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91_SB0435enr SB435 Enrolled LRB9103102KSgc 1 AN ACT concerning real estate timeshare interests and 2 repealing a named Act. 3 Be it enacted by the People of the State of Illinois, 4 represented in the General Assembly: 5 Article 1. General Provisions 6 Section 1-1. Short title. This Act may be cited as the 7 Real Estate Timeshare Act of 1999. 8 Section 1-5. Intent. The intent of the General Assembly 9 in enacting this Act is to regulate the business of timeshare 10 plans, exchange programs, and resale agents for the 11 protection of the public. 12 Section 1-10. Scope of Act. 13 (a) This Act applies to all of the following: 14 (1) Timeshare plans with an accommodation or 15 component site in Illinois. 16 (2) Timeshare plans without an accommodation or 17 component site in Illinois, if those timeshare plans are 18 sold or offered to be sold to any individual located 19 within Illinois. 20 (3) Exchange programs as defined in this Act. 21 (4) Resale agents as defined in this Act. 22 (b) Exemptions. This Act does not apply to the 23 following: 24 (1) Timeshare plans, whether or not an 25 accommodation is located in Illinois, consisting of 7 or 26 fewer timeshare periods, the use of which extends over 27 any period of less than 3 years. 28 (2) Timeshare plans, whether or not an 29 accommodation is located in Illinois, under which the SB435 Enrolled -2- LRB9103102KSgc 1 prospective purchaser's total financial obligation will 2 be less than $1,500 during the entire term of the 3 timeshare plan. 4 Section 1-15. Definitions. In this Act, unless the 5 context otherwise requires: 6 "Accommodation" means any apartment, condominium or 7 cooperative unit, cabin, lodge, hotel or motel room, or other 8 private or commercial structure containing toilet facilities 9 therein that is designed and available, pursuant to 10 applicable law, for use and occupancy as a residence by one 11 or more individuals, or any unit or berth on a commercial 12 cruise line ship, which is included in the offering of a 13 timeshare plan. 14 "Acquisition agent" means a person who, directly or 15 through the person's employees, agents, or independent 16 contractors, induces or attempts to induce by means of a 17 promotion or an advertisement any individual located within 18 the State of Illinois to attend a sales presentation for a 19 timeshare plan. 20 "Advertisement" means any written, oral, or electronic 21 communication that is directed to or targeted to persons 22 within the State of Illinois and contains a promotion, 23 inducement, or offer to sell a timeshare plan, including but 24 not limited to brochures, pamphlets, radio and television 25 scripts, electronic media, telephone and direct mail 26 solicitations, and other means of promotion. 27 "Association" means the organized body consisting of the 28 purchasers of interests in a timeshare plan. 29 "Assessment" means the share of funds required for the 30 payment of common expenses which is assessed from time to 31 time against each purchaser by the managing entity. 32 "Commissioner" means the Commissioner of Banks and Real 33 Estate, or a natural person authorized by the Commissioner, SB435 Enrolled -3- LRB9103102KSgc 1 the Office of Banks and Real Estate Act, or this Act to act 2 in the Commissioner's stead. 3 "Component site" means a specific geographic location 4 where accommodations which are part of a multi-site timeshare 5 plan are located. Separate phases of a single timeshare 6 property in a specific geographic location and under common 7 management shall be deemed a single component site. 8 "Developer" means and includes any person or entity, 9 other than a sales agent, acquisition agent, or resale agent, 10 who creates a timeshare plan or is in the business of selling 11 timeshare interests, or employs agents to do the same, or any 12 person or entity who succeeds to the interest of a developer 13 by sale, lease, assignment, mortgage, or other transfer, but 14 the term includes only those persons who offer timeshare 15 interests for disposition in the ordinary course of 16 business. 17 "Dispose" or "disposition" means a voluntary transfer or 18 assignment of any legal or equitable interest in a timeshare 19 plan, other than the transfer, assignment, or release of a 20 security interest. 21 "Exchange company" means any person owning or operating, 22 or both owning and operating, an exchange program. 23 "Exchange program" means any method, arrangement, or 24 procedure for the voluntary exchange of timeshare interests 25 or other property interests. The term does not include the 26 assignment of the right to use and occupy accommodations to 27 owners of timeshare interests within a single-site timeshare 28 plan. Any method, arrangement, or procedure that otherwise 29 meets this definition, wherein the purchaser's total 30 contractual financial obligation exceeds $3,000 per any 31 individual, recurring timeshare period, shall be regulated as 32 a timeshare plan in accordance with this Act. 33 "Managing entity" means the person who undertakes the 34 duties, responsibilities, and obligations of the management SB435 Enrolled -4- LRB9103102KSgc 1 of a timeshare plan. 2 "Offer" means any inducement, solicitation, or other 3 attempt, whether by marketing, advertisement, oral or written 4 presentation, or any other means, to encourage a person to 5 acquire a timeshare interest in a timeshare plan, other than 6 as security for an obligation. 7 "Person" means a natural person, corporation, limited 8 liability company, partnership, joint venture, association, 9 estate, trust, government, governmental subdivision or 10 agency, or other legal entity, or any combination thereof. 11 "Promotion" means a plan or device, including one 12 involving the possibility of a prospective purchaser 13 receiving a vacation, discount vacation, gift, or prize, used 14 by a developer, or an agent, independent contractor, or 15 employee of any of the same on behalf of the developer, in 16 connection with the offering and sale of timeshare interests 17 in a timeshare plan. 18 "Purchaser" means any person, other than a developer, who 19 by means of a voluntary transfer acquires a legal or 20 equitable interest in a timeshare plan other than as security 21 for an obligation. 22 "Purchase contract" means a document pursuant to which a 23 person becomes legally obligated to sell, and a purchaser 24 becomes legally obligated to buy, a timeshare interest. 25 "Resale agent" means a person who, directly or through 26 the person's employees or agents, sells or offers to sell a 27 timeshare interest previously sold to a purchaser or solicits 28 an owner of a timeshare interest to list the owner's 29 timeshare interest for sale. 30 "Reservation system" means the method, arrangement, or 31 procedure by which a purchaser, in order to reserve the use 32 or occupancy of any accommodation of a multi-site timeshare 33 plan for one or more timeshare periods, is required to 34 compete with other purchasers in the same multi-site SB435 Enrolled -5- LRB9103102KSgc 1 timeshare plan, regardless of whether the reservation system 2 is operated and maintained by the multi-site timeshare plan 3 managing entity, an exchange company, or any other person. 4 In the event that a purchaser is required to use an exchange 5 program as the purchaser's principal means of obtaining the 6 right to use and occupy accommodations, that arrangement 7 shall be deemed a reservation system. When an exchange 8 company utilizes a mechanism for the exchange of use of 9 timeshare periods among members of an exchange program, that 10 utilization is not a reservation system of a multi-site 11 timeshare plan. 12 "Sales agent" means a person, other than a resale agent, 13 who, directly or through the person's employees, agents, or 14 independent contractors, sells or offers to sell timeshare 15 interests in a timeshare plan to any individual located in 16 the State of Illinois. 17 "Timeshare instrument" means one or more documents, by 18 whatever name denominated, creating or governing the 19 operation of a timeshare plan. 20 "Timeshare interest" means and includes either: 21 (1) a "timeshare estate", which is the right to 22 occupy a timeshare property, coupled with a freehold 23 estate or an estate for years with a future interest in a 24 timeshare property or a specified portion thereof; or 25 (2) a "timeshare use", which is the right to 26 occupy a timeshare property, which right is neither 27 coupled with a freehold interest, nor coupled with an 28 estate for years with a future interest, in a timeshare 29 property. 30 "Timeshare period" means the period or periods of time 31 when the purchaser of a timeshare plan is afforded the 32 opportunity to use the accommodations of a timeshare plan. 33 "Timeshare plan" means any arrangement, plan, scheme, or 34 similar device, other than an exchange program, whether by SB435 Enrolled -6- LRB9103102KSgc 1 membership agreement, sale, lease, deed, license, or 2 right-to-use agreement or by any other means, whereby a 3 purchaser, in exchange for consideration, receives ownership 4 rights in or the right to use accommodations for a period of 5 time less than a full year during any given year, but not 6 necessarily for consecutive years. A timeshare plan may be: 7 (1) a "single-site timeshare plan", which is the 8 right to use accommodations at a single timeshare 9 property; or 10 (2) a "multi-site timeshare plan", which includes: 11 (A) a "specific timeshare interest", which is 12 the right to use accommodations at a specific 13 timeshare property, together with use rights in 14 accommodations at one or more other component sites 15 created by or acquired through the timeshare plan's 16 reservation system; or 17 (B) a "non-specific timeshare interest", which 18 is the right to use accommodations at more than one 19 component site created by or acquired through the 20 timeshare plan's reservation system, but including 21 no specific right to use any particular 22 accommodations. 23 "Timeshare property" means one or more accommodations 24 subject to the same timeshare instrument, together with any 25 other property or rights to property appurtenant to those 26 accommodations. 27 Section 1-20. Estates and interests in property. 28 Each timeshare estate constitutes, for purposes of title, a 29 separate estate or interest in property except for real 30 property tax purposes. 31 Section 1-25. Local powers; construction. 32 (a) Except as specifically provided in this Section, the SB435 Enrolled -7- LRB9103102KSgc 1 regulation of timeshare plans and exchange programs is an 2 exclusive power and function of the State. A unit of local 3 government, including a home rule unit, may not regulate 4 timeshare plans and exchange programs. This subsection is a 5 denial and limitation of home rule powers and functions under 6 subsection (h) of Section 6 of Article VII of the Illinois 7 Constitution. 8 (b) Notwithstanding subsection (a), no provision of this 9 Act invalidates or modifies any provision of any zoning, 10 subdivision, or building code or other real estate use law, 11 ordinance, or regulation. 12 Further, nothing in this Act shall be construed to affect 13 or impair the validity of Section 11-11.1-1 of the Illinois 14 Municipal Code or to deny to the corporate authorities of any 15 municipality the powers granted in that Code to enact 16 ordinances (i) prescribing fair housing practices, (ii) 17 defining unfair housing practices, (iii) establishing fair 18 housing or human relations commissions and standards for the 19 operation of such commissions in the administration and 20 enforcement of such ordinances, (iv) prohibiting 21 discrimination based on age, ancestry, color, creed, mental 22 or physical handicap, national origin, race, religion, or sex 23 in the listing, sale, assignment, exchange, transfer, lease, 24 rental, or financing of real property for the purpose of the 25 residential occupancy thereof, and (v) prescribing penalties 26 for violations of such ordinances. 27 Section 1-30. Creation of timeshare plans. A timeshare 28 plan may be created in any accommodation unless otherwise 29 prohibited. All timeshare plans must maintain a one-to-one 30 purchaser-to-accommodation ratio, which means the ratio of 31 the number of purchasers eligible to use the accommodations 32 of a timeshare plan on a given day to the number of 33 accommodations available for use within the plan on that day, SB435 Enrolled -8- LRB9103102KSgc 1 such that the total number of purchasers eligible to use the 2 accommodations of the timeshare plan during a given calendar 3 year never exceeds the total number of accommodations 4 available for use in the timeshare plan during that year. For 5 purposes of the calculation under this Section, each 6 purchaser must be counted at least once, and no individual 7 accommodation may be counted more than 365 times per calendar 8 year (or more than 366 times per leap year). A purchaser who 9 is delinquent in the payment of timeshare plan assessments 10 shall continue to be considered eligible to use the 11 accommodations of the timeshare plan for purposes of 12 calculating the one-to-one purchaser-to-accommodation ratio. 13 Article 5. Registration Requirements and Fees 14 Section 5-5. Exemptions from developer registration. A 15 person shall not be required to register as a developer under 16 this Act if: 17 (1) the person is an owner of a timeshare interest 18 who has acquired the timeshare interest for the person's 19 own use and occupancy and who later offers it for resale; 20 or 21 (2) the person is a managing entity or an 22 association that is not otherwise a developer of a 23 timeshare plan in its own right, solely while acting as 24 an association or under a contract with an association to 25 offer or sell a timeshare interest transferred to the 26 association through foreclosure, deed in lieu of 27 foreclosure, or gratuitous transfer, if such acts are 28 performed in the regular course of, or as an incident to, 29 the management of the association for its own account in 30 the timeshare plan; or 31 (3) the person offers a timeshare plan in a 32 national publication or by electronic media, as SB435 Enrolled -9- LRB9103102KSgc 1 determined by the Office of Banks and Real Estate and 2 provided by rule, which is not directed to or targeted to 3 any individual located in Illinois; or 4 (4) the person is conveyed, assigned, or transferred 5 more than 7 timeshare periods from a developer in a 6 single voluntary or involuntary transaction and 7 subsequently conveys, assigns, or transfers all of the 8 timeshare interests received from the developer to a 9 single purchaser in a single transaction. 10 Section 5-10. Exempt communications. 11 (a) The following communications are exempt from the 12 provisions of this Act: 13 (1) Any stockholder communication such as an annual 14 report or interim financial report, proxy material, a 15 registration statement, a securities prospectus, a 16 registration, a property report, or other material 17 required to be delivered to a prospective purchaser by an 18 agency of any state or the federal government. 19 (2) Any oral or written statement disseminated by a 20 developer to broadcast or print media, other than paid 21 advertising or promotional material, regarding plans for 22 the acquisition or development of timeshare property. 23 However, any rebroadcast or any other dissemination of 24 such oral statements to a prospective purchaser by a 25 seller in any manner, or any distribution of copies of 26 newspaper magazine articles or press releases, or any 27 other dissemination of such written statements to a 28 prospective purchaser by a seller in any manner, shall 29 constitute an advertisement. 30 (3) Any advertisement or promotion in any medium to 31 the general public if such advertisement or promotion 32 clearly states that it is not an offer in any 33 jurisdiction in which any applicable registration SB435 Enrolled -10- LRB9103102KSgc 1 requirements have not been fully satisfied. 2 (4) Any audio, written, or visual publication or 3 material relating to the availability of any 4 accommodations for transient rental, so long as a sales 5 presentation is not a term or condition of the 6 availability of such accommodations and so long as the 7 failure of any transient renter to take a tour of a 8 timeshare property or attend a sales presentation does 9 not result in any reduction in the level of services 10 which would otherwise be available to such transient 11 renter. 12 (b) The following communications are exempt from the 13 provisions of this Act, provided they are delivered to any 14 person who has previously executed a contract for the 15 purchase of or is an existing owner of a timeshare interest 16 in a timeshare plan: 17 (1) Any communication addressed to and relating to 18 the account of any person who has previously executed a 19 contract for the sale or purchase of a timeshare period 20 in a timeshare plan to which the communication relates. 21 (2) Any audio, written, or visual publication or 22 material relating to an exchange company or exchange 23 program provided to an existing member of that exchange 24 company or exchange program. 25 (3) Any communication by a developer to encourage a 26 person who has previously acquired a timeshare interest 27 from the developer to acquire additional use or occupancy 28 rights or benefits, or additional timeshare interests, 29 offered by the same developer. 30 Section 5-15. Developer registration requirements. 31 (a) Registration required. Any person who, to any 32 individual located in Illinois, sells, offers to sell, or 33 attempts to solicit prospective purchasers to purchase a SB435 Enrolled -11- LRB9103102KSgc 1 timeshare interest, or any person who creates a timeshare 2 plan with an accommodation in the State of Illinois, shall 3 register as a developer with the Office of Banks and Real 4 Estate and shall comply with the provisions of subsection (c) 5 of this Section. 6 (b) Items to be registered. A developer shall be 7 responsible for registering with the Office of Banks and Real 8 Estate, on forms provided by the Office of Banks and Real 9 Estate, the following: 10 (1) All timeshare plans which have accommodations 11 located in Illinois or which are sold or offered for sale 12 to any individual located in Illinois. 13 (2) All sales agents who sell or offer to sell any 14 timeshare interests in any timeshare plan offered by the 15 developer to any individual located in Illinois. 16 (3) All acquisition agents who, by means of 17 inducement, promotion, or advertisement, attempt to 18 encourage or procure prospective purchasers located in 19 Illinois to attend a sales presentation for any timeshare 20 plan offered by the developer. 21 (4) All managing entities who manage any timeshare 22 plan offered or sold by the developer to any individual 23 located in Illinois, without limitation as to whether the 24 location of the accommodation site managed is within 25 Illinois. 26 (c) Escrow. The developer shall comply with the 27 following escrow requirements: 28 (1) A developer of a timeshare plan shall deposit 29 into an escrow account in a federally insured depository 30 100% of all funds which are received during the 31 purchaser's rescission period. The deposit of such funds 32 shall be evidenced by an executed escrow agreement 33 between the escrow agent and the developer, which shall 34 include provisions that: SB435 Enrolled -12- LRB9103102KSgc 1 (A) funds may be disbursed to the developer by 2 the escrow agent from the escrow account only after 3 expiration of the purchaser's rescission period and 4 in accordance with the purchase contract, subject to 5 paragraph (2) of this subsection; and 6 (B) if a purchaser properly cancels the 7 purchase contract pursuant to its terms, the funds 8 shall be paid to the purchaser or paid to the 9 developer if the purchaser's funds have been 10 previously refunded by the developer. 11 (2) If a developer contracts to sell a timeshare 12 interest and the construction of any property in which 13 the timeshare interest is located has not been completed, 14 the developer, upon expiration of the rescission period, 15 shall continue to maintain in an escrow account all funds 16 received by or on behalf of the developer from the 17 purchaser under his or her purchase contract. The 18 Office of Banks and Real Estate shall establish, by rule, 19 the types of documentation which shall be required for 20 evidence of completion, including but not limited to a 21 certificate of occupancy, a certificate of substantial 22 completion, or an inspection by the Office of the State 23 Fire Marshal or the State Fire Marshal's designee or an 24 equivalent public safety inspection agency in the 25 applicable jurisdiction. Funds shall be released from 26 escrow as follows: 27 (A) If a purchaser properly cancels the 28 purchase contract pursuant to its terms, the funds 29 shall be paid to the purchaser or paid to the 30 developer if the purchaser's funds have been 31 previously refunded by the developer. 32 (B) If a purchaser defaults in the performance 33 of the purchaser's obligations under the purchase 34 contract, the funds shall be paid to the developer. SB435 Enrolled -13- LRB9103102KSgc 1 (C) If the funds of a purchaser have not been 2 previously disbursed in accordance with the 3 provisions of this paragraph (2), they may be 4 disbursed to the developer by the escrow agent upon 5 the issuance of acceptable evidence of completion of 6 construction as provided herein. 7 (3) In lieu of the provisions in paragraphs (1) and 8 (2), the Office of Banks and Real Estate may accept from 9 the developer a surety bond, irrevocable letter of 10 credit, or other financial assurance acceptable to the 11 Office of Banks and Real Estate, as provided by rule. 12 Any acceptable financial assurance must be in an amount 13 equal to or in excess of the funds which would otherwise 14 be placed in escrow, or in an amount equal to the cost to 15 complete the incomplete property in which the timeshare 16 interest is located. 17 (4) The developer shall provide escrow account 18 information to the Office of Banks and Real Estate and 19 shall execute in writing an authorization consenting to 20 an audit or examination of the account by the Office of 21 Banks and Real Estate on forms provided by the Office of 22 Banks and Real Estate. The developer shall comply with 23 the reconciliation and records requirements established 24 by rule by the Office of Banks and Real Estate. The 25 developer shall make documents related to the escrow 26 account or escrow obligation available to the Office of 27 Banks and Real Estate upon the Office's request. The 28 developer shall maintain any disputed funds in the escrow 29 account until either: 30 (A) receipt of written direction agreed to by 31 signature of all parties; or 32 (B) deposit of the funds with a court of 33 competent jurisdiction in which a civil action 34 regarding the funds has been filed. SB435 Enrolled -14- LRB9103102KSgc 1 (d) Comprehensive registration. In registering a 2 timeshare plan, the developer shall be responsible for 3 providing information on the following: 4 (1) The developer's legal name, any assumed names 5 used by the developer, principal office street address, 6 mailing address, primary contact person, and telephone 7 number; 8 (2) The name of the developer's authorized or 9 registered agent in the State of Illinois upon whom 10 claims can be served or service of process be had, the 11 agent's street address in Illinois, and telephone number; 12 (3) The name, street address, mailing address, 13 primary contact person, and telephone number of any 14 timeshare plan being registered; 15 (4) The name, street address, mailing address and 16 telephone number of any sales agent and acquisition agent 17 utilized by the developer, and any managing entity of the 18 timeshare plan; 19 (5) A public offering statement which complies with 20 the requirements of Sections 5-25; and 21 (6) Any other information regarding the developer, 22 timeshare plan, sales agents, acquisition agents, or 23 managing entities as reasonably required by the Office of 24 Banks and Real Estate and established by rule. 25 (e) Abbreviated registration. The Office of Banks and 26 Real Estate may accept, as provided for by rule, an 27 abbreviated registration application of a developer of a 28 timeshare plan in which all accommodations are located 29 outside of the State of Illinois. The developer shall file a 30 written notice of intent to register under this Section at 31 least 15 days prior to submission. A developer of a 32 timeshare plan with any accommodation located in the State of 33 Illinois may not file an abbreviated filing, with the 34 exception of a succeeding developer after a merger or SB435 Enrolled -15- LRB9103102KSgc 1 acquisition when all of the developers' timeshare plans were 2 registered in Illinois immediately preceding the merger or 3 acquisition. 4 The developer shall provide a certificate of registration 5 or other evidence of registration from the appropriate 6 regulatory agency of any other jurisdiction within the United 7 States in which some or all of such accommodations are 8 located. The other jurisdiction must have disclosure 9 requirements that are substantially equivalent to or greater 10 than the information required to be disclosed to purchasers 11 by the State of Illinois. A developer filing an abbreviated 12 registration application shall provide the following: 13 (1) The developer's legal name, any assumed names 14 used by the developer, and the developer's principal 15 office location, mailing address, primary contact person, 16 and telephone number. 17 (2) The name, location, mailing address, primary 18 contact person, and telephone number of the timeshare 19 plan. 20 (3) The name of the authorized agent or registered 21 agent in Illinois upon whom claims can be served or 22 service of process can be had, and the address in 23 Illinois of the authorized agent or registered agent. 24 (4) The names of any sales agent, acquisition 25 agent, and managing entity, and their principal office 26 location, mailing address, and telephone number. 27 (5) The certificate of registration or other 28 evidence of registration from any jurisdiction in which 29 the timeshare plan is approved or accepted. 30 (6) A declaration as to whether the timeshare plan 31 is a single-site timeshare plan or a multi-site 32 timeshare plan and, if a multi-site timeshare plan, 33 whether it consists of specific timeshare interests or 34 non-specific timeshare interests. SB435 Enrolled -16- LRB9103102KSgc 1 (7) Disclosure of each jurisdiction in which the 2 developer has applied for registration of the timeshare 3 plan, and whether the timeshare plan, its developer, or 4 any of its acquisition agents, sales agents, or managing 5 entities utilized were denied registration or were the 6 subject of any disciplinary proceeding. 7 (8) Copies of any disclosure documents required to 8 be given to purchasers or required to be filed with the 9 jurisdiction in which the timeshare plan is approved or 10 accepted as may be requested by the Office of Banks and 11 Real Estate. 12 (9) The appropriate fee. 13 (10) Such other information reasonably required by 14 the Office of Banks and Real Estate and established by 15 rule. 16 (f) Preliminary permits. Notwithstanding anything in 17 this Section to the contrary, the Office of Banks and Real 18 Estate may grant a 6-month preliminary permit, as established 19 by rule, allowing the developer to begin offering and selling 20 timeshare interests while the registration is in process. To 21 obtain a preliminary permit, the developer shall do all of 22 the following: 23 (1) Submit a formal written request to the Office 24 of Banks and Real Estate for a preliminary permit. 25 (2) Submit a substantially complete application for 26 registration to the Office of Banks and Real Estate, 27 including all appropriate fees and exhibits required 28 under this Article. 29 (3) Provide evidence acceptable to the Office of 30 Banks and Real Estate that all funds received by the 31 developer will be placed into an independent escrow 32 account with instructions that funds will not be released 33 until a final registration has been granted. 34 (4) Give to each purchaser and potential purchaser a SB435 Enrolled -17- LRB9103102KSgc 1 copy of the proposed public offering statement that the 2 developer has submitted to the Office of Banks and Real 3 Estate with the initial application. 4 (5) Give to each purchaser the opportunity to cancel 5 the purchase contract in accordance with Section 10-10. 6 The purchaser shall have an additional opportunity to 7 cancel upon the issuance of an approved registration if 8 the Office of Banks and Real Estate determines that there 9 is a substantial difference in the disclosures contained 10 in the final public offering statement and those given to 11 the purchaser in the proposed public offering statement. 12 (g) Alternative registration; letter of credit or other 13 assurance; recovery. 14 (1) Notwithstanding anything in this Act to the 15 contrary, the Office of Banks and Real Estate may accept, 16 as established by rule, a registration from a developer 17 for a timeshare plan if the developer provides all of the 18 following: 19 (A) A written notice of intent to register 20 under this Section at least 15 days prior to 21 submission of the alternative registration. 22 (B) An irrevocable letter of credit or other 23 acceptable assurance, as established by rule, in an 24 amount of $1,000,000, from which an Illinois 25 purchaser aggrieved by any act, representation, 26 transaction, or conduct of a duly registered 27 developer or his or her acquisition agent, sales 28 agent, managing entity, or employee, which violates 29 any provision of this Act or the rules promulgated 30 under this Act, or which constitutes embezzlement 31 of money or property or results in money or property 32 being unlawfully obtained from any person by false 33 pretenses, artifice, trickery, or forgery or by 34 reason of any fraud, misrepresentation, SB435 Enrolled -18- LRB9103102KSgc 1 discrimination, or deceit by or on the part of any 2 developer or agent or employee of the developer and 3 which results in actual monetary loss as opposed to 4 a loss in market value, may recover. 5 (C) The developer's legal name, any assumed 6 names used by the developer, and the developer's 7 principal office location, mailing address, main 8 contact person, and telephone number. 9 (D) The name, location, mailing address, main 10 contact person, and telephone number of the 11 timeshare plan included in the filing. 12 (E) The name of the authorized agent or 13 registered agent in Illinois upon whom claims can be 14 served or service of process can be had, and the 15 address in Illinois of the authorized agent or 16 registered agent. 17 (F) The names of any sales agent, acquisition 18 agent, and managing entity, and their principal 19 office location, mailing address, and telephone 20 number. 21 (G) A declaration as to whether the timeshare 22 plan is a single-site timeshare plan or a multi-site 23 timeshare plan and, if a multi-site timeshare plan, 24 whether it consists of specific timeshare interests 25 or non-specific timeshare interests. 26 (H) Disclosure of each jurisdiction in which 27 the developer has applied for registration of the 28 timeshare plan, and whether the timeshare plan, its 29 developer, or any of its acquisition agents, sales 30 agents, or managing entities utilized were denied 31 registration or were the subject of any disciplinary 32 proceeding. 33 (I) The required fee. 34 (J) Such other information reasonably required SB435 Enrolled -19- LRB9103102KSgc 1 by the Office of Banks and Real Estate and 2 established by rule. 3 (2) Any letter of credit or other acceptable 4 assurance shall remain in effect with the Office of Banks 5 and Real Estate for a period of 12 months after the date 6 the developer does not renew or otherwise cancel his or 7 her registration with the State of Illinois or 12 months 8 after the Office of Banks and Real Estate revokes, 9 suspends, or otherwise disciplines such developer or his 10 or her registration, provided there is no pending 11 litigation alleging a violation of any provision of this 12 Act known by the Office of Banks and Real Estate and 13 certified by the developer. 14 (3) The Office of Banks and Real Estate shall 15 establish procedures, by rule, to satisfy claims by any 16 Illinois purchaser pursuant to this Section. 17 (4) The Office of Banks and Real Estate shall 18 automatically suspend the registration of any developer 19 pursuant to Section 15-25 of this Act in the event the 20 Office authorizes or directs payment to an Illinois 21 purchaser from the letter of credit or other acceptable 22 assurance pursuant to this Section and as established by 23 rule. 24 (h) A developer who registers a timeshare plan pursuant 25 to this Act shall provide the purchaser with a public 26 offering statement that complies with Section 5-25 and any 27 disclosures or other written information required by this 28 Act. 29 (i) Nothing contained in this Section shall affect the 30 Office of Banks and Real Estate's ability to initiate any 31 disciplinary action against a developer in accordance with 32 this Act. 33 (j) For purposes of this Section, "Illinois purchaser" 34 means a person who, within the State of Illinois, is SB435 Enrolled -20- LRB9103102KSgc 1 solicited, offered, or sold a timeshare interest in a 2 timeshare plan registered pursuant to this Section. 3 Section 5-20. Developer supervisory duties. The 4 developer shall have the duty to supervise, manage, and 5 control all aspects of the offering of the timeshare plan, 6 including, but not limited to, promotion, advertising, 7 contracting, and closing. The developer shall have 8 responsibility for each timeshare plan registered with the 9 Office of Banks and Real Estate and for the actions of any 10 sales agent, managing entity, and acquisition agent utilized 11 by the developer in the offering or selling of any registered 12 timeshare plan. Any violation of this Act which occurs 13 during the offering activities shall be deemed to be a 14 violation by the developer as well as by the acquisition 15 agent, sales agent, or managing entity who actually committed 16 such violation. Notwithstanding anything to the contrary in 17 this Act, the developer shall be responsible for the actions 18 of the association and managing entity only while they are 19 subject to the developer's control. 20 Section 5-25. Timeshare plan public offering statement 21 requirements. 22 (a) A developer shall prepare a public offering 23 statement, shall provide the statement to each purchaser of a 24 timeshare interest in any timeshare plan at the time of 25 purchase, and shall fully and accurately disclose those facts 26 concerning the timeshare developer and timeshare plan that 27 are required by this Act or by rule. The public offering 28 statement shall be in writing and dated and shall require the 29 purchaser to certify in writing the receipt thereof. 30 (b) With regard to timeshare interests offered in a 31 timeshare plan, a public offering statement shall fully and 32 accurately disclose the following: SB435 Enrolled -21- LRB9103102KSgc 1 (1) The name of the developer and the principal 2 address of the developer. 3 (2) A description of the type of timeshare 4 interests being offered. 5 (3) A general description of the existing and 6 proposed accommodations and amenities of the timeshare 7 plan, including their type and number, personal property 8 furnishing the accommodation, any use restrictions, and 9 any required fees for use. 10 (4) A description of any accommodations and 11 amenities that are committed to be built, including, 12 without limitation: 13 (A) the developer's schedule of commencement 14 and completion of all accommodations and amenities; 15 and 16 (B) the estimated number of accommodations per 17 site that may become subject to the timeshare plan. 18 (5) A brief description of the duration, phases, 19 and operation of the timeshare plan. 20 (6) The current annual budget, if available, or the 21 projected annual budget for the timeshare plan. The 22 budget shall include, without limitation: 23 (A) a statement of the amount, or a statement 24 that there is no amount, included in the budget as a 25 reserve for repairs and replacement; 26 (B) the projected common expense liability, if 27 any, by category of expenditures for the timeshare 28 plan; and 29 (C) a statement of any services or expenses 30 not reflected in the budget that the developer 31 provides or pays. 32 (7) Any initial or special fee due from the 33 purchaser at closing, together with a description of the 34 purpose and method of calculating the fee. SB435 Enrolled -22- LRB9103102KSgc 1 (8) A description of any liens, defects, or 2 encumbrances on or affecting the title to the timeshare 3 interests. 4 (9) A description of any financing offered by or 5 available through the developer. 6 (10) A statement that within 5 calendar days after 7 receipt of the public offering statement or after 8 execution of the purchase contract, whichever is later, a 9 purchaser may cancel any purchase contract for a 10 timeshare interest from a developer together with a 11 statement providing the name and street address to which 12 the purchaser should mail any notice of cancellation. 13 However, if by agreement of the parties by and through 14 the purchase contract, the purchase contract allows for 15 cancellation of the purchase contract for a period of 16 time exceeding 5 calendar days, then the public offering 17 statement shall include a statement that the cancellation 18 of the purchase contract is allowed for that period of 19 time exceeding 5 calendar days. 20 (11) A statement of any pending suits, 21 adjudications, or disciplinary actions material to the 22 timeshare interests of which the developer has knowledge. 23 (12) Any restrictions on alienation of any number 24 or portion of any timeshare interests. 25 (13) A statement describing liability and casualty 26 insurance for the timeshare property. 27 (14) Any current or expected fees or charges to be 28 paid by timeshare purchasers for the use of any amenities 29 related to the timeshare property. 30 (15) The extent to which financial arrangements 31 have been provided for completion of all promised 32 improvements. 33 (16) The developer or managing entity must notify 34 the Office of Banks and Real Estate of the extent to SB435 Enrolled -23- LRB9103102KSgc 1 which an accommodation may become subject to a tax or 2 other lien arising out of claims against other purchasers 3 in the same timeshare plan. The Office of Banks and Real 4 Estate may require the developer or managing entity to 5 notify a prospective purchaser of any such potential tax 6 or lien which would materially and adversely affect the 7 prospective purchaser. 8 (17) A statement indicating that the developer and 9 timeshare plan are registered with the State of Illinois. 10 (18) If the timeshare plan provides purchasers with 11 the opportunity to participate in an exchange program, a 12 description of the name and address of the exchange 13 company and the method by which a purchaser accesses the 14 exchange program. 15 (19) Such other information reasonably required by 16 the Office of Banks and Real Estate and established by 17 administrative rule necessary for the protection of 18 purchasers of timeshare interests in timeshare plans. 19 (20) Any other information that the developer, with 20 the approval of the Office of Banks and Real Estate, 21 desires to include in the public offering statement. 22 (c) A developer offering a multi-site timeshare plan 23 shall also fully and accurately disclose the following 24 information, which may be disclosed in a written, graphic, or 25 tabular form: 26 (1) A description of each component site, including 27 the name and address of each component site. 28 (2) The number of accommodations and timeshare 29 periods, expressed in periods of 7-day use availability, 30 committed to the multi-site timeshare plan and available 31 for use by purchasers. 32 (3) Each type of accommodation in terms of the 33 number of bedrooms, bathrooms, and sleeping capacity, and 34 a statement of whether or not the accommodation contains SB435 Enrolled -24- LRB9103102KSgc 1 a full kitchen. For purposes of this description, a 2 "full kitchen" means a kitchen having a minimum of a 3 dishwasher, range, sink, oven, and refrigerator. 4 (4) A description of amenities available for use by 5 the purchaser at each component site. 6 (5) A description of the reservation system, which 7 shall include the following: 8 (A) The entity responsible for operating the 9 reservation system. 10 (B) A summary of the rules and regulations 11 governing access to and use of the reservation 12 system. 13 (C) The existence of and an explanation 14 regarding any priority reservation features that 15 affect a purchaser's ability to make reservations 16 for the use of a given accommodation on a 17 first-come, first-served basis. 18 (6) A description of any right to make any 19 additions, substitutions, or deletions of accommodations 20 or amenities, and a description of the basis upon which 21 accommodations and amenities may be added to, substituted 22 in, or deleted from the multi-site timeshare plan. 23 (7) A description of the purchaser's liability for 24 any fees associated with the multi-site timeshare plan. 25 (8) The location and the anticipated relative use 26 demand of each component site in a multi-site timeshare 27 plan, as well as any periodic adjustment or amendment to 28 the reservation system which may be needed in order to 29 respond to actual purchaser use patterns and changes in 30 purchaser use demand for the accommodations existing at 31 that time within the multi-site timeshare plan. 32 (9) Such other information reasonably required by 33 the Office of Banks and Real Estate and established by 34 administrative rule necessary for the protection of SB435 Enrolled -25- LRB9103102KSgc 1 purchasers of timeshare interests in timeshare plans. 2 (10) Any other information that the developer, with 3 the approval of the Office of Banks and Real Estate, 4 desires to include in the public offering statement. 5 (d) If a developer offers a non-specific timeshare 6 interest in a multi-site timeshare plan, the developer shall 7 disclose the information set forth in subsection (b) as to 8 each component site. 9 Section 5-30. Exchange company registration and 10 disclosure requirements. 11 (a) Each exchange company offering an exchange program 12 to purchasers in this State shall register with the Office of 13 Banks and Real Estate by July 1 of each year. The 14 registration shall consist of the information specified in 15 this Section. However, an exchange company shall make its 16 initial registration at least 20 calendar days prior to 17 offering membership in an exchange program to any purchaser 18 in this State. 19 (b) If a purchaser is offered the opportunity to become 20 a member of an exchange program, the developer shall deliver 21 to the purchaser, together with the public offering statement 22 and any other materials required to be furnished under this 23 Section, and prior to the offering or execution of any 24 contract between the purchaser and the exchange company 25 offering membership in the exchange program, or, if the 26 exchange company is dealing directly with the purchaser, the 27 developer or the exchange company shall deliver to the 28 purchaser, prior to the initial offering or execution of any 29 contract between the purchaser and the exchange company, the 30 following written information regarding the exchange program, 31 the form and substance of which shall first be approved by 32 the Office of Banks and Real Estate in accordance with this 33 Section: SB435 Enrolled -26- LRB9103102KSgc 1 (1) The name and address of the exchange company. 2 (2) The names of all officers, directors, and 3 shareholders of the exchange company. 4 (3) Whether the exchange company or any of its 5 officers or directors have any legal or beneficial 6 interest in any developer, seller, or managing entity for 7 any timeshare plan participating in the exchange program 8 and, if so, the identity of the timeshare plan and the 9 nature of the interest. 10 (4) Unless otherwise stated, a statement that the 11 purchaser's contract with the exchange company is a 12 contract separate and distinct from the purchaser's 13 contract with the seller of timeshare interests. 14 (5) Whether the purchaser's participation in the 15 exchange program is dependent upon the continued 16 affiliation of the applicable timeshare plan with the 17 exchange program. 18 (6) A statement that the purchaser's participation 19 in the exchange program is voluntary. 20 (7) A complete and accurate description of the 21 terms and conditions of the purchaser's contractual 22 relationship with the exchange program and the procedure 23 by which changes thereto may be made. 24 (8) A complete and accurate description of the 25 procedures necessary to qualify for and effectuate 26 exchanges. 27 (9) A complete and accurate description of all 28 limitations, restrictions, and priorities employed in the 29 operation of the exchange program, including but not 30 limited to limitations on exchanges based on seasonality, 31 accommodation size, or levels of occupancy, expressed in 32 conspicuous type, and, in the event that those 33 limitations, restrictions, or priorities are not 34 uniformly applied by the exchange company, a clear SB435 Enrolled -27- LRB9103102KSgc 1 description of the manner in which they are applied. 2 (10) Whether exchanges are arranged on a 3 space-available basis and whether any guarantees of 4 fulfillment of specific requests for exchanges are made 5 by the exchange company. 6 (11) Whether and under what circumstances an owner, 7 in dealing with the exchange program, may lose the right 8 to use and occupy an accommodation of the timeshare plan 9 during a reserved use period with respect to any properly 10 applied-for exchange without being provided with 11 substitute accommodations by the exchange program. 12 (12) The fees or range of fees for participation by 13 owners in the exchange program, a statement of whether 14 any such fees may be altered by the exchange company, and 15 the circumstances under which alterations may be made. 16 (13) The name and address of the site of each 17 accommodation included within a timeshare plan 18 participating in the exchange program. 19 (14) The number of accommodations in each timeshare 20 plan that are available for occupancy and that qualify 21 for participation in the exchange program, expressed 22 within the following numerical groups: 1-5; 6-10; 11-20; 23 21-50; and 51 and over. 24 (15) The number of currently enrolled owners for 25 each timeshare plan participating in the exchange 26 program, expressed within the following numerical groups: 27 1-100; 101-249; 250-499; 500-999; and 1,000 and over; and 28 a statement of the criteria used to determine those 29 owners who are currently enrolled with the exchange 30 program. 31 (16) The disposition made by the exchange company 32 of use periods deposited with the exchange program by 33 owners enrolled in the exchange program and not used by 34 the exchange company in effecting exchanges. SB435 Enrolled -28- LRB9103102KSgc 1 (17) The following information for the preceding 2 calendar year, which shall be independently audited by a 3 certified public accountant in accordance with the 4 standards of the Accounting Standards Board of the 5 American Institute of Certified Public Accountants and 6 reported annually no later than August 1 of each year: 7 (A) The number of owners currently enrolled in 8 the exchange program. 9 (B) The number of timeshare plans that have 10 current affiliation agreements with the exchange 11 program. 12 (C) The percentage of confirmed exchanges, 13 which is the number of exchanges confirmed by the 14 exchange program divided by the number of exchanges 15 properly applied for, together with a complete and 16 accurate statement of the criteria used to determine 17 whether an exchange request was properly applied 18 for. 19 (D) The number of use periods for which the 20 exchange program has an outstanding obligation to 21 provide an exchange to an owner who relinquished a 22 use period during a particular year in exchange for 23 a use period in any future year. 24 (E) The number of exchanges confirmed by the 25 exchange program during the year. 26 (F) A statement in conspicuous type to the 27 effect that the percentage described in subdivision 28 (17)(C) of this subsection is a summary of the 29 exchange requests entered with the exchange program 30 in the period reported and that the percentage does 31 not indicate the probabilities of an owner's being 32 confirmed to any specific choice or range of 33 choices. 34 (18) Such other information as may be reasonably SB435 Enrolled -29- LRB9103102KSgc 1 required by the Office of Banks and Real Estate of any 2 exchange company as established by rule. 3 (c) No developer shall have any liability with respect 4 to any violation of this Act arising out of the publication 5 by the developer of information provided to it by an exchange 6 company pursuant to this Article. No exchange company shall 7 have any liability with respect to any violation of this Act 8 arising out of the use by a developer of information relating 9 to an exchange program other than that provided to the 10 developer by the exchange company. 11 (d) All written, visual, and electronic communications 12 relating to an exchange company or an exchange program shall 13 be filed with the Office of Banks and Real Estate upon its 14 request. 15 (e) The failure of an exchange company to observe the 16 requirements of this Section, and the use of any unfair or 17 deceptive act or practice in connection with the operation of 18 an exchange program, is a violation of this Act. 19 (f) An exchange company may elect to deny exchange 20 privileges to any owner whose use of the accommodations of 21 the owner's timeshare plan is denied, and no exchange program 22 or exchange company shall be liable to any of its members or 23 any third parties on account of any such denial of exchange 24 privileges. 25 Section 5-35. Resale agent registration requirements. 26 (a) Every resale agent as defined in this Act shall 27 register with the Office of Banks and Real Estate. 28 (b) Every resale agent shall be responsible for 29 registering the following information with the Office of 30 Banks and Real Estate on forms provided by the Office of 31 Banks and Real Estate: 32 (1) A description of the resale program offered by 33 the resale agent. SB435 Enrolled -30- LRB9103102KSgc 1 (2) The legal name, any assumed names, and the 2 mailing address, street address, contact person, and 3 telephone number of the resale agent. 4 (3) A properly executed consent-to-audit form, 5 which allows the Office of Banks and Real Estate to audit 6 any escrow accounts held by the resale agent. 7 (4) Any other information required by the Office of 8 Banks and Real Estate to be filed by resale agents, as 9 established by rule. 10 (c) The following shall be exempt from registration 11 under this Section: 12 (1) Any developer, sales agent, acquisition agent, 13 or managing entity that is currently registered pursuant 14 to this Act. 15 (2) Any purchaser that sells or offers to sell his 16 or her own timeshare interest. 17 (3) Any homeowners' association that sells or 18 offers to sell its own timeshare interests acquired 19 through foreclosure, deed in lieu of foreclosure, or 20 gratuitous transfer. 21 (4) Any person who is licensed under the Real 22 Estate License Act of 1983 or its successor Act. 23 Section 5-40. Resale agent duties. Whether registered 24 or exempt from registration under Section 5-35, a resale 25 agent shall comply with all of the following: 26 (a) Prior to engaging in any resale activities on behalf 27 of any owner of a timeshare interest, a resale agent shall 28 enter into a listing agreement with that owner. Every 29 listing agreement shall be in writing and signed by both the 30 resale agent and the timeshare interest owner. The 31 requirements of the written listing agreement shall be 32 established by rule, but at a minimum the listing agreement 33 shall disclose the method of compensation, a definite date of SB435 Enrolled -31- LRB9103102KSgc 1 termination, whether any fees are non-refundable, and whether 2 the agreement permits the timeshare resale agent or any other 3 person to make any use whatsoever of the owner's timeshare 4 interest or receive any rents or profits generated from such 5 use of the timeshare interest. 6 (b) A resale agent shall maintain records as required by 7 rule. The records required to be maintained include, but are 8 not limited to, all listing agreements, copies of 9 disbursement authorizations in accordance with subsection 10 (c), and resale contracts. 11 (c) A resale agent who collects any fees prior to a 12 transfer of an interest from any owner shall deposit the fees 13 in an escrow account. Any fees that are to be paid to the 14 resale agent prior to closing may be disbursed from the 15 escrow account only upon receipt of a disbursement 16 authorization, signed by the owner, in the following form: 17 "I, (name of owner), am the owner of a timeshare 18 interest in (name of timeshare plan). I understand that 19 for my protection I can require the entire fee to be held 20 in escrow until the closing on the resale of my timeshare 21 interest, but I am authorizing a release before the 22 transfer in the following amount: (amount written in 23 words) ($ (amount in numbers)), for the following purpose 24 or purposes (description of purpose or purposes). I 25 understand that the resale agent is regulated by the 26 Office of Banks and Real Estate under the Real Estate 27 Timeshare Act of 1999. The Office of Banks and Real 28 Estate requires the resale agent to obtain this 29 disbursement authorization with my signature before 30 disbursement of my funds." 31 (d) A resale agent shall utilize a purchase agreement 32 that discloses to a purchaser of a timeshare interest all of 33 the following: 34 (1) A legally sufficient description of the SB435 Enrolled -32- LRB9103102KSgc 1 timeshare interest being purchased. 2 (2) The name and address of the managing entity of 3 the timeshare property. 4 (3) The current year's assessment for the common 5 expenses allocated to the timeshare interest being 6 purchased including the time period to which the 7 assessment relates and the date on which it is due. If 8 not included in the applicable common expense assessment, 9 the amount of any real or personal property taxes 10 allocated to the timeshare interest being purchased. 11 (4) A complete and accurate disclosure of the terms 12 and conditions of the purchase and closing, including the 13 obligations of the owner, the purchaser, or both for 14 closing costs and the title insurance. 15 (5) The entity responsible for providing 16 notification to the managing entity of the timeshare plan 17 and the applicable exchange company regarding any change 18 in the ownership of the timeshare interest. 19 (6) A statement of the first year in which the 20 purchaser is entitled to receive the actual use rights 21 and occupancy of the timeshare interest, as determined by 22 the managing entity of the timeshare plan and any 23 exchange company. 24 (7) In making the disclosures required by this 25 subsection (d), the timeshare resale agent may rely upon 26 information provided in writing by the owner or managing 27 entity of the timeshare plan. 28 (8) The purchaser's 5-day cancellation period as 29 required by Section 10-10. 30 (9) Any other information determined by the Office 31 of Banks and Real Estate and established by rule. 32 Section 5-45. Amendment to registration information or 33 public offering statement. The developer, resale agent, and SB435 Enrolled -33- LRB9103102KSgc 1 exchange company shall amend or supplement their disclosure 2 documents and registration information to reflect any 3 material change in any information required by this Act or 4 the rules implementing this Act. All such amendments, 5 supplements, and changes shall be filed with the Office of 6 Banks and Real Estate within 20 calendar days of the material 7 change. 8 Section 5-50. Registration review time frames. Every 9 registration required to be filed with the Office of Banks 10 and Real Estate under this Act shall be reviewed and issued a 11 certificate of registration in accordance with the following 12 schedule: 13 (1) Comprehensive registration. Registration shall 14 be effective only upon the issuance of a certificate of 15 registration by the Office of Banks and Real Estate, 16 which, in the ordinary course of business, should occur 17 no more than 60 calendar days after actual receipt by the 18 Office of Banks and Real Estate of the properly completed 19 application. The Office of Banks and Real Estate must 20 provide a list of deficiencies in the application, if 21 any, within 60 calendar days of receipt. 22 (2) Abbreviated registration. Registration shall 23 be effective only upon the issuance of a certificate of 24 registration by the Office of Banks and Real Estate, 25 which, in the ordinary course of business, should occur 26 no more than 30 calendar days after actual receipt by the 27 Office of Banks and Real Estate of the properly completed 28 application. The Office of Banks and Real Estate must 29 provide a list of deficiencies in the application, if 30 any, within 30 calendar days of receipt. 31 (3) Alternative assurance registration. 32 Registration shall be deemed effective within 15 calendar 33 days of receipt, unless the Office of Banks and Real SB435 Enrolled -34- LRB9103102KSgc 1 Estate provides to the applicant a written list of 2 deficiencies in the application, if any, within 15 3 calendar days of receipt. 4 (4) Preliminary permit registration. A preliminary 5 permit shall be issued within 15 calendar days of 6 receipt, unless the Office of Banks and Real Estate 7 provides to the applicant a written list of deficiencies 8 in the application, if any, within 15 calendar days of 9 receipt. 10 (5) Exchange company registration. Registration 11 shall be effective upon receipt by the Office of Banks 12 and Real Estate of a properly completed application. The 13 Office of Banks and Real Estate must provide a list of 14 deficiencies in the application, if any, within 30 15 calendar days of receipt. 16 Section 5-55. Fees. The Office of Banks and Real Estate 17 shall provide, by rule, for fees to be paid by applicants and 18 registrants to cover the reasonable costs of the Office of 19 Banks and Real Estate in administering and enforcing the 20 provisions of this Act. The Office of Banks and Real Estate 21 may also provide, by rule, for general fees to cover the 22 reasonable expenses of carrying out other functions and 23 responsibilities under this Act. 24 Section 5-60. Registration; offer or disposal of 25 interest. A developer, exchange company, or resale agent, or 26 any of their agents, shall not sell, offer, or dispose of a 27 timeshare interest unless all necessary registrations are 28 filed and approved by the Office of Banks and Real Estate, or 29 while an order revoking or suspending a registration is in 30 effect. 31 An applicant for registration under this Act shall submit 32 the necessary information to complete the application, as SB435 Enrolled -35- LRB9103102KSgc 1 required by the Office of Banks and Real Estate, within 6 2 months from the date the initial registration application was 3 received by the Office of Banks and Real Estate. If the 4 applicant fails to submit the information necessary to 5 complete the application as required by the Office of Banks 6 and Real Estate within the six month period, said application 7 shall be voided, and a new registration application with 8 applicable fees must be submitted. 9 Section 5-65. Securities. The offer or disposition of 10 a timeshare interest in a timeshare plan which satisfies all 11 the requirements of this Act shall not be deemed to 12 constitute the offer and sale of a security under the 13 Illinois Securities Law of 1953. 14 Article 10. Business Practices 15 Section 10-5. Management and operation provisions. 16 (a) Before the first sale of a timeshare interest, the 17 developer shall create or provide for a managing entity, 18 which shall be either the developer, a separate manager or 19 management firm, the board of directors of an owners' 20 association, or some combination thereof. 21 (b) The duties of the managing entity include, but are 22 not limited to: 23 (1) Management and maintenance of all 24 accommodations constituting the timeshare plan. 25 (2) Collection of all assessments as provided in 26 the timeshare instrument. 27 (3) Providing to all purchasers each year an 28 itemized annual budget, which shall include all estimated 29 revenues and expenses. 30 (4) Maintenance of all books and records concerning 31 the timeshare plan. SB435 Enrolled -36- LRB9103102KSgc 1 (5) Scheduling occupancy of accommodations, when 2 purchasers are not entitled to use specific timeshare 3 periods, so that all purchasers will be provided the 4 opportunity to use and possession of the accommodations 5 of the timeshare plan which they have purchased. 6 (6) Performing any other functions and duties that 7 are necessary and proper to maintain the accommodations 8 or that are required by the timeshare instrument. 9 (c) In the event a developer, managing entity, or 10 association files a complaint in a foreclosure proceeding 11 involving timeshare interests, the developer, managing 12 entity, or association may join in the same action multiple 13 defendant obligors and junior interest holders of separate 14 timeshare interests, provided: 15 (1) the foreclosure proceeding involves a single 16 timeshare plan; 17 (2) the foreclosure proceeding is filed by a single 18 plaintiff; 19 (3) the default and remedy provisions in the written 20 instruments on which the foreclosure proceeding is based 21 are substantially the same for each defendant; and 22 (4) the nature of the defaults alleged is the same 23 for each defendant. 24 (d) In any foreclosure proceeding involving multiple 25 defendants filed under subsection (c), the court shall sever 26 for separate trial any count of the complaint in which a 27 defense or counterclaim is timely raised by a defendant. 28 Section 10-10. Cancellation of purchase contract. Any 29 purchase contract entered into by a purchaser of a time share 30 interest under this Act shall be voidable by the purchaser, 31 without penalty, within 5 calendar days after the receipt of 32 the public offering statement or the execution of the 33 purchase contract, whichever is later. The purchase contract SB435 Enrolled -37- LRB9103102KSgc 1 shall provide notice of the 5-day cancellation period, 2 together with the name and mailing address to which any 3 notice of cancellation shall be delivered. Notice of 4 cancellation shall be deemed timely if the notice is 5 deposited with the United States Postal Service not later 6 than midnight of the fifth calendar day. 7 Upon such cancellation, the developer or resale agent 8 shall refund to the purchaser all payments made by the 9 purchaser, less the amount of any benefits actually received 10 pursuant to the purchase contract. The refund shall be made 11 within 20 calendar days after the receipt of the notice of 12 cancellation, or receipt of funds from the purchaser's 13 cleared check, whichever occurs later. 14 If a purchaser elects to cancel a purchase contract 15 pursuant to this Section, the purchaser may do so by hand 16 delivering a written notice of cancellation or by mailing a 17 notice of cancellation by certified mail, return receipt 18 requested, to the developer or resale ent, as applicable, at 19 an address set forth in the purchase contract. 20 Section 10-15. Interests, liens, and encumbrances; 21 alternative assurances. 22 (a) Excluding any encumbrance placed against the 23 purchaser's timeshare interest securing the purchaser's 24 payment of purchase-money financing for such purchase, the 25 developer shall not be entitled to the release of any funds 26 escrowed under subsection (c) of Section 5-15 with respect to 27 each timeshare interest and any other property or rights to 28 property appurtenant to the timeshare interest, including any 29 amenities represented to the purchaser as being part of the 30 timeshare plan, until the developer has provided satisfactory 31 evidence to the Office of Banks and Real Estate of one of the 32 following: 33 (1) The timeshare interest together with any other SB435 Enrolled -38- LRB9103102KSgc 1 property or rights to property appurtenant to the 2 timeshare interest, including any amenities represented 3 to the purchaser as being part of the timeshare plan, are 4 free and clear of any of the claims of the developer, any 5 owner of the underlying fee, a mortgagee, judgment 6 creditor, or other lienor, or any other person having an 7 interest in or lien or encumbrance against the timeshare 8 interest or appurtenant property or property rights. 9 (2) The developer, any owner of the underlying fee, 10 a mortgagee, judgment creditor, or other lienor, or any 11 other person having an interest in or lien or encumbrance 12 against the timeshare interest or appurtenant property or 13 property rights, including any amenities represented to 14 the purchaser as being part of the timeshare plan, has 15 recorded a subordination and notice to creditors document 16 in the appropriate public records of the jurisdiction in 17 which the timeshare interest is located. The 18 subordination document shall expressly and effectively 19 provide that the interest holder's right, lien, or 20 encumbrance shall not adversely affect, and shall be 21 subordinate to, the rights of the owners of the timeshare 22 interests in the timeshare plan regardless of the date of 23 purchase, from and after the effective date of the 24 subordination document. 25 (3) The developer, any owner of the underlying fee, 26 a mortgagee, judgment creditor, or other lienor, or any 27 other person having an interest in or lien or encumbrance 28 against the timeshare interest or appurtenant property or 29 property rights, including any amenities represented to 30 the purchaser as being part of the timeshare plan, has 31 transferred the subject accommodations or amenities or 32 all use rights therein to a nonprofit organization or 33 owners' association to be held for the use and benefit of 34 the owners of the timeshare plan, which entity shall act SB435 Enrolled -39- LRB9103102KSgc 1 as a fiduciary to the purchasers, provided that the 2 developer has transferred control of such entity to the 3 owners or does not exercise its voting rights in such 4 entity with respect to the subject accommodations or 5 amenities. Prior to the transfer, any lien or other 6 encumbrance against the accommodation or facility shall 7 be made subject to a subordination and notice to 8 creditors instrument pursuant to paragraph (2). 9 (4) Alternative arrangements have been made which 10 are adequate to protect the rights of the purchasers of 11 the timeshare interests and approved by the Office of 12 Banks and Real Estate. 13 (b) Nothing in this Section shall prevent a developer 14 from accessing any escrow funds if the developer has complied 15 with subsection (c) of Section 5-15. 16 Section 10-20. Licenses. Any sales or resale agent 17 shall comply with the provisions of the Real Estate License 18 Act of 1983, or its successor Act and the rules adopted 19 pursuant to that Act, including licensure, unless otherwise 20 exempt under the Real Estate License Act of 1983, or its 21 successor Act and the rules adopted pursuant to that Act. 22 Section 10-25. Liability; material misrepresentation. 23 (a) A developer or other person offering a timeshare 24 plan may not do any of the following: 25 (1) Misrepresent a fact material to a purchaser's 26 decision to buy a timeshare interest. 27 (2) Predict specific or immediate increases in the 28 value of a timeshare interest represented over a period 29 of time, excluding bona fide pending price increases by 30 the developer. 31 (3) Materially misrepresent the qualities or 32 characteristics of accommodations or the amenities SB435 Enrolled -40- LRB9103102KSgc 1 available to the occupant of those accommodations. 2 (4) Misrepresent the length of time accommodations 3 or amenities will be available to the purchaser of a 4 timeshare interest. 5 (5) Misrepresent the conditions under which a 6 purchaser of a timeshare interest may exchange the right 7 of his or her occupancy for the right to occupy other 8 accommodations. 9 (b) A developer or other person using a promotion in 10 connection with the offering of a timeshare interest shall 11 clearly disclose all of the following: 12 (1) That the purpose of the promotion is to sell 13 timeshare interests, which shall appear in bold face or 14 other conspicuous type. 15 (2) That any person whose name or address is 16 obtained during the promotion may be solicited to 17 purchase a timeshare interest. 18 (3) The name of each developer or other person 19 trying to sell a timeshare interest through the 20 promotion, and the name of each person paying for the 21 promotion. 22 (4) The complete rules of the promotion. 23 (5) The method of awarding prizes, gifts, 24 vacations, discount vacations, or other benefits under 25 the promotion; a complete and fully detailed description, 26 including approximate retail value, of all prizes, gifts, 27 or benefits under the promotion; the quantity of each 28 prize, gift, or benefit to be awarded or conferred; and 29 the date by which each prize, gift, or benefit will be 30 awarded or conferred. 31 (6) Any other disclosures provided by rule. 32 (c) If a person represents that a prize, gift, or 33 benefit will be awarded in connection with a promotion, the 34 prize, gift, or benefit must be awarded or conferred in the SB435 Enrolled -41- LRB9103102KSgc 1 manner represented, and on or before the date represented. 2 Section 10-30. Records. The managing entity shall keep 3 detailed financial records directly related to the operation 4 of the association. All financial and other records shall be 5 made reasonably available for examination by any purchaser, 6 or the authorized agent of the purchaser, and the Office of 7 Banks and Real Estate. For purposes of this Section, the 8 books and records of the timeshare plan shall be considered 9 "reasonably available" if copies of the requested portions 10 are delivered to the purchaser or the purchaser's agent or 11 the Office of Banks and Real Estate within 7 days of the date 12 the managing entity receives a written request for the 13 records signed by the purchaser or the Office of Banks and 14 Real Estate. The managing entity may charge the purchaser a 15 reasonable fee for copying the requested information. 16 Section 10-35. Maintenance of records. Every 17 developer, exchange company, or resale agent shall maintain, 18 for a period of 2 years, records of any individuals employed 19 by the developer, exchange company, or resale agent, 20 including the last known address of each of those 21 individuals. 22 Section 10-40. Partition. No action for partition of a 23 timeshare interest may be initiated except as permitted by 24 the timeshare instrument. 25 Article 15. Disciplinary Provisions 26 Section 15-5. Investigation. The Office of Banks and 27 Real Estate may investigate the actions or qualifications of 28 any person or persons holding or claiming to hold a 29 certificate of registration under this Act. Such a person SB435 Enrolled -42- LRB9103102KSgc 1 is referred to as "the respondent" in this Article. 2 Section 15-10. Disciplinary hearings; record; 3 appointment of administrative law judge. 4 (a) The Office of Banks and Real Estate has the authority 5 to conduct hearings before an administrative law judge on 6 proceedings to revoke, suspend, place on probation, 7 reprimand, or refuse to issue or renew registrants registered 8 under this Act, or to impose a civil penalty not to exceed 9 $25,000 upon any registrant registered under this Act. 10 (b) The Office of Banks and Real Estate, at its expense, 11 shall preserve a record of all proceedings at the formal 12 hearing of any case involving the refusal to issue or the 13 revocation, suspension, or other discipline of a registrant. 14 The notice of hearing, complaint, and all other documents in 15 the nature of pleadings and written motions filed in the 16 proceedings, the transcript of testimony, the report of the 17 Board, and the orders of the Office of Banks and Real Estate 18 shall be the record of proceeding. At all hearings or 19 prehearing conferences, the Office of Banks and Real Estate 20 and the respondent shall be entitled to have a court reporter 21 in attendance for purposes of transcribing the proceeding or 22 prehearing conference. 23 (c) The Commissioner has the authority to appoint any 24 attorney duly licensed to practice law in the State of 25 Illinois to serve as an administrative law judge in any 26 action for refusal to issue or renew a certificate of 27 registration or to discipline a registrant or person holding 28 a certificate of registration. The administrative law judge 29 has full authority to conduct the hearing. The 30 administrative law judge shall report his or her findings and 31 recommendations to the Commissioner. If the Commissioner 32 disagrees with the recommendation of the administrative law 33 judge, the Commissioner may issue an order in contravention SB435 Enrolled -43- LRB9103102KSgc 1 of the recommendation. 2 Section 15-15. Notice of proposed disciplinary action; 3 hearing. 4 (a) Before taking any disciplinary action with regard to 5 any registrant, the Office of Banks and Real Estate shall: 6 (1) notify the respondent in writing, at least 30 7 calendar days prior to the date set for the hearing, of 8 any charges made, the time and place for the hearing of 9 the charges, and that testimony at the hearing will be 10 heard under oath; and 11 (2) inform the respondent that upon failure to file 12 an answer and request a hearing before the date 13 originally set for the hearing, default will be taken 14 against the respondent and the respondent's registration 15 may be suspended or revoked, or the respondent may be 16 otherwise disciplined, as the Office of Banks and Real 17 Estate may deem proper. 18 (b) If the respondent fails to file an answer after 19 receiving notice, the respondent's registration may, in the 20 discretion of the Office of Banks and Real Estate, be revoked 21 or suspended, or the respondent may be otherwise disciplined 22 as deemed proper, without a hearing, if the act or acts 23 charged constitute sufficient grounds for that action under 24 this Act. 25 (c) At the time and place fixed in the notice, the Office 26 of Banks and Real Estate shall proceed to hearing of the 27 charges. Both the respondent and the complainant shall be 28 accorded ample opportunity to present in person, or by 29 counsel, statements, testimony, evidence, and argument that 30 may be pertinent to the charges or any defense to the 31 charges. 32 Section 15-20. Disciplinary consent orders. SB435 Enrolled -44- LRB9103102KSgc 1 Notwithstanding any other provisions of this Act concerning 2 the conduct of hearings and recommendations for disciplinary 3 actions, the Office of Banks and Real Estate has the 4 authority to negotiate agreements with registrants and 5 applicants resulting in disciplinary consent orders. Any 6 such consent order may provide for any form of discipline 7 provided for in the Act. Any such consent order shall provide 8 that it is not entered into as a result of any coercion by 9 the Office of Banks and Real Estate. Any such consent order 10 shall be accepted by signature or rejected by the 11 Commissioner in a timely manner. 12 Section 15-25. Disciplinary action; civil penalty. 13 The Office of Banks and Real Estate may refuse to issue or 14 renew any registration, or revoke or suspend any registration 15 or place on probation or administrative supervision, or 16 reprimand any registrant, or impose a civil penalty not to 17 exceed $25,000, for any one or any combination of the 18 following causes: 19 (1) A registrant's disregard or violation of any 20 provision of this Act or of the rules adopted by the 21 Office of Banks and Real Estate to enforce this Act. 22 (2) A conviction of the registrant or any principal 23 of the registrant of (i) a felony under the laws of any 24 U.S. jurisdiction, (ii) a misdemeanor under the laws of 25 any U.S. jurisdiction if an essential element of the 26 offense is dishonesty, or (iii) a crime under the laws of 27 any U.S. jurisdiction if the crime relates directly to 28 the practice of the profession regulated by this Act. 29 (3) A registrant's making any misrepresentation for 30 the purpose of obtaining a registration or certificate of 31 registration. 32 (4) A registrant's discipline by another U.S. 33 jurisdiction, state agency, or foreign nation regarding SB435 Enrolled -45- LRB9103102KSgc 1 the practice of the profession regulated by this Act, if 2 at least one of the grounds for the discipline is the 3 same as or substantially equivalent to one of those set 4 forth in this Act. 5 (5) A finding by the Office of Banks and Real 6 Estate that the registrant, after having his or her 7 registration placed on probationary status, has violated 8 the terms of probation. 9 (6) A registrant's practicing or attempting to 10 practice under a name other than the name as shown on his 11 or her registration or any other legally authorized name. 12 (7) A registrant's failure to file a return, or to 13 pay the tax, penalty, or interest shown in a filed 14 return, or to pay any final assessment of tax, penalty, 15 or interest, as required by any tax Act administered by 16 the Illinois Department of Revenue, until the 17 requirements of any such tax Act are satisfied. 18 (8) A registrant's engaging in dishonorable, 19 unethical, or unprofessional conduct of a character 20 likely to deceive, defraud, or harm the public. 21 (9) A registrant's aiding or abetting another person 22 or persons in disregarding or violating any provision of 23 this Act or of the rules adopted by the Office of Banks 24 and Real Estate to enforce this Act. 25 (10) Any representation in any document or 26 information filed with the Office of Banks and Real 27 Estate which is false or misleading. 28 (11) A registrant's disseminating or causing to be 29 disseminated any false or misleading promotional 30 materials or advertisements in connection with a 31 timeshare plan. 32 (12) A registrant's concealing, diverting, or 33 disposing of any funds or assets of any person in a 34 manner that impairs the rights of purchasers of timeshare SB435 Enrolled -46- LRB9103102KSgc 1 interests in the timeshare plan. 2 (13) A registrant's failure to perform any 3 stipulation or agreement made to induce the Office of 4 Banks and Real Estate to issue an order relating to the 5 timeshare plan. 6 (14) A registrant's engaging in any act that 7 constitutes a violation of Section 3-102, 3-103, 3-104, 8 or 3-105 of the Illinois Human Rights Act. 9 (15) A registrant's failure to provide information 10 requested in writing by the Office of Banks and Real 11 Estate, within 30 days of the request, either as the 12 result of a formal or informal complaint to the Office of 13 Banks and Real Estate or as a result of a random audit 14 conducted by the Office of Banks and Real Estate, which 15 would indicate a violation of this Act. 16 (16) A registrant's failure to account for or remit 17 any escrow funds coming into his or her possession which 18 belonged to others. 19 (17) A registrant's failure to make available to 20 Office of Banks and Real Estate personnel during normal 21 business hours all escrow records and related documents 22 maintained in connection therewith, within 24 hours after 23 a request from the Office of Banks and Real Estate 24 personnel. 25 Section 15-30. Subpoenas; attendance of witnesses; 26 oaths. 27 (a) The Office of Banks and Real Estate has the power to 28 issue subpoenas ad testificandum and to bring before it any 29 persons, and to take testimony either orally or by 30 deposition, or both, with the same fees and mileage and in 31 the same manner as prescribed in civil cases in the courts of 32 this State. The Office of Banks and Real Estate has the 33 power to issue subpoenas duces tecum and to bring before it SB435 Enrolled -47- LRB9103102KSgc 1 any documents, papers, files, books, and records, with the 2 same costs and in the same manner as prescribed in civil 3 cases in the courts of this State. 4 (b) Upon application of the Office of Banks and Real 5 Estate or its designee or of the applicant, registrant, or 6 person holding a certificate of registration against whom 7 proceedings under this Act are pending, any circuit court may 8 enter an order compelling the enforcement of any subpoena 9 issued by the Office of Banks and Real Estate in connection 10 with any hearing or investigation. 11 (c) The Commissioner and the designated administrative 12 law judge have power to administer oaths to witnesses at any 13 hearing that the Office of Banks and Real Estate is 14 authorized to conduct and any other oaths authorized in any 15 Act administered by the Office of Banks and Real Estate. 16 Section 15-35. Administrative law judge's findings of 17 fact, conclusions of law, and recommendations. At the 18 conclusion of the hearing, the administrative law judge shall 19 present to the Commissioner a written report of the 20 administrative law judge's findings of fact, conclusions of 21 law, and recommendations regarding discipline or a civil 22 penalty. The report shall contain a finding of whether or 23 not the respondent violated this Act or failed to comply with 24 conditions required in this Act. The administrative law 25 judge shall specify the nature of the violation or failure to 26 comply. 27 If the Commissioner disagrees in any regard with the 28 report of the administrative law judge, the Commissioner may 29 issue an order in contravention of the report. The 30 Commissioner shall provide a written report to the 31 administrative law judge on any deviation and shall specify 32 with particularity the reasons for that action in the final 33 order. SB435 Enrolled -48- LRB9103102KSgc 1 Section 15-40. Rehearing. After any hearing involving 2 disciplinary action against a registrant, a copy of the 3 administrative law judge's report shall be served on the 4 respondent by the Office of Banks and Real Estate, either 5 personally or as provided in this Act for the service of the 6 notice of hearing. Within 20 calendar days after the 7 service, the respondent may present to the Office of Banks 8 and Real Estate a motion in writing for a rehearing. The 9 motion shall specify the particular grounds for rehearing. If 10 the respondent orders a transcript of the record from the 11 reporting service and pays for it within the time for filing 12 a motion for rehearing, the 20 calendar day period within 13 which a motion for rehearing may be filed shall commence upon 14 the delivery of the transcript to the respondent. 15 If no motion for rehearing is filed, then upon the 16 expiration of the time specified for filing a motion, or if a 17 motion for rehearing is denied, then upon denial, the 18 Commissioner may enter an order in accordance with the 19 recommendations of the administrative law judge, except as 20 otherwise provided in this Article. Whenever the 21 Commissioner is not satisfied that substantial justice has 22 been done in the hearing or in the administrative law judge's 23 report, the Commissioner may order a rehearing by the same or 24 some other duly qualified administrative law judge. 25 Section 15-45. Order or certified copy. An order or a 26 certified copy of an order, over the seal of the Office of 27 Banks and Real Estate and purporting to be signed by the 28 Commissioner, shall be prima facie proof of the following: 29 (1) That the signature is the genuine signature of 30 the Commissioner. 31 (2) That the Commissioner is duly appointed and 32 qualified. 33 (3) That the administrative law judge is duly SB435 Enrolled -49- LRB9103102KSgc 1 appointed and qualified. 2 Section 15-50. Restoration of certificate of 3 registration. At any time after the suspension or revocation 4 of any certificate of registration, the Office of Banks and 5 Real Estate may restore the certificate of registration to 6 the respondent upon the written recommendation of the 7 Commissioner, unless after an investigation and a hearing the 8 Commissioner determines that restoration is not in the public 9 interest. 10 Section 15-55. Surrender of certificate of registration. 11 Upon the revocation or suspension of a certificate of 12 registration, the registrant shall immediately surrender the 13 certificate of registration to the Office of Banks and Real 14 Estate. If the registrant fails to do so, the Office of 15 Banks and Real Estate has the right to seize the certificate 16 of registration. 17 Section 15-60. Administrative Review Law. All final 18 administrative decisions of the Office of Banks and Real 19 Estate under this Act are subject to judicial review under 20 the Administrative Review Law and the rules implementing 21 that Law. The term "administrative decision" is defined as 22 in Section 3-101 of the Code of Civil Procedure. Proceedings 23 for judicial review shall be commenced in the circuit court 24 of the county in which the party applying for review resides, 25 but if the party is not a resident of this State, the venue 26 shall be in Cook or Sangamon County. 27 Pending the court's final decision on administrative 28 review, the acts, orders, sanctions, and rulings of the 29 Office of Banks and Real Estate regarding any registration 30 shall remain in full force and effect unless modified or 31 stayed by court order pending a final judicial decision. SB435 Enrolled -50- LRB9103102KSgc 1 The Office of Banks and Real Estate shall not be required 2 to certify any record to the court or file any answer in 3 court or otherwise appear in any court in a judicial review 4 proceeding unless there is filed in the court, with the 5 complaint, a receipt from the Office of Banks and Real Estate 6 acknowledging payment of the costs of furnishing and 7 certifying the record. Failure on the part of the plaintiff 8 to file a receipt in the court is grounds for dismissal of 9 the action. 10 Section 15-65. Public interest, safety, or welfare; 11 summary suspension. The Commissioner may temporarily suspend 12 any registration pursuant to this Act, without hearing, 13 simultaneously with the institution of proceedings for a 14 hearing provided for in this Section, if the Commissioner 15 finds that the evidence indicates that the public interest, 16 safety, or welfare imperatively requires emergency action. 17 If the Commissioner temporarily suspends any registration 18 without a hearing, a hearing must be held within 30 calendar 19 days after the suspension. The person whose registration is 20 suspended may seek a continuance of the hearing, during which 21 the suspension shall remain in effect. The proceeding shall 22 be concluded without appreciable delay. 23 Section 15-70. Non-registered practice; civil penalty; 24 injunction. 25 (a) Any person who practices, offers to practice, 26 attempts to practice, or holds himself or herself out to 27 practice as a registrant under this Act without being 28 registered under this Act shall, in addition to any other 29 penalty provided by law, pay a civil penalty to the Office of 30 Banks and Real Estate in an amount not to exceed $25,000 for 31 each offense as determined by the Office of Banks and Real 32 Estate. The civil penalty shall be assessed by the Office of SB435 Enrolled -51- LRB9103102KSgc 1 Banks and Real estate after a hearing is held in accordance 2 with the provisions set forth in this Act regarding the 3 provision of a hearing for the discipline of a registrant. 4 (b) The Office of Banks and Real Estate has the 5 authority and power to investigate any and all non-registered 6 activity. 7 (c) A civil penalty imposed under subsection (a) shall 8 be paid within 60 days after the effective date of the order 9 imposing the civil penalty. The order shall constitute a 10 judgment and may be filed, and execution may be had thereon, 11 in the same manner as any judgment from any court of record. 12 (d) Engaging in timeshare practices in Illinois by any 13 entity not holding a valid and current certificate of 14 registration under this Act is declared to be inimical to the 15 public welfare, to constitute a public nuisance, and to cause 16 irreparable harm to the public welfare. The Commissioner, 17 the Attorney General, the State's Attorney of any county in 18 the State, or any person may maintain an action in the name 19 of the People of the State of Illinois, and may apply for 20 injunctive relief in any circuit court to enjoin such entity 21 from engaging in such practice. Upon the filing of a 22 verified petition in the court, the court, if satisfied by 23 affidavit or otherwise that such entity has been engaged in 24 such practice without a valid and current certificate of 25 registration, may enter a temporary restraining order without 26 notice or bond, enjoining the defendant from such further 27 practice. Only the showing of nonregistration, by affidavit 28 or otherwise, is necessary in order for a temporary 29 injunction to issue. A copy of the verified complaint shall 30 be served upon the defendant and the proceedings shall 31 thereafter be conducted as in other civil cases except as 32 modified by this Section. If it is established that the 33 defendant has been or is engaged in such unlawful practice, 34 the court may enter an order or judgment perpetually SB435 Enrolled -52- LRB9103102KSgc 1 enjoining the defendant from further practice. In all 2 proceedings hereunder, the court, in its discretion, may 3 apportion the costs among the parties interested in the 4 action, including cost of filing the complaint, service of 5 process, witness fees and expenses, court reporter charges 6 and reasonable attorneys' fees. In the case of a violation 7 of any injunctive order entered under the provisions of this 8 Section, the court may summarily try and punish the offender 9 for contempt of court. Proceedings for an injunction under 10 this Section shall be in addition to, and not in lieu of, all 11 penalties and other remedies provided in this Act. 12 Section 15-75. Action for compensation; proof of 13 registration. No action or counterclaim may be maintained by 14 any person in any court in this State with respect to any 15 agreement, contract, or services for which registration is 16 required by this Act, or to recover the agreed price or any 17 compensation under any such agreement, or to recover for 18 services for which a registration is required by this Act, 19 without alleging and proving that the person had a valid 20 certificate of registration at the time of making the 21 agreement or doing the work. 22 Section 15-80. Cease and desist orders. The Office of 23 Banks and Real Estate may issue a cease and desist order to 24 any person who engages in any activity prohibited by this 25 Act. Any person in violation of a cease and desist order 26 entered by the Office of Banks and Real Estate is subject to 27 all of the remedies provided by law. 28 Section 15-85. Statute of limitations. Any action or 29 proceeding to enforce any provision of this Act must be 30 commenced within 5 years following the date of the claim upon 31 which the action or proceeding is based accrues. SB435 Enrolled -53- LRB9103102KSgc 1 Article 20. Administration 2 Section 20-5. Administration of Act. The Office of 3 Banks and Real Estate shall exercise the powers and duties 4 prescribed by the Civil Administrative Code of Illinois and 5 shall exercise other powers and duties necessary for 6 effectuating the purposes of this Act. The Office of Banks 7 and Real Estate may contract with third parties for services 8 necessary for the proper administration of this Act. The 9 Office of Banks and Real Estate has the authority to 10 establish public policies and procedures necessary for the 11 administration of this Act. 12 Section 20-10. Administrative rules. The Office of 13 Banks and Real Estate shall adopt rules for the 14 implementation and enforcement of this Act. 15 Section 20-15. Real Estate License Administration Fund. 16 All fees collected for registration and for civil 17 penalties pursuant to this Act and administrative rules 18 adopted under this Act shall be deposited into the Real 19 Estate License Administration Fund. The moneys deposited in 20 the Real Estate License Administration Fund shall be 21 appropriated to the Office of Banks and Real Estate for 22 expenses for the administration and enforcement of this Act. 23 Section 20-20. Forms. The Office of Banks and Real 24 Estate may prescribe forms and procedures for submitting 25 information to the Office of Banks and Real Estate. 26 Section 20-25. Site inspections. The Office of Banks 27 and Real Estate shall thoroughly investigate all matters 28 relating to an application for registration under this Act 29 and may require a personal inspection of any developer, SB435 Enrolled -54- LRB9103102KSgc 1 timeshare plan, accommodation, exchange company, or resale 2 company and any offices where any of the foregoing may 3 transact business. All reasonable expenses incurred by the 4 Office of Banks and Real Estate in investigating such matters 5 shall be borne by the registrant, and the registrant shall 6 reimburse the Office of Banks and Real Estate for those 7 expenses within 30 calendar days of receipt of notice of the 8 expenses from the Office. The Office of Banks and Real 9 Estate may require a deposit sufficient to cover the expenses 10 prior to incurring the expenses. 11 Article 25. Transition 12 Section 25-5. Registrations under preceding Act. All 13 registrations of developers, timeshare plans, acquisition 14 agents, exchange companies, managing agents, resale agents, 15 and sales agents under the Illinois Real Estate Time-share 16 Act in effect on the effective date of this Act shall remain 17 in full force and effect after the effective date of this Act 18 and be considered registered under this Act. 19 The provisions of this Act, insofar as they are the same 20 or substantially the same as those of any prior law, shall be 21 construed as a continuation of such prior law and not as a 22 new enactment. Any existing injunction or temporary 23 restraining order validly obtained under the Illinois Real 24 Estate Time-share Act which prohibits unregistered practice 25 of timeshare developers, timeshare plans, and their agents 26 shall not be invalidated by the enactment of this Act and 27 shall continue to have full force and effect on and after the 28 effective date of this Act. 29 Any existing disciplinary action or investigation 30 pursuant to a violation under the Illinois Real Estate 31 Time-share Act shall not be invalidated by the enactment of 32 this Act and shall continue to have full force and effect on SB435 Enrolled -55- LRB9103102KSgc 1 and after the effective date of this Act. 2 Article 90. Amendatory Provisions 3 Section 90-5. The Real Estate License Act of 2000 is 4 amended, if and only if that Act becomes law, by changing 5 Sections 1-10 and 5-20 as follows: 6 Sec. 1-10. Definitions. In this Act, unless the context 7 otherwise requires: 8 "Act" means the Real Estate License Act of 2000. 9 "Advisory Council" means the Real Estate Education 10 Advisory Council created under Section 30-10 of this Act. 11 "Agency" means a relationship in which a real estate 12 broker or licensee, whether directly or through an affiliated 13 licensee, represents a consumer by the consumer's consent, 14 whether express or implied, in a real property transaction. 15 "Applicant" means any person, as defined in this Section, 16 who applies to OBRE for a valid license as a real estate 17 broker, real estate salesperson, or leasing agent. 18 "Blind advertisement" means any real estate advertisement 19 that does not include the sponsoring broker's business name 20 and that is used by any licensee regarding the sale or lease 21 of real estate, including his or her own, licensed 22 activities, or the hiring of any licensee under this Act. 23 The broker's business name in the case of a franchise shall 24 include the franchise affiliation as well as the name of the 25 individual firm. 26 "Board" means the Real Estate Administration and 27 Disciplinary Board of OBRE. 28 "Branch office" means a sponsoring broker's office other 29 than the sponsoring broker's principal office. 30 "Broker" means an individual, partnership, limited 31 liability company, corporation, or registered limited SB435 Enrolled -56- LRB9103102KSgc 1 liability partnership other than a real estate salesperson or 2 leasing agent who for another and for compensation either 3 directly or indirectly: 4 (1) Sells, exchanges, purchases, rents, or leases 5 real estate. 6 (2) Offers to sell, exchange, purchase, rent, or 7 lease real estate. 8 (3) Negotiates, offers, attempts, or agrees to 9 negotiate the sale, exchange, purchase, rental, or 10 leasing of real estate. 11 (4) Lists, offers, attempts, or agrees to list real 12 estate for sale, lease, or exchange. 13 (5) Buys, sells, offers to buy or sell, or 14 otherwise deals in options on real estate or improvements 15 thereon. 16 (6) Supervises the collection, offer, attempt, or 17 agreement to collect rent for the use of real estate. 18 (7) Advertises or represents himself or herself as 19 being engaged in the business of buying, selling, 20 exchanging, renting, or leasing real estate. 21 (8) Assists or directs in procuring or referring of 22 prospects, intended to result in the sale, exchange, 23 lease, or rental of real estate. 24 (9) Assists or directs in the negotiation of any 25 transaction intended to result in the sale, exchange, 26 lease, or rental of real estate. 27 (10) Opens real estate to the public for marketing 28 purposes. 29 "Brokerage agreement" means a written or oral agreement 30 between a sponsoring broker and a consumer for licensed 31 activities to be provided to a consumer in return for 32 compensation or the right to receive compensation from 33 another. Brokerage agreements may constitute either a 34 bilateral or a unilateral agreement between the broker and SB435 Enrolled -57- LRB9103102KSgc 1 the broker's client depending upon the content of the 2 brokerage agreement. All exclusive brokerage agreements shall 3 be in writing. 4 "Client" means a person who is being represented by a 5 licensee. 6 "Commissioner" means the Commissioner of Banks and Real 7 Estate or a person authorized by the Commissioner, the Office 8 of Banks and Real Estate Act, or this Act to act in the 9 Commissioner's stead. 10 "Compensation" means the valuable consideration given by 11 one person or entity to another person or entity in exchange 12 for the performance of some activity or service. 13 Compensation shall include the transfer of valuable 14 consideration, including without limitation the following: 15 (1) commissions; 16 (2) referral fees; 17 (3) bonuses; 18 (4) prizes; 19 (5) merchandise; 20 (6) finder fees; 21 (7) performance of services; 22 (8) coupons or gift certificates; 23 (9) discounts; 24 (10) rebates; 25 (11) a chance to win a raffle, drawing, lottery, or 26 similar game of chance not prohibited by any other law or 27 statute; 28 (12) retainer fee; or 29 (13) salary. 30 "Confidential information" means information obtained by 31 a licensee from a client during the term of a brokerage 32 agreement that (i) was made confidential by the written 33 request or written instruction of the client, (ii) deals with 34 the negotiating position of the client, or (iii) is SB435 Enrolled -58- LRB9103102KSgc 1 information the disclosure of which could materially harm the 2 negotiating position of the client, unless at any time: 3 (1) the client permits the disclosure of 4 information given by that client by word or conduct; 5 (2) the disclosure is required by law; or 6 (3) the information becomes public from a source 7 other than the licensee. 8 "Confidential information" shall not be considered to 9 include material information about the physical condition of 10 the property. 11 "Consumer" means a person or entity seeking or receiving 12 licensed activities. 13 "Continuing education school" means any person licensed 14 by OBRE as a school for continuing education in accordance 15 with Section 30-15 of this Act. 16 "Credit hour" means 50 minutes of classroom instruction 17 in course work that meets the requirements set forth in rules 18 adopted by OBRE. 19 "Customer" means a consumer who is not being represented 20 by the licensee but for whom the licensee is performing 21 ministerial acts. 22 "Designated agency" means a contractual relationship 23 between a sponsoring broker and a client under Section 15-50 24 of this Act in which one or more licensees associated with or 25 employed by the broker are designated as agent of the client. 26 "Designated agent" means a sponsored licensee named by a 27 sponsoring broker as the legal agent of a client, as provided 28 for in Section 15-50 of this Act. 29 "Director" means the Director of the Real Estate 30 Division, OBRE. 31 "Dual agency" means an agency relationship in which a 32 licensee is representing both buyer and seller or both 33 landlord and tenant in the same transaction. When the agency 34 relationship is a designated agency, the question of whether SB435 Enrolled -59- LRB9103102KSgc 1 there is a dual agency shall be determined by the agency 2 relationships of the designated agent of the parties and not 3 of the sponsoring broker. 4 "Employee" or other derivative of the word "employee", 5 when used to refer to, describe, or delineate the 6 relationship between a real estate broker and a real estate 7 salesperson, another real estate broker, or a leasing agent, 8 shall be construed to include an independent contractor 9 relationship, provided that a written agreement exists that 10 clearly establishes and states the relationship. All 11 responsibilities of a broker shall remain. 12 "Escrow moneys" means all moneys, promissory notes or any 13 other type or manner of legal tender or financial 14 consideration deposited with any person for the benefit of 15 the parties to the transaction. A transaction exists once an 16 agreement has been reached and an accepted real estate 17 contract signed or lease agreed to by the parties. Escrow 18 moneys includes without limitation earnest moneys and 19 security deposits, except those security deposits in which 20 the person holding the security deposit is also the sole 21 owner of the property being leased and for which the security 22 deposit is being held. 23 "Inoperative" means a status of licensure where the 24 licensee holds a current license under this Act, but the 25 licensee is prohibited from engaging in licensed activities 26 because the licensee is unsponsored or the license of the 27 sponsoring broker with whom the licensee is associated or by 28 whom he or she is employed is currently expired, revoked, 29 suspended, or otherwise rendered invalid under this Act. 30 "Leasing Agent" means a person who is employed by a real 31 estate broker to engage in licensed activities limited to 32 leasing residential real estate who has obtained a license as 33 provided for in Section 5-5 of this Act. 34 "License" means the document issued by OBRE certifying SB435 Enrolled -60- LRB9103102KSgc 1 that the person named thereon has fulfilled all requirements 2 prerequisite to licensure under this Act. 3 "Licensed activities" means those activities listed in 4 the definition of "broker" under this Section. 5 "Licensee" means any person, as defined in this Section, 6 who holds a valid unexpired license as a real estate broker, 7 real estate salesperson, or leasing agent. 8 "Listing presentation" means a communication between a 9 real estate broker or salesperson and a consumer in which the 10 licensee is attempting to secure a brokerage agreement with 11 the consumer to market the consumer's real estate for sale or 12 lease. 13 "Managing broker" means a broker who has supervisory 14 responsibilities for licensees in one or, in the case of a 15 multi-office company, more than one office and who has been 16 appointed as such by the sponsoring broker of the real estate 17 firm. 18 "Medium of advertising" means any method of communication 19 intended to influence the general public to use or purchase a 20 particular good or service or real estate. 21 "Ministerial acts" means those acts that a licensee may 22 perform for a consumer that are informative or clerical in 23 nature and do not rise to the level of active representation 24 on behalf of a consumer. Examples of these acts include 25 without limitation (i) responding to phone inquiries by 26 consumers as to the availability and pricing of brokerage 27 services, (ii) responding to phone inquiries from a consumer 28 concerning the price or location of property, (iii) attending 29 an open house and responding to questions about the property 30 from a consumer, (iv) setting an appointment to view 31 property, (v) responding to questions of consumers walking 32 into a licensee's office concerning brokerage services 33 offered or particular properties, (vi) accompanying an 34 appraiser, inspector, contractor, or similar third party on a SB435 Enrolled -61- LRB9103102KSgc 1 visit to a property, (vii) describing a property or the 2 property's condition in response to a consumer's inquiry, 3 (viii) completing business or factual information for a 4 consumer on an offer or contract to purchase on behalf of a 5 client, (ix) showing a client through a property being sold 6 by an owner on his or her own behalf, or (x) referral to 7 another broker or service provider. 8 "OBRE" means the Office of Banks and Real Estate. 9 "Office" means a real estate broker's place of business 10 where the general public is invited to transact business and 11 where records may be maintained and licenses displayed, 12 whether or not it is the broker's principal place of 13 business. 14 "Person" means and includes individuals, entities, 15 corporations, limited liability companies, registered limited 16 liability partnerships, and partnerships, foreign or 17 domestic, except that when the context otherwise requires, 18 the term may refer to a single individual or other described 19 entity. 20 "Personal assistant" means a licensed or unlicensed 21 person who has been hired for the purpose of aiding or 22 assisting a sponsored licensee in the performance of the 23 sponsored licensee's job. 24 "Pocket card" means the card issued by OBRE to signify 25 that the person named on the card is currently licensed under 26 this Act. 27 "Pre-license school" means a school licensed by OBRE 28 offering courses in subjects related to real estate 29 transactions, including the subjects upon which an applicant 30 is examined in determining fitness to receive a license. 31 "Pre-renewal period" means the period between the date of 32 issue of a currently valid license and the license's 33 expiration date. 34 "Real estate" means and includes leaseholds as well as SB435 Enrolled -62- LRB9103102KSgc 1 any other interest or estate in land, whether corporeal, 2 incorporeal, freehold, or non-freehold, including timeshare 3 interests, and whether the real estate is situated in this 4 State or elsewhere. 5 "Real Estate Administration and Disciplinary Board" or 6 "Board" means the Real Estate Administration and Disciplinary 7 Board created by Section 25-10 of this Act. 8 "Salesperson" means any individual, other than a real 9 estate broker or leasing agent, who is employed by a real 10 estate broker or is associated by written agreement with a 11 real estate broker as an independent contractor and 12 participates in any activity described in the definition of 13 "broker" under this Section. 14 "Sponsoring broker" means the broker who has issued a 15 sponsor card to a licensed salesperson, another licensed 16 broker, or a leasing agent. 17 "Sponsor card" means the temporary permit issued by the 18 sponsoring real estate broker certifying that the real estate 19 broker, real estate salesperson, or leasing agent named 20 thereon is employed by or associated by written agreement 21 with the sponsoring real estate broker, as provided for in 22 Section 5-40 of this Act. 23 (Source: 91HB902ham01.) 24 Sec. 5-20. Exemptions from broker, salesperson, or 25 leasing agent license requirement. The requirement for 26 holding a license under this Article 5 shall not apply to: 27 (1) Any person, partnership, or corporation that as 28 owner or lessor performs any of the acts described in the 29 definition of "broker" under Section 1-10 of this Act with 30 reference to property owned or leased by it, or to the 31 regular employees thereof with respect to the property so 32 owned or leased, where such acts are performed in the regular 33 course of or as an incident to the management, sale, or other SB435 Enrolled -63- LRB9103102KSgc 1 disposition of such property and the investment therein, 2 provided that such regular employees do not perform any of 3 the acts described in the definition of "broker" under 4 Section 1-10 of this Act in connection with a vocation of 5 selling or leasing any real estate or the improvements 6 thereon not so owned or leased. 7 (2) An attorney in fact acting under a duly executed and 8 recorded power of attorney to convey real estate from the 9 owner or lessor or the services rendered by an attorney at 10 law in the performance of the attorney's duty as an attorney 11 at law. 12 (3) Any person acting as receiver, trustee in 13 bankruptcy, administrator, executor, or guardian or while 14 acting under a court order or under the authority of a will 15 or testamentary trust. 16 (4) Any person acting as a resident manager for the 17 owner or any employee acting as the resident manager for a 18 broker managing an apartment building, duplex, or apartment 19 complex, when the resident manager resides on the premises, 20 the premises is his or her primary residence, and the 21 resident manager is engaged in the leasing of the property of 22 which he or she is the resident manager. 23 (5) Any officer or employee of a federal agency in the 24 conduct of official duties. 25 (6) Any officer or employee of the State government or 26 any political subdivision thereof performing official duties. 27 (7) Any multiple listing service or other information 28 exchange that is engaged in the collection and dissemination 29 of information concerning real estate available for sale, 30 purchase, lease, or exchange along with which no other 31 licensed activities are provided. 32 (8) Railroads and other public utilities regulated by 33 the State of Illinois, or the officers or full time employees 34 thereof, unless the performance of any licensed activities is SB435 Enrolled -64- LRB9103102KSgc 1 in connection with the sale, purchase, lease, or other 2 disposition of real estate or investment therein not needing 3 the approval of the appropriate State regulatory authority. 4 (9) Any medium of advertising in the routine course of 5 selling or publishing advertising along with which no other 6 licensed activities are provided. 7 (10) Any resident lessee of a residential dwelling unit 8 who refers for compensation to the owner of the dwelling 9 unit, or to the owner's agent, prospective lessees of 10 dwelling units in the same building or complex as the 11 resident lessee's unit, but only if the resident lessee (i) 12 refers no more than 3 prospective lessees in any 12-month 13 period, (ii) receives compensation of no more than $1,000 or 14 the equivalent of one month's rent, whichever is less, in any 15 12-month period, and (iii) limits his or her activities to 16 referring prospective lessees to the owner, or the owner's 17 agent, and does not show a residential dwelling unit to a 18 prospective lessee, discuss terms or conditions of leasing a 19 dwelling unit with a prospective lessee, or otherwise 20 participate in the negotiation of the leasing of a dwelling 21 unit. 22 (11) An exchange company registered under the Real 23 Estate Timeshare Act of 1999 and the regular employees of 24 that registered exchange company but only when conducting an 25 exchange program as defined in that Act. 26 (12) An existing timeshare owner who, for compensation, 27 refers prospective purchasers, but only if the existing 28 timeshare owner (i) refers no more than 20 prospective 29 purchasers in any calendar year, (ii) receives no more than 30 $1,000, or its equivalent, for referrals in any calendar year 31 and (iii) limits his or her activities to referring 32 prospective purchasers of timeshare interests to the 33 developer or the developer's employees or agents, and does 34 not show, discuss terms or conditions of purchase or SB435 Enrolled -65- LRB9103102KSgc 1 otherwise participate in negotiations with regard to 2 timeshare interests. 3 (Source: 91HB902 as introduced.) 4 (765 ILCS 100/Act rep.) 5 Section 90-10. The Illinois Real Estate Time-Share Act is 6 repealed.