66-32-137 - Violations Required contents of written agreements engaging the services of a resale broker and contracts for purchase and sale. - Tennessee Statutes

66-32-137. Violations Required contents of written agreements engaging the services of a resale broker and contracts for purchase and sale.

(a)  It is a violation of this part for any time-share resale broker to:

     (1)  Enter into any agreement with any person engaging the services of the time-share resale broker in connection with the resale of a time-share interval unless a written agreement complying in all respects with the provisions of subsection (b) is first executed by the time-share resale broker and the person engaging the services of the time-share resale broker;

     (2)  Accept any moneys or any other thing of value from any person engaging the services of the time-share resale broker in connection with the resale of a time-share interval in advance of the closing of the resale of such time-share interval; or

     (3)  Utilize any form of contract or purchase and sale agreement in connection with the resale of a time-share interval unless the contract or purchase and sale agreement complies in all respects with the provisions of subsection (d).

(b)  In addition to all requirements of and obligations under the Tennessee Real Estate Broker License Act of 1973, compiled in title 62, chapter 13, all agreements engaging the services of a time-share resale broker in connection with the resale of a time-share interval shall contain all of the following:

     (1)  The following statement in conspicuous type located immediately prior to the space in the agreement reserved for the signature of the owner:

“THERE IS NO GUARANTEE THAT YOUR TIME-SHARE INTERVAL CAN BE SOLD AT ANY PARTICULAR PRICE OR WITHIN ANY PARTICULAR PERIOD OF TIME”;

     (2)  A complete and clear disclosure of any fees, commissions, and other costs or compensation payable to or received by the time-share resale broker under the agreement, whether directly or indirectly;

     (3)  The term of the agreement, a statement regarding the ability of any party to extend the term of the agreement, and a description of the conditions under which the agreement may be extended and all related costs;

     (4)  A description of the services to be provided by the time-share resale broker under the agreement, and a description of the obligations of each party regarding a resale purchaser, including any costs to be borne and any obligations regarding notification of the managing entity and any exchange company;

     (5)  A statement disclosing whether the agreement grants exclusive rights to the time-share resale broker to locate a purchaser during the term of the agreement, a statement disclosing to whom and when any proceeds from a sale of the time-share interval will be disbursed, and a statement whether any party may terminate the agreement and under what conditions;

     (6)  A statement disclosing whether the agreement permits the time-share resale broker or any other person to make any use whatsoever of the time-share interval in question and a detailed description of any such permitted use rights, including a disclosure of to whom any rents or profits generated from such use of the time-share interval will be paid; and

     (7)  A statement disclosing the existence of any judgments or orders against the time-share resale broker resulting from a violation by the time-share resale broker of this part, the Tennessee Real Estate Broker License Act of 1973, compiled in title 62, chapter 13, or the Tennessee Consumer Protection Act of 1977, compiled in title 47, chapter 18, part 1, or resulting from consumer fraud on the part of the time-share resale broker.

(c)  The person engaging the services of the time-share resale broker must receive a fully executed copy of the agreement described in subsection (b) on the day such person signs it.

(d)  All forms of contract or purchase and sale agreement utilized by a time-share resale broker in connection with the sale of a time-share interval shall contain all of the following:

     (1)  An explanation of the form of time-share ownership being purchased and a legally sufficient description of the time-share interval being purchased;

     (2)  The name and address of the managing entity of the time-share plan;

     (3)  The following statement in conspicuous type located immediately prior to the space in the contract reserved for the signature of the purchaser:

“THE CURRENT YEAR'S ASSESSMENT FOR COMMON EXPENSES ALLOCABLE TO THE TIME-SHARE INTERVAL YOU ARE PURCHASING IS $  _________ . THIS ASSESSMENT, WHICH MAY BE INCREASED FROM TIME TO TIME BY [insert name of entity having authority to increase assessment], IS PAYABLE IN FULL ON OR BEFORE [state payment due date(s)]. THIS ASSESSMENT [INCLUDES/DOES NOT INCLUDE] YEARLY AD VALOREM REAL ESTATE TAXES. [If ad valorem real property taxes are not included in the current year's assessment for common expenses, the following statement must be included: THE MOST RECENT ANNUAL ASSESSMENT FOR AD VALOREM REAL ESTATE TAXES FOR THE TIME-SHARE INTERVAL YOU ARE PURCHASING IS $  _______________________________________  ]. FAILURE TO TIMELY PAY THESE ASSESSMENTS MAY RESULT IN RESTRICTION OR LOSS OF YOUR USE AND/OR OWNERSHIP RIGHTS.”

In making the disclosures required by this subdivision (d)(3), the time-share resale broker may rely upon information provided in writing by the managing entity of the time-share project;

     (4)  A complete and accurate disclosure of the terms and conditions of the purchase and closing, including the obligations of the seller and/or the purchaser for closing costs and title insurance;

     (5)  A statement disclosing the existence of any mandatory exchange program membership included in the time-share project; and

     (6)  In lieu of subdivisions (d)(1)-(5), a time-share resale broker affiliated with a time-share developer may use the public offering statement and sales contract to consummate a resale; provided, that such information includes the substance of all of subdivisions (d)(1)-(5).

(e)  The commission has authority to enforce the provisions of this section as provided in §§ 66-32-121 and 62-13-109.

[Acts 1990, ch. 672, §§ 4, 5.]