
34 exchanges.
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1 (9) A complete and accurate description of all
2 limitations, restrictions, and priorities employed in the
3 operation of the exchange program, including but not
4 limited to limitations on exchanges based on seasonality,
5 accommodation size, or levels of occupancy, expressed in
6 conspicuous type, and, in the event that those
7 limitations, restrictions, or priorities are not
8 uniformly applied by the exchange company, a clear
9 description of the manner in which they are applied.
10 (10) Whether exchanges are arranged on a
11 space-available basis and whether any guarantees of
12 fulfillment of specific requests for exchanges are made
13 by the exchange company.
14 (11) Whether and under what circumstances an owner,
15 in dealing with the exchange program, may lose the right
16 to use and occupy an accommodation of the timeshare plan
17 during a reserved use period with respect to any properly
18 applied-for exchange without being provided with
19 substitute accommodations by the exchange program.
20 (12) The fees or range of fees for participation by
21 owners in the exchange program, a statement of whether
22 any such fees may be altered by the exchange company, and
23 the circumstances under which alterations may be made.
24 (13) The name and address of the site of each
25 accommodation included within a timeshare plan
26 participating in the exchange program.
27 (14) The number of accommodations in each timeshare
28 plan that are available for occupancy and that qualify
29 for participation in the exchange program, expressed
30 within the following numerical groups: 1-5; 6-10; 11-20;
31 21-50; and 51 and over.
32 (15) The number of currently enrolled owners for
33 each timeshare plan participating in the exchange
34 program, expressed within the following numerical groups:
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1 1-100; 101-249; 250-499; 500-999; and 1,000 and over; and
2 a statement of the criteria used to determine those
3 owners who are currently enrolled with the exchange
4 program.
5 (16) The disposition made by the exchange company
6 of use periods deposited with the exchange program by
7 owners enrolled in the exchange program and not used by
8 the exchange company in effecting exchanges.
9 (17) The following information for the preceding
10 calendar year, which shall be independently audited by a
11 certified public accountant in accordance with the
12 standards of the Accounting Standards Board of the
13 American Institute of Certified Public Accountants and
14 reported annually no later than August 1 of each year:
15 (A) The number of owners currently enrolled in
16 the exchange program.
17 (B) The number of timeshare plans that have
18 current affiliation agreements with the exchange
19 program.
20 (C) The percentage of confirmed exchanges,
21 which is the number of exchanges confirmed by the
22 exchange program divided by the number of exchanges
23 properly applied for, together with a complete and
24 accurate statement of the criteria used to determine
25 whether an exchange request was properly applied
26 for.
27 (D) The number of use periods for which the
28 exchange program has an outstanding obligation to
29 provide an exchange to an owner who relinquished a
30 use period during a particular year in exchange for
31 a use period in any future year.
32 (E) The number of exchanges confirmed by the
33 exchange program during the year.
34 (F) A statement in conspicuous type to the
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1 effect that the percentage described in subdivision
2 (17)(C) of this subsection is a summary of the
3 exchange requests entered with the exchange program
4 in the period reported and that the percentage does
5 not indicate the probabilities of an owner's being
6 confirmed to any specific choice or range or
7 choices.
8 (18) Such other information as may be reasonably
9 required by the Office of Banks and Real Estate of any
10 exchange company as established by rule.
11 (c) No developer shall have any liability with respect
12 to any violation of this Act arising out of the publication
13 by the developer of information provided to it by an exchange
14 company pursuant to this Article. No exchange company shall
15 have any liability with respect to any violation of this Act
16 arising out of the use by a developer of information relating
17 to an exchange program other than that provided to the
18 developer by the exchange company.
19 (d) All written, visual, and electronic communications
20 relating to an exchange company or an exchange program shall
21 be filed with the Office of Banks and Real Estate upon its
22 request.
23 (e) The failure of an exchange company to observe the
24 requirements of this Section, and the use of any unfair or
25 deceptive act or practice in connection with the operation of
26 an exchange program, is a violation of this Act.
27 (f) An exchange company may elect to deny exchange
28 privileges to any owner whose use of the accommodations of
29 the owner's timeshare plan is denied, and no exchange program
30 or exchange company shall be liable to any of its members or
31 any third parties on account of any such denial of exchange
32 privileges.
33 Section 5-35. Resale agent registration requirements.
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1 (a) Every resale agent as defined in this Act shall
2 register with the Office of Banks and Real Estate.
3 (b) Every resale agent shall be responsible for
4 registering the following information with the Office of
5 Banks and Real Estate on forms provided by the Office of
6 Banks and Real Estate:
7 (1) A description of the resale program offered by
8 the resale agent.
9 (2) The legal name, any assumed names, and the
10 mailing address, street address, contact person, and
11 telephone number of the resale agent.
12 (3) A properly executed consent-to-audit form,
13 which allows the Office of Banks and Real Estate to audit
14 any escrow accounts held by the resale agent.
15 (4) Any other information required by the Office of
16 Banks and Real Estate to be filed by resale agents, as
17 established by rule.
18 (c) The following shall be exempt from registration
19 under this Section:
20 (1) Any developer, sales agent, acquisition agent,
21 or managing entity that is currently registered pursuant
22 to this Act.
23 (2) Any purchaser that sells or offers to sell his
24 or her own timeshare interest.
25 (3) Any homeowners' association that sells or
26 offers to sell its own timeshare interests acquired
27 through foreclosure, deed in lieu of foreclosure, or
28 gratuitous transfer.
29 (4) Any person who is licensed under the Real
30 Estate License Act of 1983 or its successor Act.
31 Section 5-40. Resale agent duties. Whether registered
32 or exempt from registration under Section 5-35, a resale
33 agent shall comply with all of the following:
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1 (a) Prior to engaging in any resale activities on behalf
2 of any owner of a timeshare interest, a resale agent shall
3 enter into a listing agreement with that owner. Every
4 listing agreement shall be in writing and signed by both the
5 resale agent and the timeshare interest owner. The
6 requirements of the written listing agreement shall be
7 established by rule, but at a minimum the listing agreement
8 shall disclose the method of compensation, a definite date of
9 termination, whether any fees are non-refundable, and whether
10 the agreement permits the timeshare resale agent or any other
11 person to make any use whatsoever of the owner's timeshare
12 interest or receive any rents or profits generated from such
13 use of the timeshare interest.
14 (b) A resale agent shall maintain records as required by
15 rule. The records required to be maintained include, but are
16 not limited to, all listing agreements, copies of
17 disbursement authorizations in accordance with subsection
18 (c), and resale contracts.
19 (c) A resale agent who collects any fees prior to a
20 transfer of an interest from any owner shall deposit the fees
21 in an escrow account. Any fees that are to be paid to the
22 resale agent prior to closing may be disbursed from the
23 escrow account only upon receipt of a disbursement
24 authorization, signed by the owner, in the following form:
25 "I, (name of owner), am the owner of a timeshare
26 interest in (name of timeshare plan). I understand that
27 for my protection I can require the entire fee to be held
28 in escrow until the closing on the resale of my timeshare
29 interest, but I am authorizing a release before the
30 transfer in the following amount: (amount written in
31 words) ($ (amount in numbers)), for the following purpose
32 or purposes (description of purpose or purposes). I
33 understand that the resale agent is regulated by the
34 Office of Banks and Real Estate under the Real Estate
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1 Timeshare Act of 1999. The Office of Banks and Real
2 Estate requires the resale agent to obtain this
3 disbursement authorization with my signature before
4 disbursement of my funds."
5 (d) A resale agent shall utilize a purchase agreement
6 that discloses to a purchaser of a timeshare interest all of
7 the following:
8 (1) A legally sufficient description of the
9 timeshare interest being purchased.
10 (2) The name and address of the managing entity of
11 the timeshare property.
12 (3) The current year's assessment for the common
13 expenses allocated to the timeshare interest being
14 purchased including the time period to which the
15 assessment relates and the date on which it is due. If
16 not included in the applicable common expense assessment,
17 the amount of any real or personal property taxes
18 allocated to the timeshare interest being purchased.
19 (4) A complete and accurate disclosure of the terms
20 and conditions of the purchase and closing, including the
21 obligations of the owner, the purchaser, or both for
22 closing costs and the title insurance.
23 (5) The entity responsible for providing
24 notification to the managing entity of the timeshare plan
25 and the applicable exchange company regarding any change
26 in the ownership of the timeshare interest.
27 (6) A statement of the first year in which the
28 purchaser is entitled to receive the actual use rights
29 and occupancy of the timeshare interest, as determined by
30 the managing entity of the timeshare plan and any
31 exchange company.
32 (7) In making the disclosures required by this
33 subsection (d), the timeshare resale agent may rely upon
34 information provided in writing by the owner or managing
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1 entity of the timeshare plan.
2 (8) The purchaser's 5-day cancellation period as
3 required by Section 10-10.
4 (9) Any other information determined by the Office
5 of Banks and Real Estate and established by rule.
6 Section 5-45. Amendment to registration information or
7 public offering statement. The developer, resale agent, and
8 exchange company shall amend or supplement their disclosure
9 documents and registration information to reflect any
10 material change in any information required by this Act or
11 the rules implementing this Act. All such amendments,
12 supplements, and changes shall be filed with the Office of
13 Banks and Real Estate within 20 calendar days of the material
14 change.
15 Section 5-50. Registration review time frames. Every
16 registration required to be filed with the Office of Banks
17 and Real Estate under this Act shall be reviewed and issued a
18 certificate of registration in accordance with the following
19 schedule:
20 (1) Comprehensive registration. Registration shall
21 be effective only upon the issuance of a certificate of
22 registration by the Office of Banks and Real Estate,
23 which, in the ordinary course of business, should occur
24 no more than 60 calendar days after actual receipt by the
25 Office of Banks and Real Estate of the properly completed
26 application. The Office of Banks and Real Estate must
27 provide a list of deficiencies in the application, if
28 any, within 60 calendar days of receipt.
29 (2) Abbreviated registration. Registration shall
30 be effective only upon the issuance of a certificate of
31 registration by the Office of Banks and Real Estate,
32 which, in the ordinary course of business, should occur
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1 no more than 30 calendar days after actual receipt by the
2 Office of Banks and Real Estate of the properly completed
3 application. The Office of Banks and Real Estate must
4 provide a list of deficiencies in the application, if
5 any, within 30 calendar days of receipt.
6 (3) Alternative assurance registration.
7 Registration shall be deemed effective within 15 calendar
8 days of receipt, unless the Office of Banks and Real
9 Estate provides to the applicant a written list of
10 deficiencies in the application, if any, within 15
11 calendar days of receipt.
12 (4) Preliminary permit registration. A preliminary
13 permit shall be issued within 15 calendar days of
14 receipt, unless the Office of Banks and Real Estate
15 provides to the applicant a written list of deficiencies
16 in the application, if any, within 15 calendar days of
17 receipt.
18 (5) Exchange company registration. Registration
19 shall be effective upon receipt by the Office of Banks
20 and Real Estate of a properly completed application. The
21 Office of Banks and Real Estate must provide a list of
22 deficiencies in the application, if any, within 30
23 calendar days of receipt.
24 Section 5-55. Fees. The Office of Banks and Real Estate
25 shall provide, by rule, for fees to be paid by applicants and
26 registrants to cover the reasonable costs of the Office of
27 Banks and Real Estate in administering and enforcing the
28 provisions of this Act. The Office of Banks and Real Estate
29 may also provide, by rule, for general fees to cover the
30 reasonable expenses of carrying out other functions and
31 responsibilities under this Act.
32 Section 5-60. Registration; offer or disposal of
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1 interest. A developer, exchange company, or resale agent, or
2 any of their agents, shall not sell, offer, or dispose of a
3 timeshare interest unless all necessary registrations are
4 filed and approved by the Office of Banks and Real Estate, or
5 while an order revoking or suspending a registration is in
6 effect.
7 An applicant for registration under this Act shall submit
8 the necessary information to complete the application, as
9 required by the Office of Banks and Real Estate, within 6
10 months from the date of the initial registration application
11 was received by the Office of Banks and Real Estate. If the
12 applicant fails to submit the information necessary to
13 complete the application as required by the Office of Banks
14 and Real Estate with the six month period, said application
15 shall be voided, and a new registration application with
16 applicable fees must be submitted.
17 Section 5-65. Securities. The offer or disposition of
18 a timeshare interest in a timeshare plan which satisfies all
19 the requirements of this Act shall not be deemed to
20 constitute the offer and sale of a security under the
21 Illinois Securities Law of 1953.
22 Article 10. Business Practices
23 Section 10-5. Management and operation provisions.
24 (a) Before the first sale of a timeshare interest, the
25 developer shall create or provide for a managing entity,
26 which shall be either the developer, a separate manager or
27 management firm, the board of directors of an owners'
28 association, or some combination thereof.
29 (b) The duties of the managing entity include, but are
30 not limited to:
31 (1) Management and maintenance of all
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1 accommodations constituting the timeshare plan.
2 (2) Collection of all assessments as provided in
3 the timeshare instrument.
4 (3) Providing to all purchasers each year an
5 itemized annual budget, which shall include all estimated
6 revenues and expenses.
7 (4) Maintenance of all books and records concerning
8 the timeshare plan.
9 (5) Scheduling occupancy of accommodations, when
10 purchasers are not entitled to use specific timeshare
11 periods, so that all purchasers will be provided the
12 opportunity to use and possession of the accommodations
13 of the timeshare plan which they have purchased.
14 (6) Performing any other functions and duties that
15 are necessary and proper to maintain the accommodations
16 or that are required by the timeshare instrument.
17 (c) In the event a developer, managing entity, or
18 association files a complaint in a foreclosure proceeding
19 involving timeshare interests, the developer, managing
20 entity, or association may join in the same action multiple
21 defendant obligors and junior interest holders of separate
22 timeshare interests, provided:
23 (1) the foreclosure proceeding involves a single
24 timeshare plan;
25 (2) the foreclosure proceeding is filed by a single
26 plaintiff;
27 (3) the default and remedy provisions in the written
28 instruments on which the foreclosure proceeding is based
29 are substantially the same for each defendant; and
30 (4) the nature of the defaults alleged is the same
31 for each defendant.
32 (d) In any foreclosure proceeding involving multiple
33 defendants filed under subsection (c), the court shall sever
34 for separate trial any count of the complaint in which a
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1 defense or counterclaim is timely raised by a defendant.
2 Section 10-10. Cancellation of purchase contract.
3 Any purchase contract entered into by and between a developer
4 or resale agent and a purchaser shall be voidable by the
5 developer, the resale agent, or the purchaser, without
6 penalty, within 5 calendar days after the receipt of the
7 public offering statement or the execution of the purchase
8 contract, whichever is later. The purchase contract shall
9 provide notice of the 5-day cancellation period, together
10 with the name and mailing address to which any notice of
11 cancellation shall be delivered. Notice of cancellation shall
12 be deemed timely if the notice is deposited with the United
13 States Postal Service not later than midnight of the fifth
14 calendar day.
15 Upon such cancellation, the developer or resale agent
16 shall refund to the purchaser all payments made by the
17 purchaser, less the amount of any benefits actually received
18 pursuant to the purchase contract. The refund shall be made
19 within 20 calendar days after the receipt of the notice of
20 cancellation, or receipt of funds from the purchaser's
21 cleared check, whichever occurs later.
22 If any party elects to cancel a purchase contract
23 pursuant to this Section, that party may do so by hand
24 delivering a written notice of cancellation or by mailing a
25 notice of cancellation by certified mail, return receipt
26 requested, to the other party at an address set forth in the
27 purchase contract.
28 Section 10-15. Interests, liens, and encumbrances;
29 alternative assurances.
30 (a) Excluding any encumbrance placed against the
31 purchaser's timeshare interest securing the purchaser's
32 payment of purchase-money financing for such purchase, the
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1 developer shall not be entitled to the release of any funds
2 escrowed under subsection (d) of Section 5-15 with respect to
3 each timeshare interest and any other property or rights to
4 property appurtenant to the timeshare interest, including any
5 amenities represented to the purchaser as being part of the
6 timeshare plan, until the developer has provided satisfactory
7 evidence to the Office of Banks and Real Estate of one of the
8 following:
9 (1) The timeshare interest together with any other
10 property or rights to property appurtenant to the
11 timeshare interest, including any amenities represented
12 to the purchaser as being part of the timeshare plan, are
13 free and clear of any of the claims of the developer, any
14 owner of the underlying fee, a mortgagee, judgment
15 creditor, or other lienor, or any other person having an
16 interest in or lien or encumbrance against the timeshare
17 interest or appurtenant property or property rights.
18 (2) The developer, any owner of the underlying fee,
19 a mortgagee, judgment creditor, or other lienor, or any
20 other person having an interest in or lien or encumbrance
21 against the timeshare interest or appurtenant property or
22 property rights, including any amenities represented to
23 the purchaser as being part of the timeshare plan, has
24 recorded a subordination and notice to creditors document
25 in the appropriate public records of the jurisdiction in
26 which the timeshare interest is located. The
27 subordination document shall expressly and effectively
28 provide that the interest holder's right, lien, or
29 encumbrance shall not adversely affect, and shall be
30 subordinate to, the rights of the owners of the timeshare
31 interests in the timeshare plan regardless of the date of
32 purchase, from and after the effective date of the
33 subordination document.
34 (3) The developer, any owner of the underlying fee,
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1 a mortgagee, judgment creditor, or other lienor, or any
2 other person having an interest in or lien or encumbrance
3 against the timeshare interest or appurtenant property or
4 property rights, including any amenities represented to
5 the purchaser as being part of the timeshare plan, has
6 transferred the subject accommodations or amenities or
7 all use rights therein to a nonprofit organization or
8 owners' association to be held for the use and benefit of
9 the owners of the timeshare plan, which entity shall act
10 as a fiduciary to the purchasers, provided that the
11 developer has transferred control of such entity to the
12 owners or does not exercise its voting rights in such
13 entity with respect to the subject accommodations or
14 amenities. Prior to the transfer, any lien or other
15 encumbrance against the accommodation or facility shall
16 be made subject to a subordination and notice to
17 creditors instrument pursuant to paragraph (2).
18 (4) Alternative arrangements have been made which
19 are adequate to protect the rights of the purchasers of
20 the timeshare interests and approved by the Office of
21 Banks and Real Estate.
22 (b) Nothing in this Section shall prevent a developer
23 from accessing any escrow funds if the developer has complied
24 with subsection (c) of Section 5-15.
25 Section 10-20. Licenses. Any sales or resale agent
26 shall comply with the provisions of the Real Estate License
27 Act of 1983, or its successor Act and the rules adopted
28 pursuant to that Act, including licensures, unless otherwise
29 exempt under the Real Estate License Act of 1983.
30 Section 10-25. Liability; material misrepresentation.
31 (a) A developer or other person offering a timeshare
32 plan may not do any of the following:
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1 (1) Misrepresent a fact material to a purchaser's
2 decision to buy a timeshare interest.
3 (2) Predict specific or immediate increases in the
4 value of a timeshare interest represented over a period
5 of time, excluding bona fide pending price increases by
6 the developer.
7 (3) Materially misrepresent the qualities or
8 characteristics of accommodations or the amenities
9 available to the occupant of those accommodations.
10 (4) Misrepresent the length of time accommodations
11 or amenities will be available to the purchaser of a
12 timeshare interest.
13 (5) Misrepresent the conditions under which a
14 purchaser of a timeshare interest may exchange the right
15 of his or her occupancy for the right to occupy other
16 accommodations.
17 (b) A developer or other person using a promotion in
18 connection with the offering of a timeshare interest shall
19 clearly disclose all of the following:
20 (1) That the purpose of the promotion is to sell
21 timeshare interests, which shall appear in bold face or
22 other conspicuous type.
23 (2) That any person whose name or address is
24 obtained during the promotion may be solicited to
25 purchase a timeshare interest.
26 (3) The name of each developer or other person
27 trying to sell a timeshare interest through the
28 promotion, and the name of each person paying for the
29 promotion.
30 (4) The complete rules of the promotion.
31 (5) The method of awarding prizes, gifts,
32 vacations, discount vacations, or other benefits under
33 the promotion; a complete and fully detailed description,
34 including approximate retail value, of all prizes, gifts,
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1 or benefits under the promotion; the quantity of each
2 prize, gift, or benefit to be awarded or conferred; and
3 the date by which each prize, gift, or benefit will be
4 awarded or conferred.
5 (6) Any other disclosures provided by rule.
6 (c) If a person represents that a prize, gift, or
7 benefit will be awarded in connection with a promotion, the
8 prize, gift, or benefit must be awarded or conferred in the
9 manner represented, and on or before the date represented.
10 Section 10-30. Records. The managing entity shall keep
11 detailed financial records directly related to the operation
12 of the association. All financial and other records shall be
13 made reasonably available for examination by any purchaser,
14 or the authorized agent of the purchaser, and the Office of
15 Banks and Real Estate. For purposes of this Section, the
16 books and records of the timeshare plan shall be considered
17 "reasonably available" if copies of the requested portions
18 are delivered to the purchaser or the purchaser's agent or
19 the Office of Banks and Real Estate within 7 days of the date
20 the managing entity receives a written request for the
21 records signed by the purchaser or the Office of Banks and
22 Real Estate. The managing entity may charge the purchaser a
23 reasonable fee for copying the requested information.
24 Section 10-35. Maintenance of records. Every
25 developer, exchange company, or resale agent shall maintain,
26 for a period of 2 years, records of any individuals employed
27 by the developer, exchange company, or resale agent,
28 including the last known address of each of those
29 individuals.
30 Section 10-40. Partition. No action for partition of a
31 timeshare interest may be initiated except as permitted by
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1 the timeshare instrument.
2 Article 15. Disciplinary Provisions
3 Section 15-5. Investigation. The Office of Banks and
4 Real Estate may investigate the actions or qualifications of
5 any person or persons holding or claiming to hold a
6 certificate of registration under this Act. Such a person
7 is referred to as "the respondent" in this Article.
8 Section 15-10. Disciplinary hearings; record;
9 appointment of administrative law judge.
10 (a) The Office of Banks and Real Estate has the authority
11 to conduct hearings before an administrative law judge on
12 proceedings to revoke, suspend, place on probation,
13 reprimand, or refuse to issue or renew registrants registered
14 under this Act, or to impose a civil penalty not to exceed
15 $25,000 upon any registrant registered under this Act.
16 (b) The Office of Banks and Real Estate, at its expense,
17 shall preserve a record of all proceedings at the formal
18 hearing of any case involving the refusal to issue or the
19 revocation, suspension, or other discipline of a registrant.
20 The notice of hearing, complaint, and all other documents in
21 the nature of pleadings and written motions filed in the
22 proceedings, the transcript of testimony, the report of the
23 Board, and the orders of the Office of Banks and Real Estate
24 shall be the record of proceeding. At all hearings or
25 prehearing conferences, the Office of Banks and Real Estate
26 and the respondent shall be entitled to have a court reporter
27 in attendance for purposes of transcribing the proceeding or
28 prehearing conference.
29 (c) The Commissioner has the authority to appoint any
30 attorney duly licensed to practice law in the State of
31 Illinois to serve as an administrative law judge in any
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1 action for refusal to issue or renew a certificate of
2 registration or to discipline a registrant or person holding
3 a certificate of registration. The administrative law judge
4 has full authority to conduct the hearing. The
5 administrative law judge shall report his or her findings and
6 recommendations to the Commissioner. If the Commissioner
7 disagrees with the recommendation of the administrative law
8 judge, the Commissioner may issue an order in contravention
9 of the recommendation.
10 Section 15-15. Notice of proposed disciplinary action;
11 hearing.
12 (a) Before taking any disciplinary action with regard to
13 any registrant, the Office of Banks and Real Estate shall:
14 (1) notify the respondent in writing, at least 30
15 calendar days prior to the date set for the hearing, of
16 any charges made, the time and place for the hearing of
17 the charges, and that testimony at the hearing will be
18 heard under oath; and
19 (2) inform the respondent that upon failure to file
20 an answer and request a hearing before the date
21 originally set for the hearing, default will be taken
22 against the respondent and the respondent's registration
23 may be suspended or revoked, or the respondent may be
24 otherwise disciplined, as the Office of Banks and Real
25 Estate may deem proper.
26 (b) If the respondent fails to file an answer after
27 receiving notice, the respondent's registration may, in the
28 discretion of the Office of Banks and Real Estate, be revoked
29 or suspended, or the respondent may be otherwise disciplined
30 as deemed proper, without a hearing, if the act or acts
31 charged constitute sufficient grounds for that action under
32 this Act.
33 (c) At the time and place fixed in the notice, the Office
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1 of Banks and Real Estate shall proceed to hearing of the
2 charges. Both the respondent and the complainant shall be
3 accorded ample opportunity to present in person, or by
4 counsel, statements, testimony, evidence, and argument that
5 may be pertinent to the charges or any defense to the
6 charges.
7 Section 15-20. Disciplinary consent orders.
8 Notwithstanding any other provisions of this Act concerning
9 the conduct of hearings and recommendations for disciplinary
10 actions, the Office of Banks and Real Estate has the
11 authority to negotiate agreements with registrants and
12 applicants resulting in disciplinary consent orders. Any
13 such consent order may provide for any form of discipline
14 provided for in the Act. Any such consent order shall provide
15 that it is not entered into as a result of any coercion by
16 the Office of Banks and Real Estate. Any such consent order
17 shall be accepted by signature or rejected by the
18 Commissioner in a timely manner.
19 Section 15-25. Disciplinary action; civil penalty.
20 The Office of Banks and Real Estate may refuse to issue or
21 renew any registration, or revoke or suspend any registration
22 or place on probation or administrative supervision, or
23 reprimand any registrant, or impose a civil penalty not to
24 exceed $25,000, for any one or any combination of the
25 following causes:
26 (1) A registrant's disregard or violation of any
27 provision of this Act or of the rules adopted by the
28 Office of Banks and Real Estate to enforce this Act.
29 (2) A conviction of the registrant or any principal
30 of the registrant of (i) a felony under the laws of any
31 U.S. jurisdiction, (ii) a misdemeanor under the laws of
32 any U.S. jurisdiction if an essential element of the
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1 offense is dishonesty, or (iii) a crime under the laws of
2 any U.S. jurisdiction if the crime relates directly to
3 the practice of the profession regulated by this Act.
4 (3) A registrant's making any misrepresentation for
5 the purpose of obtaining a registration or certificate of
6 registration.
7 (4) A registrant's discipline by another U.S.
8 jurisdiction, state agency, or foreign nation regarding
9 the practice of the profession regulated by this Act, if
10 at least one of the grounds for the discipline is the
11 same as or substantially equivalent to one of those set
12 forth in this Act.
13 (5) A finding by the Office of Banks and Real
14 Estate that the registrant, after having his or her
15 registration placed on probationary status, has violated
16 the terms of probation.
17 (6) A registrant's practicing or attempting to
18 practice under a name other than the name as shown on his
19 or her registration or any other legally authorized name.
20 (7) A registrant's failure to file a return, or to
21 pay the tax, penalty, or interest shown in a filed
22 return, or to pay any final assessment of tax, penalty,
23 or interest, as required by any tax Act administered by
24 the Illinois Department of Revenue, until the
25 requirements of any such tax Act are satisfied.
26 (8) A registrant's engaging in dishonorable,
27 unethical, or unprofessional conduct of a character
28 likely to deceive, defraud, or harm the public.
29 (9) A registrant's aiding or abetting another person
30 or persons in disregarding or violating any provision of
31 this Act or of the rules adopted by the Office of Banks
32 and Real Estate to enforce this Act.
33 (10) Any representation in any document or
34 information filed with the Office of Banks and Real
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1 Estate which is false or misleading.
2 (11) A registrant's disseminating or causing to be
3 disseminated any false or misleading promotional
4 materials or advertisements in connection with a
5 timeshare plan.
6 (12) A registrant's concealing, diverting, or
7 disposing of any funds or assets of any person in a
8 manner that impairs the rights of purchasers of timeshare
9 interests in the timeshare plan.
10 (13) A registrant's failure to perform any
11 stipulation or agreement made to induce the Office of
12 Banks and Real Estate to issue an order relating to the
13 timeshare plan.
14 (14) A registrant's engaging in any act that
15 constitutes a violation of Section 3-102, 3-103, 3-104,
16 or 3-105 of the Illinois Human Rights Act.
17 (15) A registrant's failure to provide information
18 requested in writing by the Office of Banks and Real
19 Estate, within 30 days of the request, either as the
20 result of a formal or informal complaint to the Office of
21 Banks and Real Estate or as a result of a random audit
22 conducted by the Office of Banks and Real Estate, which
23 would indicate a violation of this Act.
24 (16) A registrant's failure to account for or remit
25 any escrow funds coming into his or her possession which
26 belonged to others.
27 (17) A registrant's failure to make available to
28 Office of Banks and Real Estate personnel during normal
29 business hours all escrow records and related documents
30 maintained in connection therewith, within 24 hours after
31 a request from the Office of Banks and Real Estate
32 personnel.
33 Section 15-30. Subpoenas; attendance of witnesses;
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1 oaths.
2 (a) The Office of Banks and Real Estate has the power to
3 issue subpoenas ad testificandum and to bring before it any
4 persons, and to take testimony either orally or by
5 deposition, or both, with the same fees and mileage and in
6 the same manner as prescribed in civil cases in the courts of
7 this State. The Office of Banks and Real Estate has the
8 power to issue subpoenas duces tecum and to bring before it
9 any documents, papers, files, books, and records, with the
10 same costs and in the same manner as prescribed in civil
11 cases in the courts of this State.
12 (b) Upon application of the Office of Banks and Real
13 Estate or its designee or of the applicant, registrant, or
14 person holding a certificate of registration against whom
15 proceedings under this Act are pending, any circuit court may
16 enter an order compelling the enforcement of any subpoena
17 issued by the Office of Banks and Real Estate in connection
18 with any hearing or investigation.
19 (c) The Commissioner and the designated administrative
20 law judge have power to administer oaths to witnesses at any
21 hearing that the Office of Banks and Real Estate is
22 authorized to conduct and any other oaths authorized in any
23 Act administered by the Office of Banks and Real Estate.
24 Section 15-35. Administrative law judge's findings of
25 fact, conclusions of law, and recommendations. At the
26 conclusion of the hearing, the administrative law judge shall
27 present to the Commissioner a written report of the
28 administrative law judge's findings of fact, conclusions of
29 law, and recommendations regarding discipline or a civil
30 penalty. The report shall contain a finding of whether or
31 not the respondent violated this Act or failed to comply with
32 conditions required in this Act. The administrative law
33 judge shall specify the nature of the violation or failure to
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1 comply.
2 If the Commissioner disagrees in any regard with the
3 report of the administrative law judge, the Commissioner may
4 issue an order in contravention of the report. The
5 Commissioner shall provide a written report to the
6 administrative law judge on any deviation and shall specify
7 with particularity the reasons for that action in the final
8 order.
9 Section 15-40. Rehearing. After any hearing involving
10 disciplinary action against a registrant, a copy of the
11 administrative law judge's report shall be served on the
12 respondent by the Office of Banks and Real Estate, either
13 personally or as provided in this Act for the service of the
14 notice of hearing. Within 20 calendar days after the
15 service, the respondent may present to the Office of Banks
16 and Real Estate a motion in writing for a rehearing. The
17 motion shall specify the particular grounds for rehearing. If
18 the respondent orders a transcript of the record from the
19 reporting service and pays for it within the time for filing
20 a motion for rehearing, the 20 calendar day period within
21 which a motion for rehearing may be filed shall commence upon
22 the delivery of the transcript to the respondent.
23 If no motion for rehearing is filed, then upon the
24 expiration of the time specified for filing a motion, or if a
25 motion for rehearing is denied, then upon denial, the
26 Commissioner may enter an order in accordance with the
27 recommendations of the administrative law judge, except as
28 otherwise provided in this Article. Whenever the
29 Commissioner is not satisfied that substantial justice has
30 been done in the hearing or in the administrative law judge's
31 report, the Commissioner may order a rehearing by the same or
32 some other duly qualified administrative law judge.
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1 Section 15-45. Order or certified copy. An order or a
2 certified copy of an order, over the seal of the Office of
3 Banks and Real Estate and purporting to be signed by the
4 Commissioner, shall be prima facie proof of the following:
5 (1) That the signature is the genuine signature of
6 the Commissioner.
7 (2) That the Commissioner is duly appointed and
8 qualified.
9 (3) That the administrative law judge is duly
10 appointed and qualified.
11 Section 15-50. Restoration of certificate of
12 registration. At any time after the suspension or revocation
13 of any certificate of registration, the Office of Banks and
14 Real Estate may restore the certificate of registration to
15 the respondent upon the written recommendation of the
16 Commissioner, unless after an investigation and a hearing the
17 Commissioner determines that restoration is not in the public
18 interest.
19 Section 15-55. Surrender of certificate of registration.
20 Upon the revocation or suspension of a certificate of
21 registration, the registrant shall immediately surrender the
22 certificate of registration to the Office of Banks and Real
23 Estate. If the registrant fails to do so, the Office of
24 Banks and Real Estate has the right to seize the certificate
25 of registration.
26 Section 15-60. Administrative Review Law. All final
27 administrative decisions of the Office of Banks and Real
28 Estate under this Act are subject to judicial review under
29 the Administrative Review Law and the rules implementing
30 that Law. The term "administrative decision" is defined as
31 in Section 3-101 of the Code of Civil Procedure. Proceedings
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1 for judicial review shall be commenced in the circuit court
2 of the county in which the party applying for review resides,
3 but if the party is not a resident of this State, the venue
4 shall be in Cook or Sangamon County.
5 Pending the court's final decision on administrative
6 review, the acts, orders, sanctions, and rulings of the
7 Office of Banks and Real Estate regarding any registration
8 shall remain in full force and effect unless modified or
9 stayed by court order pending a final judicial decision.
10 The Office of Banks and Real Estate shall not be required
11 to certify any record to the court or file any answer in
12 court or otherwise appear in any court in a judicial review
13 proceeding unless there is filed in the court, with the
14 complaint, a receipt from the Office of Banks and Real Estate
15 acknowledging payment of the costs of furnishing and
16 certifying the record. Failure on the part of the plaintiff
17 to file a receipt in the court is grounds for dismissal of
18 the action.
19 Section 15-65. Public interest, safety, or welfare;
20 summary suspension. The Commissioner may temporarily suspend
21 any registration pursuant to this Act, without hearing,
22 simultaneously with the institution of proceedings for a
23 hearing provided for in this Section, if the Commissioner
24 finds that the evidence indicates that the public interest,
25 safety, or welfare imperatively requires emergency action.
26 If the Commissioner temporarily suspends any registration
27 without a hearing, a hearing must be held within 30 calendar
28 days after the suspension. The person whose registration is
29 suspended may seek a continuance of the hearing, during which
30 the suspension shall remain in effect. The proceeding shall
31 be concluded without appreciable delay.
32 Section 15-70. Non-registered practice; civil penalty;
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1 injunction.
2 (a) Any person who practices, offers to practice,
3 attempts to practice, or holds himself or herself out to
4 practice as a registrant under this Act without being
5 registered under this Act shall, in addition to any other
6 penalty provided by law, pay a civil penalty to the Office of
7 Banks and Real Estate in an amount not to exceed $25,000 for
8 each offense as determined by the Office of Banks and Real
9 Estate. The civil penalty shall be assessed by the Office of
10 Banks and Real estate after a hearing is held in accordance
11 with the provisions set forth in this Act regarding the
12 provision of a hearing for the discipline of a registrant.
13 (b) The Office of Banks and Real Estate has the
14 authority and power to investigate any and all non-registered
15 activity.
16 (c) A civil penalty imposed under subsection (a) shall
17 be paid within 60 days after the effective date of the order
18 imposing the civil penalty. The order shall constitute a
19 judgment and may be filed, and execution may be had thereon,
20 in the same manner as any judgment from any court of record.
21 (d) Engaging in timeshare practices in Illinois by any
22 entity not holding a valid and current certificate of
23 registration under this Act is declared to be inimical to the
24 public welfare, to constitute a public nuisance, and to cause
25 irreparable harm to the public welfare. The Commissioner,
26 the Attorney General, the State's Attorney of any county in
27 the State, or any person may maintain an action in the name
28 of the People of the State of Illinois, and may apply for
29 injunctive relief in any circuit court to enjoin such entity
30 from engaging in such practice. Upon the filing of a
31 verified petition in the court, the court, if satisfied by
32 affidavit or otherwise that such entity has been engaged in
33 such practice without a valid and current certificate of
34 registration, may enter a temporary restraining order without
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1 notice or bond, enjoining the defendant from such further
2 practice. Only the showing of nonregistration, by affidavit
3 or otherwise, is necessary in order for a temporary
4 injunction to issue. A copy of the verified complaint shall
5 be served upon the defendant and the proceedings shall
6 thereafter be conducted as in other civil cases except as
7 modified by this Section. If it is established that the
8 defendant has been or is engaged in such unlawful practice,
9 the court may enter an order or judgment perpetually
10 enjoining the defendant from further practice. In all
11 proceedings hereunder, the court, in its discretion, may
12 apportion the costs among the parties interested in the
13 action, including cost of filing the complaint, service of
14 process, witness fees and expenses, court reporter charges
15 and reasonable attorneys' fees. In the case of a violation
16 of any injunctive order entered under the provisions of this
17 Section, the court may summarily try and punish the offender
18 for contempt of court. Proceedings for an injunction under
19 this Section shall be in addition to, and not in lieu of, all
20 penalties and other remedies provided in this Act.
21 Section 15-75. Action for compensation; proof of
22 registration. No action or counterclaim may be maintained by
23 any person in any court in this State with respect to any
24 agreement, contract, or services for which registration is
25 required by this Act, or to recover the agreed price or any
26 compensation under any such agreement, or to recover for
27 services for which a registration is required by this Act,
28 without alleging and proving that the person had a valid
29 certificate of registration at the time of making the
30 agreement or doing the work.
31 Section 15-80. Cease and desist orders. The Office of
32 Banks and Real Estate may issue a cease and desist order to
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1 any person who engages in any activity prohibited by this
2 Act. Any person in violation of a cease and desist order
3 entered by the Office of Banks and Real Estate is subject to
4 all of the remedies provided by law.
5 Section 15-85. Statute of limitations. Any action or
6 proceeding to enforce any provision of this Act must be
7 commenced within 5 years following the date of the claim upon
8 which the action or proceeding is based accrues.
9 Article 20. Administration
10 Section 20-5. Administration of Act. The Office of
11 Banks and Real Estate shall exercise the powers and duties
12 prescribed by the Civil Administrative Code of Illinois and
13 shall exercise other powers and duties necessary for
14 effectuating the purposes of this Act. The Office of Banks
15 and Real Estate may contract with third parties for services
16 necessary for the proper administration of this Act. The
17 Office of Banks and Real Estate has the authority to
18 establish public policies and procedures necessary for the
19 administration of this Act.
20 Section 20-10. Administrative rules. The Office of
21 Banks and Real Estate shall adopt rules for the
22 implementation and enforcement of this Act.
23 Section 20-15. Real Estate License Administration Fund.
24 All fees collected for registration and for civil
25 penalties pursuant to this Act and administrative rules
26 adopted under this Act shall be deposited into the Real
27 Estate License Administration Fund. The moneys deposited in
28 the Real Estate License Administration Fund shall be
29 appropriated to the Office of Banks and Real Estate for
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1 expenses for the administration and enforcement of this Act.
2 Section 20-20. Forms. The Office of Banks and Real
3 Estate may prescribe forms and procedures for submitting
4 information to the Office of Banks and Real Estate.
5 Section 20-25. Site inspections. The Office of Banks
6 and Real Estate shall thoroughly investigate all matters
7 relating to an application for registration under this Act
8 and may require a personal inspection of any developer,
9 timeshare plan, accommodation, exchange company, or resale
10 company and any offices where any of the foregoing may
11 transact business. All reasonable expenses incurred by the
12 Office of Banks and Real Estate in investigating such matters
13 shall be borne by the registrant, and the registrant shall
14 reimburse the Office of Banks and Real Estate for those
15 expenses within 30 calendar days of receipt of notice of the
16 expenses from the Office. The Office of Banks and Real
17 Estate may require a deposit sufficient to cover the expenses
18 prior to incurring the expenses.
19 Article 25. Transition
20 Section 25-5. Registrations under preceding Act. All
21 registrations of developers, timeshare plans, acquisition
22 agents, exchange companies, managing agents, resale agents,
23 and sales agents under the Illinois Real Estate Time-share
24 Act in effect on the effective date of this Act shall remain
25 in full force and effect after the effective date of this Act
26 and be considered registered under this Act.
27 The provisions of this Act, insofar as they are the same
28 or substantially the same as those of any prior law, shall be
29 construed as a continuation of such prior law and not as a
30 new enactment. Any existing injunction or temporary
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1 restraining order validly obtained under the Illinois Real
2 Estate Time-share Act which prohibits unregistered practice
3 of timeshare developers, timeshare plans, and their agents
4 shall not be invalidated by the enactment of this Act and
5 shall continue to have full force and effect on and after the
6 effective date of this Act.
7 Any existing disciplinary action or investigation
8 pursuant to a violation under the Illinois Real Estate
9 Time-share Act shall not be invalidated by the enactment of
10 this Act and shall continue to have full force and effect on
11 and after the effective date of this Act.
12 Article 90. Amendatory Provisions
13 Section 90-5. The Real Estate License Act of 2000 is
14 amended, if and only if that Act becomes law, by changing
15 Sections 1-10 and 5-20 as follows:
16 Sec. 1-10. Definitions. In this Act, unless the context
17 otherwise requires:
18 "Act" means the Real Estate License Act of 2000.
19 "Advisory Council" means the Real Estate Education
20 Advisory Council created under Section 30-10 of this Act.
21 "Agency" means a relationship in which a real estate
22 broker or licensee, whether directly or through an affiliated
23 licensee, represents a consumer by the consumer's consent,
24 whether express or implied, in a real property transaction.
25 "Applicant" means any person, as defined in this Section,
26 who applies to OBRE for a valid license as a real estate
27 broker, real estate salesperson, or leasing agent.
28 "Blind advertisement" means any real estate advertisement
29 that does not include the sponsoring broker's business name
30 and that is used by any licensee regarding the sale or lease
31 of real estate, including his or her own, licensed
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1 activities, or the hiring of any licensee under this Act.
2 The broker's business name in the case of a franchise shall
3 include the franchise affiliation as well as the name of the
4 individual firm.
5 "Board" means the Real Estate Administration and
6 Disciplinary Board of OBRE.
7 "Branch office" means a sponsoring broker's office other
8 than the sponsoring broker's principal office.
9 "Broker" means an individual, partnership, limited
10 liability company, corporation, or registered limited
11 liability partnership other than a real estate salesperson or
12 leasing agent who for another and for compensation either
13 directly or indirectly:
14 (1) Sells, exchanges, purchases, rents, or leases
15 real estate.
16 (2) Offers to sell, exchange, purchase, rent, or
17 lease real estate.
18 (3) Negotiates, offers, attempts, or agrees to
19 negotiate the sale, exchange, purchase, rental, or
20 leasing of real estate.
21 (4) Lists, offers, attempts, or agrees to list real
22 estate for sale, lease, or exchange.
23 (5) Buys, sells, offers to buy or sell, or
24 otherwise deals in options on real estate or improvements
25 thereon.
26 (6) Supervises the collection, offer, attempt, or
27 agreement to collect rent for the use of real estate.
28 (7) Advertises or represents himself or herself as
29 being engaged in the business of buying, selling,
30 exchanging, renting, or leasing real estate.
31 (8) Assists or directs in procuring or referring of
32 prospects, intended to result in the sale, exchange,
33 lease, or rental of real estate.
34 (9) Assists or directs in the negotiation of any
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1 transaction intended to result in the sale, exchange,
2 lease, or rental of real estate.
3 (10) Opens real estate to the public for marketing
4 purposes.
5 "Brokerage agreement" means a written or oral agreement
6 between a sponsoring broker and a consumer for licensed
7 activities to be provided to a consumer in return for
8 compensation or the right to receive compensation from
9 another. Brokerage agreements may constitute either a
10 bilateral or a unilateral agreement between the broker and
11 the broker's client depending upon the content of the
12 brokerage agreement. All exclusive brokerage agreements shall
13 be in writing.
14 "Client" means a person who is being represented by a
15 licensee.
16 "Commissioner" means the Commissioner of Banks and Real
17 Estate or a person authorized by the Commissioner, the Office
18 of Banks and Real Estate Act, or this Act to act in the
19 Commissioner's stead.
20 "Compensation" means the valuable consideration given by
21 one person or entity to another person or entity in exchange
22 for the performance of some activity or service.
23 Compensation shall include the transfer of valuable
24 consideration, including without limitation the following:
25 (1) commissions;
26 (2) referral fees;
27 (3) bonuses;
28 (4) prizes;
29 (5) merchandise;
30 (6) finder fees;
31 (7) performance of services;
32 (8) coupons or gift certificates;
33 (9) discounts;
34 (10) rebates;
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1 (11) a chance to win a raffle, drawing, lottery, or
2 similar game of chance not prohibited by any other law or
3 statute;
4 (12) retainer fee; or
5 (13) salary.
6 "Confidential information" means information obtained by
7 a licensee from a client during the term of a brokerage
8 agreement that (i) was made confidential by the written
9 request or written instruction of the client, (ii) deals with
10 the negotiating position of the client, or (iii) is
11 information the disclosure of which could materially harm the
12 negotiating position of the client, unless at any time:
13 (1) the client permits the disclosure of
14 information given by that client by word or conduct;
15 (2) the disclosure is required by law; or
16 (3) the information becomes public from a source
17 other than the licensee.
18 "Confidential information" shall not be considered to
19 include material information about the physical condition of
20 the property.
21 "Consumer" means a person or entity seeking or receiving
22 licensed activities.
23 "Continuing education school" means any person licensed
24 by OBRE as a school for continuing education in accordance
25 with Section 30-15 of this Act.
26 "Credit hour" means 50 minutes of classroom instruction
27 in course work that meets the requirements set forth in rules
28 adopted by OBRE.
29 "Customer" means a consumer who is not being represented
30 by the licensee but for whom the licensee is performing
31 ministerial acts.
32 "Designated agency" means a contractual relationship
33 between a sponsoring broker and a client under Section 15-50
34 of this Act in which one or more licensees associated with or
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1 employed by the broker are designated as agent of the client.
2 "Designated agent" means a sponsored licensee named by a
3 sponsoring broker as the legal agent of a client, as provided
4 for in Section 15-50 of this Act.
5 "Director" means the Director of the Real Estate
6 Division, OBRE.
7 "Dual agency" means an agency relationship in which a
8 licensee is representing both buyer and seller or both
9 landlord and tenant in the same transaction. When the agency
10 relationship is a designated agency, the question of whether
11 there is a dual agency shall be determined by the agency
12 relationships of the designated agent of the parties and not
13 of the sponsoring broker.
14 "Employee" or other derivative of the word "employee",
15 when used to refer to, describe, or delineate the
16 relationship between a real estate broker and a real estate
17 salesperson, another real estate broker, or a leasing agent,
18 shall be construed to include an independent contractor
19 relationship, provided that a written agreement exists that
20 clearly establishes and states the relationship. All
21 responsibilities of a broker shall remain.
22 "Escrow moneys" means all moneys, promissory notes or any
23 other type or manner of legal tender or financial
24 consideration deposited with any person for the benefit of
25 the parties to the transaction. A transaction exists once an
26 agreement has been reached and an accepted real estate
27 contract signed or lease agreed to by the parties. Escrow
28 moneys includes without limitation earnest moneys and
29 security deposits, except those security deposits in which
30 the person holding the security deposit is also the sole
31 owner of the property being leased and for which the security
32 deposit is being held.
33 "Inoperative" means a status of licensure where the
34 licensee holds a current license under this Act, but the
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1 licensee is prohibited from engaging in licensed activities
2 because the licensee is unsponsored or the license of the
3 sponsoring broker with whom the licensee is associated or by
4 whom he or she is employed is currently expired, revoked,
5 suspended, or otherwise rendered invalid under this Act.
6 "Leasing Agent" means a person who is employed by a real
7 estate broker to engage in licensed activities limited to
8 leasing residential real estate who has obtained a license as
9 provided for in Section 5-5 of this Act.
10 "License" means the document issued by OBRE certifying
11 that the person named thereon has fulfilled all requirements
12 prerequisite to licensure under this Act.
13 "Licensed activities" means those activities listed in
14 the definition of "broker" under this Section.
15 "Licensee" means any person, as defined in this Section,
16 who holds a valid unexpired license as a real estate broker,
17 real estate salesperson, or leasing agent.
18 "Listing presentation" means a communication between a
19 real estate broker or salesperson and a consumer in which the
20 licensee is attempting to secure a brokerage agreement with
21 the consumer to market the consumer's real estate for sale or
22 lease.
23 "Managing broker" means a broker who has supervisory
24 responsibilities for licensees in one or, in the case of a
25 multi-office company, more than one office and who has been
26 appointed as such by the sponsoring broker of the real estate
27 firm.
28 "Medium of advertising" means any method of communication
29 intended to influence the general public to use or purchase a
30 particular good or service or real estate.
31 "Ministerial acts" means those acts that a licensee may
32 perform for a consumer that are informative or clerical in
33 nature and do not rise to the level of active representation
34 on behalf of a consumer. Examples of these acts include
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1 without limitation (i) responding to phone inquiries by
2 consumers as to the availability and pricing of brokerage
3 services, (ii) responding to phone inquiries from a consumer
4 concerning the price or location of property, (iii) attending
5 an open house and responding to questions about the property
6 from a consumer, (iv) setting an appointment to view
7 property, (v) responding to questions of consumers walking
8 into a licensee's office concerning brokerage services
9 offered or particular properties, (vi) accompanying an
10 appraiser, inspector, contractor, or similar third party on a
11 visit to a property, (vii) describing a property or the
12 property's condition in response to a consumer's inquiry,
13 (viii) completing business or factual information for a
14 consumer on an offer or contract to purchase on behalf of a
15 client, (ix) showing a client through a property being sold
16 by an owner on his or her own behalf, or (x) referral to
17 another broker or service provider.
18 "OBRE" means the Office of Banks and Real Estate.
19 "Office" means a real estate broker's place of business
20 where the general public is invited to transact business and
21 where records may be maintained and licenses displayed,
22 whether or not it is the broker's principal place of
23 business.
24 "Person" means and includes individuals, entities,
25 corporations, limited liability companies, registered limited
26 liability partnerships, and partnerships, foreign or
27 domestic, except that when the context otherwise requires,
28 the term may refer to a single individual or other described
29 entity.
30 "Personal assistant" means a licensed or unlicensed
31 person who has been hired for the purpose of aiding or
32 assisting a sponsored licensee in the performance of the
33 sponsored licensee's job.
34 "Pocket card" means the card issued by OBRE to signify
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1 that the person named on the card is currently licensed under
2 this Act.
3 "Pre-license school" means a school licensed by OBRE
4 offering courses in subjects related to real estate
5 transactions, including the subjects upon which an applicant
6 is examined in determining fitness to receive a license.
7 "Pre-renewal period" means the period between the date of
8 issue of a currently valid license and the license's
9 expiration date.
10 "Real estate" means and includes leaseholds as well as
11 any other interest or estate in land, whether corporeal,
12 incorporeal, freehold, or non-freehold, including timeshare
13 interests, and whether the real estate is situated in this
14 State or elsewhere.
15 "Real Estate Administration and Disciplinary Board" or
16 "Board" means the Real Estate Administration and Disciplinary
17 Board created by Section 25-10 of this Act.
18 "Salesperson" means any individual, other than a real
19 estate broker or leasing agent, who is employed by a real
20 estate broker or is associated by written agreement with a
21 real estate broker as an independent contractor and
22 participates in any activity described in the definition of
23 "broker" under this Section.
24 "Sponsoring broker" means the broker who has issued a
25 sponsor card to a licensed salesperson, another licensed
26 broker, or a leasing agent.
27 "Sponsor card" means the temporary permit issued by the
28 sponsoring real estate broker certifying that the real estate
29 broker, real estate salesperson, or leasing agent named
30 thereon is employed by or associated by written agreement
31 with the sponsoring real estate broker, as provided for in
32 Section 5-40 of this Act.
33 (Source: 91HB902ham01.)
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1 Sec. 5-20. Exemptions from broker, salesperson, or
2 leasing agent license requirement. The requirement for
3 holding a license under this Article 5 shall not apply to:
4 (1) Any person, partnership, or corporation that as
5 owner or lessor performs any of the acts described in the
6 definition of "broker" under Section 1-10 of this Act with
7 reference to property owned or leased by it, or to the
8 regular employees thereof with respect to the property so
9 owned or leased, where such acts are performed in the regular
10 course of or as an incident to the management, sale, or other
11 disposition of such property and the investment therein,
12 provided that such regular employees do not perform any of
13 the acts described in the definition of "broker" under
14 Section 1-10 of this Act in connection with a vocation of
15 selling or leasing any real estate or the improvements
16 thereon not so owned or leased.
17 (2) An attorney in fact acting under a duly executed and
18 recorded power of attorney to convey real estate from the
19 owner or lessor or the services rendered by an attorney at
20 law in the performance of the attorney's duty as an attorney
21 at law.
22 (3) Any person acting as receiver, trustee in
23 bankruptcy, administrator, executor, or guardian or while
24 acting under a court order or under the authority of a will
25 or testamentary trust.
26 (4) Any person acting as a resident manager for the
27 owner or any employee acting as the resident manager for a
28 broker managing an apartment building, duplex, or apartment
29 complex, when the resident manager resides on the premises,
30 the premises is his or her primary residence, and the
31 resident manager is engaged in the leasing of the property of
32 which he or she is the resident manager.
33 (5) Any officer or employee of a federal agency in the
34 conduct of official duties.
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1 (6) Any officer or employee of the State government or
2 any political subdivision thereof performing official duties.
3 (7) Any multiple listing service or other information
4 exchange that is engaged in the collection and dissemination
5 of information concerning real estate available for sale,
6 purchase, lease, or exchange along with which no other
7 licensed activities are provided.
8 (8) Railroads and other public utilities regulated by
9 the State of Illinois, or the officers or full time employees
10 thereof, unless the performance of any licensed activities is
11 in connection with the sale, purchase, lease, or other
12 disposition of real estate or investment therein not needing
13 the approval of the appropriate State regulatory authority.
14 (9) Any medium of advertising in the routine course of
15 selling or publishing advertising along with which no other
16 licensed activities are provided.
17 (10) Any resident lessee of a residential dwelling unit
18 who refers for compensation to the owner of the dwelling
19 unit, or to the owner's agent, prospective lessees of
20 dwelling units in the same building or complex as the
21 resident lessee's unit, but only if the resident lessee (i)
22 refers no more than 3 prospective lessees in any 12-month
23 period, (ii) receives compensation of no more than $1,000 or
24 the equivalent of one month's rent, whichever is less, in any
25 12-month period, and (iii) limits his or her activities to
26 referring prospective lessees to the owner, or the owner's
27 agent, and does not show a residential dwelling unit to a
28 prospective lessee, discuss terms or conditions of leasing a
29 dwelling unit with a prospective lessee, or otherwise
30 participate in the negotiation of the leasing of a dwelling
31 unit.
32 (11) An exchange company registered under the Real
33 Estate Timeshare Act of 1999 and the regular employees of
34 that registered exchange company but only when conducting an
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1 exchange program as defined in that Act.
2 (12) An existing timeshare owner who, for compensation,
3 refers prospective purchasers, but only if the existing
4 timeshare owner (i) refers no more than 20 prospective
5 purchasers in any calendar year, (ii) receives no more than
6 $1,000, or its equivalent, for referrals in any calendar year
7 and (iii) limits his or her activities to referring
8 prospective purchasers of timeshare interests to the
9 developer or the developer's employees or agents, and does
10 not show, discuss terms or conditions of purchase or
11 otherwise participate in negotiations with regard to
12 timeshare interests.
13 (Source: 91HB902 as introduced.)
14 (765 ILCS 100/Act rep.)
15 Section 90-10. The Illinois Real Estate Time-Share Act is
16 repealed.".