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91_SB0435eng SB435 Engrossed LRB9103102KSgc 1 AN ACT concerning real estate timeshare interests and 2 repealing a named Act. 3 Be it enacted by the People of the State of Illinois, 4 represented in the General Assembly: 5 Article 1. General Provisions 6 Section 1-1. Short title. This Act may be cited as the 7 Real Estate Timeshare Act of 1999. 8 Section 1-5. Intent. The intent of the General Assembly 9 in enacting this Act is to regulate the business of timeshare 10 plans, exchange programs, and resale agents for the 11 protection of the public. 12 Section 1-10. Scope of Act. 13 (a) This Act applies to all of the following: 14 (1) Timeshare plans with an accommodation or 15 component site in Illinois. 16 (2) Timeshare plans without an accommodation or 17 component site in Illinois, if those timeshare plans are 18 sold or offered to be sold to any individual located 19 within Illinois. 20 (3) Exchange programs as defined in this Act. 21 (4) Resale agents as defined in this Act. 22 (b) Exemptions. This Act does not apply to the 23 following: 24 (1) Timeshare plans, whether or not an 25 accommodation is located in Illinois, consisting of 7 or 26 fewer timeshare periods, the use of which extends over 27 any period of less than 3 years. 28 (2) Timeshare plans, whether or not an 29 accommodation is located in Illinois, under which the SB435 Engrossed -2- LRB9103102KSgc 1 prospective purchaser's total financial obligation will 2 be less than $1,500 during the entire term of the 3 timeshare plan. 4 Section 1-15. Definitions. In this Act, unless the 5 context otherwise requires: 6 "Accommodation" means any apartment, condominium or 7 cooperative unit, cabin, lodge, hotel or motel room, or other 8 private or commercial structure containing toilet facilities 9 therein that is designed and available, pursuant to 10 applicable law, for use and occupancy as a residence by one 11 or more individuals, or any unit or berth on a commercial 12 cruise line ship, which is included in the offering of a 13 timeshare plan. 14 "Acquisition agent" means a person who, directly or 15 through the person's employees, agents, or independent 16 contractors, induces or attempts to induce by means of a 17 promotion or an advertisement any individual located within 18 the State of Illinois to attend a sales presentation for a 19 timeshare plan. 20 "Advertisement" means any written, oral, or electronic 21 communication that is directed to or targeted to persons 22 within the State of Illinois and contains a promotion, 23 inducement, or offer to sell a timeshare plan, including but 24 not limited to brochures, pamphlets, radio and television 25 scripts, electronic media, telephone and direct mail 26 solicitations, and other means of promotion. 27 "Association" means the organized body consisting of the 28 purchasers of interests in a timeshare plan. 29 "Assessment" means the share of funds required for the 30 payment of common expenses which is assessed from time to 31 time against each purchaser by the managing entity. 32 "Commissioner" means the Commissioner of Banks and Real 33 Estate, or a natural person authorized by the Commissioner, SB435 Engrossed -3- LRB9103102KSgc 1 the Office of Banks and Real Estate Act, or this Act to act 2 in the Commissioner's stead. 3 "Component site" means a specific geographic location 4 where accommodations which are part of a multi-site timeshare 5 plan are located. Separate phases of a single timeshare 6 property in a specific geographic location and under common 7 management shall be deemed a single component site. 8 "Developer" means and includes any person or entity, 9 other than a sales agent, acquisition agent, or resale agent, 10 who creates a timeshare plan or is in the business of selling 11 timeshare interests, or employs agents to do the same, or any 12 person or entity who succeeds to the interest of a developer 13 by sale, lease, assignment, mortgage, or other transfer, but 14 the term includes only those persons who offer timeshare 15 interests for disposition in the ordinary course of 16 business. 17 "Dispose" or "disposition" means a voluntary transfer or 18 assignment of any legal or equitable interest in a timeshare 19 plan, other than the transfer, assignment, or release of a 20 security interest. 21 "Exchange company" means any person owning or operating, 22 or both owning and operating, an exchange program. 23 "Exchange program" means any method, arrangement, or 24 procedure for the voluntary exchange of timeshare interests 25 or other property interests. The term does not include the 26 assignment of the right to use and occupy accommodations to 27 owners of timeshare interests within a single-site timeshare 28 plan. Any method, arrangement, or procedure that otherwise 29 meets this definition, wherein the purchaser's total 30 contractual financial obligation exceeds $3,000 per any 31 individual, recurring timeshare period, shall be regulated as 32 a timeshare plan in accordance with this Act. 33 "Managing entity" means the person who undertakes the 34 duties, responsibilities, and obligations of the management SB435 Engrossed -4- LRB9103102KSgc 1 of a timeshare plan. 2 "Offer" means any inducement, solicitation, or other 3 attempt, whether by marketing, advertisement, oral or written 4 presentation, or any other means, to encourage a person to 5 acquire a timeshare interest in a timeshare plan, other than 6 as security for an obligation. 7 "Person" means a natural person, corporation, limited 8 liability company, partnership, joint venture, association, 9 estate, trust, government, governmental subdivision or 10 agency, or other legal entity, or any combination thereof. 11 "Promotion" means a plan or device, including one 12 involving the possibility of a prospective purchaser 13 receiving a vacation, discount vacation, gift, or prize, used 14 by a developer, or an agent, independent contractor, or 15 employee of any of the same on behalf of the developer, in 16 connection with the offering and sale of timeshare interests 17 in a timeshare plan. 18 "Purchaser" means any person, other than a developer, who 19 by means of a voluntary transfer acquires a legal or 20 equitable interest in a timeshare plan other than as security 21 for an obligation. 22 "Purchase contract" means a document pursuant to which a 23 person becomes legally obligated to sell, and a purchaser 24 becomes legally obligated to buy, a timeshare interest. 25 "Resale agent" means a person who, directly or through 26 the person's employees or agents, sells or offers to sell a 27 timeshare interest previously sold to a purchaser or solicits 28 an owner of a timeshare interest to list the owner's 29 timeshare interest for sale. 30 "Reservation system" means the method, arrangement, or 31 procedure by which a purchaser, in order to reserve the use 32 or occupancy of any accommodation of a multi-site timeshare 33 plan for one or more timeshare periods, is required to 34 compete with other purchasers in the same multi-site SB435 Engrossed -5- LRB9103102KSgc 1 timeshare plan, regardless of whether the reservation system 2 is operated and maintained by the multi-site timeshare plan 3 managing entity, an exchange company, or any other person. 4 In the event that a purchaser is required to use an exchange 5 program as the purchaser's principal means of obtaining the 6 right to use and occupy accommodations, that arrangement 7 shall be deemed a reservation system. When an exchange 8 company utilizes a mechanism for the exchange of use of 9 timeshare periods among members of an exchange program, that 10 utilization is not a reservation system of a multi-site 11 timeshare plan. 12 "Sales agent" means a person, other than a resale agent, 13 who, directly or through the person's employees, agents, or 14 independent contractors, sells or offers to sell timeshare 15 interests in a timeshare plan to any individual located in 16 the State of Illinois. 17 "Timeshare instrument" means one or more documents, by 18 whatever name denominated, creating or governing the 19 operation of a timeshare plan. 20 "Timeshare interest" means and includes either: 21 (1) a "timeshare estate", which is the right to 22 occupy a timeshare property, coupled with a freehold 23 estate or an estate for years with a future interest in a 24 timeshare property or a specified portion thereof; or 25 (2) a "timeshare use", which is the right to 26 occupy a timeshare property, which right is neither 27 coupled with a freehold interest, nor coupled with an 28 estate for years with a future interest, in a timeshare 29 property. 30 "Timeshare period" means the period or periods of time 31 when the purchaser of a timeshare plan is afforded the 32 opportunity to use the accommodations of a timeshare plan. 33 "Timeshare plan" means any arrangement, plan, scheme, or 34 similar device, other than an exchange program, whether by SB435 Engrossed -6- LRB9103102KSgc 1 membership agreement, sale, lease, deed, license, or 2 right-to-use agreement or by any other means, whereby a 3 purchaser, in exchange for consideration, receives ownership 4 rights in or the right to use accommodations for a period of 5 time less than a full year during any given year, but not 6 necessarily for consecutive years. A timeshare plan may be: 7 (1) a "single-site timeshare plan", which is the 8 right to use accommodations at a single timeshare 9 property; or 10 (2) a "multi-site timeshare plan", which includes: 11 (A) a "specific timeshare interest", which is 12 the right to use accommodations at a specific 13 timeshare property, together with use rights in 14 accommodations at one or more other component sites 15 created by or acquired through the timeshare plan's 16 reservation system; or 17 (B) a "non-specific timeshare interest", which 18 is the right to use accommodations at more than one 19 component site created by or acquired through the 20 timeshare plan's reservation system, but including 21 no specific right to use any particular 22 accommodations. 23 "Timeshare property" means one or more accommodations 24 subject to the same timeshare instrument, together with any 25 other property or rights to property appurtenant to those 26 accommodations. 27 Section 1-20. Estates and interests in property. 28 Each timeshare estate constitutes, for purposes of title, a 29 separate estate or interest in property except for real 30 property tax purposes. 31 Section 1-25. Local powers; construction. 32 (a) Except as specifically provided in this Section, the SB435 Engrossed -7- LRB9103102KSgc 1 regulation of timeshare plans and exchange programs is an 2 exclusive power and function of the State. A unit of local 3 government, including a home rule unit, may not regulate 4 timeshare plans and exchange programs. This subsection is a 5 denial and limitation of home rule powers and functions under 6 subsection (h) of Section 6 of Article VII of the Illinois 7 Constitution. 8 (b) Notwithstanding subsection (a), no provision of this 9 Act invalidates or modifies any provision of any zoning, 10 subdivision, or building code or other real estate use law, 11 ordinance, or regulation. 12 Further, nothing in this Act shall be construed to affect 13 or impair the validity of Section 11-11.1-1 of the Illinois 14 Municipal Code or to deny to the corporate authorities of any 15 municipality the powers granted in that Code to enact 16 ordinances (i) prescribing fair housing practices, (ii) 17 defining unfair housing practices, (iii) establishing fair 18 housing or human relations commissions and standards for the 19 operation of such commissions in the administration and 20 enforcement of such ordinances, (iv) prohibiting 21 discrimination based on age, ancestry, color, creed, mental 22 or physical handicap, national origin, race, religion, or sex 23 in the listing, sale, assignment, exchange, transfer, lease, 24 rental, or financing of real property for the purpose of the 25 residential occupancy thereof, and (v) prescribing penalties 26 for violations of such ordinances. 27 Section 1-30. Creation of timeshare plans. A timeshare 28 plan may be created in any accommodation unless otherwise 29 prohibited. All timeshare plans must maintain a one-to-one 30 purchaser-to-accommodation ratio, which means the ratio of 31 the number of purchasers eligible to use the accommodations 32 of a timeshare plan on a given day to the number of 33 accommodations available for use within the plan on that day, SB435 Engrossed -8- LRB9103102KSgc 1 such that the total number of purchasers eligible to use the 2 accommodations of the timeshare plan during a given calendar 3 year never exceeds the total number of accommodations 4 available for use in the timeshare plan during that year. For 5 purposes of the calculation under this Section, each 6 purchaser must be counted at least once, and no individual 7 accommodation may be counted more than 365 times per calendar 8 year (or more than 366 times per leap year). A purchaser who 9 is delinquent in the payment of timeshare plan assessments 10 shall continue to be considered eligible to use the 11 accommodations of the timeshare plan for purposes of 12 calculating the one-to-one purchaser-to-accommodation ratio. 13 Article 5. Registration Requirements and Fees 14 Section 5-5. Exemptions from developer registration. A 15 person shall not be required to register as a developer under 16 this Act if: 17 (1) the person is an owner of a timeshare interest 18 who has acquired the timeshare interest for the person's 19 own use and occupancy and who later offers it for resale; 20 or 21 (2) the person is a managing entity or an 22 association that is not otherwise a developer of a 23 timeshare plan in its own right, solely while acting as 24 an association or under a contract with an association to 25 offer or sell a timeshare interest transferred to the 26 association through foreclosure, deed in lieu of 27 foreclosure, or gratuitous transfer, if such acts are 28 performed in the regular course of, or as an incident to, 29 the management of the association for its own account in 30 the timeshare plan; or 31 (3) the person offers a timeshare plan in a 32 national publication or by electronic media, as SB435 Engrossed -9- LRB9103102KSgc 1 determined by the Office of Banks and Real Estate and 2 provided by rule, which is not directed to or targeted to 3 any individual located in Illinois; or 4 (4) the person is conveyed, assigned, or transferred 5 more than 7 timeshare periods from a developer in a 6 single voluntary or involuntary transaction and 7 subsequently conveys, assigns, or transfers all of the 8 timeshare interests received from the developer to a 9 single purchaser in a single transaction. 10 Section 5-10. Exempt communications. Provided they are 11 delivered after the expiration of the rescission period when 12 applicable, the following communications are exempt from the 13 provisions of this Act: 14 (1) Any stockholder communication such as an annual 15 report or interim financial report, proxy material, a 16 registration statement, a securities prospectus, a 17 registration, a property report, or other material 18 required to be delivered to a prospective purchaser by an 19 agency of any state or the federal government. 20 (2) Any communication addressed to and relating to 21 the account of any person who has previously executed a 22 contract for the sale or purchase of a timeshare period 23 in a timeshare plan to which the communication relates. 24 (3) Any audio, written, or visual publication or 25 material relating to an exchange company or exchange 26 program. 27 (4) Any audio, written, or visual publication or 28 material relating to the promotion of the availability of 29 any accommodations for transient rental, so long as a 30 mandatory sales presentation is not a term or condition 31 of the availability of such accommodations and so long as 32 the failure of any transient renter to take a tour of a 33 timeshare property or attend a sales presentation does SB435 Engrossed -10- LRB9103102KSgc 1 not result in any reduction in the level of services 2 which would otherwise be available to such transient 3 renter. 4 (5) Any oral or written statement disseminated by a 5 developer to broadcast or print media, other than paid 6 advertising or promotional material, regarding plans for 7 the acquisition or development of timeshare property. 8 However, any rebroadcast or any other dissemination of 9 such oral statements to a prospective purchaser by a 10 seller in any manner, or any distribution of copies of 11 newspaper magazine articles or press releases, or any 12 other dissemination of such written statements to a 13 prospective purchaser by a seller in any manner, shall 14 constitute an advertisement. 15 (6) Any advertisement or promotion in any medium to 16 the general public if such advertisement or promotion 17 clearly states that it is not an offer in any 18 jurisdiction in which any applicable registration 19 requirements have not been fully satisfied. 20 (7) Any communication by a developer to encourage a 21 person who has previously acquired a timeshare interest 22 from the developer to acquire additional use or occupancy 23 rights or benefits, or additional timeshare interests, 24 offered by the same developer. 25 Section 5-15. Developer registration requirements. 26 (a) Registration required. Any person who, to any 27 individual located in Illinois, sells, offers to sell, or 28 attempts to solicit prospective purchasers to purchase a 29 timeshare interest, or any person who creates a timeshare 30 plan with an accommodation in the State of Illinois, shall 31 register as a developer with the Office of Banks and Real 32 Estate and shall comply with the provisions of subsection (c) 33 of this Section. SB435 Engrossed -11- LRB9103102KSgc 1 (b) Items to be registered. A developer shall be 2 responsible for registering with the Office of Banks and Real 3 Estate, on forms provided by the Office of Banks and Real 4 Estate, the following: 5 (1) All timeshare plans which have accommodations 6 located in Illinois or which are sold or offered for sale 7 to any individual located in Illinois. 8 (2) All sales agents who sell or offer to sell any 9 timeshare interests in any timeshare plan offered by the 10 developer to any individual located in Illinois. 11 (3) All acquisition agents who, by means of 12 inducement, promotion, or advertisement, attempt to 13 encourage or procure prospective purchasers located in 14 Illinois to attend a sales presentation for any timeshare 15 plan offered by the developer. 16 (4) All managing entities who manage any timeshare 17 plan offered or sold by the developer to any individual 18 located in Illinois, without limitation as to whether the 19 location of the accommodation site managed is within 20 Illinois. 21 (c) Escrow. The developer shall comply with the 22 following escrow requirements: 23 (1) A developer of a timeshare plan shall deposit 24 into an escrow account in a federally insured depository 25 100% of all funds which are received during the 26 purchaser's rescission period. The deposit of such funds 27 shall be evidenced by an executed escrow agreement 28 between the escrow agent and the developer, which shall 29 include provisions that: 30 (A) funds may be disbursed to the developer by 31 the escrow agent from the escrow account only after 32 expiration of the purchaser's rescission period and 33 in accordance with the purchase contract, subject to 34 paragraph (2) of this subsection; and SB435 Engrossed -12- LRB9103102KSgc 1 (B) if a purchaser properly cancels the 2 purchase contract pursuant to its terms, the funds 3 shall be paid to the purchaser or paid to the 4 developer if the purchaser's funds have been 5 previously refunded by the developer. 6 (2) If a developer contracts to sell a timeshare 7 interest and the construction of any property in which 8 the timeshare interest is located has not been completed, 9 the developer, upon expiration of the rescission period, 10 shall continue to maintain in an escrow account all funds 11 received by or on behalf of the developer from the 12 purchaser under his or her purchase contract. The 13 Office of Banks and Real Estate shall establish, by rule, 14 the types of documentation which shall be required for 15 evidence of completion, including but not limited to a 16 certificate of occupancy, a certificate of substantial 17 completion, or an inspection by the Office of the State 18 Fire Marshal or the State Fire Marshal's designee or an 19 equivalent public safety inspection agency in the 20 applicable jurisdiction. Funds shall be released from 21 escrow as follows: 22 (A) If a purchaser properly cancels the 23 purchase contract pursuant to its terms, the funds 24 shall be paid to the purchaser or paid to the 25 developer if the purchaser's funds have been 26 previously refunded by the developer. 27 (B) If a purchaser defaults in the performance 28 of the purchaser's obligations under the purchase 29 contract, the funds shall be paid to the developer. 30 (C) If the funds of a purchaser have not been 31 previously disbursed in accordance with the 32 provisions of this paragraph (2), they may be 33 disbursed to the developer by the escrow agent upon 34 the issuance of acceptable evidence of completion of SB435 Engrossed -13- LRB9103102KSgc 1 construction as provided herein. 2 (3) In lieu of the provisions in paragraphs (1) and 3 (2), the Office of Banks and Real Estate may accept from 4 the developer a surety bond, irrevocable letter of 5 credit, or other financial assurance acceptable to the 6 Office of Banks and Real Estate, as provided by rule. 7 Any acceptable financial assurance must be in an amount 8 equal to or in excess of the funds which would otherwise 9 be placed in escrow, or in an amount equal to the cost to 10 complete the incomplete property in which the timeshare 11 interest is located. 12 (4) The developer shall provide escrow account 13 information to the Office of Banks and Real Estate and 14 shall execute in writing an authorization consenting to 15 an audit or examination of the account by the Office of 16 Banks and Real Estate on forms provided by the Office of 17 Banks and Real Estate. The developer shall comply with 18 the reconciliation and records requirements established 19 by rule by the Office of Banks and Real Estate. The 20 developer shall make documents related to the escrow 21 account or escrow obligation available to the Office of 22 Banks and Real Estate upon the Office's request. The 23 developer shall maintain any disputed funds in the escrow 24 account until either: 25 (A) receipt of written direction agreed to by 26 signature of all parties; or 27 (B) deposit of the funds with a court of 28 competent jurisdiction in which a civil action 29 regarding the funds has been filed. 30 (d) Comprehensive registration. In registering a 31 timeshare plan, the developer shall be responsible for 32 providing information on the following: 33 (1) The developer's legal name, any assumed names 34 used by the developer, principal office street address, SB435 Engrossed -14- LRB9103102KSgc 1 mailing address, primary contact person, and telephone 2 number; 3 (2) The name of the developer's authorized or 4 registered agent in the State of Illinois upon whom 5 claims can be served or service of process be had, the 6 agent's street address in Illinois, and telephone number; 7 (3) The name, street address, mailing address, 8 primary contact person, and telephone number of any 9 timeshare plan being registered; 10 (4) The name, street address, mailing address and 11 telephone number of any sales agent and acquisition agent 12 utilized by the developer, and any managing entity of the 13 timeshare plan; 14 (5) A public offering statement which complies with 15 the requirements of Sections 5-25; and 16 (6) Any other information regarding the developer, 17 timeshare plan, sales agents, acquisition agents, or 18 managing entities as reasonably required by the Office of 19 Banks and Real Estate and established by rule. 20 (e) Abbreviated registration. The Office of Banks and 21 Real Estate may accept, as provided for by rule, an 22 abbreviated registration application of a developer of a 23 timeshare plan in which all accommodations are located 24 outside of the State of Illinois. The developer shall file a 25 written notice of intent to register under this Section at 26 least 15 days prior to submission. A developer of a 27 timeshare plan with any accommodation located in the State of 28 Illinois may not file an abbreviated filing, with the 29 exception of a succeeding developer after a merger or 30 acquisition when all of the developers' timeshare plans were 31 registered in Illinois immediately preceding the merger or 32 acquisition. 33 The developer shall provide a certificate of registration 34 or other evidence of registration from the appropriate SB435 Engrossed -15- LRB9103102KSgc 1 regulatory agency of any other jurisdiction within the United 2 States in which some or all of such accommodations are 3 located. The other jurisdiction must have disclosure 4 requirements that are substantially equivalent to or greater 5 than the information required to be disclosed to purchasers 6 by the State of Illinois. A developer filing an abbreviated 7 registration application shall provide the following: 8 (1) The developer's legal name, any assumed names 9 used by the developer, and the developer's principal 10 office location, mailing address, primary contact person, 11 and telephone number. 12 (2) The name, location, mailing address, primary 13 contact person, and telephone number of the timeshare 14 plan. 15 (3) The name of the authorized agent or registered 16 agent in Illinois upon whom claims can be served or 17 service of process can be had, and the address in 18 Illinois of the authorized agent or registered agent. 19 (4) The names of any sales agent, acquisition 20 agent, and managing entity, and their principal office 21 location, mailing address, and telephone number. 22 (5) The certificate of registration or other 23 evidence of registration from any jurisdiction in which 24 the timeshare plan is approved or accepted. 25 (6) A declaration as to whether the timeshare plan 26 is a single-site timeshare plan or a multi-site 27 timeshare plan and, if a multi-site timeshare plan, 28 whether it consists of specific timeshare interests or 29 non-specific timeshare interests. 30 (7) Disclosure of each jurisdiction in which the 31 developer has applied for registration of the timeshare 32 plan, and whether the timeshare plan, its developer, or 33 any of its acquisition agents, sales agents, or managing 34 entities utilized were denied registration or were the SB435 Engrossed -16- LRB9103102KSgc 1 subject of any disciplinary proceeding. 2 (8) Copies of any disclosure documents required to 3 be given to purchasers or required to be filed with the 4 jurisdiction in which the timeshare plan is approved or 5 accepted as may be requested by the Office of Banks and 6 Real Estate. 7 (9) The appropriate fee. 8 (10) Such other information reasonably required by 9 the Office of Banks and Real Estate and established by 10 rule. 11 (f) Preliminary permits. Notwithstanding anything in 12 this Section to the contrary, the Office of Banks and Real 13 Estate may grant a 6-month preliminary permit, as established 14 by rule, allowing the developer to begin offering and selling 15 timeshare interests while the registration is in process. To 16 obtain a preliminary permit, the developer shall do all of 17 the following: 18 (1) Submit a formal written request to the Office 19 of Banks and Real Estate for a preliminary permit. 20 (2) Submit a substantially complete application for 21 registration to the Office of Banks and Real Estate, 22 including all appropriate fees and exhibits required 23 under this Article. 24 (3) Provide evidence acceptable to the Office of 25 Banks and Real Estate that all funds received by the 26 developer will be placed into an independent escrow 27 account with instructions that funds will not be released 28 until a final registration has been granted. 29 (4) Give to each purchaser and potential purchaser a 30 copy of the proposed public offering statement that the 31 developer has submitted to the Office of Banks and Real 32 Estate with the initial application. 33 (5) Give to each purchaser the opportunity to cancel 34 the purchase contract in accordance with Section 10-10. SB435 Engrossed -17- LRB9103102KSgc 1 The purchaser shall have an additional opportunity to 2 cancel upon the issuance of an approved registration if 3 the Office of Banks and Real Estate determines that there 4 is a substantial difference in the disclosures contained 5 in the final public offering statement and those given to 6 the purchaser in the proposed public offering statement. 7 (g) Alternative registration; letter of credit or other 8 assurance; recovery. 9 (1) Notwithstanding anything in this Act to the 10 contrary, the Office of Banks and Real Estate may accept, 11 as established by rule, a registration from a developer 12 for a timeshare plan if the developer provides all of the 13 following: 14 (A) A written notice of intent to register 15 under this Section at least 15 days prior to 16 submission of the alternative registration. 17 (B) An irrevocable letter of credit or other 18 acceptable assurance, as established by rule, in an 19 amount of $1,000,000, from which an Illinois 20 purchaser aggrieved by any act, representation, 21 transaction, or conduct of a duly registered 22 developer or his or her acquisition agent, sales 23 agent, managing entity, or employee, which violates 24 any provision of this Act or the rules promulgated 25 under this Act, or which constitutes embezzlement 26 of money or property or results in money or property 27 being unlawfully obtained from any person by false 28 pretenses, artifice, trickery, or forgery or by 29 reason of any fraud, misrepresentation, 30 discrimination, or deceit by or on the part of any 31 developer or agent or employee of the developer and 32 which results in actual monetary loss as opposed to 33 a loss in market value, may recover. 34 (C) The developer's legal name, any assumed SB435 Engrossed -18- LRB9103102KSgc 1 names used by the developer, and the developer's 2 principal office location, mailing address, main 3 contact person, and telephone number. 4 (D) The name, location, mailing address, main 5 contact person, and telephone number of the 6 timeshare plan included in the filing. 7 (E) The name of the authorized agent or 8 registered agent in Illinois upon whom claims can be 9 served or service of process can be had, and the 10 address in Illinois of the authorized agent or 11 registered agent. 12 (F) The names of any sales agent, acquisition 13 agent, and managing entity, and their principal 14 office location, mailing address, and telephone 15 number. 16 (G) A declaration as to whether the timeshare 17 plan is a single-site timeshare plan or a multi-site 18 timeshare plan and, if a multi-site timeshare plan, 19 whether it consists of specific timeshare interests 20 or non-specific timeshare interests. 21 (H) Disclosure of each jurisdiction in which 22 the developer has applied for registration of the 23 timeshare plan, and whether the timeshare plan, its 24 developer, or any of its acquisition agents, sales 25 agents, or managing entities utilized were denied 26 registration or were the subject of any disciplinary 27 proceeding. 28 (I) The required fee. 29 (J) Such other information reasonably required 30 by the Office of Banks and Real Estate and 31 established by rule. 32 (2) Any letter of credit or other acceptable 33 assurance shall remain in effect with the Office of Banks 34 and Real Estate for a period of 12 months after the date SB435 Engrossed -19- LRB9103102KSgc 1 the developer does not renew or otherwise cancel his or 2 her registration with the State of Illinois or 12 months 3 after the Office of Banks and Real Estate revokes, 4 suspends, or otherwise disciplines such developer or his 5 or her registration, provided there is no pending 6 litigation alleging a violation of any provision of this 7 Act known by the Office of Banks and Real Estate and 8 certified by the developer. 9 (3) The Office of Banks and Real Estate shall 10 establish procedures, by rule, to satisfy claims by any 11 Illinois purchaser pursuant to this Section. 12 (4) The Office of Banks and Real Estate shall 13 automatically suspend the registration of any developer 14 pursuant to Section 15-25 of this Act in the event the 15 Office authorizes or directs payment to an Illinois 16 purchaser from the letter of credit or other acceptable 17 assurance pursuant to this Section and as established by 18 rule. 19 (h) A developer who registers a timeshare plan pursuant 20 to this Act shall provide the purchaser with a public 21 offering statement that complies with Section 5-25 and any 22 disclosures or other written information required by this 23 Act. 24 (i) Nothing contained in this Section shall affect the 25 Office of Banks and Real Estate's ability to initiate any 26 disciplinary action against a developer in accordance with 27 this Act. 28 (j) For purposes of this Section, "Illinois purchaser" 29 means a person who, within the State of Illinois, is 30 solicited, offered, or sold a timeshare interest in a 31 timeshare plan registered pursuant to this Section. 32 Section 5-20. Developer supervisory duties. The 33 developer shall have the duty to supervise, manage, and SB435 Engrossed -20- LRB9103102KSgc 1 control all aspects of the offering of the timeshare plan, 2 including, but not limited to, promotion, advertising, 3 contracting, and closing. The developer shall have 4 responsibility for each timeshare plan registered with the 5 Office of Banks and Real Estate and for the actions of any 6 sales agent, managing entity, and acquisition agent utilized 7 by the developer in the offering or selling of any registered 8 timeshare plan. Any violation of this Act which occurs 9 during the offering activities shall be deemed to be a 10 violation by the developer as well as by the acquisition 11 agent, sales agent, or managing entity who actually committed 12 such violation. Notwithstanding anything to the contrary in 13 this Act, the developer shall be responsible for the actions 14 of the association and managing entity only while they are 15 subject to the developer's control. 16 Section 5-25. Timeshare plan public offering statement 17 requirements. 18 (a) A developer shall prepare a public offering 19 statement, shall provide the statement to each purchaser of a 20 timeshare interest in any timeshare plan at the time of 21 purchase, and shall fully and accurately disclose those facts 22 concerning the timeshare developer and timeshare plan that 23 are required by this Act or by rule. The public offering 24 statement shall be in writing and dated and shall require the 25 purchaser to certify in writing the receipt thereof. 26 (b) With regard to timeshare interests offered in a 27 timeshare plan, a public offering statement shall fully and 28 accurately disclose the following: 29 (1) The name of the developer and the principal 30 address of the developer. 31 (2) A description of the type of timeshare 32 interests being offered. 33 (3) A general description of the existing and SB435 Engrossed -21- LRB9103102KSgc 1 proposed accommodations and amenities of the timeshare 2 plan, including their type and number, personal property 3 furnishing the accommodation, any use restrictions, and 4 any required fees for use. 5 (4) A description of any accommodations and 6 amenities that are committed to be built, including, 7 without limitation: 8 (A) the developer's schedule of commencement 9 and completion of all accommodations and amenities; 10 and 11 (B) the estimated number of accommodations per 12 site that may become subject to the timeshare plan. 13 (5) A brief description of the duration, phases, 14 and operation of the timeshare plan. 15 (6) The current annual budget, if available, or the 16 projected annual budget for the timeshare plan. The 17 budget shall include, without limitation: 18 (A) a statement of the amount, or a statement 19 that there is no amount, included in the budget as a 20 reserve for repairs and replacement; 21 (B) the projected common expense liability, if 22 any, by category of expenditures for the timeshare 23 plan; and 24 (C) a statement of any services or expenses 25 not reflected in the budget that the developer 26 provides or pays. 27 (7) Any initial or special fee due from the 28 purchaser at closing, together with a description of the 29 purpose and method of calculating the fee. 30 (8) A description of any liens, defects, or 31 encumbrances on or affecting the title to the timeshare 32 interests. 33 (9) A description of any financing offered by or 34 available through the developer. SB435 Engrossed -22- LRB9103102KSgc 1 (10) A statement that within 5 calendar days after 2 receipt of the public offering statement or after 3 execution of the purchase contract, whichever is later, a 4 purchaser may cancel any purchase contract for a 5 timeshare interest from a developer together with a 6 statement providing the name and street address to which 7 the purchaser should mail any notice of cancellation. 8 However, if by agreement of the parties by and through 9 the purchase contract, the purchase contract allows for 10 cancellation of the purchase contract for a period of 11 time exceeding 5 calendar days, then the public offering 12 statement shall include a statement that the cancellation 13 of the purchase contract is allowed for that period of 14 time exceeding 5 calendar days. 15 (11) A statement of any pending suits, 16 adjudications, or disciplinary actions material to the 17 timeshare interests of which the developer has knowledge. 18 (12) Any restrictions on alienation of any number 19 or portion of any timeshare interests. 20 (13) A statement describing liability and casualty 21 insurance for the timeshare property. 22 (14) Any current or expected fees or charges to be 23 paid by timeshare purchasers for the use of any amenities 24 related to the timeshare property. 25 (15) The extent to which financial arrangements 26 have been provided for completion of all promised 27 improvements. 28 (16) The developer or managing entity must notify 29 the Office of Banks and Real Estate of the extent to 30 which an accommodation may become subject to a tax or 31 other lien arising out of claims against other purchasers 32 in the same timeshare plan. The Office of Banks and Real 33 Estate may require the developer or managing entity to 34 notify a prospective purchaser of any such potential tax SB435 Engrossed -23- LRB9103102KSgc 1 or lien which would materially and adversely affect the 2 prospective purchaser. 3 (17) A statement indicating that the developer and 4 timeshare plan are registered with the State of Illinois. 5 (18) If the timeshare plan provides purchasers with 6 the opportunity to participate in an exchange program, a 7 description of the name and address of the exchange 8 company and the method by which a purchaser accesses the 9 exchange program. 10 (19) Such other information reasonably required by 11 the Office of Banks and Real Estate and established by 12 administrative rule necessary for the protection of 13 purchasers of timeshare interests in timeshare plans. 14 (20) Any other information that the developer, with 15 the approval of the Office of Banks and Real Estate, 16 desires to include in the public offering statement. 17 (c) A developer offering a multi-site timeshare plan 18 shall also fully and accurately disclose the following 19 information, which may be disclosed in a written, graphic, or 20 tabular form: 21 (1) A description of each component site, including 22 the name and address of each component site. 23 (2) The number of accommodations and timeshare 24 periods, expressed in periods of 7-day use availability, 25 committed to the multi-site timeshare plan and available 26 for use by purchasers. 27 (3) Each type of accommodation in terms of the 28 number of bedrooms, bathrooms, and sleeping capacity, and 29 a statement of whether or not the accommodation contains 30 a full kitchen. For purposes of this description, a 31 "full kitchen" means a kitchen having a minimum of a 32 dishwasher, range, sink, oven, and refrigerator. 33 (4) A description of amenities available for use by 34 the purchaser at each component site. SB435 Engrossed -24- LRB9103102KSgc 1 (5) A description of the reservation system, which 2 shall include the following: 3 (A) The entity responsible for operating the 4 reservation system. 5 (B) A summary of the rules and regulations 6 governing access to and use of the reservation 7 system. 8 (C) The existence of and an explanation 9 regarding any priority reservation features that 10 affect a purchaser's ability to make reservations 11 for the use of a given accommodation on a 12 first-come, first-served basis. 13 (6) A description of any right to make any 14 additions, substitutions, or deletions of accommodations 15 or amenities, and a description of the basis upon which 16 accommodations and amenities may be added to, substituted 17 in, or deleted from the multi-site timeshare plan. 18 (7) A description of the purchaser's liability for 19 any fees associated with the multi-site timeshare plan. 20 (8) The location and the anticipated relative use 21 demand of each component site in a multi-site timeshare 22 plan, as well as any periodic adjustment or amendment to 23 the reservation system which may be needed in order to 24 respond to actual purchaser use patterns and changes in 25 purchaser use demand for the accommodations existing at 26 that time within the multi-site timeshare plan. 27 (9) Such other information reasonably required by 28 the Office of Banks and Real Estate and established by 29 administrative rule necessary for the protection of 30 purchasers of timeshare interests in timeshare plans. 31 (10) Any other information that the developer, with 32 the approval of the Office of Banks and Real Estate, 33 desires to include in the public offering statement. 34 (d) If a developer offers a non-specific timeshare SB435 Engrossed -25- LRB9103102KSgc 1 interest in a multi-site timeshare plan, the developer shall 2 disclose the information set forth in subsection (b) as to 3 each component site. 4 Section 5-30. Exchange company registration and 5 disclosure requirements. 6 (a) Each exchange company offering an exchange program 7 to purchasers in this State shall register with the Office of 8 Banks and Real Estate by July 1 of each year. The 9 registration shall consist of the information specified in 10 this Section. However, an exchange company shall make its 11 initial registration at least 20 calendar days prior to 12 offering membership in an exchange program to any purchaser 13 in this State. 14 (b) If a purchaser is offered the opportunity to become 15 a member of an exchange program, the developer shall deliver 16 to the purchaser, together with the public offering statement 17 and any other materials required to be furnished under this 18 Section, and prior to the offering or execution of any 19 contract between the purchaser and the exchange company 20 offering membership in the exchange program, or, if the 21 exchange company is dealing directly with the purchaser, the 22 developer or the exchange company shall deliver to the 23 purchaser, prior to the initial offering or execution of any 24 contract between the purchaser and the exchange company, the 25 following written information regarding the exchange program, 26 the form and substance of which shall first be approved by 27 the Office of Banks and Real Estate in accordance with this 28 Section: 29 (1) The name and address of the exchange company. 30 (2) The names of all officers, directors, and 31 shareholders of the exchange company. 32 (3) Whether the exchange company or any of its 33 officers or directors have any legal or beneficial SB435 Engrossed -26- LRB9103102KSgc 1 interest in any developer, seller, or managing entity for 2 any timeshare plan participating in the exchange program 3 and, if so, the identity of the timeshare plan and the 4 nature of the interest. 5 (4) Unless otherwise stated, a statement that the 6 purchaser's contract with the exchange company is a 7 contract separate and distinct from the purchaser's 8 contract with the seller of timeshare interests. 9 (5) Whether the purchaser's participation in the 10 exchange program is dependent upon the continued 11 affiliation of the applicable timeshare plan with the 12 exchange program. 13 (6) A statement that the purchaser's participation 14 in the exchange program is voluntary. 15 (7) A complete and accurate description of the 16 terms and conditions of the purchaser's contractual 17 relationship with the exchange program and the procedure 18 by which changes thereto may be made. 19 (8) A complete and accurate description of the 20 procedures necessary to qualify for and effectuate 21 exchanges. 22 (9) A complete and accurate description of all 23 limitations, restrictions, and priorities employed in the 24 operation of the exchange program, including but not 25 limited to limitations on exchanges based on seasonality, 26 accommodation size, or levels of occupancy, expressed in 27 conspicuous type, and, in the event that those 28 limitations, restrictions, or priorities are not 29 uniformly applied by the exchange company, a clear 30 description of the manner in which they are applied. 31 (10) Whether exchanges are arranged on a 32 space-available basis and whether any guarantees of 33 fulfillment of specific requests for exchanges are made 34 by the exchange company. SB435 Engrossed -27- LRB9103102KSgc 1 (11) Whether and under what circumstances an owner, 2 in dealing with the exchange program, may lose the right 3 to use and occupy an accommodation of the timeshare plan 4 during a reserved use period with respect to any properly 5 applied-for exchange without being provided with 6 substitute accommodations by the exchange program. 7 (12) The fees or range of fees for participation by 8 owners in the exchange program, a statement of whether 9 any such fees may be altered by the exchange company, and 10 the circumstances under which alterations may be made. 11 (13) The name and address of the site of each 12 accommodation included within a timeshare plan 13 participating in the exchange program. 14 (14) The number of accommodations in each timeshare 15 plan that are available for occupancy and that qualify 16 for participation in the exchange program, expressed 17 within the following numerical groups: 1-5; 6-10; 11-20; 18 21-50; and 51 and over. 19 (15) The number of currently enrolled owners for 20 each timeshare plan participating in the exchange 21 program, expressed within the following numerical groups: 22 1-100; 101-249; 250-499; 500-999; and 1,000 and over; and 23 a statement of the criteria used to determine those 24 owners who are currently enrolled with the exchange 25 program. 26 (16) The disposition made by the exchange company 27 of use periods deposited with the exchange program by 28 owners enrolled in the exchange program and not used by 29 the exchange company in effecting exchanges. 30 (17) The following information for the preceding 31 calendar year, which shall be independently audited by a 32 certified public accountant in accordance with the 33 standards of the Accounting Standards Board of the 34 American Institute of Certified Public Accountants and SB435 Engrossed -28- LRB9103102KSgc 1 reported annually no later than August 1 of each year: 2 (A) The number of owners currently enrolled in 3 the exchange program. 4 (B) The number of timeshare plans that have 5 current affiliation agreements with the exchange 6 program. 7 (C) The percentage of confirmed exchanges, 8 which is the number of exchanges confirmed by the 9 exchange program divided by the number of exchanges 10 properly applied for, together with a complete and 11 accurate statement of the criteria used to determine 12 whether an exchange request was properly applied 13 for. 14 (D) The number of use periods for which the 15 exchange program has an outstanding obligation to 16 provide an exchange to an owner who relinquished a 17 use period during a particular year in exchange for 18 a use period in any future year. 19 (E) The number of exchanges confirmed by the 20 exchange program during the year. 21 (F) A statement in conspicuous type to the 22 effect that the percentage described in subdivision 23 (17)(C) of this subsection is a summary of the 24 exchange requests entered with the exchange program 25 in the period reported and that the percentage does 26 not indicate the probabilities of an owner's being 27 confirmed to any specific choice or range of 28 choices. 29 (18) Such other information as may be reasonably 30 required by the Office of Banks and Real Estate of any 31 exchange company as established by rule. 32 (c) No developer shall have any liability with respect 33 to any violation of this Act arising out of the publication 34 by the developer of information provided to it by an exchange SB435 Engrossed -29- LRB9103102KSgc 1 company pursuant to this Article. No exchange company shall 2 have any liability with respect to any violation of this Act 3 arising out of the use by a developer of information relating 4 to an exchange program other than that provided to the 5 developer by the exchange company. 6 (d) All written, visual, and electronic communications 7 relating to an exchange company or an exchange program shall 8 be filed with the Office of Banks and Real Estate upon its 9 request. 10 (e) The failure of an exchange company to observe the 11 requirements of this Section, and the use of any unfair or 12 deceptive act or practice in connection with the operation of 13 an exchange program, is a violation of this Act. 14 (f) An exchange company may elect to deny exchange 15 privileges to any owner whose use of the accommodations of 16 the owner's timeshare plan is denied, and no exchange program 17 or exchange company shall be liable to any of its members or 18 any third parties on account of any such denial of exchange 19 privileges. 20 Section 5-35. Resale agent registration requirements. 21 (a) Every resale agent as defined in this Act shall 22 register with the Office of Banks and Real Estate. 23 (b) Every resale agent shall be responsible for 24 registering the following information with the Office of 25 Banks and Real Estate on forms provided by the Office of 26 Banks and Real Estate: 27 (1) A description of the resale program offered by 28 the resale agent. 29 (2) The legal name, any assumed names, and the 30 mailing address, street address, contact person, and 31 telephone number of the resale agent. 32 (3) A properly executed consent-to-audit form, 33 which allows the Office of Banks and Real Estate to audit SB435 Engrossed -30- LRB9103102KSgc 1 any escrow accounts held by the resale agent. 2 (4) Any other information required by the Office of 3 Banks and Real Estate to be filed by resale agents, as 4 established by rule. 5 (c) The following shall be exempt from registration 6 under this Section: 7 (1) Any developer, sales agent, acquisition agent, 8 or managing entity that is currently registered pursuant 9 to this Act. 10 (2) Any purchaser that sells or offers to sell his 11 or her own timeshare interest. 12 (3) Any homeowners' association that sells or 13 offers to sell its own timeshare interests acquired 14 through foreclosure, deed in lieu of foreclosure, or 15 gratuitous transfer. 16 (4) Any person who is licensed under the Real 17 Estate License Act of 1983 or its successor Act. 18 Section 5-40. Resale agent duties. Whether registered 19 or exempt from registration under Section 5-35, a resale 20 agent shall comply with all of the following: 21 (a) Prior to engaging in any resale activities on behalf 22 of any owner of a timeshare interest, a resale agent shall 23 enter into a listing agreement with that owner. Every 24 listing agreement shall be in writing and signed by both the 25 resale agent and the timeshare interest owner. The 26 requirements of the written listing agreement shall be 27 established by rule, but at a minimum the listing agreement 28 shall disclose the method of compensation, a definite date of 29 termination, whether any fees are non-refundable, and whether 30 the agreement permits the timeshare resale agent or any other 31 person to make any use whatsoever of the owner's timeshare 32 interest or receive any rents or profits generated from such 33 use of the timeshare interest. SB435 Engrossed -31- LRB9103102KSgc 1 (b) A resale agent shall maintain records as required by 2 rule. The records required to be maintained include, but are 3 not limited to, all listing agreements, copies of 4 disbursement authorizations in accordance with subsection 5 (c), and resale contracts. 6 (c) A resale agent who collects any fees prior to a 7 transfer of an interest from any owner shall deposit the fees 8 in an escrow account. Any fees that are to be paid to the 9 resale agent prior to closing may be disbursed from the 10 escrow account only upon receipt of a disbursement 11 authorization, signed by the owner, in the following form: 12 "I, (name of owner), am the owner of a timeshare 13 interest in (name of timeshare plan). I understand that 14 for my protection I can require the entire fee to be held 15 in escrow until the closing on the resale of my timeshare 16 interest, but I am authorizing a release before the 17 transfer in the following amount: (amount written in 18 words) ($ (amount in numbers)), for the following purpose 19 or purposes (description of purpose or purposes). I 20 understand that the resale agent is regulated by the 21 Office of Banks and Real Estate under the Real Estate 22 Timeshare Act of 1999. The Office of Banks and Real 23 Estate requires the resale agent to obtain this 24 disbursement authorization with my signature before 25 disbursement of my funds." 26 (d) A resale agent shall utilize a purchase agreement 27 that discloses to a purchaser of a timeshare interest all of 28 the following: 29 (1) A legally sufficient description of the 30 timeshare interest being purchased. 31 (2) The name and address of the managing entity of 32 the timeshare property. 33 (3) The current year's assessment for the common 34 expenses allocated to the timeshare interest being SB435 Engrossed -32- LRB9103102KSgc 1 purchased including the time period to which the 2 assessment relates and the date on which it is due. If 3 not included in the applicable common expense assessment, 4 the amount of any real or personal property taxes 5 allocated to the timeshare interest being purchased. 6 (4) A complete and accurate disclosure of the terms 7 and conditions of the purchase and closing, including the 8 obligations of the owner, the purchaser, or both for 9 closing costs and the title insurance. 10 (5) The entity responsible for providing 11 notification to the managing entity of the timeshare plan 12 and the applicable exchange company regarding any change 13 in the ownership of the timeshare interest. 14 (6) A statement of the first year in which the 15 purchaser is entitled to receive the actual use rights 16 and occupancy of the timeshare interest, as determined by 17 the managing entity of the timeshare plan and any 18 exchange company. 19 (7) In making the disclosures required by this 20 subsection (d), the timeshare resale agent may rely upon 21 information provided in writing by the owner or managing 22 entity of the timeshare plan. 23 (8) The purchaser's 5-day cancellation period as 24 required by Section 10-10. 25 (9) Any other information determined by the Office 26 of Banks and Real Estate and established by rule. 27 Section 5-45. Amendment to registration information or 28 public offering statement. The developer, resale agent, and 29 exchange company shall amend or supplement their disclosure 30 documents and registration information to reflect any 31 material change in any information required by this Act or 32 the rules implementing this Act. All such amendments, 33 supplements, and changes shall be filed with the Office of SB435 Engrossed -33- LRB9103102KSgc 1 Banks and Real Estate within 20 calendar days of the material 2 change. 3 Section 5-50. Registration review time frames. Every 4 registration required to be filed with the Office of Banks 5 and Real Estate under this Act shall be reviewed and issued a 6 certificate of registration in accordance with the following 7 schedule: 8 (1) Comprehensive registration. Registration shall 9 be effective only upon the issuance of a certificate of 10 registration by the Office of Banks and Real Estate, 11 which, in the ordinary course of business, should occur 12 no more than 60 calendar days after actual receipt by the 13 Office of Banks and Real Estate of the properly completed 14 application. The Office of Banks and Real Estate must 15 provide a list of deficiencies in the application, if 16 any, within 60 calendar days of receipt. 17 (2) Abbreviated registration. Registration shall 18 be effective only upon the issuance of a certificate of 19 registration by the Office of Banks and Real Estate, 20 which, in the ordinary course of business, should occur 21 no more than 30 calendar days after actual receipt by the 22 Office of Banks and Real Estate of the properly completed 23 application. The Office of Banks and Real Estate must 24 provide a list of deficiencies in the application, if 25 any, within 30 calendar days of receipt. 26 (3) Alternative assurance registration. 27 Registration shall be deemed effective within 15 calendar 28 days of receipt, unless the Office of Banks and Real 29 Estate provides to the applicant a written list of 30 deficiencies in the application, if any, within 15 31 calendar days of receipt. 32 (4) Preliminary permit registration. A preliminary 33 permit shall be issued within 15 calendar days of SB435 Engrossed -34- LRB9103102KSgc 1 receipt, unless the Office of Banks and Real Estate 2 provides to the applicant a written list of deficiencies 3 in the application, if any, within 15 calendar days of 4 receipt. 5 (5) Exchange company registration. Registration 6 shall be effective upon receipt by the Office of Banks 7 and Real Estate of a properly completed application. The 8 Office of Banks and Real Estate must provide a list of 9 deficiencies in the application, if any, within 30 10 calendar days of receipt. 11 Section 5-55. Fees. The Office of Banks and Real Estate 12 shall provide, by rule, for fees to be paid by applicants and 13 registrants to cover the reasonable costs of the Office of 14 Banks and Real Estate in administering and enforcing the 15 provisions of this Act. The Office of Banks and Real Estate 16 may also provide, by rule, for general fees to cover the 17 reasonable expenses of carrying out other functions and 18 responsibilities under this Act. 19 Section 5-60. Registration; offer or disposal of 20 interest. A developer, exchange company, or resale agent, or 21 any of their agents, shall not sell, offer, or dispose of a 22 timeshare interest unless all necessary registrations are 23 filed and approved by the Office of Banks and Real Estate, or 24 while an order revoking or suspending a registration is in 25 effect. 26 An applicant for registration under this Act shall submit 27 the necessary information to complete the application, as 28 required by the Office of Banks and Real Estate, within 6 29 months from the date the initial registration application was 30 received by the Office of Banks and Real Estate. If the 31 applicant fails to submit the information necessary to 32 complete the application as required by the Office of Banks SB435 Engrossed -35- LRB9103102KSgc 1 and Real Estate within the six month period, said application 2 shall be voided, and a new registration application with 3 applicable fees must be submitted. 4 Section 5-65. Securities. The offer or disposition of 5 a timeshare interest in a timeshare plan which satisfies all 6 the requirements of this Act shall not be deemed to 7 constitute the offer and sale of a security under the 8 Illinois Securities Law of 1953. 9 Article 10. Business Practices 10 Section 10-5. Management and operation provisions. 11 (a) Before the first sale of a timeshare interest, the 12 developer shall create or provide for a managing entity, 13 which shall be either the developer, a separate manager or 14 management firm, the board of directors of an owners' 15 association, or some combination thereof. 16 (b) The duties of the managing entity include, but are 17 not limited to: 18 (1) Management and maintenance of all 19 accommodations constituting the timeshare plan. 20 (2) Collection of all assessments as provided in 21 the timeshare instrument. 22 (3) Providing to all purchasers each year an 23 itemized annual budget, which shall include all estimated 24 revenues and expenses. 25 (4) Maintenance of all books and records concerning 26 the timeshare plan. 27 (5) Scheduling occupancy of accommodations, when 28 purchasers are not entitled to use specific timeshare 29 periods, so that all purchasers will be provided the 30 opportunity to use and possession of the accommodations 31 of the timeshare plan which they have purchased. SB435 Engrossed -36- LRB9103102KSgc 1 (6) Performing any other functions and duties that 2 are necessary and proper to maintain the accommodations 3 or that are required by the timeshare instrument. 4 (c) In the event a developer, managing entity, or 5 association files a complaint in a foreclosure proceeding 6 involving timeshare interests, the developer, managing 7 entity, or association may join in the same action multiple 8 defendant obligors and junior interest holders of separate 9 timeshare interests, provided: 10 (1) the foreclosure proceeding involves a single 11 timeshare plan; 12 (2) the foreclosure proceeding is filed by a single 13 plaintiff; 14 (3) the default and remedy provisions in the written 15 instruments on which the foreclosure proceeding is based 16 are substantially the same for each defendant; and 17 (4) the nature of the defaults alleged is the same 18 for each defendant. 19 (d) In any foreclosure proceeding involving multiple 20 defendants filed under subsection (c), the court shall sever 21 for separate trial any count of the complaint in which a 22 defense or counterclaim is timely raised by a defendant. 23 Section 10-10. Cancellation of purchase contract. 24 Any purchase contract entered into by and between a developer 25 or resale agent and a purchaser shall be voidable by the 26 developer, the resale agent, or the purchaser, without 27 penalty, within 5 calendar days after the receipt of the 28 public offering statement or the execution of the purchase 29 contract, whichever is later. The purchase contract shall 30 provide notice of the 5-day cancellation period, together 31 with the name and mailing address to which any notice of 32 cancellation shall be delivered. Notice of cancellation shall 33 be deemed timely if the notice is deposited with the United SB435 Engrossed -37- LRB9103102KSgc 1 States Postal Service not later than midnight of the fifth 2 calendar day. 3 Upon such cancellation, the developer or resale agent 4 shall refund to the purchaser all payments made by the 5 purchaser, less the amount of any benefits actually received 6 pursuant to the purchase contract. The refund shall be made 7 within 20 calendar days after the receipt of the notice of 8 cancellation, or receipt of funds from the purchaser's 9 cleared check, whichever occurs later. 10 If any party elects to cancel a purchase contract 11 pursuant to this Section, that party may do so by hand 12 delivering a written notice of cancellation or by mailing a 13 notice of cancellation by certified mail, return receipt 14 requested, to the other party at an address set forth in the 15 purchase contract. 16 Section 10-15. Interests, liens, and encumbrances; 17 alternative assurances. 18 (a) Excluding any encumbrance placed against the 19 purchaser's timeshare interest securing the purchaser's 20 payment of purchase-money financing for such purchase, the 21 developer shall not be entitled to the release of any funds 22 escrowed under subsection (c) of Section 5-15 with respect to 23 each timeshare interest and any other property or rights to 24 property appurtenant to the timeshare interest, including any 25 amenities represented to the purchaser as being part of the 26 timeshare plan, until the developer has provided satisfactory 27 evidence to the Office of Banks and Real Estate of one of the 28 following: 29 (1) The timeshare interest together with any other 30 property or rights to property appurtenant to the 31 timeshare interest, including any amenities represented 32 to the purchaser as being part of the timeshare plan, are 33 free and clear of any of the claims of the developer, any SB435 Engrossed -38- LRB9103102KSgc 1 owner of the underlying fee, a mortgagee, judgment 2 creditor, or other lienor, or any other person having an 3 interest in or lien or encumbrance against the timeshare 4 interest or appurtenant property or property rights. 5 (2) The developer, any owner of the underlying fee, 6 a mortgagee, judgment creditor, or other lienor, or any 7 other person having an interest in or lien or encumbrance 8 against the timeshare interest or appurtenant property or 9 property rights, including any amenities represented to 10 the purchaser as being part of the timeshare plan, has 11 recorded a subordination and notice to creditors document 12 in the appropriate public records of the jurisdiction in 13 which the timeshare interest is located. The 14 subordination document shall expressly and effectively 15 provide that the interest holder's right, lien, or 16 encumbrance shall not adversely affect, and shall be 17 subordinate to, the rights of the owners of the timeshare 18 interests in the timeshare plan regardless of the date of 19 purchase, from and after the effective date of the 20 subordination document. 21 (3) The developer, any owner of the underlying fee, 22 a mortgagee, judgment creditor, or other lienor, or any 23 other person having an interest in or lien or encumbrance 24 against the timeshare interest or appurtenant property or 25 property rights, including any amenities represented to 26 the purchaser as being part of the timeshare plan, has 27 transferred the subject accommodations or amenities or 28 all use rights therein to a nonprofit organization or 29 owners' association to be held for the use and benefit of 30 the owners of the timeshare plan, which entity shall act 31 as a fiduciary to the purchasers, provided that the 32 developer has transferred control of such entity to the 33 owners or does not exercise its voting rights in such 34 entity with respect to the subject accommodations or SB435 Engrossed -39- LRB9103102KSgc 1 amenities. Prior to the transfer, any lien or other 2 encumbrance against the accommodation or facility shall 3 be made subject to a subordination and notice to 4 creditors instrument pursuant to paragraph (2). 5 (4) Alternative arrangements have been made which 6 are adequate to protect the rights of the purchasers of 7 the timeshare interests and approved by the Office of 8 Banks and Real Estate. 9 (b) Nothing in this Section shall prevent a developer 10 from accessing any escrow funds if the developer has complied 11 with subsection (c) of Section 5-15. 12 Section 10-20. Licenses. Any sales or resale agent 13 shall comply with the provisions of the Real Estate License 14 Act of 1983, or its successor Act and the rules adopted 15 pursuant to that Act, including licensure, unless otherwise 16 exempt under the Real Estate License Act of 1983. 17 Section 10-25. Liability; material misrepresentation. 18 (a) A developer or other person offering a timeshare 19 plan may not do any of the following: 20 (1) Misrepresent a fact material to a purchaser's 21 decision to buy a timeshare interest. 22 (2) Predict specific or immediate increases in the 23 value of a timeshare interest represented over a period 24 of time, excluding bona fide pending price increases by 25 the developer. 26 (3) Materially misrepresent the qualities or 27 characteristics of accommodations or the amenities 28 available to the occupant of those accommodations. 29 (4) Misrepresent the length of time accommodations 30 or amenities will be available to the purchaser of a 31 timeshare interest. 32 (5) Misrepresent the conditions under which a SB435 Engrossed -40- LRB9103102KSgc 1 purchaser of a timeshare interest may exchange the right 2 of his or her occupancy for the right to occupy other 3 accommodations. 4 (b) A developer or other person using a promotion in 5 connection with the offering of a timeshare interest shall 6 clearly disclose all of the following: 7 (1) That the purpose of the promotion is to sell 8 timeshare interests, which shall appear in bold face or 9 other conspicuous type. 10 (2) That any person whose name or address is 11 obtained during the promotion may be solicited to 12 purchase a timeshare interest. 13 (3) The name of each developer or other person 14 trying to sell a timeshare interest through the 15 promotion, and the name of each person paying for the 16 promotion. 17 (4) The complete rules of the promotion. 18 (5) The method of awarding prizes, gifts, 19 vacations, discount vacations, or other benefits under 20 the promotion; a complete and fully detailed description, 21 including approximate retail value, of all prizes, gifts, 22 or benefits under the promotion; the quantity of each 23 prize, gift, or benefit to be awarded or conferred; and 24 the date by which each prize, gift, or benefit will be 25 awarded or conferred. 26 (6) Any other disclosures provided by rule. 27 (c) If a person represents that a prize, gift, or 28 benefit will be awarded in connection with a promotion, the 29 prize, gift, or benefit must be awarded or conferred in the 30 manner represented, and on or before the date represented. 31 Section 10-30. Records. The managing entity shall keep 32 detailed financial records directly related to the operation 33 of the association. All financial and other records shall be SB435 Engrossed -41- LRB9103102KSgc 1 made reasonably available for examination by any purchaser, 2 or the authorized agent of the purchaser, and the Office of 3 Banks and Real Estate. For purposes of this Section, the 4 books and records of the timeshare plan shall be considered 5 "reasonably available" if copies of the requested portions 6 are delivered to the purchaser or the purchaser's agent or 7 the Office of Banks and Real Estate within 7 days of the date 8 the managing entity receives a written request for the 9 records signed by the purchaser or the Office of Banks and 10 Real Estate. The managing entity may charge the purchaser a 11 reasonable fee for copying the requested information. 12 Section 10-35. Maintenance of records. Every 13 developer, exchange company, or resale agent shall maintain, 14 for a period of 2 years, records of any individuals employed 15 by the developer, exchange company, or resale agent, 16 including the last known address of each of those 17 individuals. 18 Section 10-40. Partition. No action for partition of a 19 timeshare interest may be initiated except as permitted by 20 the timeshare instrument. 21 Article 15. Disciplinary Provisions 22 Section 15-5. Investigation. The Office of Banks and 23 Real Estate may investigate the actions or qualifications of 24 any person or persons holding or claiming to hold a 25 certificate of registration under this Act. Such a person 26 is referred to as "the respondent" in this Article. 27 Section 15-10. Disciplinary hearings; record; 28 appointment of administrative law judge. 29 (a) The Office of Banks and Real Estate has the authority SB435 Engrossed -42- LRB9103102KSgc 1 to conduct hearings before an administrative law judge on 2 proceedings to revoke, suspend, place on probation, 3 reprimand, or refuse to issue or renew registrants registered 4 under this Act, or to impose a civil penalty not to exceed 5 $25,000 upon any registrant registered under this Act. 6 (b) The Office of Banks and Real Estate, at its expense, 7 shall preserve a record of all proceedings at the formal 8 hearing of any case involving the refusal to issue or the 9 revocation, suspension, or other discipline of a registrant. 10 The notice of hearing, complaint, and all other documents in 11 the nature of pleadings and written motions filed in the 12 proceedings, the transcript of testimony, the report of the 13 Board, and the orders of the Office of Banks and Real Estate 14 shall be the record of proceeding. At all hearings or 15 prehearing conferences, the Office of Banks and Real Estate 16 and the respondent shall be entitled to have a court reporter 17 in attendance for purposes of transcribing the proceeding or 18 prehearing conference. 19 (c) The Commissioner has the authority to appoint any 20 attorney duly licensed to practice law in the State of 21 Illinois to serve as an administrative law judge in any 22 action for refusal to issue or renew a certificate of 23 registration or to discipline a registrant or person holding 24 a certificate of registration. The administrative law judge 25 has full authority to conduct the hearing. The 26 administrative law judge shall report his or her findings and 27 recommendations to the Commissioner. If the Commissioner 28 disagrees with the recommendation of the administrative law 29 judge, the Commissioner may issue an order in contravention 30 of the recommendation. 31 Section 15-15. Notice of proposed disciplinary action; 32 hearing. 33 (a) Before taking any disciplinary action with regard to SB435 Engrossed -43- LRB9103102KSgc 1 any registrant, the Office of Banks and Real Estate shall: 2 (1) notify the respondent in writing, at least 30 3 calendar days prior to the date set for the hearing, of 4 any charges made, the time and place for the hearing of 5 the charges, and that testimony at the hearing will be 6 heard under oath; and 7 (2) inform the respondent that upon failure to file 8 an answer and request a hearing before the date 9 originally set for the hearing, default will be taken 10 against the respondent and the respondent's registration 11 may be suspended or revoked, or the respondent may be 12 otherwise disciplined, as the Office of Banks and Real 13 Estate may deem proper. 14 (b) If the respondent fails to file an answer after 15 receiving notice, the respondent's registration may, in the 16 discretion of the Office of Banks and Real Estate, be revoked 17 or suspended, or the respondent may be otherwise disciplined 18 as deemed proper, without a hearing, if the act or acts 19 charged constitute sufficient grounds for that action under 20 this Act. 21 (c) At the time and place fixed in the notice, the Office 22 of Banks and Real Estate shall proceed to hearing of the 23 charges. Both the respondent and the complainant shall be 24 accorded ample opportunity to present in person, or by 25 counsel, statements, testimony, evidence, and argument that 26 may be pertinent to the charges or any defense to the 27 charges. 28 Section 15-20. Disciplinary consent orders. 29 Notwithstanding any other provisions of this Act concerning 30 the conduct of hearings and recommendations for disciplinary 31 actions, the Office of Banks and Real Estate has the 32 authority to negotiate agreements with registrants and 33 applicants resulting in disciplinary consent orders. Any SB435 Engrossed -44- LRB9103102KSgc 1 such consent order may provide for any form of discipline 2 provided for in the Act. Any such consent order shall provide 3 that it is not entered into as a result of any coercion by 4 the Office of Banks and Real Estate. Any such consent order 5 shall be accepted by signature or rejected by the 6 Commissioner in a timely manner. 7 Section 15-25. Disciplinary action; civil penalty. 8 The Office of Banks and Real Estate may refuse to issue or 9 renew any registration, or revoke or suspend any registration 10 or place on probation or administrative supervision, or 11 reprimand any registrant, or impose a civil penalty not to 12 exceed $25,000, for any one or any combination of the 13 following causes: 14 (1) A registrant's disregard or violation of any 15 provision of this Act or of the rules adopted by the 16 Office of Banks and Real Estate to enforce this Act. 17 (2) A conviction of the registrant or any principal 18 of the registrant of (i) a felony under the laws of any 19 U.S. jurisdiction, (ii) a misdemeanor under the laws of 20 any U.S. jurisdiction if an essential element of the 21 offense is dishonesty, or (iii) a crime under the laws of 22 any U.S. jurisdiction if the crime relates directly to 23 the practice of the profession regulated by this Act. 24 (3) A registrant's making any misrepresentation for 25 the purpose of obtaining a registration or certificate of 26 registration. 27 (4) A registrant's discipline by another U.S. 28 jurisdiction, state agency, or foreign nation regarding 29 the practice of the profession regulated by this Act, if 30 at least one of the grounds for the discipline is the 31 same as or substantially equivalent to one of those set 32 forth in this Act. 33 (5) A finding by the Office of Banks and Real SB435 Engrossed -45- LRB9103102KSgc 1 Estate that the registrant, after having his or her 2 registration placed on probationary status, has violated 3 the terms of probation. 4 (6) A registrant's practicing or attempting to 5 practice under a name other than the name as shown on his 6 or her registration or any other legally authorized name. 7 (7) A registrant's failure to file a return, or to 8 pay the tax, penalty, or interest shown in a filed 9 return, or to pay any final assessment of tax, penalty, 10 or interest, as required by any tax Act administered by 11 the Illinois Department of Revenue, until the 12 requirements of any such tax Act are satisfied. 13 (8) A registrant's engaging in dishonorable, 14 unethical, or unprofessional conduct of a character 15 likely to deceive, defraud, or harm the public. 16 (9) A registrant's aiding or abetting another person 17 or persons in disregarding or violating any provision of 18 this Act or of the rules adopted by the Office of Banks 19 and Real Estate to enforce this Act. 20 (10) Any representation in any document or 21 information filed with the Office of Banks and Real 22 Estate which is false or misleading. 23 (11) A registrant's disseminating or causing to be 24 disseminated any false or misleading promotional 25 materials or advertisements in connection with a 26 timeshare plan. 27 (12) A registrant's concealing, diverting, or 28 disposing of any funds or assets of any person in a 29 manner that impairs the rights of purchasers of timeshare 30 interests in the timeshare plan. 31 (13) A registrant's failure to perform any 32 stipulation or agreement made to induce the Office of 33 Banks and Real Estate to issue an order relating to the 34 timeshare plan. SB435 Engrossed -46- LRB9103102KSgc 1 (14) A registrant's engaging in any act that 2 constitutes a violation of Section 3-102, 3-103, 3-104, 3 or 3-105 of the Illinois Human Rights Act. 4 (15) A registrant's failure to provide information 5 requested in writing by the Office of Banks and Real 6 Estate, within 30 days of the request, either as the 7 result of a formal or informal complaint to the Office of 8 Banks and Real Estate or as a result of a random audit 9 conducted by the Office of Banks and Real Estate, which 10 would indicate a violation of this Act. 11 (16) A registrant's failure to account for or remit 12 any escrow funds coming into his or her possession which 13 belonged to others. 14 (17) A registrant's failure to make available to 15 Office of Banks and Real Estate personnel during normal 16 business hours all escrow records and related documents 17 maintained in connection therewith, within 24 hours after 18 a request from the Office of Banks and Real Estate 19 personnel. 20 Section 15-30. Subpoenas; attendance of witnesses; 21 oaths. 22 (a) The Office of Banks and Real Estate has the power to 23 issue subpoenas ad testificandum and to bring before it any 24 persons, and to take testimony either orally or by 25 deposition, or both, with the same fees and mileage and in 26 the same manner as prescribed in civil cases in the courts of 27 this State. The Office of Banks and Real Estate has the 28 power to issue subpoenas duces tecum and to bring before it 29 any documents, papers, files, books, and records, with the 30 same costs and in the same manner as prescribed in civil 31 cases in the courts of this State. 32 (b) Upon application of the Office of Banks and Real 33 Estate or its designee or of the applicant, registrant, or SB435 Engrossed -47- LRB9103102KSgc 1 person holding a certificate of registration against whom 2 proceedings under this Act are pending, any circuit court may 3 enter an order compelling the enforcement of any subpoena 4 issued by the Office of Banks and Real Estate in connection 5 with any hearing or investigation. 6 (c) The Commissioner and the designated administrative 7 law judge have power to administer oaths to witnesses at any 8 hearing that the Office of Banks and Real Estate is 9 authorized to conduct and any other oaths authorized in any 10 Act administered by the Office of Banks and Real Estate. 11 Section 15-35. Administrative law judge's findings of 12 fact, conclusions of law, and recommendations. At the 13 conclusion of the hearing, the administrative law judge shall 14 present to the Commissioner a written report of the 15 administrative law judge's findings of fact, conclusions of 16 law, and recommendations regarding discipline or a civil 17 penalty. The report shall contain a finding of whether or 18 not the respondent violated this Act or failed to comply with 19 conditions required in this Act. The administrative law 20 judge shall specify the nature of the violation or failure to 21 comply. 22 If the Commissioner disagrees in any regard with the 23 report of the administrative law judge, the Commissioner may 24 issue an order in contravention of the report. The 25 Commissioner shall provide a written report to the 26 administrative law judge on any deviation and shall specify 27 with particularity the reasons for that action in the final 28 order. 29 Section 15-40. Rehearing. After any hearing involving 30 disciplinary action against a registrant, a copy of the 31 administrative law judge's report shall be served on the 32 respondent by the Office of Banks and Real Estate, either SB435 Engrossed -48- LRB9103102KSgc 1 personally or as provided in this Act for the service of the 2 notice of hearing. Within 20 calendar days after the 3 service, the respondent may present to the Office of Banks 4 and Real Estate a motion in writing for a rehearing. The 5 motion shall specify the particular grounds for rehearing. If 6 the respondent orders a transcript of the record from the 7 reporting service and pays for it within the time for filing 8 a motion for rehearing, the 20 calendar day period within 9 which a motion for rehearing may be filed shall commence upon 10 the delivery of the transcript to the respondent. 11 If no motion for rehearing is filed, then upon the 12 expiration of the time specified for filing a motion, or if a 13 motion for rehearing is denied, then upon denial, the 14 Commissioner may enter an order in accordance with the 15 recommendations of the administrative law judge, except as 16 otherwise provided in this Article. Whenever the 17 Commissioner is not satisfied that substantial justice has 18 been done in the hearing or in the administrative law judge's 19 report, the Commissioner may order a rehearing by the same or 20 some other duly qualified administrative law judge. 21 Section 15-45. Order or certified copy. An order or a 22 certified copy of an order, over the seal of the Office of 23 Banks and Real Estate and purporting to be signed by the 24 Commissioner, shall be prima facie proof of the following: 25 (1) That the signature is the genuine signature of 26 the Commissioner. 27 (2) That the Commissioner is duly appointed and 28 qualified. 29 (3) That the administrative law judge is duly 30 appointed and qualified. 31 Section 15-50. Restoration of certificate of 32 registration. At any time after the suspension or revocation SB435 Engrossed -49- LRB9103102KSgc 1 of any certificate of registration, the Office of Banks and 2 Real Estate may restore the certificate of registration to 3 the respondent upon the written recommendation of the 4 Commissioner, unless after an investigation and a hearing the 5 Commissioner determines that restoration is not in the public 6 interest. 7 Section 15-55. Surrender of certificate of registration. 8 Upon the revocation or suspension of a certificate of 9 registration, the registrant shall immediately surrender the 10 certificate of registration to the Office of Banks and Real 11 Estate. If the registrant fails to do so, the Office of 12 Banks and Real Estate has the right to seize the certificate 13 of registration. 14 Section 15-60. Administrative Review Law. All final 15 administrative decisions of the Office of Banks and Real 16 Estate under this Act are subject to judicial review under 17 the Administrative Review Law and the rules implementing 18 that Law. The term "administrative decision" is defined as 19 in Section 3-101 of the Code of Civil Procedure. Proceedings 20 for judicial review shall be commenced in the circuit court 21 of the county in which the party applying for review resides, 22 but if the party is not a resident of this State, the venue 23 shall be in Cook or Sangamon County. 24 Pending the court's final decision on administrative 25 review, the acts, orders, sanctions, and rulings of the 26 Office of Banks and Real Estate regarding any registration 27 shall remain in full force and effect unless modified or 28 stayed by court order pending a final judicial decision. 29 The Office of Banks and Real Estate shall not be required 30 to certify any record to the court or file any answer in 31 court or otherwise appear in any court in a judicial review 32 proceeding unless there is filed in the court, with the SB435 Engrossed -50- LRB9103102KSgc 1 complaint, a receipt from the Office of Banks and Real Estate 2 acknowledging payment of the costs of furnishing and 3 certifying the record. Failure on the part of the plaintiff 4 to file a receipt in the court is grounds for dismissal of 5 the action. 6 Section 15-65. Public interest, safety, or welfare; 7 summary suspension. The Commissioner may temporarily suspend 8 any registration pursuant to this Act, without hearing, 9 simultaneously with the institution of proceedings for a 10 hearing provided for in this Section, if the Commissioner 11 finds that the evidence indicates that the public interest, 12 safety, or welfare imperatively requires emergency action. 13 If the Commissioner temporarily suspends any registration 14 without a hearing, a hearing must be held within 30 calendar 15 days after the suspension. The person whose registration is 16 suspended may seek a continuance of the hearing, during which 17 the suspension shall remain in effect. The proceeding shall 18 be concluded without appreciable delay. 19 Section 15-70. Non-registered practice; civil penalty; 20 injunction. 21 (a) Any person who practices, offers to practice, 22 attempts to practice, or holds himself or herself out to 23 practice as a registrant under this Act without being 24 registered under this Act shall, in addition to any other 25 penalty provided by law, pay a civil penalty to the Office of 26 Banks and Real Estate in an amount not to exceed $25,000 for 27 each offense as determined by the Office of Banks and Real 28 Estate. The civil penalty shall be assessed by the Office of 29 Banks and Real estate after a hearing is held in accordance 30 with the provisions set forth in this Act regarding the 31 provision of a hearing for the discipline of a registrant. 32 (b) The Office of Banks and Real Estate has the SB435 Engrossed -51- LRB9103102KSgc 1 authority and power to investigate any and all non-registered 2 activity. 3 (c) A civil penalty imposed under subsection (a) shall 4 be paid within 60 days after the effective date of the order 5 imposing the civil penalty. The order shall constitute a 6 judgment and may be filed, and execution may be had thereon, 7 in the same manner as any judgment from any court of record. 8 (d) Engaging in timeshare practices in Illinois by any 9 entity not holding a valid and current certificate of 10 registration under this Act is declared to be inimical to the 11 public welfare, to constitute a public nuisance, and to cause 12 irreparable harm to the public welfare. The Commissioner, 13 the Attorney General, the State's Attorney of any county in 14 the State, or any person may maintain an action in the name 15 of the People of the State of Illinois, and may apply for 16 injunctive relief in any circuit court to enjoin such entity 17 from engaging in such practice. Upon the filing of a 18 verified petition in the court, the court, if satisfied by 19 affidavit or otherwise that such entity has been engaged in 20 such practice without a valid and current certificate of 21 registration, may enter a temporary restraining order without 22 notice or bond, enjoining the defendant from such further 23 practice. Only the showing of nonregistration, by affidavit 24 or otherwise, is necessary in order for a temporary 25 injunction to issue. A copy of the verified complaint shall 26 be served upon the defendant and the proceedings shall 27 thereafter be conducted as in other civil cases except as 28 modified by this Section. If it is established that the 29 defendant has been or is engaged in such unlawful practice, 30 the court may enter an order or judgment perpetually 31 enjoining the defendant from further practice. In all 32 proceedings hereunder, the court, in its discretion, may 33 apportion the costs among the parties interested in the 34 action, including cost of filing the complaint, service of SB435 Engrossed -52- LRB9103102KSgc 1 process, witness fees and expenses, court reporter charges 2 and reasonable attorneys' fees. In the case of a violation 3 of any injunctive order entered under the provisions of this 4 Section, the court may summarily try and punish the offender 5 for contempt of court. Proceedings for an injunction under 6 this Section shall be in addition to, and not in lieu of, all 7 penalties and other remedies provided in this Act. 8 Section 15-75. Action for compensation; proof of 9 registration. No action or counterclaim may be maintained by 10 any person in any court in this State with respect to any 11 agreement, contract, or services for which registration is 12 required by this Act, or to recover the agreed price or any 13 compensation under any such agreement, or to recover for 14 services for which a registration is required by this Act, 15 without alleging and proving that the person had a valid 16 certificate of registration at the time of making the 17 agreement or doing the work. 18 Section 15-80. Cease and desist orders. The Office of 19 Banks and Real Estate may issue a cease and desist order to 20 any person who engages in any activity prohibited by this 21 Act. Any person in violation of a cease and desist order 22 entered by the Office of Banks and Real Estate is subject to 23 all of the remedies provided by law. 24 Section 15-85. Statute of limitations. Any action or 25 proceeding to enforce any provision of this Act must be 26 commenced within 5 years following the date of the claim upon 27 which the action or proceeding is based accrues. 28 Article 20. Administration 29 Section 20-5. Administration of Act. The Office of SB435 Engrossed -53- LRB9103102KSgc 1 Banks and Real Estate shall exercise the powers and duties 2 prescribed by the Civil Administrative Code of Illinois and 3 shall exercise other powers and duties necessary for 4 effectuating the purposes of this Act. The Office of Banks 5 and Real Estate may contract with third parties for services 6 necessary for the proper administration of this Act. The 7 Office of Banks and Real Estate has the authority to 8 establish public policies and procedures necessary for the 9 administration of this Act. 10 Section 20-10. Administrative rules. The Office of 11 Banks and Real Estate shall adopt rules for the 12 implementation and enforcement of this Act. 13 Section 20-15. Real Estate License Administration Fund. 14 All fees collected for registration and for civil 15 penalties pursuant to this Act and administrative rules 16 adopted under this Act shall be deposited into the Real 17 Estate License Administration Fund. The moneys deposited in 18 the Real Estate License Administration Fund shall be 19 appropriated to the Office of Banks and Real Estate for 20 expenses for the administration and enforcement of this Act. 21 Section 20-20. Forms. The Office of Banks and Real 22 Estate may prescribe forms and procedures for submitting 23 information to the Office of Banks and Real Estate. 24 Section 20-25. Site inspections. The Office of Banks 25 and Real Estate shall thoroughly investigate all matters 26 relating to an application for registration under this Act 27 and may require a personal inspection of any developer, 28 timeshare plan, accommodation, exchange company, or resale 29 company and any offices where any of the foregoing may 30 transact business. All reasonable expenses incurred by the SB435 Engrossed -54- LRB9103102KSgc 1 Office of Banks and Real Estate in investigating such matters 2 shall be borne by the registrant, and the registrant shall 3 reimburse the Office of Banks and Real Estate for those 4 expenses within 30 calendar days of receipt of notice of the 5 expenses from the Office. The Office of Banks and Real 6 Estate may require a deposit sufficient to cover the expenses 7 prior to incurring the expenses. 8 Article 25. Transition 9 Section 25-5. Registrations under preceding Act. All 10 registrations of developers, timeshare plans, acquisition 11 agents, exchange companies, managing agents, resale agents, 12 and sales agents under the Illinois Real Estate Time-share 13 Act in effect on the effective date of this Act shall remain 14 in full force and effect after the effective date of this Act 15 and be considered registered under this Act. 16 The provisions of this Act, insofar as they are the same 17 or substantially the same as those of any prior law, shall be 18 construed as a continuation of such prior law and not as a 19 new enactment. Any existing injunction or temporary 20 restraining order validly obtained under the Illinois Real 21 Estate Time-share Act which prohibits unregistered practice 22 of timeshare developers, timeshare plans, and their agents 23 shall not be invalidated by the enactment of this Act and 24 shall continue to have full force and effect on and after the 25 effective date of this Act. 26 Any existing disciplinary action or investigation 27 pursuant to a violation under the Illinois Real Estate 28 Time-share Act shall not be invalidated by the enactment of 29 this Act and shall continue to have full force and effect on 30 and after the effective date of this Act. 31 Article 90. Amendatory Provisions SB435 Engrossed -55- LRB9103102KSgc 1 Section 90-5. The Real Estate License Act of 2000 is 2 amended, if and only if that Act becomes law, by changing 3 Sections 1-10 and 5-20 as follows: 4 Sec. 1-10. Definitions. In this Act, unless the context 5 otherwise requires: 6 "Act" means the Real Estate License Act of 2000. 7 "Advisory Council" means the Real Estate Education 8 Advisory Council created under Section 30-10 of this Act. 9 "Agency" means a relationship in which a real estate 10 broker or licensee, whether directly or through an affiliated 11 licensee, represents a consumer by the consumer's consent, 12 whether express or implied, in a real property transaction. 13 "Applicant" means any person, as defined in this Section, 14 who applies to OBRE for a valid license as a real estate 15 broker, real estate salesperson, or leasing agent. 16 "Blind advertisement" means any real estate advertisement 17 that does not include the sponsoring broker's business name 18 and that is used by any licensee regarding the sale or lease 19 of real estate, including his or her own, licensed 20 activities, or the hiring of any licensee under this Act. 21 The broker's business name in the case of a franchise shall 22 include the franchise affiliation as well as the name of the 23 individual firm. 24 "Board" means the Real Estate Administration and 25 Disciplinary Board of OBRE. 26 "Branch office" means a sponsoring broker's office other 27 than the sponsoring broker's principal office. 28 "Broker" means an individual, partnership, limited 29 liability company, corporation, or registered limited 30 liability partnership other than a real estate salesperson or 31 leasing agent who for another and for compensation either 32 directly or indirectly: 33 (1) Sells, exchanges, purchases, rents, or leases SB435 Engrossed -56- LRB9103102KSgc 1 real estate. 2 (2) Offers to sell, exchange, purchase, rent, or 3 lease real estate. 4 (3) Negotiates, offers, attempts, or agrees to 5 negotiate the sale, exchange, purchase, rental, or 6 leasing of real estate. 7 (4) Lists, offers, attempts, or agrees to list real 8 estate for sale, lease, or exchange. 9 (5) Buys, sells, offers to buy or sell, or 10 otherwise deals in options on real estate or improvements 11 thereon. 12 (6) Supervises the collection, offer, attempt, or 13 agreement to collect rent for the use of real estate. 14 (7) Advertises or represents himself or herself as 15 being engaged in the business of buying, selling, 16 exchanging, renting, or leasing real estate. 17 (8) Assists or directs in procuring or referring of 18 prospects, intended to result in the sale, exchange, 19 lease, or rental of real estate. 20 (9) Assists or directs in the negotiation of any 21 transaction intended to result in the sale, exchange, 22 lease, or rental of real estate. 23 (10) Opens real estate to the public for marketing 24 purposes. 25 "Brokerage agreement" means a written or oral agreement 26 between a sponsoring broker and a consumer for licensed 27 activities to be provided to a consumer in return for 28 compensation or the right to receive compensation from 29 another. Brokerage agreements may constitute either a 30 bilateral or a unilateral agreement between the broker and 31 the broker's client depending upon the content of the 32 brokerage agreement. All exclusive brokerage agreements shall 33 be in writing. 34 "Client" means a person who is being represented by a SB435 Engrossed -57- LRB9103102KSgc 1 licensee. 2 "Commissioner" means the Commissioner of Banks and Real 3 Estate or a person authorized by the Commissioner, the Office 4 of Banks and Real Estate Act, or this Act to act in the 5 Commissioner's stead. 6 "Compensation" means the valuable consideration given by 7 one person or entity to another person or entity in exchange 8 for the performance of some activity or service. 9 Compensation shall include the transfer of valuable 10 consideration, including without limitation the following: 11 (1) commissions; 12 (2) referral fees; 13 (3) bonuses; 14 (4) prizes; 15 (5) merchandise; 16 (6) finder fees; 17 (7) performance of services; 18 (8) coupons or gift certificates; 19 (9) discounts; 20 (10) rebates; 21 (11) a chance to win a raffle, drawing, lottery, or 22 similar game of chance not prohibited by any other law or 23 statute; 24 (12) retainer fee; or 25 (13) salary. 26 "Confidential information" means information obtained by 27 a licensee from a client during the term of a brokerage 28 agreement that (i) was made confidential by the written 29 request or written instruction of the client, (ii) deals with 30 the negotiating position of the client, or (iii) is 31 information the disclosure of which could materially harm the 32 negotiating position of the client, unless at any time: 33 (1) the client permits the disclosure of 34 information given by that client by word or conduct; SB435 Engrossed -58- LRB9103102KSgc 1 (2) the disclosure is required by law; or 2 (3) the information becomes public from a source 3 other than the licensee. 4 "Confidential information" shall not be considered to 5 include material information about the physical condition of 6 the property. 7 "Consumer" means a person or entity seeking or receiving 8 licensed activities. 9 "Continuing education school" means any person licensed 10 by OBRE as a school for continuing education in accordance 11 with Section 30-15 of this Act. 12 "Credit hour" means 50 minutes of classroom instruction 13 in course work that meets the requirements set forth in rules 14 adopted by OBRE. 15 "Customer" means a consumer who is not being represented 16 by the licensee but for whom the licensee is performing 17 ministerial acts. 18 "Designated agency" means a contractual relationship 19 between a sponsoring broker and a client under Section 15-50 20 of this Act in which one or more licensees associated with or 21 employed by the broker are designated as agent of the client. 22 "Designated agent" means a sponsored licensee named by a 23 sponsoring broker as the legal agent of a client, as provided 24 for in Section 15-50 of this Act. 25 "Director" means the Director of the Real Estate 26 Division, OBRE. 27 "Dual agency" means an agency relationship in which a 28 licensee is representing both buyer and seller or both 29 landlord and tenant in the same transaction. When the agency 30 relationship is a designated agency, the question of whether 31 there is a dual agency shall be determined by the agency 32 relationships of the designated agent of the parties and not 33 of the sponsoring broker. 34 "Employee" or other derivative of the word "employee", SB435 Engrossed -59- LRB9103102KSgc 1 when used to refer to, describe, or delineate the 2 relationship between a real estate broker and a real estate 3 salesperson, another real estate broker, or a leasing agent, 4 shall be construed to include an independent contractor 5 relationship, provided that a written agreement exists that 6 clearly establishes and states the relationship. All 7 responsibilities of a broker shall remain. 8 "Escrow moneys" means all moneys, promissory notes or any 9 other type or manner of legal tender or financial 10 consideration deposited with any person for the benefit of 11 the parties to the transaction. A transaction exists once an 12 agreement has been reached and an accepted real estate 13 contract signed or lease agreed to by the parties. Escrow 14 moneys includes without limitation earnest moneys and 15 security deposits, except those security deposits in which 16 the person holding the security deposit is also the sole 17 owner of the property being leased and for which the security 18 deposit is being held. 19 "Inoperative" means a status of licensure where the 20 licensee holds a current license under this Act, but the 21 licensee is prohibited from engaging in licensed activities 22 because the licensee is unsponsored or the license of the 23 sponsoring broker with whom the licensee is associated or by 24 whom he or she is employed is currently expired, revoked, 25 suspended, or otherwise rendered invalid under this Act. 26 "Leasing Agent" means a person who is employed by a real 27 estate broker to engage in licensed activities limited to 28 leasing residential real estate who has obtained a license as 29 provided for in Section 5-5 of this Act. 30 "License" means the document issued by OBRE certifying 31 that the person named thereon has fulfilled all requirements 32 prerequisite to licensure under this Act. 33 "Licensed activities" means those activities listed in 34 the definition of "broker" under this Section. SB435 Engrossed -60- LRB9103102KSgc 1 "Licensee" means any person, as defined in this Section, 2 who holds a valid unexpired license as a real estate broker, 3 real estate salesperson, or leasing agent. 4 "Listing presentation" means a communication between a 5 real estate broker or salesperson and a consumer in which the 6 licensee is attempting to secure a brokerage agreement with 7 the consumer to market the consumer's real estate for sale or 8 lease. 9 "Managing broker" means a broker who has supervisory 10 responsibilities for licensees in one or, in the case of a 11 multi-office company, more than one office and who has been 12 appointed as such by the sponsoring broker of the real estate 13 firm. 14 "Medium of advertising" means any method of communication 15 intended to influence the general public to use or purchase a 16 particular good or service or real estate. 17 "Ministerial acts" means those acts that a licensee may 18 perform for a consumer that are informative or clerical in 19 nature and do not rise to the level of active representation 20 on behalf of a consumer. Examples of these acts include 21 without limitation (i) responding to phone inquiries by 22 consumers as to the availability and pricing of brokerage 23 services, (ii) responding to phone inquiries from a consumer 24 concerning the price or location of property, (iii) attending 25 an open house and responding to questions about the property 26 from a consumer, (iv) setting an appointment to view 27 property, (v) responding to questions of consumers walking 28 into a licensee's office concerning brokerage services 29 offered or particular properties, (vi) accompanying an 30 appraiser, inspector, contractor, or similar third party on a 31 visit to a property, (vii) describing a property or the 32 property's condition in response to a consumer's inquiry, 33 (viii) completing business or factual information for a 34 consumer on an offer or contract to purchase on behalf of a SB435 Engrossed -61- LRB9103102KSgc 1 client, (ix) showing a client through a property being sold 2 by an owner on his or her own behalf, or (x) referral to 3 another broker or service provider. 4 "OBRE" means the Office of Banks and Real Estate. 5 "Office" means a real estate broker's place of business 6 where the general public is invited to transact business and 7 where records may be maintained and licenses displayed, 8 whether or not it is the broker's principal place of 9 business. 10 "Person" means and includes individuals, entities, 11 corporations, limited liability companies, registered limited 12 liability partnerships, and partnerships, foreign or 13 domestic, except that when the context otherwise requires, 14 the term may refer to a single individual or other described 15 entity. 16 "Personal assistant" means a licensed or unlicensed 17 person who has been hired for the purpose of aiding or 18 assisting a sponsored licensee in the performance of the 19 sponsored licensee's job. 20 "Pocket card" means the card issued by OBRE to signify 21 that the person named on the card is currently licensed under 22 this Act. 23 "Pre-license school" means a school licensed by OBRE 24 offering courses in subjects related to real estate 25 transactions, including the subjects upon which an applicant 26 is examined in determining fitness to receive a license. 27 "Pre-renewal period" means the period between the date of 28 issue of a currently valid license and the license's 29 expiration date. 30 "Real estate" means and includes leaseholds as well as 31 any other interest or estate in land, whether corporeal, 32 incorporeal, freehold, or non-freehold, including timeshare 33 interests, and whether the real estate is situated in this 34 State or elsewhere. SB435 Engrossed -62- LRB9103102KSgc 1 "Real Estate Administration and Disciplinary Board" or 2 "Board" means the Real Estate Administration and Disciplinary 3 Board created by Section 25-10 of this Act. 4 "Salesperson" means any individual, other than a real 5 estate broker or leasing agent, who is employed by a real 6 estate broker or is associated by written agreement with a 7 real estate broker as an independent contractor and 8 participates in any activity described in the definition of 9 "broker" under this Section. 10 "Sponsoring broker" means the broker who has issued a 11 sponsor card to a licensed salesperson, another licensed 12 broker, or a leasing agent. 13 "Sponsor card" means the temporary permit issued by the 14 sponsoring real estate broker certifying that the real estate 15 broker, real estate salesperson, or leasing agent named 16 thereon is employed by or associated by written agreement 17 with the sponsoring real estate broker, as provided for in 18 Section 5-40 of this Act. 19 (Source: 91HB902ham01.) 20 Sec. 5-20. Exemptions from broker, salesperson, or 21 leasing agent license requirement. The requirement for 22 holding a license under this Article 5 shall not apply to: 23 (1) Any person, partnership, or corporation that as 24 owner or lessor performs any of the acts described in the 25 definition of "broker" under Section 1-10 of this Act with 26 reference to property owned or leased by it, or to the 27 regular employees thereof with respect to the property so 28 owned or leased, where such acts are performed in the regular 29 course of or as an incident to the management, sale, or other 30 disposition of such property and the investment therein, 31 provided that such regular employees do not perform any of 32 the acts described in the definition of "broker" under 33 Section 1-10 of this Act in connection with a vocation of SB435 Engrossed -63- LRB9103102KSgc 1 selling or leasing any real estate or the improvements 2 thereon not so owned or leased. 3 (2) An attorney in fact acting under a duly executed and 4 recorded power of attorney to convey real estate from the 5 owner or lessor or the services rendered by an attorney at 6 law in the performance of the attorney's duty as an attorney 7 at law. 8 (3) Any person acting as receiver, trustee in 9 bankruptcy, administrator, executor, or guardian or while 10 acting under a court order or under the authority of a will 11 or testamentary trust. 12 (4) Any person acting as a resident manager for the 13 owner or any employee acting as the resident manager for a 14 broker managing an apartment building, duplex, or apartment 15 complex, when the resident manager resides on the premises, 16 the premises is his or her primary residence, and the 17 resident manager is engaged in the leasing of the property of 18 which he or she is the resident manager. 19 (5) Any officer or employee of a federal agency in the 20 conduct of official duties. 21 (6) Any officer or employee of the State government or 22 any political subdivision thereof performing official duties. 23 (7) Any multiple listing service or other information 24 exchange that is engaged in the collection and dissemination 25 of information concerning real estate available for sale, 26 purchase, lease, or exchange along with which no other 27 licensed activities are provided. 28 (8) Railroads and other public utilities regulated by 29 the State of Illinois, or the officers or full time employees 30 thereof, unless the performance of any licensed activities is 31 in connection with the sale, purchase, lease, or other 32 disposition of real estate or investment therein not needing 33 the approval of the appropriate State regulatory authority. 34 (9) Any medium of advertising in the routine course of SB435 Engrossed -64- LRB9103102KSgc 1 selling or publishing advertising along with which no other 2 licensed activities are provided. 3 (10) Any resident lessee of a residential dwelling unit 4 who refers for compensation to the owner of the dwelling 5 unit, or to the owner's agent, prospective lessees of 6 dwelling units in the same building or complex as the 7 resident lessee's unit, but only if the resident lessee (i) 8 refers no more than 3 prospective lessees in any 12-month 9 period, (ii) receives compensation of no more than $1,000 or 10 the equivalent of one month's rent, whichever is less, in any 11 12-month period, and (iii) limits his or her activities to 12 referring prospective lessees to the owner, or the owner's 13 agent, and does not show a residential dwelling unit to a 14 prospective lessee, discuss terms or conditions of leasing a 15 dwelling unit with a prospective lessee, or otherwise 16 participate in the negotiation of the leasing of a dwelling 17 unit. 18 (11) An exchange company registered under the Real 19 Estate Timeshare Act of 1999 and the regular employees of 20 that registered exchange company but only when conducting an 21 exchange program as defined in that Act. 22 (12) An existing timeshare owner who, for compensation, 23 refers prospective purchasers, but only if the existing 24 timeshare owner (i) refers no more than 20 prospective 25 purchasers in any calendar year, (ii) receives no more than 26 $1,000, or its equivalent, for referrals in any calendar year 27 and (iii) limits his or her activities to referring 28 prospective purchasers of timeshare interests to the 29 developer or the developer's employees or agents, and does 30 not show, discuss terms or conditions of purchase or 31 otherwise participate in negotiations with regard to 32 timeshare interests. 33 (Source: 91HB902 as introduced.) SB435 Engrossed -65- LRB9103102KSgc 1 (765 ILCS 100/Act rep.) 2 Section 90-10. The Illinois Real Estate Time-Share Act is 3 repealed.