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Louisiana Timesharing Act

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Louisiana Timesharing Act Amendment Filings

§1131.1. Short title

This Part shall be known as and may be cited as the Louisiana Timesharing Act.

Added by Acts 1983, No. 552, §1.

§1131.2. Definitions

As used in this Part:

(1) “Affiliate” means any person who controls, is controlled by, or is under common control with a developer.

(a) A person “controls” a developer if the person:

(i) is a general partner, officer, director, or employer of the developer;

(ii) directly or indirectly or acting in concert with one or more other persons or through one or more subsidiaries, owns, controls, holds with power to vote, or holds proxies representing more than twenty percent of, the voting interest in the developer or its general partner;

(iii) controls in any manner the selection of a majority of the directors or the general partner of the developer; or

(iv) has contributed more than twenty percent of the capital of the developer.

(b) A person “is controlled by” a developer if the developer:

(i) is a general partner, officer, director, or employer of the person;

(iii) controls in any manner the election of a majority of the directors of the person; or

(iv) has contributed more than twenty percent of the capital of the person.

(c) A person is also “controlled by” a developer if such person is a project broker or sales agent for any timeshare property of the developer.

(d) Control does not exist if the powers described in this Paragraph are held solely as security for an obligation and are not exercised.

(2) “Common elements” means all portions of timeshare property other than units.

(3) “Completion of construction” means:

(a)(i) That a certificate of occupancy has been issued for the entire building in which the timeshare interest being sold is located, or for the improvement, or that the equivalent authorization has been issued, by the governmental body having jurisdiction; or

(ii) In a jurisdiction in which no certificate of occupancy or equivalent authorization is issued, that the construction, finishing, and equipping of the building or improvements according to the plans and specifications have been substantially completed; and

(b) That all accommodations of the timeshare unit and facilities of the timeshare plan are available for use in a manner identical in all material respects to the manner portrayed by the promotional material, advertising, and public offering statements filed with the Louisiana Real Estate Commission.

(4) “Conspicuous type” means type in boldfaced capital letters no smaller than the largest type, exclusive of headings, on the page on which it appears and, in all cases, at least 10-point type. Where conspicuous type is required, it must be separated on all sides from other type and print. Conspicuous type may be utilized in purchase contracts or public offering statements only where required by law.

(5) “Contract” includes any agreement conferring the rights and obligations of a timeshare ownership on the purchaser.

(6) “Developer” means the person, or any successor or assignee of such person, who creates the timeshare plan or who is in the business of making sales of timeshare interests which it owns or purports to own.

(7) “Exchange company” means the person operating a program providing any opportunity or procedure for the assignment or exchange of timeshare interests among owners and purchasers in the same or other timeshare plans.

(8) “Lease timeshare interest” means an interest in which a person receives the right to use or occupy, however evidenced or documented, immovable property for a period of time or intervals of time which can be less than a full year during each year, over a period of more than three years.

(9) “Managing entity” means an entity with the duty to manage and operate the timeshare plan and/or the timeshare property.

(10) “Multiple use project” means a project which combines hotel and/or apartment accommodations with timeshare units in which the timeshare interest sold is a lease timeshare interest and the hotel and/or apartment units exceed fifty units in number not subject to a timeshare interest and the timeshare interest units of the development account for less than forty percent of the total square footage of all the units in the project.

(11) “Owner” means any person who owns or is a co-owner of a timeshare interest.

(12) “Ownership timeshare interest” means an interest in which a person receives the right to use or occupy, however evidenced or documented, immovable property for a period of less than a full year during each year, over a period of more than three years, coupled with an ownership interest in immovable property.

(13) “Person” means an individual, partnership, corporation, or other legal entity.

(14) “Project” means immovable property containing more than one unit. “Project” includes but is not limited to condominiums and cooperative housing corporations. A project may include units that are not timeshare units.

(15) “Purchaser” means any person to whom a timeshare interest is offered or who has contracted to purchase a timeshare interest.

(16) “Timeshare association” means a corporation owned by the timeshare interest owners and through which the timeshare interest owners manage and regulate the timeshare property.

(17) “Timeshare declaration” or “declaration” means the instrument by which the timeshare property is made subject to a timeshare plan.

(18) “Timeshare documents” means all of the documents, by whatever names denominated, and any amendments thereto, which establish the timeshare plan, create and govern the rights and relationships of owners, and govern the use and operation of the timeshare property. Such documents include, but are not limited to, the declaration, the articles of incorporation and by-laws of the association, and the rules and regulations for the timeshare plan.

(19) “Timeshare expenses” means any expenditures, fees, charges, or other liabilities for which an owner of a timeshare interest is liable as a result of the ownership of the timeshare interest.

(20) “Timeshare interest” means an ownership “timeshare interest”, a lease timeshare interest, a timeshare estate, and a timeshare use unless expressly provided otherwise and includes any of the following:

(a) A “timeshare estate” which is the right to occupy a timeshare property, coupled with present ownership or some right to future ownership in a timeshare property or a specified portion thereof.

(b) A “timeshare use” which is the right to occupy a timeshare property which right is neither coupled with present ownership nor some right to future ownership in a timeshare property or a specified portion thereof.

(c) An “ownership timeshare interest” which is an interest in which a person receives the right to use or occupy immovable property for a period of less than a full year, over a period of more than three years, coupled with an ownership in immovable property.

(d) A “lease timeshare interest” which is an interest in which a person receives the right to use or occupy immovable property for a period of less than a full year, over a period of more than three years.

(21) “Timeshare instrument” means the legal document or documents, by whatever names denominated, that convey a timeshare interest to a purchaser.

(22) “Timeshare plan” means any arrangement, plan, scheme, or similar device, other than an exchange program, whether by membership agreement, sale, lease, license, other act of conveyance, or 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, but not necessarily for consecutive years. A timeshare plan may be either of the following:

(a) A “single-site timeshare plan” which is the right to use accommodations at a single timeshare property.

(b) A “multisite timeshare plan” which includes either of the following:

(i) A “specific timeshare interest” which is the right to use accommodations at a specific timeshare property together with use rights in accommodations at one or more other component sites created by or acquired through the timeshare plan’s reservations system.

(ii) A “nonspecific timeshare interest” which is the right to use accommodations at more than one component site created by or acquired through the timeshare plan’s reservation system but including no specific right to use any particular accommodations.

(23) “Timeshare property” means one or more timeshare units subject to the same timeshare plan, together with any common elements or any other immovable property, or rights therein, appurtenant to those units.

(24) “Timeshare unit” means a unit which is the subject of a timeshare plan.

(25) “Unit” means immovable property, or a portion thereof, designated for separate occupancy.

(26) “Use period” means the increments of time into which a timeshare unit or the timeshare property is divided for the purpose of allocating rights of use and occupancy to the owners.

Added by Acts 1983, No. 552, §1. Acts 1984, No. 943, §1, eff. July 20, 1984; Acts 1985, No. 999, §1; Acts 2003, No. 978, §1.

§1131.3. Applicability and scope

A. This Part shall apply to the sale, offer to sell, or solicitation of persons for the sale of any timeshare interest in immovable property located in Louisiana, and to the sale, offer to sell, or solicitation of persons in Louisiana for the sale of any timeshare interest in immovable property located in Louisiana and outside Louisiana except as otherwise provided by this Part.

B. The provisions of this Part shall be applicable, from and after the effective date of this Part, to existing timeshare interests created prior to the effective date of this Part; however, the developer of existing timeshare interests or the timeshare association of owners of existing timeshare interests shall have until December 1, 1983 to comply with R.S. 9:1131.4 of this Part. The obligation to provide a public offering statement under this Part or contribution to the fund in R.S. 9:1131.17 shall apply only to sales of timeshare interests after the effective date of this Part. This Part shall not affect or impair any right that is guaranteed or protected by the constitutions of Louisiana or the United States, nor shall this Part be construed to impair or affect any act done or right accruing, accrued, or acquired prior to the effective date of this Part. This Part shall not be construed to impair or cast a cloud upon the titles to units of any timeshare property conveyed prior to the effective date of this Part.

C. The provisions of the Louisiana Condominium Act, R.S. 9:1121.101 et seq., shall be applicable to an ownership timeshare interest created in a condominium to the extent that the provisions do not conflict with the provisions of this Part. However, whenever documents must be filed of record or delivered to purchasers under the Louisiana Condominium Act and this Part, they may be combined to avoid duplication.

D. A developer who sells lease timeshare interests in a multiple use project shall be exempt from the requirements and provisions of Sections 1131.4, 1131.5, 1131.6, 1131.8, 1131.20, 1131.21, 1131.22, and 1131.23 of this Part. The developer shall file an abstract of each lease timeshare interest sold in the conveyance records of the parish in which the timeshare interest is located within thirty days from the date of the sale.

E. The Louisiana Real Estate Commission shall not require a developer of a timeshare plan located outside of this state to make changes in any timeshare instrument to conform to the provisions of this Part regarding the structure of the timeshare regime provided it complies with the law of the state in which the plan is located. The Louisiana Real Estate Commission shall have the power to require disclosure of such provisions as the commission determines is necessary to fairly, meaningfully, and effectively disclose all aspects of the timeshare plan.

F. Each timeshare interest constitutes, for purposes of title, a separate interest in property except for taxes on immovable property in Louisiana.

G. The offer or disposition of a timeshare interest in a timeshare plan which satisfies all the requirements of this Part shall not be deemed to constitute the offer and sale of a security under any other Louisiana law.

H. The commission may grant an exemption from this Part to timeshare plans, whether or not an accommodation is located in Louisiana, under which the prospective purchaser’s total contractual financial obligation is less than three thousand dollars during the entire term of the timeshare plan.

Added by Acts 1983, No. 552, §1; Acts 2003, No. 978, §1.

§1131.4. Creation of a timeshare plan

A.(1) No person shall offer for sale, sell, offer to sell, or attempt to solicit any person located in Louisiana to purchase a timeshare interest in a timeshare property unless:

(a) Such timeshare interest offered by such person for sale is pursuant to a timeshare plan registered with and approved by the Louisiana Real Estate Commission, and

(b) Such person has provided the Louisiana Real Estate Commission with proof of its financial ability to complete the timeshare project in accordance with:

(i) The registered timeshare plan.

(ii) The contractual obligations of such person.

(2) No person shall sell, offer to sell, solicit, or attempt to solicit the purchase of a timeshare interest from any location within the state of Louisiana unless such person, or a related entity, has registered with the Louisiana Real Estate Commission a timeshare plan for a timeshare project located in the state of Louisiana consisting of at least forty completed or proposed units, committed to either an ownership timeshare interest or a lease timeshare interest where the initial rights are or were for a period of not less than twenty years provided however, that:

(a) If the person or related entity has not previously registered a timeshare plan in the state of Louisiana consisting of at least forty completed units with the Louisiana Real Estate Commission, as set forth in this Paragraph, but has registered with the Louisiana Real Estate Commission a proposed timeshare plan located in the state of Louisiana, as set forth in this Paragraph, consisting of at least forty units, such person prior to selling, offering to sell, soliciting, or attempting to solicit a person for the purchase of a timeshare interest in a timeshare plan located in the state of Louisiana, shall provide to the Louisiana Real Estate Commission:

(i) A copy of the contract for construction of the initial fifteen units of the timeshare plan,

(ii) A bond for completion of such construction in an amount satisfactory to the Louisiana Real Estate Commission, and

(iii) All applicable permits required by the appropriate local governmental subdivisions, or

(b) In the event such person, or related entity, intends to sell, offer to sell, solicit, or attempt to solicit the purchase of a timeshare interest in a timeshare plan located outside of the state of Louisiana from a location within the state of Louisiana and if the person, or related entity, has not previously registered a timeshare plan located in the state of Louisiana consisting of at least forty completed units with the Louisiana Real Estate Commission, as set forth in this Paragraph, but has registered with the Louisiana Real Estate Commission a proposed timeshare plan located in the state of Louisiana, as set forth in this Paragraph, consisting of at least forty units, such person, prior to selling, offering to sell, soliciting, or attempting to solicit the purchase of a timeshare interest in a timeshare plan located outside the state of Louisiana from a location within the state of Louisiana shall:

(i) Obtain a certificate from the Louisiana Real Estate Commission certifying that a minimum of fifteen units in such hereinabove required timeshare plan are complete for use and occupancy as a timeshare project in accordance with the timeshare plan, and

(ii) Provide the Louisiana Real Estate Commission with a copy of the contract for construction of the remaining units in the timeshare plan, a bond for the completion of such construction, and certified copies of all required permits from the applicable local governmental subdivision.

(3) All timeshare plans approved by the Louisiana Real Estate Commission after August 15, 2003, shall maintain a one-to-one purchaser to accommodation ratio, which means the ratio of the number of purchasers eligible to use the accommodation of a timeshare plan or project on a given day to the number of accommodations available for use within the plan or project on that day, such that the total number of purchasers eligible to use the accommodations of the timeshare plan or project during a given calendar year shall never exceed the total number of accommodations available for use in the timeshare plan or project during that year. For purposes of calculation, each purchaser shall be counted at least once and no individual accommodation may be counted more than three hundred sixty-five times per each calendar year. For purposes of calculating the one-to-one purchaser to accommodation ratio only, a purchaser who is delinquent in the payment of timeshare plan or project assessments shall continue to be considered eligible to use the accommodations of the timeshare plan or timeshare project without regard as to whether such right of use is suspended due to such delinquency.

B. A timeshare plan is created by the execution and recordation of a timeshare declaration and shall be effective upon approval of and shall have legal force and effect in the state of Louisiana as of the date of its approval by the Louisiana Real Estate Commission. The timeshare declaration shall be filed for registry in the conveyance records in the parish or parishes in which the timeshare property is located.

C. A timeshare declaration shall contain the following information:

(1) A legally sufficient description of the timeshare property and the name or other identification of the project, development, or building, if any, within which the timeshare property is located.

(2) A scale drawing showing the boundaries of all timeshare units, all common elements, and a designation by letter, number, name, or combination thereof of all such timeshare units.

(3) A schedule of use periods identifying the use by letter, number, name, or combination thereof for all use periods available in each timeshare unit or, if there are no timeshare units, in the full timeshare property.

(4) A provision for an annual service period for the timeshare property. If the timeshare property is divided into timeshare units, the service period may be different for different timeshare units and need not be for a specifically designated time period or for consecutive days.

(5) A statement that the timeshare property has or has not been made subject to the Louisiana Condominium Act, R.S. 9:1121.101 et seq., and, if the timeshare property is subject to the Louisiana Condominium Act, the date of filing of the condominium declaration required by R.S. 9:1122.101. A timeshare property otherwise subject to the Louisiana Condominium Act will nonetheless be exempt from the provisions of R.S. 9:1122.106(3).

(6) In registering a timeshare plan, the developer shall be responsible for providing information on the following:

(a) The developer’s legal name, any assumed names used by the developer, principal office street address, mailing address, primary contact person, and telephone number.

(b) The name of the developer’s authorized or registered agent in the state of Louisiana upon whom claims can be served or service of process be had, the agent’s street address in Louisiana, and telephone number.

(c) The name, street address, mailing address, primary contact person, and telephone number of any timeshare plan being registered.

(d) The name, street address, mailing address, and telephone number of the managing entity of the timeshare plan.

(e) A public offering statement which complies with the requirements of R.S. 9:1131.9.2, which includes all of the following:

(i) A scale drawing showing the boundaries of all timeshare units, all common elements, and a designation by letter, number, name, or combination thereof of all such timeshare units.

(ii) If it is an ownership timeshare interest, the nature of the timeshare interest and the method for allocating use periods. If it is a lease timeshare interest, the nature of that lease interest and its duration.

(iii) The percentage of timeshare interest expenses and the voting rights assigned to each timeshare interest.

(iv) The method for amendment of the timeshare instrument.

(f) Such other information regarding the developer, timeshare plan, timeshare interest sales persons, acquisition agents, or managing entities as reasonably required by the Louisiana Real Estate Commission.

D. A timeshare declaration filed after August 30, 1983, shall also include a bond issued by a surety company authorized to do business in this state in the amount of one thousand dollars for each unit week included in the timeshare plan. This bond shall be filed and maintained with the Louisiana Real Estate Commission in favor of the state for the use, benefit, and indemnity of any person who suffers any damage or loss as a result of any unfair or deceptive practice, breach of a contractual duty, or violation of law in connection with the offer or solicitation of a sale or management of a timeshare interest or in connection with the management of a timeshare plan or project by a developer, its agents, employees, sales persons, and others. Said bond shall be maintained until one year following the date of the last timeshare sale made by the filing developer or until January 1, 2008, whichever occurs first. Beginning January 1, 2004, the amount of the bond shall be reduced in an amount by one-quarter in each of the four years following August 15, 2003. On January 1, 2008, this bonding requirement shall be eliminated for all timeshare projects. Thereafter, the developer shall provide to the Louisiana Real Estate Commission proof of its suitability and financial ability to complete its timeshare projects. The commission, by rule and regulation, adopted and promulgated as prescribed by law, shall provide for the kinds of proof that shall be required to be provided.

E. The timeshare declaration must be accompanied by an affidavit or affidavits signed by the chief executive officer or managing partner of the developer and by any natural person having an ownership interest exceeding ten percent in either the developer or entities which control it. The affidavit or affidavits must state under penalty of perjury that the affiant has read the timeshare declaration, and all attached documents and that they are true and complete. Any person who executes an affidavit required under this Section which is not true, or who fails to correct in said affidavit any false statement, false representation of material fact, or omission of material fact made in the timeshare declaration or in documents required to be attached thereto, is guilty of a felony, and shall be imprisoned for not more than five years with or without hard labor or shall be fined not more than five thousand dollars, or both.

F. A person shall not be required to register as a developer under this Part, provided the person performs only the following acts:

(1) The person is an owner of a timeshare interest who has acquired the timeshare interest for his or her own use and occupancy and who later offers it for resale.

(2) A managing entity or an association that is not otherwise a developer of a timeshare plan in its own right, solely while acting as an association or under a contract with an association to offer or sell a timeshare interest transferred to the association through foreclosure, giving in payment, or gratuitous transfer, if such acts are performed in the regular course, or as an incident to, the management of the association for its own account in the timeshare plan.

(3) Offers a timeshare plan in a national publication or by electronic media which is not directed to or targeted to any person located in Louisiana.

(4) A person is conveyed, assigned, or transferred more than seven timeshare interests from a developer in a single voluntary or involuntary transaction and subsequently conveys, assigns, or transfers all of the timeshare interests received from the developer to a single purchaser in a single transaction, which transaction may occur in stages.

Added by Acts 1983, No. 552, §1; Acts 1985, No. 999, §§1, 3; Acts 2003, No. 978, §§1, 3; Acts 2009, No. 273, §1.

NOTE: SEE ACTS 1985, NO. 999, §5.

§1131.5. Construction and validity of declaration

A. All provisions of the declaration are severable.

B. The effectiveness of the timeshare declaration and merchantability of title to a timeshare interest are not affected by reason of an insubstantial failure of the declaration to comply with this Part.

Added by Acts 1983, No. 552, §1.

§1131.6. Description of timeshare property

A. After the declaration is properly filed for registry, a description of the timeshare property that sets forth the name of the timeshare property, the place of recordation of the declaration, and the parish in which the timeshare property is located is a sufficient legal description of that timeshare property even if the common element interest is not described or referred to therein.

B. The timeshare unit may be legally described by using the identifying designation as set forth in the declaration in conjunction with the legal description of the timeshare property as provided for in this Section.

C. The use period may be legally described by using the identifying designation as set forth in the declaration in conjunction with the legal description of the timeshare property and the timeshare unit as provided in this Section.

Added by Acts 1983, No. 552, §1.

§1131.7. Partition

The timeshare property subject to an ownership timeshare interest shall remain undivided and shall not be subject to partition until the termination of the timeshare plan as provided for in R.S. 9:1131.8(F) or as otherwise provided for in the timeshare documents.

Added by Acts 1983, No. 552, §1.

§1131.8. Termination

A. Except as otherwise provided, a timeshare plan shall terminate at the end of the term of the timeshare plan as set forth in the timeshare declaration, or prior to the end of the term:

(1) As provided in the timeshare documents.

(2) Upon entry of a final judgment by a court of competent jurisdiction brought by an owner or the association declaring that the useful life of the timeshare property¹ has ended.

B. Termination of the timeshare plan shall not terminate the association, which shall continue for so long as is necessary to implement the provisions of the timeshare documents.

C. Unless the timeshare documents expressly provide to the contrary, upon termination of the timeshare plan, the association may sell, convey, transfer, or otherwise dispose of the owners’ interests in the timeshare property, upon such terms and conditions as the board of directors, in its sole discretion, shall determine. The timeshare property may be conveyed by deed or other appropriate instrument of conveyance executed and acknowledged by two officers of the association, which instrument recites that it is made pursuant to the authority provided by this Section and, if the timeshare documents provide any procedure therefor, that the procedure set forth in the timeshare documents for the disposition of the timeshare property was followed. After such conveyance, it shall be conclusively presumed that a deed or other instrument of conveyance so executed and acknowledged, and containing such recitals, shall vest good and marketable title in the vendee named therein. No action may be instituted by or on behalf of any owner to set aside or invalidate any conveyance so made.

D.(1) Any proceeds remaining after expenses associated with the termination of a timeshare plan that are received by the association in connection with the sale or other disposition of the owner’s interest in the timeshare property shall be distributed to owners in accordance with such owner’s percentage ownership in the timeshare property, when a timeshare plan is composed of timeshare estates, and in accordance with the applicable owner’s pro rata share of timeshare expenses in the case of a timeshare plan composed of timeshare uses.

(2) If the timeshare plan is a lease timeshare interest plan, such proceeds shall be distributed to owners in the same ratio as they share timeshare expense liability.

E. The association shall notify each owner of the right to receive a pro rata share of the proceeds by certified mail, return receipt requested, sent to the owner’s last known address listed in the association records. This notice shall state that the owner shall have one hundred twenty days in which to claim the proceeds, the method for making such claim, and the fact that failure to do so within the allowable time period shall result in the termination of the right to receive the proceeds. Any unclaimed proceeds shall be redistributed to owners who make a claim on a pro rata basis under Subsection D of this Section.

F. If the association fails to act pursuant to Subsection C of this Section within one hundred eighty days from the termination of the timeshare plan, any owner may seek partition of the timeshare property in a court of competent jurisdiction.

Added by Acts 1983, No. 552, §1; Acts 2003, No. 978, §1.

¹As appears in enrolled bill (should be “plan”)

§1131.9. Tax assessment and payment

A. All kinds of taxes and special assessments authorized by law shall be assessed against the timeshare property as a single entity unless the timeshare property is subject to the Louisiana Condominium Act, R.S. 9:1121.101 et seq., in which case the taxes and special assessments shall be assessed as provided in R.S. 9:1121.105. Each owner shall pay the taxes and assessments in the same ratio as they share the timeshare expenses.

B. The association, through its managing entity, shall collect each owner’s share of the taxes or special assessments and shall have responsibility for its payment. For purposes of R.S. 9:1131.22, each owner’s share of the taxes or special assessments shall be deemed an assessment for a timeshare interest expense.

C. The assessed value of a timeshare unit shall not exceed the assessed value of a comparable apartment, condominium unit, dwelling, or other accommodation owned by a single owner that is not the subject of a timesharing plan.

Added by Acts 1983, No. 552, §1; Acts 2003, No. 978, §1.

§1131.9.1. Developer supervisory duties

The developer shall have the duty to supervise, manage, and control all aspects of the offering of the timeshare plan, including but not limited to promotion, advertising, contracting, and closing. The developer shall have responsibility for each timeshare plan approved by the Louisiana Real Estate Commission and for the actions of any timeshare interest sales person utilized by the developer in the offering or selling of any registered timeshare plan. Any violation of this Part which occurs during the offering activities shall be deemed to be a violation by the developer as well as by the timeshare interest salesperson or whoever actually committed such violation.

Acts 2003, No. 978, §1.

§1131.9.2. Public offering statement

A.(1) Prior to offering any timeshare interest, the developer shall file a public offering statement with the Louisiana Real Estate Commission for approval. The developer shall fully and accurately disclose those facts concerning the developer and the timeshare plan as hereinafter provided prior to the initial sale of a timeshare interest, and the developer shall furnish each purchaser with a copy of the approved public offering statement. The public offering statement shall be delivered to each prospective purchaser in written format. Written format includes but is not limited to documents delivered on CD-ROM or by other electronic means as approved by the Louisiana Real Estate Commission. The public offering statement shall be dated and shall require the purchaser to certify in writing the receipt thereof. Until the Louisiana Real Estate Commission approves such filing, any contract regarding the sale of the timeshare plan which is subject to the public offering statement is voidable by the purchaser unless otherwise provided by this Section.

(2) The Louisiana Real Estate Commission shall, upon receiving a public offering statement from a developer, mail to the developer an acknowledgment of receipt. The failure of the Louisiana Real Estate Commission to send such acknowledgment will not, however, relieve the developer from the duty of complying with this Section. An applicant for registration under this Act shall submit the necessary information to complete the application, as required by the Louisiana Real Estate Commission, within six months from the date the initial registration application and its supplements were received by the Louisiana Real Estate Commission. If the applicant fails to submit the information necessary to complete the application as required by the Louisiana Real Estate Commission within the six-month period, said application may be voided and a new registration application with applicable fees may be required to be submitted.

(3) All registrations required to be filed with the Louisiana Real Estate Commission under this Act shall be reviewed, and registration shall be effective upon the issuance of a certificate of registration by the Louisiana Real Estate Commission which, in the ordinary course of business, should occur no more than forty-five calendar days after actual receipt by the Louisiana Real Estate Commission of the properly completed application. The Louisiana Real Estate Commission shall provide a list of deficiencies in such application, if any, within thirty calendar days after receipt. If the Louisiana Real Estate Commission fails to either issue a certificate of registration or provide a list of deficiencies within forty-five calendar days after receipt, the registration shall be deemed effective.

(4) Any material change to an approved filing shall be filed with the Louisiana Real Estate Commission for approval as an amendment prior to the changes becoming effective. The Louisiana Real Estate Commission shall have twenty days to approve or cite deficiencies in the proposed amendment. If the Louisiana Real Estate Commission fails to act within twenty days, the amendment will be deemed approved. If the developer fails to file corrections to any deficiency citation within thirty days, the Louisiana Real Estate Commission may reject the amendment.

(5) Upon the filing of a public offering statement, the developer shall pay to the Louisiana Real Estate Commission a filing fee of five hundred dollars or ten dollars for each timeshare unit which is to be part of the proposed timeshare plan, whichever is greater. A developer who files an amendment to a public offering statement already on file with the Louisiana Real Estate Commission shall pay a filing fee of two hundred fifty dollars.

B. Every public offering statement shall contain and accurately disclose the following:

(1) The name of the developer and the principal address of the developer and the name and address of the timeshare plan in which interests are being offered.

(2) A description of the type of timeshare interests being offered.

(3) A general description of the existing and proposed accommodations and amenities of the timeshare plan, including their type and number, personal property furnishing the accommodations, any use restrictions, and any required fees for use.

(4) A description of any accommodations and amenities that are committed to be built, including without limitation:

(a) The developer’s schedule of commencement and completion of all accommodations and amenities.

(b) The estimated number of accommodations per site that may become subject to the timeshare plan.

(5) A brief description of the duration, phases, and operation of the timeshare plan.

(6) The current annual budget, if available, or the projected annual budget for the timeshare plan. The budget shall include without limitation:

(a) A statement of the amount included in the budget as a reserve for repairs and replacement.

(b) The projected common expense liability, if any, by category of expenditures for the timeshare plan.

(7) Any initial or special fee due from the purchaser at closing, together with a description of the purpose and method of calculating the fee.

(8) A description of any liens, defects, or encumbrances on or affecting the title to the timeshare interests.

(9) A general description of any purchaser financing offered by or available through the developer.

(10) A statement that within seven calendar days after receipt of the public offering statement or after purchase contract execution, whichever is later, a purchaser may cancel any purchase contract for the purchase of a timeshare interest from a developer, together with a statement providing the name and address to which the purchaser should mail any notice of cancellation. However, if by agreement of the parties by and through the purchase contract the purchase contract allows for cancellation of the purchase contract for a period of time exceeding seven calendar days, then a statement that the cancellation of the purchase contract is allowed for that period of time exceeding seven calendar days.

(11) A statement of any pending suits, adjudications, or disciplinary proceedings material to the timeshare plan of which a developer has knowledge.

(12) Any restrictions on alienation of any number or portion of any timeshare interests.

(13) A statement describing liability and casualty insurance for the timeshare property.

(14) Any current or expected fees or charges to be paid by timeshare purchasers for the use of any amenities related to the timeshare property, including but not limited to all assessments for such use or maintenance.

(15) The extent to which financial arrangements have been provided for completion of all promised improvements.

(16) The developer or managing entity must notify the Louisiana Real Estate Commission of the extent to which an accommodation may become subject to a tax or other lien arising out of claims against other purchasers in the same timeshare plan. The Louisiana Real Estate Commission may require the developer or managing entity to notify a prospective purchaser of any such potential tax or lien which would materially and adversely affect the prospective purchaser.

(17) A statement indicating that the developer and timeshare plan are registered with the Louisiana Real Estate Commission.

(18) Copies of the following documents and plans, to the extent they are applicable, shall be included as exhibits:

(a) A declaration of servitude of properties serving the timeshare accommodations or facilities but not owned by purchasers or leased to them or the association.

(b) A statement of condition of the existing building or buildings, if the offering is of timeshare periods in an existing facility being converted to condominium ownership.

(c) A statement of inspection for termite damage and treatment of the existing improvements, if the timeshare property is a condominium conversion.

(d) The form of agreement for sale of timeshare interests.

(e) The executed agreement for escrow of payments made to the developer prior to closing.

(f) Any documents containing any restrictions on use of the property.

(19) 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.

(20) Such other information reasonably required by the Louisiana Real Estate Commission and established by administrative rule necessary for the protection of purchasers of timeshare interests in timeshare plans.

(21) Any other information that the developer, with the approval of the Louisiana Real Estate Commission, desires to include in the public offering statement text.

C. A developer offering a multisite timeshare plan shall also fully and accurately disclose the following information, which information may be disclosed in a written, graphic, or tabular form:

(1) A description of each component site including the name and address of each component site.

(2) The number of accommodations and timeshare periods, expressed in periods of seven-day use availability, committed to the multisite timeshare plan and available for use by purchasers.

(3) Each type of accommodation in terms of the number of bedrooms, bathrooms, sleeping capacity, and whether or not the accommodation contains a full kitchen. For purposes of this description, a full kitchen shall mean a kitchen having a minimum of a dishwasher, range, sink, oven, and refrigerator.

(4) A description of amenities available for use by the purchaser at each component site.

(5) A description of the reservation system, which description shall include the following:

(a) The entity responsible for operating the reservation system.

(b) A summary of the rules and regulations governing access to and use of the reservation system.

(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.

(6) A description of any right to make any additions, substitutions, or deletions of accommodations or amenities and a description of the basis upon which accommodations and amenities may be added, substituted, 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 and the anticipated relative use demand of each component site in a multisite timeshare plan as well as any periodic adjustment or amendment to the reservation system which may be needed in order to respond to actual purchaser use patterns and changes in purchaser use demand for the accommodations existing at that time within the multisite timeshare plan.

(9) Such other information reasonably required by the Louisiana Real Estate Commission and established by administrative rule necessary for the protection of purchasers of timeshare interests in timeshare plans.

(10) Any other information that the developer, with the approval of the Louisiana Real Estate Commission, desires to include in the public offering statement text.

D. If a developer offers a nonspecific timeshare interest in a multisite timeshare plan, the developer shall disclose the information set forth in Subsection B of this Section as to each component site.

E. A developer shall promptly amend the public offering statement to report any material change in the information required by this Section. In the event amendments are made to a public offering statement provided to a purchaser whose transaction has not closed that materially alter or modify the offering in a material and adverse manner to a purchaser, the amendment shall be provided to the purchaser together with a notice containing a statement in conspicuous type in substantially the following form:

“The public offering statement previously delivered to you, together with the enclosed revisions, has been approved by the Louisiana Real Estate Commission. Accordingly, your cancellation right expires seven calendar days after you sign your purchase contract or seven calendar days after you receive these revisions, whichever is later.”

F. A purchaser who does not receive a public offering statement prior to or at the time of the act of sale for a timeshare interest may cancel the act of sale for the timeshare interest within one year after the date of the receipt of the public offering statement without penalty or cost of any kind.

Acts 2003, No. 978, §1.

§1131.10.1. Contracts for purchase of timeshare interests

No developer of a timeshare interest shall fail to utilize and furnish each purchaser a fully completed copy of a purchase contract pertaining to the sale, which contract shall include the following information:

(1) The actual date the purchase contract is executed by each party.

(2) The names and addresses of the developer, any owner of the underlying real estate, and the timeshare plan.

(3) The total financial obligation of the purchaser, including the initial purchase price and any additional charges to which the purchaser may be subject, including but not limited to financing, reservation, maintenance, management, and recreation charges.

(4) The estimated date of completion of construction of each accommodation in which the timeshare interest is being purchased that is not completed at the time the purchase contract, unless that information is contained in a public offering statement that incorporates the contract by reference, is executed by the developer and purchaser.

(5) A description of the nature and duration of the timeshare interest being sold, including whether any interest in real property is being conveyed and the specific number of years constituting the term of the timeshare plan.

(6) Immediately prior to the space reserved in the purchase contract for the signature of the purchaser, in conspicuous type, substantially the following statements:

YOU MAY CANCEL THIS PURCHASE CONTRACT WITHOUT ANY PENALTY OR OBLIGATION WITHIN SEVEN DAYS FROM THE DATE YOU SIGN THIS PURCHASE CONTRACT, AND UNTIL SEVEN DAYS AFTER YOU RECEIVE THE PUBLIC OFFERING STATEMENT, WHICHEVER IS LATER. IF YOU DECIDE TO CANCEL THIS PURCHASE CONTRACT, YOU MUST NOTIFY THE DEVELOPER IN WRITING OF YOUR INTENT TO CANCEL. YOUR NOTICE OF CANCELLATION SHALL BE EFFECTIVE UPON THE DATE SENT AND SHALL BE SENT TO …(NAME OF DEVELOPER)… AT …(ADDRESS OF DEVELOPER)… ANY ATTEMPT TO OBTAIN A WAIVER OF YOUR CANCELLATION RIGHT IS UNLAWFUL.

(7) A statement that, in the event the purchaser cancels the purchase contract during a seven-day cancellation period, the developer will refund to the purchaser the total amount of all payments made by the purchaser under the purchase contract, reduced by the proportion of any contract benefits the purchaser has actually received under the purchase contract prior to the effective date of cancellation. The statement shall further provide that the refund will be made within thirty days after receipt of notice of cancellation or within five days after receipt of funds from the purchaser’s cleared check, whichever is later.

(8) Unless the developer is, at the time of offering the interest, the owner of the timeshare property free and clear of all liens and encumbrances, a statement that the developer is not the sole owner of the timeshare property and facilities without liens or encumbrances, which statement shall include:

(a) The names and addresses of all persons or entities having an ownership interest or other interest in the timeshare property; and

(b) The actual interest of the developer in the timeshare property.

(9) If the contract is for the sale or transfer of a timeshare interest in which the timeshare property is subject to a lease, the following statement within the text in conspicuous type: THIS TIMESHARE INTEREST IS SUBJECT TO A LEASE (OR SUBLEASE). A copy of the executed lease shall be attached as an exhibit.

Acts 1985, No. 999, §3; Acts 2003, No. 978, §1.

§1131.11. Public offering statement; when not required

A. The developer shall not be required to prepare and distribute a public offering statement if the developer has registered and there has been issued a public offering statement or similar disclosure document which is provided to purchasers under the Securities and Exchange Act of 1933.

B. A public offering statement need not be prepared or delivered in the case of:

(1) Any transfer of timeshare interest by any timeshare interest owner other than the developer or his or her agent.

(2) Any disposition pursuant to court order.

(3) A disposition by a government or governmental agency.

(4) A disposition by foreclosure or deed in lieu of foreclosure.

(5) A gratuitous transfer of a timeshare interest.

Added by Acts 1983, No. 552, §1.

§1131.12. Regulations of timeshare advertising

A.(1) No person shall intentionally, directly or indirectly, authorize, use, direct, or aid in the dissemination, publication, distribution, or circulation of any statement, advertisement, radio broadcast, or telecast concerning a timeshare property, or promotion thereof, that contains any statement or sketch that is false, misleading, or without substantiation at the time the statement is made.

(2) Nothing in this Section shall be construed to hold the publisher or employee of any newspaper, or any job printer, or any broadcaster or telecaster, or any magazine publisher, or any of the employees thereof, liable for any publication herein referred to unless the publisher, employee, or printer has actual knowledge of the falsity thereof.

B. All advertising materials must be substantially in compliance with this Part and in full compliance with the mandatory provisions of this Part. In the event that any such material is not in compliance, the commission may require any developer to correct the deficiency.

C. The term advertising material includes but is not limited to:

(1) Any promotional brochure, pamphlet, advertisement, or other material to be disseminated to the public in connection with the sale of a timeshare plan.

(2) A transcript of any radio or television advertisement.

(3) Any telephone solicitation.

(4) Any lodging or vacation certificate.

(5) A transcript of any standard oral sales presentation or solicitation, if any.

(6) A picture or proof of any billboard or sign posted on or off the premises.

(7) Any photograph, drawing, or artist’s representation of accommodations or facilities of a timeshare plan which exists or which will or may exist.

(8) Any paid publication relating to a timeshare plan which exists or which will or may exist.

(9) Any other promotional device or statement related to a timeshare plan, including any prize and gift promotional offer.

D. The following communications are exempt from the provisions of this Section:

(1) Any stockholder communication such as an annual report, interim financial report, proxy material, registration statement, securities prospectus, registration, property report, or other material required to be delivered to a prospective purchaser by an agency of any other state or the Federal Government.

(2) Any communication addressed to and relating to the account of the person who has previously executed a contract for the sale and purchase of a timeshare period in the timeshare plan to which the communication relates, except when directed to the sale of additional timeshare interests.

(3) Any audio, written, or visual publication or material relating to an exchange company or exchange program.

(4) Any audio, written, or visual publication or material relating to the promotion of the availability of any accommodations for transient rental, provided a mandatory sales presentation is not a term or condition of the availability of such accommodations and provided the failure of any transient renter to take a tour of a timeshare property or attend a sales presentation does not result in any reduction in the level of services which would otherwise be available to such transient renter.

(5) Any oral or written statement disseminated by a developer to broadcast or print media, other than paid advertising or promotional material, regarding plans for the acquisition or development of timeshare property. However, any rebroadcast or any other dissemination of such oral statements to a prospective purchaser by a seller in any manner, or any distribution of copies of newspapers, magazine articles, press releases, or any other dissemination of such written statements to a prospective purchaser by a seller in any manner, shall constitute an advertisement.

(6) Any advertisement or promotion, not clearly directed to Louisiana residents, in any medium to the general public if such advertisement or promotion clearly states that it is not an offer in any jurisdiction in which any applicable registration requirements have not been fully satisfied.

(7) Any communication by a developer to encourage a person who has previously acquired a timeshare interest from the developer to acquire additional use or occupancy rights or benefits, or additional timeshare interests, offered by the same developer or in the same timeshare plan.

E. No advertising or oral statement made by any developer, affiliate, or their agents shall:

(1) Misrepresent a fact or create a false or misleading impression regarding the timeshare plan or property or promotion thereof.

(2) Make a prediction of specific or immediate increases in the price or value of timeshare periods.

(3) Contain a statement concerning future price increases which are non-specific or not bona fide.

(4) Contain any asterisk or other reference symbol as a means of contradicting or substantially changing any previously made statement or as a means of obscuring a material fact.

(5) Describe or portray any improvement to the timeshare plan that is not required to be built or that is uncompleted unless the description or portrayal is conspicuously labeled or identified as “NEED NOT BE BUILT,” or “UNDER CONSTRUCTION” with the date of promised completion clearly indicated.

(6) Materially misrepresent the size, nature, extent, qualities, or characteristics of any offered accommodations or facilities or property or the amenities available to the occupant of those facilities or properties.

(7) Misrepresent the amount or period of time during which the accommodations or facilities will be available to any purchaser.

(8) Misrepresent the nature or extent of any facilities or services incident to the timeshare plan.

(9) Make any misleading or deceptive representation with respect to the contents of the timeshare instrument, timeshare documents including the public offering statement and the contract or the rights, privileges, benefits, or obligations of the purchaser under these documents or this Part.

(10) Misrepresent the conditions under which a purchaser may exchange the right to use accommodations or facilities in one location for the right to use accommodations or facilities in another location.

(11) Misrepresent the availability of a resale or rental program offered by or on behalf of the developer.

(12) Contain an offer or inducement to purchase which purports to be limited as to quantity or restricted as to time unless the numerical quantity or time limit applicable to the offer or inducement is clearly stated.

(13) Misrepresent or imply that a facility or service is available for the exclusive use of purchasers if the facility or service may actually be shared by others or by the general public.

(14) Repealed by Acts 2003, No. 978, §3.

(15) Misrepresent the source of the advertising or statement by leading a prospective purchaser to believe that the advertising material is mailed by a governmental or official agency, credit bureau, bank, or attorney, if that is not the case.

(16) Misrepresent the nature or value of any prize, gift, or other item to be awarded in connection with any prize and gift promotional offer.

(17) Contain any representation as to the availability of a resale program or rental program offered by or on behalf of the developer or its affiliate, unless the resale program and/or rental program has been made a part of the offering, and substantiation is available at the time of the representation to show that a resale market exists.

(18) Repealed by Acts 2003, No. 978, §3.

(19) Contain any statement that the timeshare interest being offered for sale can be further divided, unless a full disclosure of the legal requirements for further division of the timeshare interest is included.

(20) Misrepresent the conditions under which a purchaser or timeshare interest owner may participate in any exchange program.

(21) Describe any proposed or uncompleted private facilities over which the developer has no control, unless the estimated date of completion is set forth, and completion and operation of the facilities are reasonably assured within the time represented in the advertisement.

F. No written advertising material relating to a timeshare property, including any lodging certificate, gift award, premium, discount, or display booth may be utilized without a disclosure that: “This advertising material is being used for the purpose of soliciting sales of timeshare interests” or a substantially similar disclosure.

G. Prize and gift promotional offers:

(1) As used herein, the term “prize and gift promotional offer” means any advertising material wherein a prospective purchaser may receive goods or services other than the timeshare property itself, either free or at a discount, including, but not limited to, the use of any prize, gift, award, premium, or lodging or vacation certificate.

(2) A developer or other person using a prize and gift promotional offer in connection with the offering of a timeshare interest shall clearly disclose all of the following:

(a) That the purpose of the promotion is to sell timeshare interests, which shall appear in boldface or other conspicuous type.

(b) The name of each developer or other person trying to sell a timeshare interest through the promotion and the name of each person paying for the promotion.

(d) The method of awarding prizes, gifts, vacations, discount vacations, or other benefits under the promotion, a complete and fully detailed description, including approximate retail value of all prizes, gifts, or benefits under the promotion, the quantity of each prize, gift, or benefit to be awarded or conferred, and the date by which each prize, gift, or benefit will be awarded or conferred, and if a game of chance, the odds of winning.

(e) Such other disclosures as provided by rule.

(3) If a person represents that a prize, gift, or benefit will be awarded in connection with a promotion, the prize, gift, or benefit must be awarded or conferred in the manner represented and on or before the date represented.

Added by Acts 1983, No. 552, §1; Acts 1985, No. 999, §1; Acts 2003, No. 978, §§1 and 3.

§1131.13. Cancellation

A. Any purchase contract entered into by and between a developer and a purchaser or any purchase contract utilized pursuant to R.S. 9:1131.10.1 and 1131.18 shall be voidable by either party to the purchase contract, without penalty, within seven calendar days after the receipt of the public offering statement from the developer or the execution of the purchase contract, whichever is later. The purchase contract shall provide notice of the seven-day cancellation period together with the name and mailing address to which any notice of cancellation shall be delivered. If either party elects to cancel a purchase contract pursuant to this Section, either party must do so not later than midnight of the seventh calendar day after the receipt of the public offering statement from the developer or the execution of the purchase contract, whichever is later, by hand delivering a written notice of cancellation or by mailing notice of cancellation by certified mail, return receipt requested, to the other party at an address so noted in the purchase contract. Upon such cancellation, the party holding the funds shall refund to the purchaser all payments made by the purchaser less the amount of any benefits actually received pursuant to the purchase agreement. Such refund shall be made within thirty calendar days after receipt of the notice of cancellation, or receipt of funds from the purchaser’s cleared check, whichever occurs later.

B. This right of cancellation may not be waived by any purchaser or by any other person on behalf of the purchaser. However, nothing in this Section precludes the execution of documents in advance for delivery after expiration of the cancellation period.

C. Any notice of cancellation shall be considered given on the date postmarked if mailed, or when transmitted from the place or origin if telegraphed. If given by means of writing transmitted other than by mail or telegraph, the notice of cancellation shall be considered given at the time of actual or constructive delivery to the developer.

D. In the event of a timely cancellation, or in the event the plan is a lease timeshare and at any time the accommodations or facilities are no longer available, the developer shall honor the right of any purchaser to cancel the contract which granted the timeshare purchaser rights in and to the plan. Upon such cancellation, the developer shall refund to the purchaser all payments made by the purchaser which exceed the proportionate amount of benefits made available under the plan, using the number of years of the proposed plan as the base.

E. Upon proper cancellation, the developer shall make a full refund to the purchaser of all monies paid and shall return for cancellation all instruments signed by the purchaser. The refund and return of instruments shall be within thirty days after receipt of the notice of cancellation or after receipt by the developer of notice that the purchaser’s check has cleared, whichever is later. In no event shall the refund be made later than sixty days after receipt of notice of cancellation from the purchaser. The cancellation provisions of this Section shall not be waivable.

Added by Acts 1983, No. 552, §1; Acts 1985, No. 999, §1; Acts 2003, No. 978, §§1 and 3.

§1131.16.1. Escrow of payments; escrow accounts; nondisturbance agreements; interests, liens, and encumbrances; alternative assurances

A. Prior to the filing of the public offering statement with the Louisiana Real Estate Commission, the developer shall establish an independent escrow account with an escrow agent for the purpose of protecting the payments of purchasers. No developer or seller nor any officer, director, affiliate, subsidiary, or employee thereof may serve the escrow agent in any of the above capacities. An escrow agent shall maintain the accounts prescribed in this Section in such a manner as to be under the direct supervision and control of the escrow agent. A fiduciary relationship shall exist between the escrow agent and the purchaser. The escrow agent shall retain all affidavits received pursuant to this Section for a period of five years. Should the escrow agent receive conflicting demands for the escrowed funds or property, the escrow agent shall immediately, with the consent of all parties, either submit the matter to arbitration or seek an adjudication of the matter from a court of competent jurisdiction.

B. One hundred percent of all funds or other property constituting the purchase payment which is received from or on behalf of purchasers of timeshare interests prior to the occurrence of events required herein shall be deposited pursuant to an escrow agreement approved by the Louisiana Real Estate Commission. The deposit of such funds shall be evidenced by an executed escrow agreement between the escrow agent and the developer, the provisions of which shall include the following:

(1) Funds may be disbursed to the developer by the escrow agent from the escrow account only after expiration of the purchaser’s rescission period and in accordance with the purchase contract, subject to Subsection C of this Section.

(2) If a purchaser properly cancels the purchase contract pursuant to its terms, the funds shall be paid to the purchaser or paid to the developer if the purchaser’s funds have been previously refunded by the developer.

C. If a developer contracts to sell a timeshare interest and the construction of any property in which the timeshare interest is located has not been completed, the developer, upon expiration of the rescission period, shall continue to maintain in an escrow account all funds received by or on behalf of the developer from the purchaser under a purchase contract. Funds shall be released from escrow as follows:

(1) If a purchaser properly cancels the purchase contract pursuant to its terms, the funds shall be paid to the purchaser or paid to the developer if the purchaser’s funds have been previously refunded by the developer.

(2) If a purchaser defaults in the performance of the purchaser’s obligations under the purchase contract, the funds shall be paid to the developer.

(3) If the developer defaults in the performance of the developer’s obligations under the purchase contract, the funds shall be paid to the purchaser.

(4) If the funds of a purchaser have not been previously disbursed in accordance with the provisions of this Subsection and if no claim of cancellation or default has been received, the funds may be disbursed to the developer by the escrow agent upon the issuance of acceptable evidence of completion of construction as provided herein.

D. In lieu of the provisions of Subsections B and C of this Section, the Louisiana Real Estate Commission may accept from the developer a surety bond, irrevocable letter of credit, or other financial assurance acceptable to the Louisiana Real Estate Commission including, without limitation, any financial assurance posted in another state or jurisdiction, or as provided by rule. Any acceptable financial assurance must be the lesser of an amount equal to or in excess of the funds which would otherwise be placed in escrow, or in an amount equal to the cost to complete the incomplete property in which the timeshare interest is located.

E. The developer shall provide escrow account information to the Louisiana Real Estate Commission and shall execute in writing an authorization consenting to an audit or examination of the account by the Louisiana Real Estate Commission on forms provided by the Louisiana Real Estate Commission. The developer shall make available documents related to the escrow account or escrow obligation to the Louisiana Real Estate Commission upon the Louisiana Real Estate Commission’s request. The developer shall maintain any disputed funds in the escrow account until either of the following occurs:

(1) The developer receives written direction agreed to by signature of all parties.

(2) The funds are deposited with a court of competent jurisdiction in which a civil action regarding the funds has been filed.

F. As used in this Section, independent escrow agent means a financial institution whose accounts are insured by a governmental agency or instrumentality, an attorney, or a licensed title insurance company, in which:

(1) The escrow agent is not a relative or an employee of the developer or managing entity or of any officer, director, affiliate, or subsidiary of the developer or managing entity.

(2) There is no financial relationship, other than the payment of fiduciary fees or as otherwise provided in this Section, between the escrow agent and the developer or managing entity or any officer, director, affiliate, or subsidiary of the developer or managing entity.

(3) Compensation paid by the developer to the escrow agent for services rendered is not paid from funds in the escrow account.

G. For purposes of Subsection F of this Section, an independent escrow agent may not be disqualified to serve as escrow agent solely because of any of the following:

(1) The escrow agent provides the developer or managing entity with routine banking services that do not include construction or receivables financing or any other lending activities.

(2) A nonemployee, attorney-client relationship exists between the developer or managing entity and the escrow agent.

(3) The escrow agent performs closings for the developer or issues owner’s or lender’s title insurance commitments or policies in connection with such closings.

H. If the developer has previously provided a certified copy of any document required by this Section, the developer may, for all subsequent disbursements, substitute a true and correct copy of the certified copy, provided no changes to the document have been made or are required to be made.

I. In lieu of any escrow provisions required by this Section, the director of the Louisiana Real Estate Commission shall have the discretion to permit deposit of funds or other property in an escrow account as required by the jurisdiction in which the sale took place.

J. In lieu of any escrows required by this Section, the director of the Louisiana Real Estate Commission shall have the discretion to accept other assurances, including but not limited to a surety bond issued by a company authorized and licensed to do business in this state as surety or an irrevocable letter of credit in an amount equal to the escrow requirements of this Section.

K. An escrow agent holding funds escrowed pursuant to this Section may invest such escrowed funds in securities of the United States government, or any agency thereof, or in savings or time deposits in institutions insured by an agency of the United States government. Interest generated by any such investments shall be paid to the party to whom the escrowed funds or property are paid unless otherwise specified by contract.

L. Each escrow agent shall maintain separate books and records for each timeshare plan and shall maintain such books and records in accordance with good accounting practices.

M. Developers, sellers, escrow agents, and their employees and agents have a fiduciary duty to purchasers with respect to funds required to be escrowed under this Section. Any developer, seller, escrow agent, or any employee or agent of a developer, seller, or escrow agent who intentionally fails to comply with the requirements of this Section concerning the establishment of an escrow account, deposits of funds, and property into escrow, or withdrawal therefrom, shall be fined not more than three thousand dollars or shall be imprisoned, with or without hard labor, for not more than ten years, or both. The failure to establish an escrow account or to place funds therein as required in this Section is prima facie evidence of an intentional and purposeful violation of this Section.

N. Excluding any encumbrance placed against the purchaser’s timeshare interest securing the purchaser’s financing for such purchase, the developer shall not be entitled to the release of any funds escrowed under this Section or release of bond or other acceptable financial assurance with respect to each timeshare interest and any other property or rights to property appurtenant to such timeshare interest, including any amenities represented to the purchaser as being part of the timeshare plan until the developer has provided satisfactory evidence to the Louisiana Real Estate Commission of one of the following:

(1) The timeshare interest together with any other property or rights to property appurtenant to such timeshare interest, including any amenities represented to the purchaser as being part of the timeshare plan, are free and clear of any of the claims of the developer, any owner of immovable property, a mortgagee, judgment creditor, other lienholder, or any other person having an interest in or lien or monetary encumbrance against such timeshare interest or appurtenant property or property rights.

(2) The developer, any owner of immovable property, a mortgagee, judgment creditor, other lienholder, or any other person having an interest in or lien or monetary encumbrance against such timeshare interest or appurtenant property or property rights, including any amenities represented to the purchaser as being part of the timeshare plan, has recorded a subordination and notice to creditors document and recorded it among the appropriate public records in the jurisdiction in which the timeshare interest is located. The subordination document shall expressly and effectively provide that the interest holder’s right, lien, or encumbrance shall not adversely affect, and shall be subordinate to, the rights of the owners of the timeshare interests in the timeshare plan regardless of the date of purchase, from and after the effective date of such subordination document.

(3) The developer, any owner of immovable property, a mortgagee, judgment creditor, other lienholder, or any other person having an interest in or lien or monetary encumbrance against such timeshare interest or appurtenant property or property rights, including any amenities represented to the purchaser as being part of the timeshare plan, has transferred the subject accommodations or amenities or all use rights therein to a nonprofit organization or owners’ association to be held for the use and benefit of the owners of the timeshare plan. The nonprofit organization or owners’ association shall act as a fiduciary to the purchasers, provided that the developer has transferred control of such entity to the owners or does not exercise its voting rights in such entity with respect to the subject accommodations or amenities. Prior to such transfer, any lien or other encumbrance against such accommodation or facility shall be made subject to a subordination and notice to creditors instrument pursuant to Paragraph (2) of this Subsection.

Acts 2003, No. 978, §1.

§1131.17. Escrow account; establishment; claims for damages

A. The developer of a lease timeshare interest in a multiple use project in Louisiana and the developer of each timeshare plan that has timeshare property located in Louisiana or who maintains a sales office in Louisiana for the sale of timeshare interests shall deposit in an interest bearing account established in the name of the developer at a financial institution in the parish where the timeshare property or sales office is located, the sum of fifty dollars for each timeshare interest sold. The deposit shall be made within thirty days after each sale of a timeshare interest. The funds in the escrow account shall be available to pay judgments against the developer resulting from a violation of this Part.

B. The fifty dollar deposit shall remain in the escrow account for a period of one year from the date of deposit. At the end of one year from the date of deposit, the developer shall be entitled to withdraw each fifty dollar deposit together with all interest earned on the deposit unless the executive director of the Louisiana Real Estate Commission certifies that the deposit is required to satisfy an existing judgment or that an action has been filed against the developer which may reasonably require the deposit to satisfy a judgment. If the executive director of the Louisiana Real Estate Commission thereafter determines that the deposit, or any portion thereof, is not reasonably required to satisfy a judgment, the deposit or the unused portion together with all interest earned may be withdrawn by the developer.

C. If a purchaser or timeshare interest owner receives a final money judgment against a developer for a violation of this Part, or files suit under this Part, the purchaser or timeshare interest owner shall file a notification with the executive director of the Louisiana Real Estate Commission. This notification shall include appropriate evidence of the judgment or the filing of the cause of action. Upon receipt of such notification, the executive director of the Louisiana Real Estate Commission shall give notice to the financial institution holding the escrow account of the judgment or filing of a cause of action. Upon receipt of the notice by a financial institution, no funds in the escrow account established by the developer under the provisions of this Section shall be disbursed by the financial institution unless approved by the executive director of the Louisiana Real Estate Commission.

D. The Louisiana Real Estate Commission shall have the right to require a developer to give reasonable evidence of the deposits required under the provisions of this Section. The commission shall have the power to seek an injunction to prohibit any further sales by a developer who fails to give the evidence of deposits required herein.

E. The Louisiana Real Estate Commission may adopt reasonable rules and regulations necessary to implement the provisions of this Section.

F. The provisions of this Section shall in no way limit recovery of damages from a developer’s assets under any appropriate remedy provided by law.

G. If the Louisiana Real Estate Commission determines that a developer is in compliance with the escrow requirements of R.S. 9:1131.16, it may notify the developer that it will no longer require deposits under this Section, and will return all deposits existing on the date of such notification within one year of such notification, provided no judgment or action exists which the deposits may reasonably be required to satisfy, and provided the developer continues to comply with R.S. 9:1131.16.

Added by Acts 1983, No. 552, §1; Acts 1985, No. 999, §3.

§1131.18. Resales of timeshares

A. Except in the case of a sale where delivery of a public offering statement is required or which is subject to the exemptions of R.S. 9:1131.11 (A) and (B)(2)-(5), a seller of a timeshare interest in timeshare property in Louisiana shall furnish to the purchaser before execution of any contract for the sale or, if there is no contract for sale, before the transfer of the timeshare interest, a copy of the timeshare documents, including any plats or plans, and a certificate containing:

(1) A statement disclosing the effect on the proposed transfer of any right of first refusal or other restraint on transfer of the timeshare interest or any portion thereof.

(2) A statement setting forth the amount of the periodic timeshare interest expense liability applicable to the timeshare interest to be sold, and any unpaid timeshare expense or special assessment or other sums currently due and payable from the seller as to the timeshare interest to be sold.

(3) A statement of any other fees payable by owners.

(4) A statement of any judgments or other matters that are or may become privileges against the timeshare interest or the timeshare property and the status of any pending suits that may result in those privileges.

B. A managing entity, within ten days after a request by an owner, shall furnish a certificate containing the information necessary to enable the timeshare owner to comply with this Section. An owner providing a certificate pursuant to Subsection A of this Section is not liable to the purchaser for any erroneous information provided by the managing entity and included in the certificate, other than for judgment privileges against the timeshare interest or the timeshare property.

C. A purchaser is not liable for any unpaid timeshare expense liability or fee greater than the amount set forth in a certificate prepared by a managing entity. An owner is not liable to a purchaser for the failure or delay of a managing entity to provide the certificate in a timely manner, but the contract to purchase or the transfer of the timeshare interest is voidable by the purchaser until the certificate has been provided.

Added by Acts 1983, No. 552, §1. Acts 1984, No. 943, §1, eff. July 20, 1984.

§1131.19. Privileges

A. In the case of a sale of a timeshare interest in timeshare property in Louisiana when delivery of a public offering statement is required, a developer shall, before transferring a timeshare interest, record, or furnish to the purchaser, releases of all privileges affecting that timeshare interest that the purchaser does not expressly agree to take subject to or assume, or he shall provide a surety bond or substitute collateral.

B. If a privilege other than a mortgage becomes effective against more than one timeshare interest, any owner is entitled to a release of his timeshare interest from the privilege upon payment of his proportionate liability for the privilege in accordance with timeshare expense liability, unless he or his predecessor in interest agreed otherwise with the holder of the privilege. After payment, the managing entity may not assess or have a privilege against that timeshare interest for any portion of the timeshare expenses incurred in connection with that privilege.

C. If a privilege is to be enforced against all timeshare interests in a timeshare property, service of process upon the managing entity, if any, constitutes service thereof upon all the owners for the purposes of foreclosure or enforcement. The managing entity shall forward promptly, by certified or registered mail, a copy thereof to each owner at the last address known to the managing entity. The cost of forwarding must be advanced by the holder of the privilege and may be taxed as a cost of the enforcement proceeding. Such notice does not suffice for the entry of a deficiency or other personal judgment against any owner.

D. A privilege arising from non-payment of taxes may be enforced as provided in Subsection C, despite the fact that it may only attach to a single timeshare interest.

Added by Acts 1983, No. 552, §1; Acts 1985, No. 999, §3.

‍§1131.20. Management and operation of the timeshare plan

A. All timeshare plans having more than twelve timeshare interests shall have an association of owners. If the number of timeshare interests in the timeshare plan is twelve or fewer, the owners may form an association.

B. A required timeshare association shall be organized prior to the first sale of a timeshare interest.

C. The membership of the timeshare association at all times shall include all the timeshare interest owners or, following termination of the timeshare plan, all former timeshare interest owners entitled to distributions of proceeds under R.S. 9:1131.8, or their heirs, successors, or assigns.

D. The timeshare association shall be responsible for and have control over the administration, operation, and maintenance of the timeshare property, except to the extent the timeshare documents vest control of the operation, and maintenance of the common elements in another entity. The timeshare association, through the managing agent, shall assess and collect timeshare expenses and shall establish reserves to provide for maintenance, improvements, replacements, working capital, and other appropriate purposes. The actual management of the timeshare plan and the operation and maintenance of the timeshare property shall be performed by a managing agent or, in the case of a multilocation project, one or more managing agents, selected by the board of directors and engaged by the timeshare association pursuant to a written management agreement. The developer or an affiliate may be a managing agent. Collect and remit all state and local hotel and motel occupancy taxes as those taxes apply to persons renting transient use of accommodations from the association or managing entity.¹ Timeshare owners and persons occupying accommodations through an exchange program are not transient guests and are not subject to occupancy taxes for the use of accommodations, and comply with all applicable state and local health and safety regulations.

E. – I. Repealed by Acts 2003, No. 978, §3.

J. Managing entities and their agents shall act in the capacity of a fiduciary to the timeshare owners. In this connection they shall:

(1) Provide each year to all owners an itemized annual budget, which shall include all receipts and expenditures.

(2) Maintain all books and records concerning the timeshare plan and make all such books and records reasonably available for inspection by any owner or the authorized agent of such owner.

(3) Arrange for an annual independent audit of all the books and financial records of the timeshare plan by a certified public accountant in accordance with generally accepted auditing standards. A copy of the audit shall be forwarded to the officers of the association; or, if no association exists, the owner of each timeshare interest shall be notified that such audit is available upon request.

(4) Make available for inspection any books and records of the timeshare plan upon request of the Louisiana Real Estate Commission.

(5) Schedule occupancy of the timeshare units, when owners are not entitled to use specific timeshare periods, so that all owners will be provided the use and possession of the accommodations of the timeshare plan which they have purchased.

(6) Perform any other functions and duties which are necessary and proper to maintain the timeshare property as provided in the timeshare documents.

(7) Any person who willfully misappropriates the property or funds of an association shall be guilty of theft.

K.(1) With regard to timeshare plans located within the state of Louisiana, the contract retaining a management company shall be automatically renewable every five years, beginning with the fifth year after the management company is first retained. If the owner’s association wishes to terminate the contract, the association must affirmatively vote to discharge the management company. Such a vote shall be conducted by the board of the owners’ association, and the management company shall be discharged only if at least sixty-six percent of the purchasers voting, which shall be at least fifty percent of all votes allocated to purchasers, vote to discharge the management company.

(2) In the event the management company is discharged, the board of the owners’ association is responsible for obtaining another managing entity. If the board fails to do so, any timeshare owner may apply to the parish district court within the jurisdiction of which the accommodations lie for the appointment of a receiver to manage the affairs of the association. At least thirty days before applying to the said district court, the timeshare owner shall mail to the association and post in a conspicuous place on the timeshare property a notice describing the intended action, giving the association the opportunity to fill any vacancies on the board. If during such time the association fails to fill the vacancies, the timeshare owner may proceed with the petition. If a receiver is appointed, the association is responsible for payment of the salary of the receiver, court costs, and attorney fees. The receiver shall have all powers and duties of a duly constituted board of administration and shall serve until the association fills vacancies on the board sufficient to constitute a quorum.

(3) The management company of a timeshare plan subject to the provisions of any other law may be discharged pursuant to that law.

Added by Acts 1983, No. 552, §1; Acts 1984, No. 943, §1, eff. July 20, 1984; Acts 1985, No. 999, §3; Acts 2003, No. 978, §§1 and 3.

¹As appears in enrolled bill (incomplete sentence).

§1131.21. Assessment for timeshare interest expenses

A. Until timeshare expense assessments are made against the timeshare interests, the developer shall pay all timeshare expenses. After any timeshare expense assessment has been made against the owners, timeshare expense assessments must be made at least annually, based on a budget adopted at least annually by the managing entity.

B.(1) Except for assessments under Subsections C, D, and E of this Section, all timeshare expenses must be assessed against all the timeshare interests in accordance with the allocation set forth in the timeshare documents. The allocation of total common expenses set forth in the timeshare documents may vary on any reasonable basis, including but not limited to timeshare unit size, timeshare unit type, timeshare unit location, specific identification, or a combination of these factors, if the percentage interest in the common elements attributable to each timeshare interest equals the share of the total common expenses allocable to that interest. The share of a timeshare interest in the common expenses allocable to the timeshare interest may vary on any reasonable basis if the timeshare interest’s share of its parcel’s common expense allocation is equal to that timeshare interest’s share of the percentage interest in common elements attributable to such interest.

(2) No owner of a timeshare interest may be excused from the payment of its proportional share of the common expenses, except that the developer may be excused from the payment of such common expenses which would have been assessed against those units during a stated period of time during which the developer has guaranteed in writing to each timeshare interest owner or to the association that the expenses for the common elements would not increase over a stated dollar amount. If such a guarantee is given, the developer is obligated to pay any amount of common expenses incurred during the guarantee period, which was not produced by the assessments at the guarantee level from other timeshare interest owners. Any past due assessment or installment thereof bears interest at the rate established by the managing entity or timeshare documents not to exceed twelve percent per annum.

C. Any timeshare expense benefiting fewer than all of the owners must be assessed exclusively against the owners benefited.

D. Repealed by Acts 2003, No. 978, §3.

E. If any timeshare interest expense is caused by the misconduct of any owner, the timeshare association may assess that expense exclusively against that owner’s timeshare interest.

F. The provisions of this Section shall apply only to timeshare interests in timeshare property located in Louisiana.

G. No owner of a timeshare interest may be excused from the payment of his share of the common expenses unless all owners are likewise excused. Past due assessments may bear interest at the legal rate or some lesser rate established by the managing entity.

Added by Acts 1983, No. 552, §1; Acts 1984, No. 943, §1, eff. July 20, 1984; Acts 1985, No. 999, §3; Acts 2003, No. 978, §§1 and 3.

§1131.22. Privilege for assessments

A. A person who has a duty to make assessments for timeshare expenses has a privilege on a timeshare interest for any assessment levied against that timeshare interest or fines imposed against its owner from the time the assessment or fine becomes due. The privilege may be foreclosed in like manner as a mortgage on immovable property. Unless the timeshare documents otherwise provide, fees, charges, late charges, fines, and interest charged are enforceable as assessments under this Section. If an assessment is payable in installments, the full amount of the assessment is a privilege from the time the first installment thereof becomes due.

B. A privilege under this Section is superior to all other privileges and encumbrances on a timeshare interest except:

(1) Privileges and encumbrances recorded before the privilege under this Section is perfected;

(2) Mortgages on the timeshare interest securing first mortgage holders and recorded before the due date of the assessment or the due date of the first installment payable on the assessment;

(3) Privileges for property taxes and other governmental assessments or charges against the timeshare interest; and

(4)Privileges securing assessments or charges made by a person managing a project of which the timeshare property is a part.

C. The privilege is perfected upon recordation of a claim of privilege in the parish in which the timeshare unit is situated.

D. A privilege for unpaid assessments is prescribed unless proceedings to enforce the privilege are instituted within three years after the assessments become payable.

E. This Section does not prohibit actions or suits to recover sums for which Subsection A of this Section creates a privilege nor preclude resort to any contractual or other remedy permitted by law.

F. A judgment or decree in any action or suit brought under this Section must include costs and reasonable attorney fees for the prevailing party.

G. A person who has a duty to make assessments for timeshare expenses shall furnish to an owner, upon written request, a recordable statement setting forth the amount of unpaid assessments currently levied against his timeshare interest. The statement must be furnished within ten business days after receipt of the request and is binding in favor of persons reasonably relying thereon.

H. The provisions of this Section shall apply only to timeshare interests in timeshare property located in Louisiana.

Added by Acts 1983, No. 552, §1.

‍§1131.23. Insurance

A. Commencing not later than the time of the first conveyance of a timeshare interest in timeshare property located in Louisiana to a person other than a developer, the timeshare association shall maintain the following:

(1) Property insurance covering the timeshare property, insuring against all risks of direct physical loss commonly insured against. The total amount of insurance, after application of any deductibles, shall be not less than eighty percent of the actual cash value of the insured property, exclusive of land, excavations, foundations, and other items normally excluded from property insurance policies; and

(2) Comprehensive general liability insurance, including medical payments insurance, in an amount determined by the board of directors of the timeshare association, but not less than any amount specified in the declaration, covering all occurrences commonly insured against for death, bodily injury, and property damage arising out of or in connection with the use, ownership, or maintenance of the timeshare property.

B.(1) If the insurance described in Subsection A is not maintained, the association promptly shall cause notice of that fact to be hand-delivered or sent prepaid by United States mail to all owners.

(2) The declaration may require the timeshare association to carry any other insurance, and the timeshare association in any event may carry any other insurance it deems appropriate, to protect the association or the owners.

C. Insurance policies carried pursuant to Subsection A must provide that:

(1) Each owner is an insured person under the policy with respect to liability arising out of his ownership of a timeshare interest in the timeshare property or his membership in the association.

(2) The insurer waives its right to subrogation under the policy against any owner or members of his household.

(3) No act or omission by any owner, unless acting within the scope of his authority on behalf of the association, will void the policy or be a condition to recovery under the policy.

(4) If, at the time of a loss under the policy, there is other insurance in the name of the owner covering the same property covered by the policy, the policy is primary insurance not contributing with the other insurance.

D. Any loss covered by the property policy under Subsection (A)(1) of this Section shall be adjusted with the timeshare association, but the insurance proceeds for that loss shall be payable to any insurance trustee designated for that purpose, or otherwise to the timeshare association, and not to any mortgagee. The insurance trustee or the timeshare association shall hold any insurance proceeds in trust for owners and privilege holders as their interest may appear. Subject to the provisions of Subsection G of this Section, the proceeds shall be disbursed first for the repair or restoration of the damaged timeshare property, and owners and privilege holders are not entitled to receive payment of any portion of the proceeds unless there is a surplus of proceeds after the timeshare property has been completely repaired or restored, or the timeshare plan is terminated.

E. An insurance policy issued to the timeshare association does not prevent an owner from obtaining insurance for his own benefit.

F. An insurer that has issued an insurance policy to the timeshare association under this Section shall issue certificates or memoranda of insurance, upon request, to any owner or mortgagee. The insurance may not be cancelled until thirty days after notice of the proposed cancellation has been mailed to the timeshare association, each owner and each mortgagee to whom certificates of insurance have been issued.

G.(1) Any portion of the timeshare property damaged or destroyed shall be repaired or replaced promptly by the timeshare association unless any of the following occur:

(a) The timeshare plan is terminated.

(b) Repair or replacement would be illegal under any state or local health or safety statute or ordinance.

(d) The cost of repair or replacement of timeshare property subject to an ownership timeshare interest in excess of insurance proceeds and reserves is a common expense.

(2) In the case of an ownership timeshare interest, if the entire timeshare property is not repaired or replaced:

(a) The insurance proceeds attributable to the damaged timeshare property shall be used to restore the damaged area to a condition compatible with the remainder of the timeshare property.

(b) The insurance proceeds attributable to timeshare property which is not rebuilt shall be distributed to the owners of those timeshare interests and the owners of the timeshare interests to which unrepaired limited common elements were assigned.

(c) The remainder of the insurance proceeds shall be distributed to all the owners in proportion to their interest in the timeshare property.

(3) In the case of a lease timeshare interest, if the entire timeshare property is not repaired or replaced:

(a) The insurance proceeds attributable to the damaged timeshare property shall be used to restore the damaged area to a condition compatible with the remainder of the timeshare property.

(b) The insurance proceeds attributable to the timeshare property which is not rebuilt shall be distributed to the owners of those timeshare interests and the owners of the timeshare interests to which those limited common elements were assigned up to the amount of the owner’s purchase price reduced by a sum computed by multiplying the purchase price by a fraction, the numerator of which is the number of years the owner has owned the lease timeshare interest and the denominator of which is the original term of the lease timeshare interests.

(4) If the owners vote not to rebuild any unit, that unit’s entire common element interest, vote in the association, and common expense liability are automatically reallocated upon the vote as if the unit had been condemned. The association promptly shall prepare, execute, and record an amendment to the declaration reflecting the reallocations.

H. The managing entity shall make available for reasonable inspection by purchasers or their authorized agents a copy of each policy of insurance.

Added by Acts 1983, No. 552, §1; Acts 1984, No. 943, §1, eff. July 20, 1984; Acts 1985, No. 999, §3; Acts 2003, No. 978, §1.

NOTE: SEE ACTS 1985, NO. 999, §5.

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§1131.24. Requirements where developer’s interest in the timeshare property is a leasehold interest

A. If the interest which the developer holds in the timeshare property is a leasehold interest, the lease, or an amendment or supplement thereto, must contain a purchaser protection clause.

B. The purchaser protection clause shall provide that the lessor cannot terminate the lease by reason of the lessee’s default without first giving reasonable notice of the default to the timeshare association and providing the timeshare association with a reasonable opportunity to cure the default.

C. The purchaser protection clause shall also obligate the lessor to enter into a new lease with the association on the same terms and conditions as the old lease so that bankruptcy of the lessee will not disrupt the timeshare interest owner’s continued rights of occupancy.

Acts 1984, No. 943, §1, eff. July 20, 1984.

§1131.25. Remedies

A. The remedies provided herein shall be in addition to any other remedies provided by law.

B. The timeshare declaration and bylaws shall have the force of law between the individual owners. The remedies for breach of any obligation imposed on owners or the developer shall be damages, injunctions, or any other remedies provided by law.

C.(1) No developer shall have any liability arising out of the use, delivery, or publication by the developer of information provided to it by an exchange company; unless the developer knows the information is false.

(2)(a) Except as provided in this Subsection, no exchange company shall have any liability with respect to:

(i) any representation made by the developer relating to a program for the exchange of timeshare interests or an exchange company; or

(ii) the use, delivery, or publication by the developer of any information relating to a program for the exchange of timeshare interests or an exchange company.

(b) An exchange company shall only be liable for written information provided to the developer by the exchange company.

Added by Acts 1983, No. 552, §1.

§1131.26. Louisiana Real Estate Recovery Fund; exemption

The Louisiana Real Estate Recovery Fund, R.S. 37:1461 et seq., is hereby exempt from¹ and no claim shall be made against the fund for any damages arising from the sale of a timeshare interest to the extent such claim is a claim for which an escrow account is established under R.S. 9:1131.17.

Added by Acts 1983, No. 552, §1.

¹As appears in enrolled act

§1131.28. Recordation

For timeshare plans located inside and outside the state of Louisiana, the developer shall record the instrument conveying the timeshare interest to the purchaser with the appropriate recording agency within ninety days after the closing of the transaction. Within ninety days after receipt by the developer of the recorded instrument conveying the timeshare interest from the appropriate recording agency, the developer shall mail the recorded instrument bearing its recordation number to the purchaser.

Acts 1984, No. 943, §3, eff. July 20, 1984; Acts 1985, No. 999, §1; Acts 2003, No. 978, §1.

§1131.29. Waiver prohibited

The Louisiana Timesharing Act is enacted to protect the public welfare. No person shall solicit any waiver of its provisions which protect the purchaser. Any waiver of its provisions shall be without effect.

Acts 1984, No. 943, §3, eff. July 20, 1984.

§1131.30. Preservation of claims and defenses

A. Any cause of action or defense, for which the remedy of rescission of a sale is provided in the Louisiana Condominium Act,* which a purchaser may raise against a timeshare interest seller arising out of a timeshare interest sale is preserved against any assignee or successor to the contract of sale or to any credit contract executed by the purchaser in connection with the timeshare interest sale.

B. Sellers and creditors shall include the following language in promissory notes executed in connection with timeshare interest sales:

NOTICE

ANY HOLDER OF THIS CREDIT CONTRACT IS SUBJECT TO ALL CLAIMS AND DEFENSES FOR WHICH RESCISSION OF THE CONTRACT OF SALE IS PROVIDED IN THE LOUISIANA CONDOMINIUM ACT AND WHICH THE DEBTOR COULD ASSERT AGAINST THE SELLER OF SERVICES OR PROPERTY OBTAINED PURSUANT HERETO OR WITH THE PROCEEDS THEREOF. RECOVERY HEREUNDER BY THE DEBTOR SHALL NOT EXCEED AMOUNTS PAID BY THE DEBTOR HEREUNDER.

Acts 1984, No. 943, §3, eff. July 20, 1984.

*R.S. 9:1121.101.

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