§ 34-41-2.05 - Termination of time shares.
SECTION 34-41-2.05
§ 34-41-2.05 Termination of time shares.– (a) This section applies to all time share estates except it shall apply totime-share licenses only to the extent expressly provided by the time-shareinstrument.
(b) All time shares in a time-share property may beterminated only by agreement of the time-share owners having at least eightypercent (80%) of the time shares, or such larger majority as the time-shareinstrument may specify.
(c) An agreement to terminate all time shares in a time-shareproperty must be evidenced by the execution of a termination agreement, orratifications thereof, in the same manner as a deed, by the requisite number oftime-share owners. The termination agreement must specify a date after whichthe agreement will be void unless it is recorded before that date. Atermination agreement and a certification by the managing entity of theratification thereof must be recorded in every municipal office of landevidence records in which a portion of the time-share property is situated, andis effective only upon recordation.
(d) Unless the termination agreement sets forth the materialterms of a contract or proposed contract under which an estate or interest ineach time-share unit equal to the sum of the time shares therein is to be soldand designates a trustee to effect the sale, title to an estate or interest ineach time-share unit equal to the sum of the time shares therein vests upontermination in the time-share owners thereof in proportion to their respectiveinterests as provided in subsection (h), and liens on the time shares shiftaccordingly to encumber those interests. Any co-owner of that estate orinterest in a unit may thereafter maintain an action for partition or forallotment or sale in lieu of partition pursuant to the laws of this state.
(e) If the termination agreement sets forth the materialterms of a contract or proposed contract under which an estate or interest ineach time-share unit equal to the sum of the time shares therein is to be soldand designates a trustee to effect the sale, title to that estate or interestvests upon termination in the trustee for the benefit of the time-share owners,to be transferred pursuant to the contract. Proceeds of the sale must bedistributed to time-share owners and lienholders as their interests may appear,in proportion to the respective interests of the time-share owners as providedin subsection (h).
(f) Except as otherwise specified in the terminationagreement, so long as the former time-share owners or their trustee hold titleto the estate or interest equal to the sum of the time shares, each formertime-share owner and his or her successors in interest have the same rightswith respect to occupancy in the former time-share unit that he or she wouldhave had if termination had not occurred, together with the same liabilitiesand other obligations imposed by this chapter or the time-share instrument.
(g) After termination of all time shares in a time-shareproperty and adequate provision for the payment of the claims of the creditorsfor time-share expenses, distribution must be made, in proportion to theirrespective interests as provided in subsection (h), to the former time-shareowners and their successors in interest of (i) the proceeds of any salepursuant to this section, (ii) the proceeds of any personalty held for the useand benefit of the former time-share owners, and (iii) any other funds held forthe use and benefit of the former time-share owners. Following termination,creditors of the association holding liens perfected against the time-shareproperty before the termination may enforce those liens in the same manner asany other lienholder. All other creditors of the association are to be treatedas if they had perfected liens on the time-share property immediately beforetermination.
(h) The time-share instrument may specify the respectivefractional or percentage interest in the estate or interest in each unit equalto the sum of the time shares therein that will be owned by each formertime-share owner. Otherwise, not more than one hundred eighty (180) days priorto the termination, an appraisal must be made of the fair market value of eachtime share by one or more impartial qualified appraisers selected either by thetrustee designated in the termination agreement, or by the managing entity ifno trustee was so designated. The appraisal must also state the correspondingfractional or percentage interests calculated in proportion to those values andin accordance with this subsection. A notice stating all of those values andcorresponding interests and the return address of the sender must be sent bycertified or registered mail, return receipt requested, by the managing entityor by the trustee designated in the termination agreements, to all of thetime-share owners. The appraisal governs the magnitude of each interest unless(i) at least twenty-five percent (25%) of the time-share owners deliver, withinsixty (60) days after the date the notices were mailed, written disapprovals tothe return address of the sender of the notice, or (ii) the final judgment of acourt of competent jurisdiction, entered during or after that period, holdsthat the appraisal should be set aside. The appraisal and the calculation ofinterests must be made in accordance with the following:
(1) If the termination agreement sets forth the materialterms of a contract or proposed contract for the sale of the estate or interestequal to the sum of the time shares, each time share conferring a right ofoccupancy during a limited number of time periods must be appraised as if thetime until the date specified for the conveyance of the property had alreadyelapsed. Otherwise, each time share of that kind must be appraised as if thetime until the date specified pursuant to subsection (c) had already elapsed.
(2) The interest of each time-share owner is the value of thetime share he or she owned divided by the sum of the values of all time sharesin the unit or units to which his or her time share applies.
(i) Foreclosure or enforcement of a lien or encumbranceagainst all of the time shares in a time-share property does not of itselfterminate those time shares.