California Business and Professions Code 11267 – (a) The time-share instruments shall require the use of a …
(a) The time-share instruments shall require the use of a managing entity for the time-share plan or component site pursuant to a written management agreement that shall include all of the following provisions:
(1) Delegation of authority to the managing entity to carry out the duties and obligations of the association or the developer to the time-share interest owners.
Terms Used In California Business and Professions Code 11267
- Accommodation: means any apartment, condominium or cooperative unit, cabin, lodge, hotel or motel room, or other private or commercial structure containing toilet facilities therein that is designed and available, pursuant to applicable law, for use and occupancy as a residence by one or more individuals, or any unit or berth on a commercial passenger ship, which is included in the offering of a time-share plan. See California Business and Professions Code 11212
- Association: means the organized body consisting of the purchasers of time-share interests in a time-share plan. See California Business and Professions Code 11212
- Commissioner: means the Real Estate Commissioner. See California Business and Professions Code 11212
- Component site: means a specific geographic location where accommodations that are part of a multisite time-share plan are located. See California Business and Professions Code 11212
- Contract: A legal written agreement that becomes binding when signed.
- Developer: means and includes any person who creates a time-share plan or is in the business of selling time-share interests, other than those employees or agents of the developer who sell time-share interests on the developer's behalf, or retains agents to do the same, or any person who succeeds to the interest of a developer by sale, lease, assignment, mortgage, or other transfer, but the term includes only those persons who offer time-share interests for disposition in the ordinary course of business. See California Business and Professions Code 11212
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Managing entity: means the person who undertakes the duties, responsibilities, and obligations of the management of a time-share plan. See California Business and Professions Code 11212
- Public report: means a preliminary public report, conditional public report, final public report, or other such disclosure document authorized for use in connection with the offering of time-share interests pursuant to this chapter. See California Business and Professions Code 11212
- State: means the State of California, unless applied to the different parts of the United States. See California Business and Professions Code 21
- Subdivision: means a subdivision of the section in which that term occurs, unless some other section is expressly mentioned. See California Business and Professions Code 15
- Time-share instrument: means one or more documents, by whatever name denominated, creating or governing the operation of a time-share plan and includes the declaration dedicating accommodations to the time-share plan. See California Business and Professions Code 11212
- Time-share interest: means and includes either of the following:
California Business and Professions Code 11212
- Time-share plan: means any arrangement, plan, scheme, or similar device, other than an exchange program, whether by membership agreement, sale, lease, deed, license, right to use agreement, or by any other means, whereby a purchaser, in exchange for consideration, receives ownership rights in or the right to use accommodations for a period of time less than a full year during any given year, on a recurring basis for more than one year, but not necessarily for consecutive years. See California Business and Professions Code 11212
- Time-share property: means one or more accommodations subject to the same time-share instrument, together with any other property or rights to property appurtenant to those accommodations. See California Business and Professions Code 11212
(2) Authority of the managing entity to use subagents, if applicable.
(3) A term of not more than five years with automatic renewals for successive three-year periods after expiration of the first term unless the association by the vote or written assent of a majority of the voting power residing in members other than the developer determines not to renew the contract and gives appropriate notice of that determination. However, in those time-share plans where the association is controlled by owners other than the developer, the management agreement shall not be subject to the term limitations set forth in this section, and any longer term shall not be grounds for denial of a public report, unless the longer term of the management contract is the result of the developer exercising control.
(4) Termination for cause at any time by the governing body of the association. If the single site time-share plan or the component site of a multisite time-share plan is located within the state, then that termination provision shall include a provision for arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association or another third-party arbitration organization selected by the parties and in accordance with Title 9 (commencing with Section 1280) of Part 3 of the Code of Civil Procedure if requested by or on behalf of the managing entity.
(5) Not less than 90 days’ written notice to the association of the intention of the managing entity to resign.
(6) Enumeration of the powers and duties of the managing entity in the operation of the time-share plan and the maintenance of the accommodations comprising the time-share plan.
(7) Compensation to be paid to the managing entity.
(8) Records to be maintained by the managing entity.
(9) A requirement that the managing entity provide a policy for fidelity insurance or bond for the activities of the managing entity, payable to the association that shall be in an amount no less than the sum of the largest amount of funds expected to be held or controlled by the managing entity at any time during the year, pursuant to the budget. The commissioner may provide a reduction in the insurance policy or bond amounts required by this paragraph.
(10) Errors and omissions insurance coverage for the managing entity, if available.
(11) Delineation of the authority of the managing entity and persons authorized by the managing entity to enter into accommodations of the time-share plan for the purpose of cleaning, maid service, maintenance and repair, including emergency repairs, and for the purpose of abating a nuisance or dangerous, unlawful, or prohibited activity being conducted in the accommodation.
(12) Description of the duties of the managing entity, including, but not limited to, the following:
(A) Collection of all assessments as provided in the time-share instruments.
(B) Maintenance of all books and records concerning the time-share plan.
(C) Scheduling occupancy of accommodations, when purchasers are not entitled to use specific time-share periods, so that all purchasers will be provided the opportunity for use and possession of the accommodations of the time-share plan, that they have purchased.
(D) Providing for the annual meeting of the association of owners.
(E) Performing any other functions and duties related to the maintenance of the accommodations or that are required by the time-share instrument.
(b) Any written management agreement in existence as of the effective date of this chapter shall not be subject to the term limitations set forth above.
(c) For single site time-share plans and component sites of a multisite time-share plan located outside of the state, the time-share instruments shall include the subject matter set forth in subdivision (a). The time-share instruments shall be in compliance with the applicable laws of the state or jurisdiction in which the time-share property or component site is located, and if a conflict exists between laws of the situs state and the requirements set forth in this section, the law of the situs state shall control. If the time-share instruments provide for the matters contained in subdivision (a), the time-share instruments shall be deemed to be in compliance with the requirements of subdivision (a) and the developer shall not be required to make revisions in order to comply with subdivision (a) and this subdivision.
(Amended by Stats. 2020, Ch. 370, Sec. 14. (SB 1371) Effective January 1, 2021.)