59.1-448.1 - Public offering statement.
§ 59.1-448.1. Public offering statement.
A. The travel club shall prepare and distribute to any prospective purchaser,before execution thereby of a travel services agreement, a public offeringstatement which discloses fully and accurately the characteristics of thetravel club and its travel services, the membership offered and shall makeknown to prospective purchasers all material circumstances affecting thetravel club and its travel services. The proposed public offering statementshall be filed with the Commissioner, shall be in a form prescribed by hisrules and shall include the following to the extent applicable:
1. The name and principal address of the travel club, including:
a. The name, principal occupation and address of every director, partner, ortrustee of the travel club;
b. The name and address of each person owning or controlling an interest oftwenty percent or more in the travel club;
c. The particulars of any indictment, conviction, judgment, decree or orderof any court or administrative agency against the travel club for violationof a federal, state, local or foreign country law or regulation in connectionwith activities relating to the rendition of travel services;
d. A statement of any unsatisfied judgments against the travel club, thestatus of any pending suits involving the rendition of travel services towhich the travel club or any general partner, executive officer, director, ormajority stockholder thereof is a defending party, and the status of anypending suits of significance to the travel club; and
e. The name and address of the travel club's agent for service of process.
2. A general description of the travel services offered by the travel clubwhich are made available to purchasers.
3. A general description of the travel club and its more significant featuresincluding without limitation the duration of membership, the types ofmembership offered, all fees, costs, and charges imposed on the purchaserthereby, and any provision for its cancellation by the purchaser other thanby default.
4. Provisions, if any, that have been made by the travel club for fulfillingthe demand of the purchaser for accommodations in lodgings.
5. If the travel club's net worth is less than $500,000, a copy of the travelclub's current audited balance sheet; if such club's net worth exceeds saidamount, a statement by such travel club that its equity exceeds $500,000.
6. Any initial or special fee due from the purchaser for membership in thetravel club together with a description of the purpose and method ofcalculating the fee.
7. A general description of any financing offered by or available through thetravel club.
8. A statement that the purchaser has a right to cancel the travel serviceagreement directing the purchaser to see such travel services agreement forthe particulars of such right of cancellation.
9. Any restraints on alienation of the travel club membership by thepurchaser.
10. A description of any insurance coverage provided for the benefit of thepurchaser.
11. Any services which the travel club provides or expense it pays and whichit expects may become at any subsequent time an expense of the purchaser andwhich is to be paid thereby.
12. A description of the terms of the deposit escrow requirements, includinga statement that deposits may be removed from escrow at the termination ofthe cancellation period.
13. Any other information required by the Commissioner to assure full andfair disclosure to prospective purchasers.
14. A statement, expressed in terms of a percentage, of the number ofpurchasers who applied for accommodations from the travel club during thepreceding year in contrast to the total number of purchasers who actuallyreceived such accommodations for the same preceding year. For purposes ofcalculation, an application shall be treated as only one applicationnotwithstanding that the purchaser contemporaneously requests accommodationsat a number of different real property improvements. Such statement shall beprepared by an independent certified public accounting firm and may take theform of an exhibit to the public offering statement.
B. If any prospective purchaser of a travel club membership is offered theopportunity to subscribe to or participate in any exchange program registeredunder the Virginia Real Estate Time-Share Act (§ 55-360 et seq.), the publicoffering statement shall include as an exhibit or supplement, the disclosuredocument prepared by the exchange company in accordance with § 55-374.2 and abrief narrative description of the exchange program which shall include thefollowing:
1. A statement of whether membership or participation in the program isvoluntary or mandatory;
2. The name and address of the exchange company together with the names ofthe principal officers and all directors of the exchange company;
3. A statement of whether the exchange company or any of its officers ordirectors are holders of a ten percent or greater interest in the travel club;
4. A statement of whether the travel club or any of its officers or directorsare holders of a ten percent or greater interest in an exchange company;
5. A statement that the purchaser's contract with the exchange company is acontract separate and distinct from the purchaser's contract with the travelclub; and
6. A brief narrative description of the procedure whereby exchanges areconducted.
C. The travel club shall amend the public offering statement to reflect anymaterial change in the travel club membership. The travel club shall filewith the Commissioner the public offering statement amended to reflect anymaterial change. The Commissioner may at any time require the travel club toalter or supplement the form or substance of the public offering statement toassure full and fair disclosure to prospective purchasers.
The following events shall not be deemed to be a material changenecessitating an amendment to the public offering statement:
1. A change correcting spelling, grammar, omissions, or other similar errorsnot affecting the substance of the public offering statement;
2. A change in the fees, dues, or assessments of the purchasers or othersimilar recurring expense items;
3. A change which is an aspect or result of the orderly development,operation, or management of the travel club in accordance with the travelservices agreement, including, without limitation, the addition or deletionof accommodations, transportation or other service related to travel;
4. A change resulting from the adoption of a new budget;
5. A change occurring in the issuance of an exchange company's updated annualreport or disclosure documents provided upon its receipt by the travel clubit shall commence distribution of same in lieu of all others; and
6. A change in the ownership of the travel club, provided the change affectsless than an ownership interest of twenty percent.
(1994, c. 482.)