SB2112 96TH GENERAL ASSEMBLY

LRB096 09414 AJO 19571 b

96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
SB2112

Introduced 2/20/2009, by Sen. Don Harmon

SYNOPSIS AS INTRODUCED:

See Index

Amends the Real Estate Timeshare Act of 1999. Provides a description of the Act's scope. Provides that a resale agent is a person who for another and for compensation, or with the intention or expectation of receiving compensation, either directly or indirectly, sells or offers to sell (instead of directly or through an employee or agent sells or offers to sell a timeshare). Provides definition of "managing entity lien". Provides that the minimum requirements of a timeshare sale listing agreement include the use, rental, or exchange of the unit while listed; designation of any rental fees recipient; disclosure of any relationship between the resale agent and any person receiving a benefit from use of the timeshare; any pre-sale fees; the resale agent's prior experience; commissions; and other items (instead of requiring only disclosure of the resale agent's compensation, certain terms of the use or rental of the timeshare, and the length of the term of the listing contract). Provides for disclosures, in addition to those required, to a prospective purchaser of a timeshare that include the status of assessments and real estate or personal property taxes and the location of documents about the timeshare. Provides that a timeshare resale agent shall be a licensed real estate broker unless exempt from licensure by the Real Estate License Act of 2000 or because of selling no more than 8 timeshares per year. Provides for a managing entity lien. Provides procedures, including notices and auctions, for the nonjudicial foreclosure against time share estates and the foreclosure of a lien or security interest on a timeshare use under the Act or under the Uniform Commercial Code. Repeals certain provisions of existing law regarding resale agent registration requirements. Makes other changes. Provides for severability of the amendatory provisions. Effective immediately.

A BILL FOR

AN ACT concerning civil law.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Real Estate Timeshare Act of 1999 is amended by changing Sections 1-10, 1-15, 5-40, 5-45, 5-60, 10-5, and 10-25 and by adding Sections 10-45, 10-50, and 10-55 as follows:

(765 ILCS 101/1-10)

Sec. 1-10. Scope of Act.

(a) This Act applies to all of the following:

(1) Timeshare plans with an accommodation or component site in Illinois.

(2) Timeshare plans without an accommodation or component site in Illinois, if those timeshare plans are sold or offered to be sold to any individual located within Illinois.

(3) Exchange programs as defined in this Act.

(4) Resale agents as defined in this Act.

(b) Exemptions. This Act does not apply to the following:

(1) Timeshare plans, whether or not an accommodation is located in Illinois, consisting of 7 or fewer timeshare periods, the use of which extends over any period of less than 3 years; or .

(2) Timeshare plans, whether or not an accommodation is located in Illinois, under which the prospective purchaser's total financial obligation will be less than $1,500 during the entire term of the timeshare plan.

(Source: P.A. 91-585, eff. 1-1-00.)

(765 ILCS 101/1-15)

Sec. 1-15. Definitions. In this Act, unless the context otherwise requires:

"Accommodation" means any apartment, condominium or cooperative unit, cabin, lodge, hotel or motel room, or other private or commercial structure containing toilet facilities therein that is designed and available, pursuant to applicable law, for use and occupancy as a residence by one or more individuals, or any unit or berth on a commercial cruise line ship, which is included in the offering of a timeshare plan.

"Acquisition agent" means a person who, directly or through the person's employees, agents, or independent contractors, induces or attempts to induce by means of a promotion or an advertisement any individual located within the State of Illinois to attend a sales presentation for a timeshare plan.

"Advertisement" means any written, oral, or electronic communication that is directed to or targeted to persons within the State of Illinois and contains a promotion, inducement, or offer to sell a timeshare plan, including but not limited to brochures, pamphlets, radio and television scripts, electronic media, telephone and direct mail solicitations, and other means of promotion.

"Association" means the organized body consisting of the purchasers of interests in a timeshare plan.

"Assessment" means the share of funds required for the payment of common expenses which is assessed from time to time against each purchaser by the managing entity.

"Commissioner" means the Commissioner of Banks and Real Estate, or a natural person authorized by the Commissioner, the Office of Banks and Real Estate Act, or this Act to act in the Commissioner's stead.

"Component site" means a specific geographic location where accommodations which are part of a multi-site timeshare plan are located. Separate phases of a single timeshare property in a specific geographic location and under common management shall be deemed a single component site.

"Developer" means and includes any person or entity, other than a sales agent, acquisition agent, or resale agent, who creates a timeshare plan or is in the business of selling timeshare interests, or employs agents to do the same, or any person or entity who succeeds to the interest of a developer by sale, lease, assignment, mortgage, or other transfer, but the term includes only those persons who offer timeshare interests for disposition in the ordinary course of business.

"Dispose" or "disposition" means a voluntary transfer or assignment of any legal or equitable interest in a timeshare plan, other than the transfer, assignment, or release of a security interest.

"Exchange company" means any person owning or operating, or both owning and operating, an exchange program.

"Exchange program" means any method, arrangement, or procedure for the voluntary exchange of timeshare interests or other property interests. The term does not include the assignment of the right to use and occupy accommodations to owners of timeshare interests within a single-site timeshare plan. Any method, arrangement, or procedure that otherwise meets this definition, wherein the purchaser's total contractual financial obligation exceeds $3,000 per any individual, recurring timeshare period, shall be regulated as a timeshare plan in accordance with this Act.

"Managing entity" means the person who undertakes the duties, responsibilities, and obligations of the management of a timeshare plan.

"Managing entity lien" means a lien created pursuant to Section 10-45.

"Offer" means any inducement, solicitation, or other attempt, whether by marketing, advertisement, oral or written presentation, or any other means, to encourage a person to acquire a timeshare interest in a timeshare plan, other than as security for an obligation.

"Person" means a natural person, corporation, limited liability company, partnership, joint venture, association, estate, trust, government, governmental subdivision or agency, or other legal entity, or any combination thereof.

"Promotion" means a plan or device, including one involving the possibility of a prospective purchaser receiving a vacation, discount vacation, gift, or prize, used by a developer, or an agent, independent contractor, or employee of any of the same on behalf of the developer, in connection with the offering and sale of timeshare interests in a timeshare plan.

"Purchaser" means any person, other than a developer, who by means of a voluntary transfer acquires a legal or equitable interest in a timeshare plan other than as security for an obligation.

"Purchase contract" means a document pursuant to which a person becomes legally obligated to sell, and a purchaser becomes legally obligated to buy, a timeshare interest.

"Resale agent" means a person who, for another and for compensation, or with the intention or expectation of receiving compensation, either directly or indirectly directly or through the person's employees or agents, sells, or offers to sell, or advertises to sell within this State any a timeshare interest previously sold to a purchaser or solicits an owner of a timeshare interest to list the owner's timeshare interest, wherever located, for sale.

"Reservation system" means the method, arrangement, or procedure by which a purchaser, in order to reserve the use or occupancy of any accommodation of a multi-site timeshare plan for one or more timeshare periods, is required to compete with other purchasers in the same multi-site timeshare plan, regardless of whether the reservation system is operated and maintained by the multi-site timeshare plan managing entity, an exchange company, or any other person. In the event that a purchaser is required to use an exchange program as the purchaser's principal means of obtaining the right to use and occupy accommodations, that arrangement shall be deemed a reservation system. When an exchange company utilizes a mechanism for the exchange of use of timeshare periods among members of an exchange program, that utilization is not a reservation system of a multi-site timeshare plan.

"Sales agent" means a person, other than a resale agent, who, directly or through the person's employees, agents, or independent contractors, sells or offers to sell timeshare interests in a timeshare plan to any individual located in the State of Illinois.

"Timeshare instrument" means one or more documents, by whatever name denominated, creating or governing the operation of a timeshare plan.

"Timeshare interest" means and includes either:

(1) a "timeshare estate", which is the right to occupy a timeshare property, coupled with a freehold estate or an estate for years with a future interest in a timeshare property or a specified portion thereof; or

(2) a "timeshare use", which is the right to occupy a timeshare property, which right is neither coupled with a freehold interest, nor coupled with an estate for years with a future interest, in a timeshare property.

"Timeshare period" means the period or periods of time when the purchaser of a timeshare plan is afforded the opportunity to use the accommodations of a timeshare plan.

"Timeshare plan" means any arrangement, plan, scheme, or similar device, other than an exchange program, whether by membership agreement, sale, lease, deed, license, 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:

(1) a "single-site timeshare plan", which is the right to use accommodations at a single timeshare property; or

(2) a "multi-site timeshare plan", which includes:

(A) 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 reservation system; or

(B) a "non-specific 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.

"Timeshare property" means one or more accommodations subject to the same timeshare instrument, together with any other property or rights to property appurtenant to those accommodations.

(Source: P.A. 91-585, eff. 1-1-00.)

(765 ILCS 101/5-40)

Sec. 5-40. Resale agent duties. A Whether registered or exempt from registration under Section 5-35, a resale agent shall comply with all of the following:

(a) Prior to engaging in any resale activities on behalf of any owner of a timeshare interest or accepting anything of value from any owner of a timeshare interest, a resale agent shall enter into a listing agreement with that owner. Every listing agreement shall be in writing and signed by both the resale agent and the timeshare interest owner. The requirements of the written listing agreement shall be established by rule, but at a minimum the listing agreement shall disclose the following:

(1) The name and address of the resale agent and the timeshare interest owner.

(2) The term of the listing agreement.

(3) Whether the resale agent's rights under the listing agreement are exclusive and, if the resale agent's rights are exclusive, the length of such exclusivity period.

(4) Whether any person other than the timeshare interest owner may use the timeshare during the period before the timeshare interest is resold.

(5) Whether any person other than the timeshare interest owner may rent or exchange the use of the timeshare interest during the term of the listing agreement.

(6) The name of any person who will receive any rents, profits, or other thing of value generated from the use of the timeshare interest during the period before the timeshare interest is resold.

(7) A detailed description of any relationship between the resale agent and any other person who receives any benefit from the use of the timeshare interest.

(8) A description of any fees or costs that relate to the listing or sale of the timeshare interest that the timeshare interest owner (or any other person) must pay to the resale agent or any third party. If the timeshare interest owner (or any other person) must pay a fee to the resale agent or any third party before the sale of the timeshare interest, the listing agreement must identify each of the following:

(A) The amount of each pre-sale fee and to whom such pre-sale fee must be paid.

(B) The time by which each pre-sale fee must be paid.

(C) A reasonable description of each pre-sale cost or fee.

(D) A description and the estimated amount of any other fees or costs associated with the listing or sale of the timeshare interest.

(E) The ratio or percentage of the number of listings of timeshare interests for sale versus the number of timeshare interests sold by the resale agent for each of the past 3 years.

(9) A description of the amount or percentage and procedures for paying any commissions due to the resale agent upon resale of the timeshare interest. the method of compensation, a definite date of termination, whether any fees are non-refundable, and whether the agreement permits the timeshare resale agent or any other person to make any use whatsoever of the owner's timeshare interest or receive any rents or profits generated from such use of the timeshare interest.

(b) A resale agent shall maintain records as required by rule. The records required to be maintained include, but are not limited to, all listing agreements, copies of disbursement authorizations in accordance with subsection (c), and resale contracts.

(c) A resale agent who collects any fees prior to a transfer of an interest from any owner shall deposit the fees in an escrow account. Any fees that are to be paid to the resale agent prior to closing may be disbursed from the escrow account only upon receipt of a disbursement authorization, signed by the owner, in the following form:

"I, (name of owner), am the owner of a timeshare interest in (name of timeshare plan). I understand that for my protection I can require the entire fee to be held in escrow until the closing on the resale of my timeshare interest, but I am authorizing a release before the transfer in the following amount: (amount written in words) ($ (amount in numbers)), for the following purpose or purposes (description of purpose or purposes). I understand that the resale agent is regulated by the Office of Banks and Real Estate under the Real Estate Timeshare Act of 1999. The Office of Banks and Real Estate requires the resale agent to obtain this disbursement authorization with my signature before disbursement of my funds."

(d) A resale agent shall utilize a purchase agreement that discloses to a purchaser of a timeshare interest all of the following:

(1) A legally sufficient description of the timeshare interest being purchased.

(2) The name and address of the managing entity of the timeshare property.

(3) The amount of the most recent current year's assessment for the common expenses allocated to the timeshare interest being purchased including the time period to which the assessment relates (e.g., monthly, quarterly, yearly) and the date on which it is due. If not included in the applicable common expense assessment, the amount of any real or personal property taxes allocated to the timeshare interest being purchased.

(3.5) Whether all assessments and real or personal property taxes that are due against the timeshare interest are paid in full and, if not, the amount owed and the consequences of failure to pay timely any assessment or real or personal property taxes.

(4) A complete and accurate disclosure of the terms and conditions of the purchase and closing, including the obligations of the owner, the purchaser, or both for closing costs and the title insurance.

(5) The entity responsible for providing notification to the managing entity of the timeshare plan and the applicable exchange company regarding any change in the ownership of the timeshare interest.

(6) A statement of the first year in which the purchaser is entitled to receive the actual use rights and occupancy of the timeshare interest, as determined by the managing entity of the timeshare plan and any exchange company.

(6.5) The name, address, telephone number, and website (if applicable) where the governing documents of the association, if any, and the timeshare instrument may be obtained, together with the following disclosure:

"There are many important documents relating to the timeshare plan that you should review before purchasing a timeshare interest. These may include, but are not limited to, (a) the declaration of condominium, (b) the declaration of timeshare plan, (c) the reciprocal easement and cost sharing agreement, (d) the declaration of restrictions, covenants, and conditions, (e) the owners association articles and bylaws, (f) the current year's operating and reserve budgets, if any, for the owners association, and (g) any rules and regulations affecting the use of the timeshare property or other facility or amenity available for use by timeshare interest owners."

(7) In making the disclosures required by this subsection (d), the timeshare resale agent may rely upon information provided in writing by the owner or managing entity of the timeshare plan.

(8) The purchaser's 5-day cancellation period as required by Section 10-10.

(9) Any other information determined by the Office of Banks and Real Estate and established by rule.

(e) Unless exempt from licensure pursuant to the Real Estate License Act of 2000 or its successor Act, a resale agent must be licensed as a real estate broker or salesperson pursuant to the Real Estate License Act of 2000 or its successor Act.

(f) A resale agent is exempt from the duties imposed by subsections (a)-(d) of this Section 5-40 if the resale agent offers an aggregate total no more than 8 timeshare interests per calendar year as a resale agent, regardless of (1) whether those timeshare interests are located in this State and (2) whether the resale agent offers all, or only some, of those timeshare interests, in this State.

(Source: P.A. 91-585, eff. 1-1-00.)

(765 ILCS 101/5-45)

Sec. 5-45. Amendment to registration information or public offering statement. The developer, resale agent, and exchange company shall amend or supplement their disclosure documents and registration information to reflect any material change in any information required by this Act or the rules implementing this Act. All such amendments, supplements, and changes shall be filed with the Office of Banks and Real Estate within 30 20 calendar days of the material change.

(Source: P.A. 91-585, eff. 1-1-00.)

(765 ILCS 101/5-60)

Sec. 5-60. Registration; offer or disposal of interest.

(a) A developer or , exchange company, or resale agent, or any of their agents, shall not sell, offer, or dispose of a timeshare interest unless all necessary registrations are filed and approved by the Office of Banks and Real Estate, or while an order revoking or suspending a registration is in effect.

(b) An applicant for registration under this Act shall submit the necessary information to complete the application, as required by the Office of Banks and Real Estate, within 6 months from the date the initial registration application was received by the Office of Banks and Real Estate. If the applicant fails to submit the information necessary to complete the application as required by the Office of Banks and Real Estate within the six month period, said application shall be voided, and a new registration application with applicable fees must be submitted.

(Source: P.A. 91-585, eff. 1-1-00.)

(765 ILCS 101/10-5)

Sec. 10-5. Management and operation provisions.

(a) Before the first sale of a timeshare interest, the developer shall create or provide for a managing entity, which shall be either the developer, a separate manager or management firm, the board of directors of an owners' association, or some combination thereof.

(b) The duties of the managing entity include, but are not limited to:

(1) Management and maintenance of all accommodations constituting the timeshare plan.

(2) Collection of all assessments as provided in the timeshare instrument.

(3) Providing to all purchasers each year an itemized annual budget, which shall include all estimated revenues and expenses.

(4) Maintenance of all books and records concerning the timeshare plan.

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

(6) Performing any other functions and duties that are necessary and proper to maintain the accommodations or that are required by the timeshare instrument.

(c) If In the event a developer, mortgagee, managing entity, or association does not pursue nonjudicial foreclosure as provided in Section 10-50 or 10-55 and instead forecloses against a timeshare interest pursuant to the Illinois Mortgage Foreclosure Law, files a complaint in a foreclosure proceeding involving timeshare interests, the developer, mortgagee, managing entity, or association may join in the same action multiple defendant obligors and junior interest holders of separate timeshare interests, provided:

(1) the foreclosure proceeding involves a single timeshare plan;

(2) the foreclosure proceeding is filed by a single plaintiff;

(3) the default and remedy provisions in the written instruments on which the foreclosure proceeding is based are substantially the same for each defendant; and

(4) the nature of the defaults alleged is the same for each defendant.

(d) In any foreclosure proceeding involving multiple defendants filed under subsection (c), the court shall sever for separate trial any count of the complaint in which a defense or counterclaim is timely raised by a defendant.

(Source: P.A. 91-585, eff. 1-1-00.)

(765 ILCS 101/10-25)

Sec. 10-25. Liability; material misrepresentation.

(a) A developer or other person offering a timeshare plan may not do any of the following:

(1) Misrepresent a fact material to a purchaser's decision to buy a timeshare interest.

(2) Predict specific or immediate increases in the value of a timeshare interest represented over a period of time, excluding bona fide pending price increases by the developer.

(3) Materially misrepresent the qualities or characteristics of accommodations or the amenities available to the occupant of those accommodations.

(4) Misrepresent the length of time accommodations or amenities will be available to the purchaser of a timeshare interest.

(5) Misrepresent the conditions under which a purchaser of a timeshare interest may exchange the right of his or her occupancy for the right to occupy other accommodations.

(b) A developer or other person using a promotion in connection with the offering of a timeshare interest shall clearly disclose all of the following:

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

(2) That any person whose name or address is obtained during the promotion may be solicited to purchase a timeshare interest.

(3) 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.

(4) The complete rules of the promotion.

(5) 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.

(6) Any other disclosures provided by rule.

(c) 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.

(d) A developer or other person using a promotion in connection with the offering of a timeshare interest shall provide the disclosures required by this Section in writing or electronically to the prospective purchaser at least once before the earlier of (1) a reasonable period before the scheduled sales presentation to ensure that the prospective purchaser receives the disclosures before leaving to attend the sales presentation or (2) the payment of any nonrefundable monies by the prospective purchaser in regard to the promotion.

(e) A developer or other person using a promotion in connection with the offering of a timeshare interest is not required to provide the disclosures required by this Section in every advertisement or other written, oral, or electronic communication provided or made to a prospective purchaser.

(Source: P.A. 91-585, eff. 1-1-00.)

(765 ILCS 101/10-45 new)

Sec. 10-45. Managing entity lien created.

(a) A managing entity has a lien on a timeshare interest for any of the following respectively levied or imposed against a timeshare interest:

(1) Assessments, which for purposes of this Act unless the timeshare instrument provides otherwise, shall include fees, charges, late charges, fines, collection costs, and interest charged in accordance with the timeshare instrument;

(2) Reasonable collection and attorneys fees and costs the managing entity incurs to collect assessments; and

(3) Taxes, interest, penalties, late payment fees or fines in accordance with applicable law or the timeshare instrument.

(b) Managing entity liens pursuant to this Section are created and attached when the charges described in Section 10-45(a) become due. If such amounts are payable in installments, the full amount of such charges is a managing entity lien from the time that the first installment thereof becomes due.

(c) Managing entity liens pursuant to this Section are perfected on the date that the managing entity:

(1) In the case of a timeshare estate, records a notice of lien against the timeshare estate in the registry of deeds in the county where the timeshare estate is located, which notice of lien must identify each of the following:

(A) The name of the timeshare estate owner;

(B) The name and address of the managing entity;

(C) The description of the timeshare estate in the same manner required for recording a mortgage against a timeshare estate; and

(D) The amount of the debt secured by the managing entity lien.

(2) In the case of a timeshare use, files a notice of lien against the timeshare use in the filing office of the Illinois Secretary of State pursuant to Article 9 of the Uniform Commercial Code, which notice of lien, in addition to any other filing requirements imposed by Article 9 of the Uniform Commercial Code, must identify each of the following:

(A) The name of the timeshare use owner as the debtor;

(B) The name of the managing entity as the secured party;

(C) The address of the managing entity;

(D) The timeshare use as the collateral; and

(E) The amount of the debt secured by the managing entity lien.

(d) The managing entity must send a copy of the recorded or filed notice of lien on the timeshare interest, as the case may be, to the last known address of the timeshare interest owner.

(e) A managing entity lien against a timeshare estate, at the managing entity's option, may (1) be foreclosed as provided in Section 10-50 or (2) be foreclosed in the same manner as a mortgage pursuant to the Illinois Mortgage Foreclosure Law.

(f) A managing entity lien against a timeshare use, at the managing entity's option, may (1) be foreclosed as provided in Section 10-55 or (2) be enforced in the same manner as a security interest pursuant to Article 9 of the Uniform Commercial Code.

(765 ILCS 101/10-50 new)

Sec. 10-50. Nonjudicial foreclosure against timeshare estates.

(a) Notwithstanding anything in the Illinois Mortgage Foreclosure Law or other applicable law to the contrary:

(1) The holder of a mortgage against a timeshare estate may foreclose or otherwise enforce a security interest pursuant to this Section 10-50; and

(2) The holder of a managing entity lien against a timeshare estate may foreclose such managing entity lien pursuant to this Section 10-50.

(b) Upon default, and after all applicable cure periods identified in the mortgage (if such default is under a mortgage) or the timeshare instrument (if default is under a managing entity lien) have expired, the holder of the mortgage or managing entity lien must:

(1) Provide written notice of the default to the timeshare estate owner at the last known address of the timeshare estate owner by (A) certified mail, return receipt requested and (B) first-class mail.

(2) Provide the timeshare estate owner an additional opportunity to cure for a period of at least 30 days following the later date of the mailing of the notices pursuant to Sections 10-50(b)(1)(A) and 10-50(b)(1)(B).

(c) If, the timeshare estate owner does not cure the default before the expiration of the additional cure period granted pursuant to Section 10-50(b)(2), the holder of the mortgage or managing entity lien may foreclose the mortgage or managing entity lien by conducting a public auction that complies with the following requirements:

(1) The holder of the mortgage or managing entity lien must provide notice of the public auction as follows:

(A) By publishing notice of the public auction in at least each of 3 successive weeks in a newspaper, whether printed or electronic, of general circulation in the county where the timeshare estate is located. The first notice must be published no more than 30 days before the date of the public auction, which 30-day period shall be calculated by excluding the date of publication of the first notice and the date of the public auction.

(B) By sending written notice identifying the time, date, and place of the public auction to the last known address of the owner of record of the timeshare estate at least 30 days before the date of the public auction by (i) certified mail, return receipt requested and (ii) first-class mail.

(C) By sending notice identifying the time, date, and place of the public auction to all persons known to have a lien against the timeshare estate at least 30 days before the date of the public auction by certified mail, return receipt requested.

(2) The notices given pursuant to Section 10-50(c)(1) must also contain:

(A) The name of the timeshare estate owner;

(B) A general description of the timeshare estate; and

(C) The terms of the public auction.

(3) If more than one timeshare estate is to be included in the public auction, all such timeshare estates may be combined into one notice of public auction.

(4) The public notice required by Section 10-50(c)(1)(A) for foreclosing a mortgage against a timeshare estate must be printed in substantially the following form:

NOTICE OF SALE OF TIMESHARE ESTATE OR ESTATES UNDER SECTION 10-50 OF THE ILLINOIS REAL ESTATE TIMESHARE ACT OF 1999 By virtue of 765 ILCS 101/10-50 and in execution of a certain mortgage (or mortgages, if more than one) on the timeshare estate (or estates, if more than one) given by the owner of the timeshare estate (or owners, if more than one) set forth below for breach of the conditions of said mortgage (or mortgages, if more than one) and for the purpose of foreclosing, the same will be sold at public auction starting at........... on............ 20.. at........, Illinois, being all and singular the premises described in said mortgage (or mortgages, if more than one). (For each mortgage, list the name and address of the timeshare estate owner, a general description of the timeshare estate, and the book and page number of the mortgage.) TERMS OF SALE: (State the deposit amount to be paid by the purchaser at the time and place of the sale and the times for payment of the balance or the whole, as the case may be. The timeshare estates, if more than one, must be sold in individual lots unless there are no individual bidders, in which case, they may be sold as a group.) Other terms may be announced at the public auction.

Signed.................................

Holder of mortgage or authorized agent.

(5) The public notice required by Section 10-50(c)(1)(A) for foreclosing a managing entity lien against a timeshare estate must be printed in substantially the following form:

NOTICE OF SALE OF TIMESHARE ESTATE OR ESTATES UNDER SECTION 10-50 OF THE ILLINOIS REAL ESTATE TIMESHARE ACT OF 1999

By virtue of the timeshare instrument of the ................... (name and address of timeshare property) and 765 ILCS 101/10-45 establishing a managing entity lien for failure to pay assessments and other costs on the timeshare estate (or estates, if more than one) held by the owner of the timeshare estate (or owners, if more than one) listed below, the timeshare estate (or estates, if more than one) and for the purpose of foreclosing, the same will be sold at public auction starting at ......... on ........ 20.. at ............., Illinois. (For each timeshare estate, list the name and address of the timeshare estate owner, a general description of the timeshare estate, and the book and page number of the deed.)

TERMS OF SALE: (State the deposit amount to be paid by the purchaser at the time and place of the sale and the times for payment of the balance or the whole, as the case may be. The timeshare estates, if more than one, must be sold in individual lots unless there are no individual bidders, in which case, they may be sold as a group.)

Other terms may be announced at the public auction.

Signed ................................

Managing entity lienholder or authorized agent.

(6) Publishing and sending notices in compliance with this Section 10-50(c) constitutes sufficient public notice of the public auction.

(d) Public auctions pursuant to this Section 10-50 must be conducted as follows:

(1) The public auction must take place within the county where the timeshare estate is located.

(2) The public auction must be open to the general public and conducted by an auctioneer licensed pursuant to the Auction License Act.

(3) Notwithstanding anything in the Auction License Act to the contrary, the auctioneer, in his or her discretion, may waive the reading of the names of the timeshare estate owners, if more than one, the description of the timeshare estates, if more than one, and the recording information of the applicable mortgages or managing entity liens (as the case may be), if more than one.

(4) All rights of redemption of the timeshare estate owner are extinguished upon sale of a timeshare estate at the public auction.

(5) The holder of the mortgage or managing entity lien, the developer, the managing entity, and the timeshare estate owner are not precluded from bidding at the public auction.

(6) The successful purchaser at the public auction is not required to complete the purchase of the timeshare estate if the timeshare estate, at the time the auctioneer accepts the successful bid, is subject to liens or other encumbrances, other than those identified in the notice of public auction and those identified at the auction before the auctioneer opens bidding on the applicable timeshare estate.

(7) The purchaser at the public auction takes title to the timeshare estate free and clear of any outstanding assessments owed by the prior timeshare estate owner to the managing entity.

(e) Upon the sale of a timeshare estate pursuant to this Section 10-50, the holder of the mortgage or managing entity lien must provide the purchaser with (1) a foreclosure deed or other appropriate instrument transferring the mortgage holder's or managing entity's interest in the timeshare estate and (2) an affidavit affirming that all requirements of the foreclosure pursuant to this Section 10-50 have been satisfied.

(f) The timeshare estate is considered sold, and the deed or other instrument transferring the timeshare estate must transfer the timeshare estate, subject to municipal or other taxes and any liens or encumbrances recorded before the recording of the mortgage or the managing entity lien foreclosed pursuant to this Section 10-50 (as the case may be), but not including such managing entity lien.

(g) The purchaser of a timeshare estate at a public auction pursuant to this Section 10-50 must record the foreclosure deed or other instrument with the appropriate recorder of deeds within 30 days after the date the foreclosing mortgage holder or managing entity (as the case may be) delivers the foreclosure deed or other instrument to the purchaser.

(h) If the holder of a mortgage or managing entity lien conducts a nonjudicial foreclosure pursuant to this Section 10-50, the holder of the mortgage or managing entity lien forfeits its right to pursue a claim for any deficiency in the payment of the obligations of the timeshare estate owner resulting from the application of the proceeds of the sale to such obligations.

(i) For purposes of this Section 10-50, obligations to pay assessments secured by a lien established pursuant to a timeshare instrument before the effective date of this amendatory Act of the 96th General Assembly are considered managing entity liens.

(j) This Section 10-50 applies to the foreclosure of mortgages and liens considered to be managing entity liens that arose before or after the effective date of this amendatory Act of the 96th General Assembly.

(765 ILCS 101/10-55 new)

Sec. 10-55. Foreclosure of lien or security interest on a timeshare use.

(a) Notwithstanding anything in the Illinois Mortgage Foreclosure Law or the Uniform Commercial Code to the contrary, the holder of a managing entity lien on a timeshare use created by Section 10-45, in the case of the failure to pay assessments when due, or a security interest against a timeshare use, in the case of a breach of the security agreement, may do either of the following:

(1) Enforce the security interest pursuant to Part 6 of Article 9 of the Uniform Commercial Code, including (without limitation) accepting the timeshare use in full or partial satisfaction of the timeshare use owner's obligation pursuant to Section 9-620 of the Uniform Commercial Code; or

(2) Nonjudicially foreclose in the same manner as authorized by Section 10-50 for holders of a mortgage or managing entity lien against a timeshare estate.

(b) All rights of redemption of a timeshare use owner are extinguished upon sale of a timeshare use as authorized by Section 10-55(a).

(c) The holder of the security interest or managing entity lien, the developer, the managing entity and the timeshare use owner are not precluded from bidding at the sale of the timeshare use pursuant to this Section 10-55 and may enter into agreements for the purchase of one or more timeshare uses following the completion of the sale proceedings.

(d) The purchaser at the public auction takes title to the timeshare use free and clear of any outstanding assessments owed by the prior timeshare use owner to the managing entity.

(765 ILCS 101/5-35 rep.)

Section 10. The Real Estate Timeshare Act of 1999 is amended by repealing Section 5-35.

Section 97. Severability. The provisions of this Act are severable under Section 1.31 of the Statute on Statutes.

Section 99. Effective date. This Act takes effect upon becoming law.