CHAPTER 221. TEXAS TIMESHARE ACT

PROPERTY CODE

TITLE 12. MISCELLANEOUS SHARED REAL PROPERTY INTERESTS

CHAPTER 221. TEXAS TIMESHARE ACT

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 221.001. SHORT TITLE. This chapter shall be known and may

be cited as the Texas Timeshare Act.

Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,

1987. Renumbered from Sec. 201.001 by Acts 1989, 71st Leg., ch.

2, Sec. 13.03(b), eff. Aug. 28, 1989.

Sec. 221.002. DEFINITIONS. As used in this chapter:

(1) "Accommodation" means any apartment, condominium or

cooperative unit, hotel or motel room, cabin, lodge, or other

private or commercial structure that:

(A) is affixed to real property;

(B) is designed for occupancy or use by one or more individuals;

and

(C) is part of a timeshare plan.

(2) "Advertisement" means any written, oral, or electronic

communication that is directed to or targeted at individuals in

this state and contains a promotion, inducement, or offer to sell

a timeshare interest, including a promotion, inducement, or offer

to sell:

(A) contained in a brochure, pamphlet, or radio or television

transcript;

(B) communicated by electronic media or telephone; or

(C) solicited through direct mail.

(3) "Amenities" means all common areas and includes recreational

and maintenance facilities of the timeshare plan.

(4) "Assessment" means an amount assessed against or collected

from a purchaser by an association or its managing entity in a

fiscal year, regardless of the frequency with which the amount is

assessed or collected, to cover expenditures, charges, reserves,

or liabilities related to the operation of a timeshare plan or

timeshare properties managed by the same managing entity.

(5) "Association" means a council or association composed of all

persons who have purchased a timeshare interest.

(6) "Commission" means the Texas Real Estate Commission.

(7) "Component site" means a specific geographic location where

accommodations that are part of a multisite timeshare plan are

located. Separate phases of a single timeshare property in a

specific geographic location and under common management are a

single component site.

(8) "Developer" means:

(A) any person, excluding a sales agent, who creates a timeshare

plan or is in the business of selling timeshare interests or

employs a sales agent to sell timeshare interests; or

(B) any person who succeeds in the developer's interest by sale,

lease, assignment, mortgage, or other transfer if the person:

(i) offers at least 12 timeshare interests in a particular

timeshare plan; and

(ii) is in the business of selling timeshare interests or

employs a sales agent to sell timeshare interests.

(9) "Dispose" or "disposition" means a voluntary transfer of any

legal or equitable timeshare interest but does not include the

transfer or release of a real estate lien or of a security

interest.

(10) "Escrow agent" means a bonded escrow company, a financial

institution whose accounts are insured by a governmental agency

or instrumentality, or an attorney or title insurance agent

licensed in this state who is responsible for the receipt and

disbursement of funds in accordance with this chapter.

(11) "Exchange company" means any person who owns or operates an

exchange program.

(12) "Exchange disclosure statement" means a written statement

that includes the information required by Section 221.033.

(13) "Exchange program" means any method, arrangement, or

procedure for the voluntary exchange of timeshare interests among

purchasers or owners.

(14) "Incidental use right" means the right to use

accommodations and amenities at one or more timeshare properties

that is not guaranteed and is administered by the managing entity

of the timeshare properties that makes vacant accommodations at

the timeshare properties available to owners of timeshare

interests in the timeshare properties.

(15) "Managing entity" means the person responsible for

operating and maintaining a timeshare property.

(16) "Multisite timeshare plan" means a plan in which a

timeshare purchaser has:

(A) a specific timeshare interest, which is the right to use and

occupy accommodations at a specific timeshare property and the

right to use and occupy accommodations at one or more other

component sites created by or acquired solely through the

reservation system of the timeshare plan; or

(B) a nonspecific timeshare interest, which is the right to use

and occupy accommodations at more than one component site created

by or acquired solely through the reservation system of the

timeshare plan but which does not include a right to use and

occupy a particular accommodation.

(17) "Offering" or "offer" means any advertisement, inducement,

or solicitation and includes any attempt to encourage a person to

purchase a timeshare interest other than as a security for an

obligation.

(18) "Project instrument" means a timeshare instrument or one or

more recordable documents, by whatever name denominated, applying

to the whole of a timeshare project and containing restrictions

or covenants regulating the use, occupancy, or disposition of

units in a project, including a declaration for a condominium,

association articles of incorporation, association bylaws, and

rules for a condominium in which a timeshare plan is created.

(19) "Promotion" means any program, activity, contest, or gift,

prize, or other item of value used to induce any person to attend

a timeshare sales presentation.

(20) "Purchaser" means any person, other than a developer, who

by means of a voluntary transfer acquires a legal or equitable

interest in a timeshare interest other than as a security for an

obligation.

(21) "Reservation system" means the method, arrangement, or

procedure by which a purchaser, in order to reserve the use and

occupancy of an accommodation of a multisite timeshare plan for

one or more timeshare periods, is required to compete with other

purchasers in the same multisite timeshare plan, regardless of

whether the reservation system is operated and maintained by the

multisite timeshare plan, a managing entity, an exchange company,

or any other person. If a purchaser is required to use an

exchange program as the purchaser's principal means of obtaining

the right to use and occupy the accommodations and facilities of

the plan, the arrangement is considered a reservation system. If

the exchange company uses a mechanism to exchange timeshare

periods among members of the exchange program, the use of the

mechanism is not considered a reservation system of the multisite

timeshare plan.

(22) "Single-site timeshare plan" means a timeshare plan in

which a timeshare purchaser's right to use and occupy

accommodations is limited to a single timeshare property. A

single-site timeshare plan that includes an incidental use right

or a program under which the owner of a timeshare interest at a

specific timeshare property may exchange a timeshare period for

another timeshare period at the same or another timeshare

property under common management does not transform the

single-site timeshare plan into a multisite timeshare plan.

(23) "Timeshare disclosure statement" means a written statement

that includes the information required by Section 221.032.

(24) "Timeshare estate" means an arrangement under which the

purchaser receives a right to occupy a timeshare property and an

estate interest in the real property.

(25) "Timeshare interest" means a timeshare estate or timeshare

use.

(26) "Timeshare instrument" means a master deed, master lease,

declaration, or any other instrument used in the creation of a

timeshare plan.

(27) "Timeshare period" means the period within which the

purchaser of a timeshare interest is entitled to the exclusive

possession, occupancy, and use of an accommodation.

(28) "Timeshare plan" means any arrangement, plan, scheme, or

similar method, excluding an exchange program but including a

membership agreement, sale, lease, deed, license, or right-to-use

agreement, by which a purchaser, in exchange for consideration,

receives an ownership right in or the right to use accommodations

for a period of time less than a year during a given year, but

not necessarily consecutive years.

(29) "Timeshare property" means:

(A) one or more accommodations and any related amenities subject

to the same timeshare instrument; and

(B) any other property or property rights appurtenant to the

accommodations and amenities.

(30) "Timeshare use" means any arrangement under which the

purchaser receives a right to occupy a timeshare property, but

under which the purchaser does not receive an estate interest in

the timeshare property.

Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,

1987. Renumbered from Sec. 201.002 by Acts 1989, 71st Leg., ch.

2, Sec. 13.03(b), eff. Aug. 28, 1989. Amended by Acts 1993, 73rd

Leg., ch. 443, Sec. 1, eff. Sept. 1, 1993.

Amended by:

Acts 2005, 79th Leg., Ch.

539, Sec. 1, eff. January 15, 2006.

Sec. 221.003. APPLICABILITY. (a) This chapter applies to all

timeshare properties that are located in this state or offered

for sale in this state.

(b) Timeshare properties located outside this state are subject

only to Subchapters C through H.

(c) This chapter applies to any timeshare property in existence

on or after August 26, 1985, but does not affect a timeshare

contract in existence before that date.

(d) A timeshare property subject to this chapter is not subject

to Chapter 209 unless an individual timeshare owner continuously

occupies a single timeshare property as the owner's primary

residence 12 months of the year.

(e) If a person with a specific program that might otherwise be

subject to this chapter received from the commission, before

January 31, 2005, a written determination that the program is

exempt from this chapter as the chapter existed when the

determination was made, the program remains exempt from this

chapter if:

(1) the program does not vary materially from the terms on which

the exemption was granted; or

(2) the program varies materially from the terms on which the

exemption was granted, but the person receives from the

commission a new written determination that the program is exempt

from this chapter.

Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,

1987. Renumbered from Sec. 201.003 by Acts 1989, 71st Leg., ch.

2, Sec. 13.03(b), eff. Aug. 28, 1989.

Amended by:

Acts 2005, 79th Leg., Ch.

539, Sec. 2, eff. January 15, 2006.

SUBCHAPTER B. CREATION OF TIMESHARE REGIME

Sec. 221.011. DECLARATION. (a) The developer of a timeshare

plan any part of which is located in this state must record the

timeshare instrument in this state. When a person expressly

declares an intent to subject the property to a timeshare plan

through the recordation of a timeshare instrument that sets forth

the information provided in Subsections (b) and (c), that

property shall be established thenceforth as a timeshare plan.

(b) The declaration made in a timeshare instrument recorded

under this section must include:

(1) a legal description of the timeshare property, including a

ground plan indicating the location of each existing or proposed

building included in the timeshare plan;

(2) a description of each existing or proposed accommodation,

including the location and square footage of each unit and an

interior floor plan of each existing or proposed building;

(3) a description of any amenities furnished or to be furnished

to the purchaser;

(4) a statement of the fractional or percentage part that each

timeshare interest bears to the entire timeshare plan;

(5) if applicable, a statement that the timeshare property is

part of a multisite timeshare plan; and

(6) any additional provisions that are consistent with this

section.

(c) Any timeshare interest created under this section is subject

to Section 1101.002(5), Occupations Code, but Sections

1101.351(a)(1) and (c), Occupations Code, do not apply to the

acts of an exchange company in exchanging timeshare periods.

Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,

1987. Renumbered from Sec. 201.011 by Acts 1989, 71st Leg., ch.

2, Sec. 13.03(b), eff. Aug. 28, 1989. Amended by Acts 1993, 73rd

Leg., ch. 443, Sec. 2, eff. Sept. 1, 1993; Acts 2003, 78th Leg.,

ch. 1276, Sec. 14A.809, eff. Sept. 1, 2003.

Amended by:

Acts 2005, 79th Leg., Ch.

539, Sec. 3, eff. January 15, 2006.

Sec. 221.012. CONVEYANCE AND ENCUMBRANCE. Once the property is

established as a timeshare plan, each timeshare interest may be

individually conveyed or encumbered and shall be entirely

independent of all other timeshare interests in the same

timeshare property. Any title or interest in a timeshare

interest may be recorded.

Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,

1987. Renumbered from Sec. 201.012 by Acts 1989, 71st Leg., ch.

2, Sec. 13.03(b), eff. Aug. 28, 1989.

Amended by:

Acts 2005, 79th Leg., Ch.

539, Sec. 3, eff. January 15, 2006.

Sec. 221.013. COMMON OWNERSHIP. (a) Any timeshare interest may

be jointly or commonly owned by more than one person.

(b) A timeshare estate may be jointly or commonly owned in the

same manner as any other real property interest in this state.

Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,

1987. Renumbered from Sec. 201.013 by Acts 1989, 71st Leg., ch.

2, Sec. 13.03(b) eff. Aug. 28, 1989.

Amended by:

Acts 2005, 79th Leg., Ch.

539, Sec. 3, eff. January 15, 2006.

Sec. 221.014. PARTITION. An action for partition of a timeshare

interest may not be maintained during the term of a timeshare

plan.

Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,

1987. Renumbered from Sec. 201.014 by Acts 1989, 71st Leg., ch.

2, Sec. 13.03(b), eff. Aug. 28, 1989.

Amended by:

Acts 2005, 79th Leg., Ch.

539, Sec. 3, eff. January 15, 2006.

SUBCHAPTER C. REGISTRATION

Sec. 221.021. REGISTRATION REQUIRED. (a) Except as provided by

Subsection (b) or (d) of this section or another provision of

this chapter, a person may not offer or dispose of a timeshare

interest unless the timeshare plan is registered with the

commission.

(b) Before a registration application for a timeshare plan is

submitted or completed, a developer or any person acting on the

developer's behalf may accept a reservation and a deposit from a

prospective purchaser if the deposit is placed in a segregated

escrow account with an independent escrow agent and if the

deposit is fully refundable at any time at the request of the

purchaser. The deposit may not be forfeited unless the purchaser

affirmatively creates a binding obligation by a subsequent

written instrument.

(c) A developer or any person acting on the developer's behalf

may not offer or dispose of a timeshare interest during any

period within which there is in effect an order by the commission

or by any court of competent jurisdiction revoking or suspending

the registration of the timeshare plan of which such timeshare

interest is a part.

(d) At the developer's request, the commission may authorize the

developer to conduct presales before a timeshare plan is

registered if the registration application is administratively

complete, as determined by the commission or as established by

commission rule. The authorization for presales permits the

developer to offer and dispose of timeshare interests during the

period the application is in process. To obtain a presales

authorization, the developer must:

(1) submit a written request to the commission for an

authorization to conduct presales;

(2) submit an administratively complete application for

registration, including appropriate fees and exhibits required by

the commission; and

(3) provide evidence acceptable to the commission that all funds

received by the developer will be placed with an escrow agent

with instructions requiring the funds to be retained until a

registration application is complete as determined by the

commission.

(e) During the presales authorization period, the developer

must:

(1) provide to each purchaser and prospective purchaser a copy

of the proposed timeshare disclosure statement that the developer

submitted to the commission with the initial registration

application; and

(2) offer each purchaser the opportunity to cancel the purchase

contract as provided by Section 221.041.

(f) After the final timeshare disclosure statement is approved

by the commission, the developer must:

(1) give each purchaser and prospective purchaser a copy of the

final timeshare disclosure statement; and

(2) if the commission determines that a materially adverse

change exists between the disclosures contained in the proposed

timeshare disclosure statement and the final timeshare disclosure

statement, provide the purchaser a second opportunity to cancel

the purchase contract as provided by Section 221.041.

(g) The requirements of this subchapter remain in effect during

the period the developer offers or disposes of timeshare

interests of the timeshare plan registered with the commission.

The developer must notify the commission in writing when all of

the timeshare interests of a timeshare plan have been disposed

of.

Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,

1987. Renumbered from Sec. 201.021 by Acts 1989, 71st Leg., ch.

2, Sec. 13.03(b), eff. Aug. 28, 1989.

Amended by:

Acts 2005, 79th Leg., Ch.

539, Sec. 4, eff. January 15, 2006.

Sec. 221.022. APPLICATION FOR REGISTRATION. (a) An application

for registration filed under this section must include a

timeshare disclosure statement and any required exchange

disclosure statement required by Section 221.033, recorded copies

of all timeshare instruments, and other information as may be

required by the commission. If the timeshare property is a newly

developed property, recorded copies of the timeshare instruments

must be provided promptly after recorded copies are available

from the entity with which the instruments are recorded. If

existing or proposed accommodations are in a condominium, an

applicant who complies with this section is not required to

prepare or deliver a condominium information statement or a

resale certificate as described by Chapter 82.

(b) If existing or proposed accommodations are in a condominium

or similar development, the application for registration must

contain the project instruments of that development and

affirmatively indicate that the creation and disposition of

timeshare interests are not prohibited by those instruments. If

the project instruments do not expressly authorize the creation

and disposition of timeshare interests, the application must

contain evidence that existing owners of the condominium

development were provided written notice, at least 60 days before

the application for registration, that timeshare interests would

be created and sold. If the project instruments prohibit the

creation or disposition of timeshare interests, the application

must contain a certification by the authorized representative of

all existing owners that the project instruments have been

properly amended to permit that creation and disposition.

(c) The commission may accept an abbreviated registration

application from a developer of a timeshare plan for any

accommodations in the plan located outside this state. The

developer must file written notice of the intent to register

under this section not later than the 15th day before the date

the abbreviated application is submitted.

(d) A developer of a timeshare plan with any accommodation

located in this state may not file an abbreviated application

unless:

(1) the developer is a:

(A) successor in interest after a merger or acquisition; or

(B) joint venture in which the previous developer or its

affiliate is a partner or a member; and

(2) the previous developer registered the timeshare plan in this

state preceding the merger, acquisition, or joint venture.

(e) A developer filing an abbreviated application must provide:

(1) the legal name and any assumed names and the principal

office location, mailing address, telephone number, and primary

contact person of the developer;

(2) the name, location, mailing address, telephone number, and

primary contact person of the timeshare plan;

(3) the name and address of the developer's authorized or

registered agent for service of process in this state;

(4) the name, primary office location, mailing address, and

telephone number of the managing entity of the timeshare plan;

(5) the certificate or other evidence of registration from any

jurisdiction in which the timeshare plan is approved or accepted;

(6) the certificate or other evidence of registration from the

appropriate regulatory agency of any other jurisdiction in the

United States in which some or all of the accommodations are

located;

(7) a declaration stating whether the timeshare plan is a

single-site timeshare plan or a multisite timeshare plan;

(8) if the plan is a multisite timeshare plan, a declaration

stating whether the plan consists of specific timeshare interests

or nonspecific timeshare interests;

(9) a disclosure of each jurisdiction in which the developer has

applied for registration of the timeshare plan and whether the

timeshare plan, the developer, or the managing entity used were

denied registration or, during the five-year period before the

registration application date, were the subject of a final

adverse disposition in a disciplinary proceeding;

(10) if requested by the commission, copies of any disclosure

documents required to be provided to purchasers or filed with any

jurisdiction that approved or accepted the timeshare plan;

(11) the appropriate filing fee; and

(12) any other information reasonably requested by the

commission or required by commission rule.

(f) A foreign jurisdiction providing evidence of registration as

provided by Subsection (e)(6) must have registration and

disclosure requirements that are substantially similar to or

stricter than the requirements of this chapter.

(g) The commission shall investigate all matters relating to the

application and may in its discretion require a personal

inspection of the proposed timeshare property by any persons

designated by it. All direct expenses incurred by the commission

in inspecting the property shall be borne by the applicant. The

commission may require the applicant to pay an advance deposit

sufficient to cover those expenses.

Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,

1987. Renumbered from Sec. 201.022 by Acts 1989, 71st Leg., ch.

2, Sec. 13.03(b), eff. Aug. 28, 1989.

Amended by:

Acts 2005, 79th Leg., Ch.

539, Sec. 4, eff. January 15, 2006.

Acts 2009, 81st Leg., R.S., Ch.

279, Sec. 1, eff. September 1, 2009.

Sec. 221.023. AMENDMENT OF REGISTRATION. The developer shall

file amendments to the registration reporting to the commission

any materially adverse change in any document contained in the

registration not later than the 30th day after the date the

developer knows or reasonably should know of the change. The

developer may continue to offer and dispose of timeshare

interests under the existing registration pending review of the

amendments by the commission if the materially adverse change is

disclosed to prospective purchasers.

Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,

1987. Renumbered from Sec. 201.023 by Acts 1989, 71st Leg., ch.

2, Sec. 13.03(b), eff. Aug. 28, 1989.

Amended by:

Acts 2005, 79th Leg., Ch.

539, Sec. 4, eff. January 15, 2006.

Sec. 221.024. POWERS OF COMMISSION. (a) The commission may

prescribe and publish forms and adopt rules necessary to carry

out the provisions of this chapter and may suspend or revoke the

registration of any developer, place on probation the

registration of a developer that has been suspended or revoked,

reprimand a developer, impose an administrative penalty of not

more than $10,000, or take any other disciplinary action

authorized by this chapter if, after notice and hearing, the

commission determines that a developer has materially violated

this chapter, the Deceptive Trade Practices-Consumer Protection

Act (Subchapter E, Chapter 17, Business & Commerce Code), or

the Contest and Gift Giveaway Act (Chapter 621, Business &

Commerce Code).

(b) The commission:

(1) shall authorize the State Office of Administrative Hearings

to conduct hearings in contested cases; and

(2) may establish reasonable fees for forms and documents it

provides to the public and for the filing or registration of

documents required by this chapter.

(c) If the commission initiates a disciplinary proceeding under

this chapter, the person is entitled to a hearing before the

State Office of Administrative Hearings. The commission by rule

shall adopt procedures to permit an appeal to the commission from

a determination made by the State Office of Administrative

Hearings in a disciplinary action.

(d) The commission shall set the time and place of the hearing.

(e) A disciplinary procedure under this chapter is governed by

the contested case procedures of Chapter 2001, Government Code.

(f) The commission may file a suit in a district court of Travis

County to prevent a violation of this chapter or for any other

appropriate relief.

(g) Judicial review of a commission order imposing an

administrative penalty is:

(1) instituted by filing a petition as provided by Subchapter G,

Chapter 2001, Government Code; and

(2) by trial de novo.

Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,

1987. Renumbered from Sec. 201.024 by Acts 1989, 71st Leg., ch.

2, Sec. 13.03(b), eff. Aug. 28, 1989. Amended by Acts 1989, 71st

Leg., ch. 381, Sec. 1, eff. June 14, 1989; Acts 1999, 76th Leg.,

ch. 62, Sec. 7.87, eff. Sept. 1, 1999.

Amended by:

Acts 2005, 79th Leg., Ch.

539, Sec. 4, eff. January 15, 2006.

Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 2.34, eff. April 1, 2009.

Acts 2009, 81st Leg., R.S., Ch.

23, Sec. 8, eff. May 12, 2009.

Sec. 221.025. EFFECT OF REGISTRATION ON OTHER LAWS: EXEMPTION

FROM CERTAIN LAWS. (a) A developer's compliance with this

chapter exempts the developer's offer and disposition of

timeshare interests subject to this chapter from securities and

dealer registration under The Securities Act (Article 581-1 et

seq., Vernon's Texas Civil Statutes).

(b) A timeshare plan created as a condominium regime before

January 1, 1994, that complies with this chapter is exempt from

the requirements of Section 81.112 relating to club membership.

(c) A timeshare plan subject to Chapter 82 that complies with

this chapter is exempt from the requirements of Section 82.0675

relating to club membership.

(d) A developer's compliance with this chapter as to any

timeshare plan exempts any company, as defined by Chapter 181,

Finance Code (Texas Trust Company Act), that holds title to the

timeshare interests in the timeshare plan from compliance with

the Texas Trust Company Act as to the company's activities

relating to the holding of that title.

Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,

1987. Renumbered from Sec. 201.025 by Acts 1989, 71st Leg., ch.

2, Sec. 13.03(b), eff. Aug. 28, 1989.

Amended by:

Acts 2005, 79th Leg., Ch.

539, Sec. 4, eff. January 15, 2006.

Sec. 221.026. ISSUANCE AND RENEWAL OF REGISTRATION. (a) The

commission by rule shall adopt requirements for the issuance and

renewal of a developer's registration under this chapter,

including:

(1) the form required for application for registration or a

renewal of registration; and

(2) any supporting documentation required for registration or

renewal of registration.

(b) The commission shall issue or renew a registration under

this chapter for a period not to exceed 24 months.

(c) The commission may assess and collect a fee for the issuance

or renewal of a registration under this chapter.

(d) The commission may assess and collect a late fee if the

commission has not received the fee or any supporting

documentation required before the 61st day after the date a

registration is issued or renewed under this section.

(e) Failure to pay a renewal fee or late fee is a violation of

this chapter.

Added by Acts 2005, 79th Leg., Ch.

539, Sec. 4, eff. January 15, 2006.

Sec. 221.027. TEMPORARY SUSPENSION. (a) The presiding officer

of the commission shall appoint a disciplinary panel consisting

of three commission members to determine whether the registration

for a timeshare plan under this chapter should be temporarily

suspended.

(b) If the disciplinary panel determines from the information

presented to the panel that a timeshare plan registered under

this chapter would, by the continued disposition of the timeshare

property, constitute a continuing threat to the public welfare,

the panel shall temporarily suspend the registration of the

timeshare plan.

(c) A registration may be suspended under this section without

notice or hearing on the complaint if:

(1) institution of proceedings for a hearing before the State

Office of Administrative Hearings is initiated simultaneously

with the temporary suspension; and

(2) a hearing is held under Chapter 2001, Government Code, and

this chapter as soon as possible.

(d) Notwithstanding Chapter 551, Government Code, the

disciplinary panel may hold a meeting by telephone conference

call if immediate action is required and convening the panel at

one location is inconvenient for any member of the panel.

Added by Acts 2007, 80th Leg., R.S., Ch.

1411, Sec. 58, eff. September 1, 2007.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

23, Sec. 9, eff. May 12, 2009.

SUBCHAPTER D. DISCLOSURE

Sec. 221.031. ADVERTISEMENTS AND PROMOTIONS. (a) At any time,

the commission may request a developer to file for review by the

commission any advertisement used in this state by the developer

in connection with offering a timeshare interest. The developer

shall provide the advertisement not later than the 15th day after

the date the commission makes the request. If the commission

determines that the advertisement violates this chapter or

Chapter 621, Business & Commerce Code, the commission shall

notify the developer in writing, stating the specific grounds for

the commission's determination not later than the 15th day after

the date the commission makes its determination. The commission

may grant the developer provisional approval for the

advertisement if the developer agrees to correct the deficiencies

identified by the commission. A developer, on its own

initiative, may submit any proposed advertisement to the

commission for review and approval by the commission.

(b) Any advertisement that contains a promotion in connection

with the offering of a timeshare interest must comply with

Chapter 621, Business & Commerce Code.

(c) As provided by Subsections (d) and (e), an advertisement

that contains a promotion in connection with the offering of a

timeshare interest must include, in addition to any disclosures

required under Chapter 621, Business & Commerce Code, the

following:

(1) a statement to the effect that the promotion is intended to

solicit purchasers of timeshare interests;

(2) if applicable, a statement to the effect that any person

whose name is obtained during the promotion may be solicited to

purchase a timeshare interest;

(3) the full name of the developer of the timeshare property;

and

(4) if applicable, the full name and address of any marketing

company involved in the promotion of the timeshare property,

excluding the developer or an affiliate or subsidiary of the

developer.

(d) An advertisement containing the disclosures required by

Chapter 621, Business & Commerce Code, and Subsection (c)

must be provided in writing or electronically:

(1) at least once before a scheduled sales presentation; and

(2) in a reasonable period before the scheduled sales

presentation to ensure that the recipient receives the

disclosures before leaving to attend the sales presentation.

(e) The developer is not required to provide the disclosures

required by this section in every advertisement or other written,

oral, or electronic communication provided or made to a recipient

before a scheduled sales presentation.

Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,

1987. Renumbered from Sec. 201.031 by Acts 1989, 71st Leg., ch.

2, Sec. 13.03(b), eff. Aug. 28, 1989. Amended by Acts 1989, 71st

Leg., ch. 381, Sec. 2, eff. June 14, 1989.

Amended by:

Acts 2005, 79th Leg., Ch.

539, Sec. 5, eff. January 15, 2006.

Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 2.35, eff. April 1, 2009.

Sec. 221.032. TIMESHARE DISCLOSURE STATEMENT. (a) Before the

signing of any agreement to acquire a timeshare interest, the

developer shall provide a timeshare disclosure statement to the

prospective purchaser and shall obtain from the purchaser a

written acknowledgement of receipt of the timeshare disclosure

statement.

(b) The timeshare disclosure statement for a single-site

timeshare plan or a multisite timeshare plan that includes a

specific timeshare interest must include:

(1) the type of timeshare plan offered and the name and address

of:

(A) the developer; and

(B) the single site or specific site offered for the multisite

timeshare plan;

(2) a description of the duration and operation of the timeshare

plan;

(3) a description of the existing or proposed accommodations,

including the type and number of timeshare interests in the

accommodations expressed in periods of seven-day use availability

or other time increment applicable to the timeshare plan. The

description of each type of accommodation included in the

timeshare plan shall be categorized by the number of bedrooms,

the number of bathrooms, and sleeping capacity, and shall include

a statement indicating whether the accommodation contains a full

kitchen, which means a kitchen that has a minimum of a

dishwasher, range, sink, oven, and refrigerator. If the

accommodations are proposed or incomplete, a schedule for

commencement, completion, and availability of the accommodations

shall be provided;

(4) a description of any existing or proposed amenities of the

timeshare plan and, if the amenities are proposed or incomplete,

a schedule for commencement, completion, and availability of the

amenities;

(5) the extent to which financial arrangements have been

provided for the completion of all promised accommodations and

amenities that are committed to be built;

(6) a description of the method and timing for performing

maintenance of the accommodations;

(7) a statement indicating that, on an annual basis, the sum of

the nights that purchasers are entitled to use the accommodations

does not exceed the number of nights the accommodations are

available for use by the purchasers;

(8) a description of the method by which purchasers' use of the

accommodations is scheduled;

(9) a statement that an association exists or is expected to be

created or that such an association does not exist and is not

expected to be created and, if such an association exists or is

reasonably contemplated, a description of its powers and

responsibilities;

(10) relating to the single-site timeshare plan or the specific

timeshare interest of a multisite timeshare plan, copies of the

following documents, if applicable, including any amendments to

the documents, unless separately provided to the purchaser

simultaneously with the timeshare disclosure statement:

(A) the declaration;

(B) the association articles of incorporation;

(C) the association bylaws;

(D) the association rules; and

(E) any lease or contract, excluding the purchase contract and

other loan documents required to be signed by the purchaser at

closing;

(11) the name and principal address of the managing entity and a

description of the procedures, if any, for altering the powers

and responsibilities of the managing entity and for removing or

replacing it;

(12) the current annual budget, if available, or the projected

annual budget for the timeshare plan or timeshare properties

managed by the same managing entity if assessments are deposited

in a common account. The budget must include:

(A) a statement of the amount reserved or budgeted for repairs,

replacements, and refurbishment;

(B) the projected common expense liability, if any, by category

of expenditure for the timeshare plan or timeshare properties

managed by the same managing entity; and

(C) the assumptions on which the operating budget is based;

(13) the projected assessments and a description of the method

for calculating and apportioning those assessments among

purchasers;

(14) any initial fee or special fee due from the purchaser at

closing, together with a description of the purpose and method of

calculating the fee;

(15) a description of any lien, defect, or encumbrance on or

affecting title to the timeshare interest and, if applicable, a

copy of each written warranty provided by the developer;

(16) a description of any bankruptcy that is pending or that has

occurred within the past five years, pending civil or criminal

suit, adjudication, or disciplinary actions material to the

timeshare plan of which the developer has knowledge;

(17) a description of any financing offered by or available

through the developer;

(18) any current or anticipated fees or charges to be paid by

timeshare purchasers for the use of any accommodations or

amenities related to the timeshare plan, and a statement that the

fees or charges are subject to change;

(19) a description and amount of insurance coverage provided for

the protection of the purchaser;

(20) the extent to which a timeshare interest may become subject

to a tax lien or other lien arising out of claims against

purchasers of different timeshare interests;

(21) a description of those matters required by Section 221.041;

(22) a statement disclosing any right of first refusal or other

restraint on the transfer of all or any portion of a timeshare

interest;

(23) a statement disclosing that any deposit made in connection

with the purchase of a timeshare interest must be held by an

escrow agent until expiration of any right to cancel the contract

and that any deposit must be returned to the purchaser if the

purchaser elects to exercise the right of cancellation; or, if

the commission accepts from the developer a surety bond,

irrevocable letter of credit, or other form of financial

assurance instead of an escrow deposit, a statement disclosing

that the developer has provided a surety bond, irrevocable letter

of credit, or other form of financial assurance in an amount

equal to or in excess of the funds that would otherwise be held

by an escrow agent and that the deposit must be returned if the

purchaser elects to exercise the right of cancellation;

(24) if applicable, a statement that the assessments collected

from the purchasers may be placed in a common account with the

assessments collected from the purchasers of other timeshare

properties managed by the same managing entity;

(25) if the timeshare plan provides purchasers with the

opportunity to participate in an exchange program, a description

of the name and address of the exchange company and the method by

which a purchaser accesses the exchange program; and

(26) any other information the commission determines is

necessary to protect prospective purchasers or to implement the

purpose of this chapter.

(c) A developer who offers a specific timeshare interest in a

multisite timeshare plan also must fully disclose the following

information in written, graphic, or tabular form:

(1) a description of each component site, including the name and

address of each component site;

(2) a description of each type of accommodation in each

component site, categorized by the number of bedrooms, the number

of bathrooms, and sleeping capacity, and a statement indicating

whether the accommodation contains a full kitchen, which means a

kitchen that has a minimum of a dishwasher, range, sink, oven,

and refrigerator;

(3) a description of the amenities at each component site

available for use by the purchasers;

(4) a description of the reservation system, which must include:

(A) the entity responsible for operating the reservation system,

its relationship to the developer, and the duration of any

agreement for operation of the reservation system;

(B) a summary or the rules governing access to and use of the

reservation system; and

(C) the existence of and explanation regarding any priority

reservation features that affect a purchaser's ability to make

reservations for the use of a given accommodation on a

first-come, first-served basis;

(5) the name and principal address of the managing entity for

the multisite timeshare plan and a description of the procedures,

if any, for altering the powers and responsibilities of the

managing entity and for removing or replacing it;

(6) a description of any right to make additions to,

substitutions in, or deletions from accommodations, amenities, or

component sites, and a description of the basis on which

accommodations, amenities, or component sites may be added to,

substituted in, or deleted from the multisite timeshare plan;

(7) a description of the purchaser's liability for any fees

associated with the multisite timeshare plan;

(8) the location of each component site of the multisite

timeshare plan, the historical occupancy of each component site

for the prior 12-month period, if the component site was part of

the multisite timeshare plan during such 12-month time period, as

well as any periodic adjustment or amendment to the reservation

system that may be needed in order to respond to actual purchaser

use patterns and changes in purchaser use demand for the

accommodations existing at the time within the multisite

timeshare plan; and

(9) any other information the commission determines is necessary

to protect prospective purchasers or to implement the purpose of

this chapter.

(d) A developer who offers a nonspecific timeshare interest in a

multisite timeshare plan must disclose the following information

in written, graphic, or tabular form:

(1) the name and address of the developer;

(2) a description of the type of interest and the usage rights

the purchaser will receive;

(3) a description of the duration and operation of the timeshare

plan;

(4) a description of the type of insurance coverage provided for

each component site;

(5) an explanation of who holds title to the accommodations of

each component site;

(6) a description of each component site, including the name and

address of each component site;

(7) a description of the existing or proposed accommodations,

expressed in periods of seven-day use availability or any other

time increment applicable to the timeshare plan. The description

of each type of accommodation included in the timeshare plan

shall be categorized by the number of bedrooms, the number of

bathrooms, and sleeping capacity, and shall include a statement

indicating whether the accommodation contains a full kitchen,

which means a kitchen that has a minimum of a dishwasher, range,

sink, oven, and refrigerator. If the accommodations are proposed

or incomplete, a schedule for commencement, completion, and

availability of the accommodations shall be provided;

(8) a statement that an association exists or is expected to be

created or that such an association does not exist and is not

expected to be created and, if such an association exists or is

reasonably contemplated, a description of its powers and

responsibilities;

(9) if applicable, copies of the following documents applicable

to the multisite timeshare plan, including any amendments to the

documents, unless separately provided to the purchaser

simultaneously with the timeshare disclosure statement:

(A) the declaration;

(B) the association articles of incorporation;

(C) the association bylaws;

(D) the association rules; and

(E) any lease or contract, excluding the purchase contract and

other loan documents required to be signed by the purchaser at

closing;

(10) a description of the method and timing for performing

maintenance of the accommodations;

(11) a statement indicating that, on an annual basis, the sum of

the nights that purchasers are entitled to use the accommodations

does not exceed the number of nights the accommodations are

available for use by the purchasers;

(12) a description of each type of accommodation included in the

timeshare plan, categorized by the number of bedrooms, the number

of bathrooms, and sleeping capacity, and a statement indicating

whether the accommodation contains a full kitchen, which means a

kitchen that has a minimum of a dishwasher, range, sink, oven,

and refrigerator;

(13) a description of amenities available for use by the

purchaser at each component site;

(14) the location of each component site of the multisite

timeshare plan, the historical occupancy of each component site

for the prior 12-month period, if the component site was part of

the multisite timeshare plan during such 12-month time period, as

well as any periodic adjustment or amendment to the reservation

system that may be needed in order to respond to actual purchaser

use patterns and changes in purchaser use demand for the

accommodations existing at the time within the multisite

timeshare plan;

(15) a description of the right to make any additions,

substitutions, or deletions of accommodations, amenities, or

component sites, and a description of the basis upon which

accommodations, amenities, or component sites may be added to,

substituted in, or deleted from the multisite timeshare plan;

(16) a description of the reservation system that shall include

all of the following:

(A) the entity responsible for operating the reservation system,

its relationship to the developer, and the duration of any

agreement for operation of the reservation system;

(B) a summary of the rules governing access to and use of the

reservation system; and

(C) the existence of and an explanation regarding any priority

reservation features that affect a purchaser's ability to make

reservations for the use of a given accommodation on a

first-come, first-served basis;

(17) the name and principal address of the managing entity for

the multisite timeshare plan and a description of the procedures,

if any, for altering the powers and responsibilities of the

managing entity and for removing or replacing it, and a

description of the relationship between the multisite timeshare

plan managing entity and the managing entity of the component

sites of the multisite timeshare plan, if different from the

multisite timeshare plan managing entity;

(18) the current annual budget of the multisite timeshare plan,

if available, or the projected annual budget for the multisite

timeshare plan, which must include:

(A) a statement of the amount reserved or budgeted for repairs,

replacements, and refurbishment;

(B) the projected common expense liability, if any, by category

of expenditure for the multisite timeshare plan; and

(C) the assumptions on which the operating budget is based;

(19) the projected assessments and a description of the method

for calculating and apportioning those assessments among

purchasers of the multisite timeshare plan;

(20) if applicable, a statement that the assessments collected

from the purchasers may be placed in a common account with the

assessments collected from the purchasers of other timeshare

properties managed by the same managing entity;

(21) any current fees or charges to be paid by timeshare

purchasers for the use of any amenities related to the timeshare

plan and a statement that the fees or charges are subject to

change;

(22) any initial or special fee due from the purchaser at

closing, together with a description of the purpose of and method

of calculating the fee;

(23) a description of the purchaser's liability for any fees

associated with the multisite timeshare plan;

(24) a description of any lien, defect, or encumbrance on or

affecting title to the timeshare interest and, if applicable, a

copy of each written warranty provided by the developer;

(25) the extent to which a timeshare interest may become subject

to a tax lien or other lien arising out of claims against

purchasers of different timeshare interests;

(26) a description of those matters required by Section 221.041;

(27) a description of any financing offered by or available

through the developer;

(28) a description of any bankruptcy that is pending or that has

occurred within the past five years, pending civil or criminal

suits, adjudications, or disciplinary actions material to the

timeshare plan of which the developer has knowledge;

(29) a statement disclosing any right of first refusal or other

restraint on the transfer of all or a portion of a timeshare

interest;

(30) a statement disclosing that any deposit made in connection

with the purchase of a timeshare interest must be held by an

escrow agent until expiration of any right to cancel the contract

and that any deposit must be returned to the purchaser if the

purchaser elects to exercise the right of cancellation; or, if

the commission accepts from the developer a surety bond,

irrevocable letter of credit, or other form of financial

assurance instead of an escrow deposit, a statement disclosing

that the developer has provided a surety bond, irrevocable letter

of credit, or other form of financial assurance in an amount

equal to or in excess of the funds that would otherwise be held

by an escrow agent and that the deposit must be returned if the

purchaser elects to exercise the right of cancellation;

(31) if the timeshare plan provides purchasers with the

opportunity to participate in an exchange program, a description

of the name and address of the exchange company and the method by

which a purchaser accesses the exchange program; and

(32) any other information the commission determines is

necessary to protect prospective purchasers or to implement the

purpose of this chapter.

(e) A developer may include any other information in a timeshare

disclosure statement required by this section on approval by the

commission.

(f) If a timeshare plan is located wholly outside this state,

the commission may permit the developer to submit a timeshare

disclosure statement the developer is currently providing

purchasers or an equivalent timeshare disclosure statement filed

for the timeshare plan in another state if the current statement

or the equivalent statement substantially complies with the

requirements of this subchapter. This subsection does not exempt

the developer from other requirements of this chapter.

Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,

1987. Renumbered from Sec. 201.032 by Acts 1989, 71st Leg., ch.

2, Sec. 13.03(b), eff. Aug. 28, 1989. Amended by Acts 1993, 73rd

Leg., ch. 443, Sec. 3, eff. Sept. 1, 1993.

Amended by:

Acts 2005, 79th Leg., Ch.

539, Sec. 5, eff. January 15, 2006.

Acts 2009, 81st Leg., R.S., Ch.

279, Sec. 2, eff. September 1, 2009.

Sec. 221.033. EXCHANGE DISCLOSURE STATEMENT. (a) Before the

signing of any agreement to purchase a timeshare interest in

which a prospective purchaser is also offered participation in

any exchange program, the developer shall also deliver to the

prospective purchaser the exchange disclosure statement of any

exchange company whose service is advertised or offered by the

developer or other person in connection with the disposition.

(b) If participation in an exchange program is offered for the

first time after a disposition has occurred, any person offering

that participation shall also deliver an exchange disclosure

statement to the purchaser before the execution by the purchaser

of any instrument relating to participation in the exchange

program.

(c) In all cases, the person offering participation in the

exchange program shall obtain from the purchaser a written

acknowledgement of receipt of the exchange disclosure statement.

(d) The exchange disclosure statement must include the following

information:

(1) the name and address of the exchange company;

(2) if the exchange company is not the developer, a statement

describing the legal relationship, if any, between the exchange

company and the developer;

(3) a statement indicating the conditions under which the

exchange program might terminate or become unavailable;

(4) whether membership or participation or both in the exchange

program is voluntary or mandatory;

(5) a complete description of the required procedure for

executing an exchange of timeshare periods;

(6) the fee required for membership or participation or both in

the program and whether the fee is subject to change;

(7) a statement to the effect that participation in the exchange

program is conditioned on compliance with the terms of a contract

between the exchange company and the purchaser;

(8) a statement in conspicuous and bold-faced print to the

effect that all exchanges are arranged on a space-available basis

and that neither the developer nor the exchange company

guarantees that a particular timeshare period can be exchanged;

and

(9) a description of seasonal demand and unit occupancy

restrictions employed in the exchange program.

Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,

1987. Renumbered from Sec. 201.033 by Acts 1989, 71st Leg., ch.

2, Sec. 13.03(b), eff. Aug. 28, 1989.

Amended by:

Acts 2005, 79th Leg., Ch.

539, Sec. 6, eff. January 15, 2006.

Sec. 221.034. EXEMPT OFFERINGS AND DISPOSITIONS; COMMUNICATIONS.

(a) An offering or disposition is exempt from this chapter if

it is:

(1) a gratuitous offering or disposition of a timeshare

interest;

(2) a disposition pursuant to a court order;

(3) a disposition by a governmental agency;

(4) a disposition by foreclosure or deed in lieu of foreclosure;

(5) an offering or disposition by an association of its own

timeshare interest acquired through foreclosure, deed in lieu of

foreclosure, or gratuitous transfer;

(6) an offering or disposition of all timeshare interests in a

timeshare plan to not more than five persons;

(7) an offering or disposition of a timeshare interest in a

timeshare property situated wholly outside this state under a

contract executed wholly outside this state, if there has been no

offering to the purchaser within this state;

(8) an offering or disposition of a timeshare interest to a

purchaser who is not a resident of this state under a contract

executed wholly outside this state, if there has been no offering

to the purchaser within this state;

(9) the offering or redisposition of a timeshare interest by a

purchaser who acquired the interest for the purchaser's personal

use; or

(10) the offering or disposition of a rental of an accommodation

for a period of three years or less.

(b) If a developer has a timeshare plan registered under this

chapter and is subject to Section 221.024, the developer may

offer or dispose of an interest in a timeshare plan that is not

registered under this chapter to a person who is the owner of a

timeshare interest in a timeshare plan created by the developer.

A developer under this subsection is exempt from Sections

221.021, 221.022, 221.023, 221.032, 221.041, 221.042, 221.043,

221.061, 221.071(a)(1) and (8), 221.074, and 221.075 if the

developer:

(1) permits the purchaser to cancel the purchase contract before

the sixth day after the date the contract is signed; and

(2) provides the purchaser all timeshare disclosure documents

required by law to be provided in the jurisdiction in which the

timeshare property is located.

(c) The following communications are not advertisements under

this chapter:

(1) any stockholder communication, including an annual report or

interim financial report, proxy material, registration statement,

securities prospectus, timeshare disclosure statement, or other

material required to be delivered to a prospective purchaser by a

state or federal governmental entity;

(2) any oral or written statement disseminated by a developer to

broadcast or print media, excluding:

(A) paid advertising or promotional material relating to plans

for acquiring or developing timeshare property; and

(B) the rebroadcast or other dissemination of any oral

statements by a developer to a prospective purchaser or the

distribution or other dissemination of written statements,

including newspaper or magazine articles or press releases, by a

developer to prospective purchasers;

(3) the offering of a timeshare interest in a national

publication or by electronic media that is not directed to or

targeted at any individual located in this state;

(4) any audio, written, or visual publication or material

relating to the availability of any accommodations for transient

rental if:

(A) a sales presentation is not a term or condition of the

availability of the accommodations; and

(B) the failure of the transient renter to take a tour of the

timeshare property or attend a sales presentation does not result

in a reduction in the level of services or an increase in the

rental price that would otherwise be available to the renter; or

(5) any follow-up communication with a person relating to a

promotion if the person previously received an advertisement

relating to the promotion that complied with Section 221.031.

(d) The following communications are exempt from this chapter if

they are delivered to a person who has previously executed a

contract for the purchase of or is an owner of a timeshare

interest in a timeshare plan:

(1) any communication addressed to and relating to the account

of the person; or

(2) any audio, written, or visual publication or material

relating to an exchange company or program if the person is a

member of that exchange company or program.

Added by Acts 1987, 70th Leg., ch. 167, Sec. 6.03, eff. Sept. 1,

1987. Renumbered from Sec. 201.034 by Acts 1989, 71st Leg., ch.

2, Sec. 13.03(b), eff. Aug. 28, 1989.

Amended by:

Acts 2005, 79th Leg., Ch.

539, Sec. 7, eff. January 15, 2006.

Sec. 221.035. SUPERVISORY DUTIES OF DEVELOPER. Notwithstanding

obligations placed upon any other persons by this chapter, the

developer shall supervise, manage, and control all aspects of the

offering of a timeshare interest, including but not limited to

promotion, advertising, contracting, and closing. Any violation

of this chapter which occurs during such offering activities is

considered to be a violation by the developer as well as by the

person actually committing the violation.

Added by Acts 1989, 71st Leg., ch. 381, Sec. 3, eff. June 14,

1989.

Sec. 221.036. DEVELOPER PREPARATION AND COMPLETION OF DOCUMENTS.

(a) A developer may charge a reasonable fee for completion of a

contract form, closing document, or disclosure document required

for the sale, exchange, option, lease, or rental of a timeshare

interest.

(b) The action of a developer under Subsection (a) does not

constitute the unauthorized or illegal practice of law in this<