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Public Act 91-0585
SB435 Enrolled LRB9103102KSgc
AN ACT concerning real estate timeshare interests and
repealing a named Act.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Article 1. General Provisions
Section 1-1. Short title. This Act may be cited as the
Real Estate Timeshare Act of 1999.
Section 1-5. Intent. The intent of the General Assembly
in enacting this Act is to regulate the business of timeshare
plans, exchange programs, and resale agents for the
protection of the public.
Section 1-10. Scope of Act.
(a) This Act applies to all of the following:
(1) Timeshare plans with an accommodation or
component site in Illinois.
(2) Timeshare plans without an accommodation or
component site in Illinois, if those timeshare plans are
sold or offered to be sold to any individual located
within Illinois.
(3) Exchange programs as defined in this Act.
(4) Resale agents as defined in this Act.
(b) Exemptions. This Act does not apply to the
following:
(1) Timeshare plans, whether or not an
accommodation is located in Illinois, consisting of 7 or
fewer timeshare periods, the use of which extends over
any period of less than 3 years.
(2) Timeshare plans, whether or not an
accommodation is located in Illinois, under which the
prospective purchaser's total financial obligation will
be less than $1,500 during the entire term of the
timeshare plan.
Section 1-15. Definitions. In this Act, unless the
context otherwise requires:
"Accommodation" means any apartment, condominium or
cooperative unit, cabin, lodge, hotel or motel room, or other
private or commercial structure containing toilet facilities
therein that is designed and available, pursuant to
applicable law, for use and occupancy as a residence by one
or more individuals, or any unit or berth on a commercial
cruise line ship, which is included in the offering of a
timeshare plan.
"Acquisition agent" means a person who, directly or
through the person's employees, agents, or independent
contractors, induces or attempts to induce by means of a
promotion or an advertisement any individual located within
the State of Illinois to attend a sales presentation for a
timeshare plan.
"Advertisement" means any written, oral, or electronic
communication that is directed to or targeted to persons
within the State of Illinois and contains a promotion,
inducement, or offer to sell a timeshare plan, including but
not limited to brochures, pamphlets, radio and television
scripts, electronic media, telephone and direct mail
solicitations, and other means of promotion.
"Association" means the organized body consisting of the
purchasers of interests in a timeshare plan.
"Assessment" means the share of funds required for the
payment of common expenses which is assessed from time to
time against each purchaser by the managing entity.
"Commissioner" means the Commissioner of Banks and Real
Estate, or a natural person authorized by the Commissioner,
the Office of Banks and Real Estate Act, or this Act to act
in the Commissioner's stead.
"Component site" means a specific geographic location
where accommodations which are part of a multi-site timeshare
plan are located. Separate phases of a single timeshare
property in a specific geographic location and under common
management shall be deemed a single component site.
"Developer" means and includes any person or entity,
other than a sales agent, acquisition agent, or resale agent,
who creates a timeshare plan or is in the business of selling
timeshare interests, or employs agents to do the same, or any
person or entity who succeeds to the interest of a developer
by sale, lease, assignment, mortgage, or other transfer, but
the term includes only those persons who offer timeshare
interests for disposition in the ordinary course of
business.
"Dispose" or "disposition" means a voluntary transfer or
assignment of any legal or equitable interest in a timeshare
plan, other than the transfer, assignment, or release of a
security interest.
"Exchange company" means any person owning or operating,
or both owning and operating, an exchange program.
"Exchange program" means any method, arrangement, or
procedure for the voluntary exchange of timeshare interests
or other property interests. The term does not include the
assignment of the right to use and occupy accommodations to
owners of timeshare interests within a single-site timeshare
plan. Any method, arrangement, or procedure that otherwise
meets this definition, wherein the purchaser's total
contractual financial obligation exceeds $3,000 per any
individual, recurring timeshare period, shall be regulated as
a timeshare plan in accordance with this Act.
"Managing entity" means the person who undertakes the
duties, responsibilities, and obligations of the management
of a timeshare plan.
"Offer" means any inducement, solicitation, or other
attempt, whether by marketing, advertisement, oral or written
presentation, or any other means, to encourage a person to
acquire a timeshare interest in a timeshare plan, other than
as security for an obligation.
"Person" means a natural person, corporation, limited
liability company, partnership, joint venture, association,
estate, trust, government, governmental subdivision or
agency, or other legal entity, or any combination thereof.
"Promotion" means a plan or device, including one
involving the possibility of a prospective purchaser
receiving a vacation, discount vacation, gift, or prize, used
by a developer, or an agent, independent contractor, or
employee of any of the same on behalf of the developer, in
connection with the offering and sale of timeshare interests
in a timeshare plan.
"Purchaser" means any person, other than a developer, who
by means of a voluntary transfer acquires a legal or
equitable interest in a timeshare plan other than as security
for an obligation.
"Purchase contract" means a document pursuant to which a
person becomes legally obligated to sell, and a purchaser
becomes legally obligated to buy, a timeshare interest.
"Resale agent" means a person who, directly or through
the person's employees or agents, sells or offers to sell a
timeshare interest previously sold to a purchaser or solicits
an owner of a timeshare interest to list the owner's
timeshare interest for sale.
"Reservation system" means the method, arrangement, or
procedure by which a purchaser, in order to reserve the use
or occupancy of any accommodation of a multi-site timeshare
plan for one or more timeshare periods, is required to
compete with other purchasers in the same multi-site
timeshare plan, regardless of whether the reservation system
is operated and maintained by the multi-site timeshare plan
managing entity, an exchange company, or any other person.
In the event that a purchaser is required to use an exchange
program as the purchaser's principal means of obtaining the
right to use and occupy accommodations, that arrangement
shall be deemed a reservation system. When an exchange
company utilizes a mechanism for the exchange of use of
timeshare periods among members of an exchange program, that
utilization is not a reservation system of a multi-site
timeshare plan.
"Sales agent" means a person, other than a resale agent,
who, directly or through the person's employees, agents, or
independent contractors, sells or offers to sell timeshare
interests in a timeshare plan to any individual located in
the State of Illinois.
"Timeshare instrument" means one or more documents, by
whatever name denominated, creating or governing the
operation of a timeshare plan.
"Timeshare interest" means and includes either:
(1) a "timeshare estate", which is the right to
occupy a timeshare property, coupled with a freehold
estate or an estate for years with a future interest in a
timeshare property or a specified portion thereof; or
(2) a "timeshare use", which is the right to
occupy a timeshare property, which right is neither
coupled with a freehold interest, nor coupled with an
estate for years with a future interest, in a timeshare
property.
"Timeshare period" means the period or periods of time
when the purchaser of a timeshare plan is afforded the
opportunity to use the accommodations of a timeshare plan.
"Timeshare plan" means any arrangement, plan, scheme, or
similar device, other than an exchange program, whether by
membership agreement, sale, lease, deed, license, or
right-to-use agreement or by any other means, whereby a
purchaser, in exchange for consideration, receives ownership
rights in or the right to use accommodations for a period of
time less than a full year during any given year, but not
necessarily for consecutive years. A timeshare plan may be:
(1) a "single-site timeshare plan", which is the
right to use accommodations at a single timeshare
property; or
(2) a "multi-site timeshare plan", which includes:
(A) a "specific timeshare interest", which is
the right to use accommodations at a specific
timeshare property, together with use rights in
accommodations at one or more other component sites
created by or acquired through the timeshare plan's
reservation system; or
(B) a "non-specific timeshare interest", which
is the right to use accommodations at more than one
component site created by or acquired through the
timeshare plan's reservation system, but including
no specific right to use any particular
accommodations.
"Timeshare property" means one or more accommodations
subject to the same timeshare instrument, together with any
other property or rights to property appurtenant to those
accommodations.
Section 1-20. Estates and interests in property.
Each timeshare estate constitutes, for purposes of title, a
separate estate or interest in property except for real
property tax purposes.
Section 1-25. Local powers; construction.
(a) Except as specifically provided in this Section, the
regulation of timeshare plans and exchange programs is an
exclusive power and function of the State. A unit of local
government, including a home rule unit, may not regulate
timeshare plans and exchange programs. This subsection is a
denial and limitation of home rule powers and functions under
subsection (h) of Section 6 of Article VII of the Illinois
Constitution.
(b) Notwithstanding subsection (a), no provision of this
Act invalidates or modifies any provision of any zoning,
subdivision, or building code or other real estate use law,
ordinance, or regulation.
Further, nothing in this Act shall be construed to affect
or impair the validity of Section 11-11.1-1 of the Illinois
Municipal Code or to deny to the corporate authorities of any
municipality the powers granted in that Code to enact
ordinances (i) prescribing fair housing practices, (ii)
defining unfair housing practices, (iii) establishing fair
housing or human relations commissions and standards for the
operation of such commissions in the administration and
enforcement of such ordinances, (iv) prohibiting
discrimination based on age, ancestry, color, creed, mental
or physical handicap, national origin, race, religion, or sex
in the listing, sale, assignment, exchange, transfer, lease,
rental, or financing of real property for the purpose of the
residential occupancy thereof, and (v) prescribing penalties
for violations of such ordinances.
Section 1-30. Creation of timeshare plans. A timeshare
plan may be created in any accommodation unless otherwise
prohibited. All timeshare plans must maintain a one-to-one
purchaser-to-accommodation ratio, which means the ratio of
the number of purchasers eligible to use the accommodations
of a timeshare plan on a given day to the number of
accommodations available for use within the plan on that day,
such that the total number of purchasers eligible to use the
accommodations of the timeshare plan during a given calendar
year never exceeds the total number of accommodations
available for use in the timeshare plan during that year. For
purposes of the calculation under this Section, each
purchaser must be counted at least once, and no individual
accommodation may be counted more than 365 times per calendar
year (or more than 366 times per leap year). A purchaser who
is delinquent in the payment of timeshare plan assessments
shall continue to be considered eligible to use the
accommodations of the timeshare plan for purposes of
calculating the one-to-one purchaser-to-accommodation ratio.
Article 5. Registration Requirements and Fees
Section 5-5. Exemptions from developer registration. A
person shall not be required to register as a developer under
this Act if:
(1) the person is an owner of a timeshare interest
who has acquired the timeshare interest for the person's
own use and occupancy and who later offers it for resale;
or
(2) the person is a managing entity or an
association that is not otherwise a developer of a
timeshare plan in its own right, solely while acting as
an association or under a contract with an association to
offer or sell a timeshare interest transferred to the
association through foreclosure, deed in lieu of
foreclosure, or gratuitous transfer, if such acts are
performed in the regular course of, or as an incident to,
the management of the association for its own account in
the timeshare plan; or
(3) the person offers a timeshare plan in a
national publication or by electronic media, as
determined by the Office of Banks and Real Estate and
provided by rule, which is not directed to or targeted to
any individual located in Illinois; or
(4) the person is conveyed, assigned, or transferred
more than 7 timeshare periods from a developer in a
single voluntary or involuntary transaction and
subsequently conveys, assigns, or transfers all of the
timeshare interests received from the developer to a
single purchaser in a single transaction.
Section 5-10. Exempt communications.
(a) The following communications are exempt from the
provisions of this Act:
(1) Any stockholder communication such as an annual
report or interim financial report, proxy material, a
registration statement, a securities prospectus, a
registration, a property report, or other material
required to be delivered to a prospective purchaser by an
agency of any state or the federal government.
(2) Any oral or written statement disseminated by a
developer to broadcast or print media, other than paid
advertising or promotional material, regarding plans for
the acquisition or development of timeshare property.
However, any rebroadcast or any other dissemination of
such oral statements to a prospective purchaser by a
seller in any manner, or any distribution of copies of
newspaper magazine articles or press releases, or any
other dissemination of such written statements to a
prospective purchaser by a seller in any manner, shall
constitute an advertisement.
(3) Any advertisement or promotion in any medium to
the general public if such advertisement or promotion
clearly states that it is not an offer in any
jurisdiction in which any applicable registration
requirements have not been fully satisfied.
(4) Any audio, written, or visual publication or
material relating to the availability of any
accommodations for transient rental, so long as a sales
presentation is not a term or condition of the
availability of such accommodations and so long as the
failure of any transient renter to take a tour of a
timeshare property or attend a sales presentation does
not result in any reduction in the level of services
which would otherwise be available to such transient
renter.
(b) The following communications are exempt from the
provisions of this Act, provided they are delivered to any
person who has previously executed a contract for the
purchase of or is an existing owner of a timeshare interest
in a timeshare plan:
(1) Any communication addressed to and relating to
the account of any person who has previously executed a
contract for the sale or purchase of a timeshare period
in a timeshare plan to which the communication relates.
(2) Any audio, written, or visual publication or
material relating to an exchange company or exchange
program provided to an existing member of that exchange
company or exchange program.
(3) Any communication by a developer to encourage a
person who has previously acquired a timeshare interest
from the developer to acquire additional use or occupancy
rights or benefits, or additional timeshare interests,
offered by the same developer.
Section 5-15. Developer registration requirements.
(a) Registration required. Any person who, to any
individual located in Illinois, sells, offers to sell, or
attempts to solicit prospective purchasers to purchase a
timeshare interest, or any person who creates a timeshare
plan with an accommodation in the State of Illinois, shall
register as a developer with the Office of Banks and Real
Estate and shall comply with the provisions of subsection (c)
of this Section.
(b) Items to be registered. A developer shall be
responsible for registering with the Office of Banks and Real
Estate, on forms provided by the Office of Banks and Real
Estate, the following:
(1) All timeshare plans which have accommodations
located in Illinois or which are sold or offered for sale
to any individual located in Illinois.
(2) All sales agents who sell or offer to sell any
timeshare interests in any timeshare plan offered by the
developer to any individual located in Illinois.
(3) All acquisition agents who, by means of
inducement, promotion, or advertisement, attempt to
encourage or procure prospective purchasers located in
Illinois to attend a sales presentation for any timeshare
plan offered by the developer.
(4) All managing entities who manage any timeshare
plan offered or sold by the developer to any individual
located in Illinois, without limitation as to whether the
location of the accommodation site managed is within
Illinois.
(c) Escrow. The developer shall comply with the
following escrow requirements:
(1) A developer of a timeshare plan shall deposit
into an escrow account in a federally insured depository
100% of all funds which are received during the
purchaser's rescission period. The deposit of such funds
shall be evidenced by an executed escrow agreement
between the escrow agent and the developer, which shall
include provisions that:
(A) funds may be disbursed to the developer by
the escrow agent from the escrow account only after
expiration of the purchaser's rescission period and
in accordance with the purchase contract, subject to
paragraph (2) of this subsection; and
(B) if a purchaser properly cancels the
purchase contract pursuant to its terms, the funds
shall be paid to the purchaser or paid to the
developer if the purchaser's funds have been
previously refunded by the developer.
(2) If a developer contracts to sell a timeshare
interest and the construction of any property in which
the timeshare interest is located has not been completed,
the developer, upon expiration of the rescission period,
shall continue to maintain in an escrow account all funds
received by or on behalf of the developer from the
purchaser under his or her purchase contract. The
Office of Banks and Real Estate shall establish, by rule,
the types of documentation which shall be required for
evidence of completion, including but not limited to a
certificate of occupancy, a certificate of substantial
completion, or an inspection by the Office of the State
Fire Marshal or the State Fire Marshal's designee or an
equivalent public safety inspection agency in the
applicable jurisdiction. Funds shall be released from
escrow as follows:
(A) If a purchaser properly cancels the
purchase contract pursuant to its terms, the funds
shall be paid to the purchaser or paid to the
developer if the purchaser's funds have been
previously refunded by the developer.
(B) If a purchaser defaults in the performance
of the purchaser's obligations under the purchase
contract, the funds shall be paid to the developer.
(C) If the funds of a purchaser have not been
previously disbursed in accordance with the
provisions of this paragraph (2), they may be
disbursed to the developer by the escrow agent upon
the issuance of acceptable evidence of completion of
construction as provided herein.
(3) In lieu of the provisions in paragraphs (1) and
(2), the Office of Banks and Real Estate may accept from
the developer a surety bond, irrevocable letter of
credit, or other financial assurance acceptable to the
Office of Banks and Real Estate, as provided by rule.
Any acceptable financial assurance must be in an amount
equal to or in excess of the funds which would otherwise
be placed in escrow, or in an amount equal to the cost to
complete the incomplete property in which the timeshare
interest is located.
(4) The developer shall provide escrow account
information to the Office of Banks and Real Estate and
shall execute in writing an authorization consenting to
an audit or examination of the account by the Office of
Banks and Real Estate on forms provided by the Office of
Banks and Real Estate. The developer shall comply with
the reconciliation and records requirements established
by rule by the Office of Banks and Real Estate. The
developer shall make documents related to the escrow
account or escrow obligation available to the Office of
Banks and Real Estate upon the Office's request. The
developer shall maintain any disputed funds in the escrow
account until either:
(A) receipt of written direction agreed to by
signature of all parties; or
(B) deposit of the funds with a court of
competent jurisdiction in which a civil action
regarding the funds has been filed.
(d) Comprehensive registration. In registering a
timeshare plan, the developer shall be responsible for
providing information on the following:
(1) The developer's legal name, any assumed names
used by the developer, principal office street address,
mailing address, primary contact person, and telephone
number;
(2) The name of the developer's authorized or
registered agent in the State of Illinois upon whom
claims can be served or service of process be had, the
agent's street address in Illinois, and telephone number;
(3) The name, street address, mailing address,
primary contact person, and telephone number of any
timeshare plan being registered;
(4) The name, street address, mailing address and
telephone number of any sales agent and acquisition agent
utilized by the developer, and any managing entity of the
timeshare plan;
(5) A public offering statement which complies with
the requirements of Sections 5-25; and
(6) Any other information regarding the developer,
timeshare plan, sales agents, acquisition agents, or
managing entities as reasonably required by the Office of
Banks and Real Estate and established by rule.
(e) Abbreviated registration. The Office of Banks and
Real Estate may accept, as provided for by rule, an
abbreviated registration application of a developer of a
timeshare plan in which all accommodations are located
outside of the State of Illinois. The developer shall file a
written notice of intent to register under this Section at
least 15 days prior to submission. A developer of a
timeshare plan with any accommodation located in the State of
Illinois may not file an abbreviated filing, with the
exception of a succeeding developer after a merger or
acquisition when all of the developers' timeshare plans were
registered in Illinois immediately preceding the merger or
acquisition.
The developer shall provide a certificate of registration
or other evidence of registration from the appropriate
regulatory agency of any other jurisdiction within the United
States in which some or all of such accommodations are
located. The other jurisdiction must have disclosure
requirements that are substantially equivalent to or greater
than the information required to be disclosed to purchasers
by the State of Illinois. A developer filing an abbreviated
registration application shall provide the following:
(1) The developer's legal name, any assumed names
used by the developer, and the developer's principal
office location, mailing address, primary contact person,
and telephone number.
(2) The name, location, mailing address, primary
contact person, and telephone number of the timeshare
plan.
(3) The name of the authorized agent or registered
agent in Illinois upon whom claims can be served or
service of process can be had, and the address in
Illinois of the authorized agent or registered agent.
(4) The names of any sales agent, acquisition
agent, and managing entity, and their principal office
location, mailing address, and telephone number.
(5) The certificate of registration or other
evidence of registration from any jurisdiction in which
the timeshare plan is approved or accepted.
(6) A declaration as to whether the timeshare plan
is a single-site timeshare plan or a multi-site
timeshare plan and, if a multi-site timeshare plan,
whether it consists of specific timeshare interests or
non-specific timeshare interests.
(7) Disclosure of each jurisdiction in which the
developer has applied for registration of the timeshare
plan, and whether the timeshare plan, its developer, or
any of its acquisition agents, sales agents, or managing
entities utilized were denied registration or were the
subject of any disciplinary proceeding.
(8) Copies of any disclosure documents required to
be given to purchasers or required to be filed with the
jurisdiction in which the timeshare plan is approved or
accepted as may be requested by the Office of Banks and
Real Estate.
(9) The appropriate fee.
(10) Such other information reasonably required by
the Office of Banks and Real Estate and established by
rule.
(f) Preliminary permits. Notwithstanding anything in
this Section to the contrary, the Office of Banks and Real
Estate may grant a 6-month preliminary permit, as established
by rule, allowing the developer to begin offering and selling
timeshare interests while the registration is in process. To
obtain a preliminary permit, the developer shall do all of
the following:
(1) Submit a formal written request to the Office
of Banks and Real Estate for a preliminary permit.
(2) Submit a substantially complete application for
registration to the Office of Banks and Real Estate,
including all appropriate fees and exhibits required
under this Article.
(3) Provide evidence acceptable to the Office of
Banks and Real Estate that all funds received by the
developer will be placed into an independent escrow
account with instructions that funds will not be released
until a final registration has been granted.
(4) Give to each purchaser and potential purchaser a
copy of the proposed public offering statement that the
developer has submitted to the Office of Banks and Real
Estate with the initial application.
(5) Give to each purchaser the opportunity to cancel
the purchase contract in accordance with Section 10-10.
The purchaser shall have an additional opportunity to
cancel upon the issuance of an approved registration if
the Office of Banks and Real Estate determines that there
is a substantial difference in the disclosures contained
in the final public offering statement and those given to
the purchaser in the proposed public offering statement.
(g) Alternative registration; letter of credit or other
assurance; recovery.
(1) Notwithstanding anything in this Act to the
contrary, the Office of Banks and Real Estate may accept,
as established by rule, a registration from a developer
for a timeshare plan if the developer provides all of the
following:
(A) A written notice of intent to register
under this Section at least 15 days prior to
submission of the alternative registration.
(B) An irrevocable letter of credit or other
acceptable assurance, as established by rule, in an
amount of $1,000,000, from which an Illinois
purchaser aggrieved by any act, representation,
transaction, or conduct of a duly registered
developer or his or her acquisition agent, sales
agent, managing entity, or employee, which violates
any provision of this Act or the rules promulgated
under this Act, or which constitutes embezzlement
of money or property or results in money or property
being unlawfully obtained from any person by false
pretenses, artifice, trickery, or forgery or by
reason of any fraud, misrepresentation,
discrimination, or deceit by or on the part of any
developer or agent or employee of the developer and
which results in actual monetary loss as opposed to
a loss in market value, may recover.
(C) The developer's legal name, any assumed
names used by the developer, and the developer's
principal office location, mailing address, main
contact person, and telephone number.
(D) The name, location, mailing address, main
contact person, and telephone number of the
timeshare plan included in the filing.
(E) The name of the authorized agent or
registered agent in Illinois upon whom claims can be
served or service of process can be had, and the
address in Illinois of the authorized agent or
registered agent.
(F) The names of any sales agent, acquisition
agent, and managing entity, and their principal
office location, mailing address, and telephone
number.
(G) A declaration as to whether the timeshare
plan is a single-site timeshare plan or a multi-site
timeshare plan and, if a multi-site timeshare plan,
whether it consists of specific timeshare interests
or non-specific timeshare interests.
(H) Disclosure of each jurisdiction in which
the developer has applied for registration of the
timeshare plan, and whether the timeshare plan, its
developer, or any of its acquisition agents, sales
agents, or managing entities utilized were denied
registration or were the subject of any disciplinary
proceeding.
(I) The required fee.
(J) Such other information reasonably required
by the Office of Banks and Real Estate and
established by rule.
(2) Any letter of credit or other acceptable
assurance shall remain in effect with the Office of Banks
and Real Estate for a period of 12 months after the date
the developer does not renew or otherwise cancel his or
her registration with the State of Illinois or 12 months
after the Office of Banks and Real Estate revokes,
suspends, or otherwise disciplines such developer or his
or her registration, provided there is no pending
litigation alleging a violation of any provision of this
Act known by the Office of Banks and Real Estate and
certified by the developer.
(3) The Office of Banks and Real Estate shall
establish procedures, by rule, to satisfy claims by any
Illinois purchaser pursuant to this Section.
(4) The Office of Banks and Real Estate shall
automatically suspend the registration of any developer
pursuant to Section 15-25 of this Act in the event the
Office authorizes or directs payment to an Illinois
purchaser from the letter of credit or other acceptable
assurance pursuant to this Section and as established by
rule.
(h) A developer who registers a timeshare plan pursuant
to this Act shall provide the purchaser with a public
offering statement that complies with Section 5-25 and any
disclosures or other written information required by this
Act.
(i) Nothing contained in this Section shall affect the
Office of Banks and Real Estate's ability to initiate any
disciplinary action against a developer in accordance with
this Act.
(j) For purposes of this Section, "Illinois purchaser"
means a person who, within the State of Illinois, is
solicited, offered, or sold a timeshare interest in a
timeshare plan registered pursuant to this Section.
Section 5-20. Developer supervisory duties. The
developer shall have the duty to supervise, manage, and
control all aspects of the offering of the timeshare plan,
including, but not limited to, promotion, advertising,
contracting, and closing. The developer shall have
responsibility for each timeshare plan registered with the
Office of Banks and Real Estate and for the actions of any
sales agent, managing entity, and acquisition agent utilized
by the developer in the offering or selling of any registered
timeshare plan. Any violation of this Act which occurs
during the offering activities shall be deemed to be a
violation by the developer as well as by the acquisition
agent, sales agent, or managing entity who actually committed
such violation. Notwithstanding anything to the contrary in
this Act, the developer shall be responsible for the actions
of the association and managing entity only while they are
subject to the developer's control.
Section 5-25. Timeshare plan public offering statement
requirements.
(a) A developer shall prepare a public offering
statement, shall provide the statement to each purchaser of a
timeshare interest in any timeshare plan at the time of
purchase, and shall fully and accurately disclose those facts
concerning the timeshare developer and timeshare plan that
are required by this Act or by rule. The public offering
statement shall be in writing and dated and shall require the
purchaser to certify in writing the receipt thereof.
(b) With regard to timeshare interests offered in a
timeshare plan, a public offering statement shall fully and
accurately disclose the following:
(1) The name of the developer and the principal
address of the developer.
(2) A description of the type of timeshare
interests being offered.
(3) A general description of the existing and
proposed accommodations and amenities of the timeshare
plan, including their type and number, personal property
furnishing the accommodation, any use restrictions, and
any required fees for use.
(4) A description of any accommodations and
amenities that are committed to be built, including,
without limitation:
(A) the developer's schedule of commencement
and completion of all accommodations and amenities;
and
(B) the estimated number of accommodations per
site that may become subject to the timeshare plan.
(5) A brief description of the duration, phases,
and operation of the timeshare plan.
(6) The current annual budget, if available, or the
projected annual budget for the timeshare plan. The
budget shall include, without limitation:
(A) a statement of the amount, or a statement
that there is no amount, included in the budget as a
reserve for repairs and replacement;
(B) the projected common expense liability, if
any, by category of expenditures for the timeshare
plan; and
(C) a statement of any services or expenses
not reflected in the budget that the developer
provides or pays.
(7) Any initial or special fee due from the
purchaser at closing, together with a description of the
purpose and method of calculating the fee.
(8) A description of any liens, defects, or
encumbrances on or affecting the title to the timeshare
interests.
(9) A description of any financing offered by or
available through the developer.
(10) A statement that within 5 calendar days after
receipt of the public offering statement or after
execution of the purchase contract, whichever is later, a
purchaser may cancel any purchase contract for a
timeshare interest from a developer together with a
statement providing the name and street address to which
the purchaser should mail any notice of cancellation.
However, if by agreement of the parties by and through
the purchase contract, the purchase contract allows for
cancellation of the purchase contract for a period of
time exceeding 5 calendar days, then the public offering
statement shall include a statement that the cancellation
of the purchase contract is allowed for that period of
time exceeding 5 calendar days.
(11) A statement of any pending suits,
adjudications, or disciplinary actions material to the
timeshare interests of which the developer has knowledge.
(12) Any restrictions on alienation of any number
or portion of any timeshare interests.
(13) A statement describing liability and casualty
insurance for the timeshare property.
(14) Any current or expected fees or charges to be
paid by timeshare purchasers for the use of any amenities
related to the timeshare property.
(15) The extent to which financial arrangements
have been provided for completion of all promised
improvements.
(16) The developer or managing entity must notify
the Office of Banks and Real Estate of the extent to
which an accommodation may become subject to a tax or
other lien arising out of claims against other purchasers
in the same timeshare plan. The Office of Banks and Real
Estate may require the developer or managing entity to
notify a prospective purchaser of any such potential tax
or lien which would materially and adversely affect the
prospective purchaser.
(17) A statement indicating that the developer and
timeshare plan are registered with the State of Illinois.
(18) If the timeshare plan provides purchasers with
the opportunity to participate in an exchange program, a
description of the name and address of the exchange
company and the method by which a purchaser accesses the
exchange program.
(19) Such other information reasonably required by
the Office of Banks and Real Estate and established by
administrative rule necessary for the protection of
purchasers of timeshare interests in timeshare plans.
(20) Any other information that the developer, with
the approval of the Office of Banks and Real Estate,
desires to include in the public offering statement.
(c) A developer offering a multi-site timeshare plan
shall also fully and accurately disclose the following
information, which may be disclosed in a written, graphic, or
tabular form:
(1) A description of each component site, including
the name and address of each component site.
(2) The number of accommodations and timeshare
periods, expressed in periods of 7-day use availability,
committed to the multi-site timeshare plan and available
for use by purchasers.
(3) Each type of accommodation in terms of the
number of bedrooms, bathrooms, and sleeping capacity, and
a statement of whether or not the accommodation contains
a full kitchen. For purposes of this description, a
"full kitchen" means a kitchen having a minimum of a
dishwasher, range, sink, oven, and refrigerator.
(4) A description of amenities available for use by
the purchaser at each component site.
(5) A description of the reservation system, which
shall include the following:
(A) The entity responsible for operating the
reservation system.
(B) A summary of the rules and regulations
governing access to and use of the reservation
system.
(C) The existence of and an explanation
regarding any priority reservation features that
affect a purchaser's ability to make reservations
for the use of a given accommodation on a
first-come, first-served basis.
(6) A description of any right to make any
additions, substitutions, or deletions of accommodations
or amenities, and a description of the basis upon which
accommodations and amenities may be added to, substituted
in, or deleted from the multi-site timeshare plan.
(7) A description of the purchaser's liability for
any fees associated with the multi-site timeshare plan.
(8) The location and the anticipated relative use
demand of each component site in a multi-site timeshare
plan, as well as any periodic adjustment or amendment to
the reservation system which may be needed in order to
respond to actual purchaser use patterns and changes in
purchaser use demand for the accommodations existing at
that time within the multi-site timeshare plan.
(9) Such other information reasonably required by
the Office of Banks and Real Estate and established by
administrative rule necessary for the protection of
purchasers of timeshare interests in timeshare plans.
(10) Any other information that the developer, with
the approval of the Office of Banks and Real Estate,
desires to include in the public offering statement.
(d) If a developer offers a non-specific timeshare
interest in a multi-site timeshare plan, the developer shall
disclose the information set forth in subsection (b) as to
each component site.
Section 5-30. Exchange company registration and
disclosure requirements.
(a) Each exchange company offering an exchange program
to purchasers in this State shall register with the Office of
Banks and Real Estate by July 1 of each year. The
registration shall consist of the information specified in
this Section. However, an exchange company shall make its
initial registration at least 20 calendar days prior to
offering membership in an exchange program to any purchaser
in this State.
(b) If a purchaser is offered the opportunity to become
a member of an exchange program, the developer shall deliver
to the purchaser, together with the public offering statement
and any other materials required to be furnished under this
Section, and prior to the offering or execution of any
contract between the purchaser and the exchange company
offering membership in the exchange program, or, if the
exchange company is dealing directly with the purchaser, the
developer or the exchange company shall deliver to the
purchaser, prior to the initial offering or execution of any
contract between the purchaser and the exchange company, the
following written information regarding the exchange program,
the form and substance of which shall first be approved by
the Office of Banks and Real Estate in accordance with this
Section:
(1) The name and address of the exchange company.
(2) The names of all officers, directors, and
shareholders of the exchange company.
(3) Whether the exchange company or any of its
officers or directors have any legal or beneficial
interest in any developer, seller, or managing entity for
any timeshare plan participating in the exchange program
and, if so, the identity of the timeshare plan and the
nature of the interest.
(4) Unless otherwise stated, a statement that the
purchaser's contract with the exchange company is a
contract separate and distinct from the purchaser's
contract with the seller of timeshare interests.
(5) Whether the purchaser's participation in the
exchange program is dependent upon the continued
affiliation of the applicable timeshare plan with the
exchange program.
(6) A statement that the purchaser's participation
in the exchange program is voluntary.
(7) A complete and accurate description of the
terms and conditions of the purchaser's contractual
relationship with the exchange program and the procedure
by which changes thereto may be made.
(8) A complete and accurate description of the
procedures necessary to qualify for and effectuate
exchanges.
(9) A complete and accurate description of all
limitations, restrictions, and priorities employed in the
operation of the exchange program, including but not
limited to limitations on exchanges based on seasonality,
accommodation size, or levels of occupancy, expressed in
conspicuous type, and, in the event that those
limitations, restrictions, or priorities are not
uniformly applied by the exchange company, a clear
description of the manner in which they are applied.
(10) Whether exchanges are arranged on a
space-available basis and whether any guarantees of
fulfillment of specific requests for exchanges are made
by the exchange company.
(11) Whether and under what circumstances an owner,
in dealing with the exchange program, may lose the right
to use and occupy an accommodation of the timeshare plan
during a reserved use period with respect to any properly
applied-for exchange without being provided with
substitute accommodations by the exchange program.
(12) The fees or range of fees for participation by
owners in the exchange program, a statement of whether
any such fees may be altered by the exchange company, and
the circumstances under which alterations may be made.
(13) The name and address of the site of each
accommodation included within a timeshare plan
participating in the exchange program.
(14) The number of accommodations in each timeshare
plan that are available for occupancy and that qualify
for participation in the exchange program, expressed
within the following numerical groups: 1-5; 6-10; 11-20;
21-50; and 51 and over.
(15) The number of currently enrolled owners for
each timeshare plan participating in the exchange
program, expressed within the following numerical groups:
1-100; 101-249; 250-499; 500-999; and 1,000 and over; and
a statement of the criteria used to determine those
owners who are currently enrolled with the exchange
program.
(16) The disposition made by the exchange company
of use periods deposited with the exchange program by
owners enrolled in the exchange program and not used by
the exchange company in effecting exchanges.
(17) The following information for the preceding
calendar year, which shall be independently audited by a
certified public accountant in accordance with the
standards of the Accounting Standards Board of the
American Institute of Certified Public Accountants and
reported annually no later than August 1 of each year:
(A) The number of owners currently enrolled in
the exchange program.
(B) The number of timeshare plans that have
current affiliation agreements with the exchange
program.
(C) The percentage of confirmed exchanges,
which is the number of exchanges confirmed by the
exchange program divided by the number of exchanges
properly applied for, together with a complete and
accurate statement of the criteria used to determine
whether an exchange request was properly applied
for.
(D) The number of use periods for which the
exchange program has an outstanding obligation to
provide an exchange to an owner who relinquished a
use period during a particular year in exchange for
a use period in any future year.
(E) The number of exchanges confirmed by the
exchange program during the year.
(F) A statement in conspicuous type to the
effect that the percentage described in subdivision
(17)(C) of this subsection is a summary of the
exchange requests entered with the exchange program
in the period reported and that the percentage does
not indicate the probabilities of an owner's being
confirmed to any specific choice or range of
choices.
(18) Such other information as may be reasonably
required by the Office of Banks and Real Estate of any
exchange company as established by rule.
(c) No developer shall have any liability with respect
to any violation of this Act arising out of the publication
by the developer of information provided to it by an exchange
company pursuant to this Article. No exchange company shall
have any liability with respect to any violation of this Act
arising out of the use by a developer of information relating
to an exchange program other than that provided to the
developer by the exchange company.
(d) All written, visual, and electronic communications
relating to an exchange company or an exchange program shall
be filed with the Office of Banks and Real Estate upon its
request.
(e) The failure of an exchange company to observe the
requirements of this Section, and the use of any unfair or
deceptive act or practice in connection with the operation of
an exchange program, is a violation of this Act.
(f) An exchange company may elect to deny exchange
privileges to any owner whose use of the accommodations of
the owner's timeshare plan is denied, and no exchange program
or exchange company shall be liable to any of its members or
any third parties on account of any such denial of exchange
privileges.
Section 5-35. Resale agent registration requirements.
(a) Every resale agent as defined in this Act shall
register with the Office of Banks and Real Estate.
(b) Every resale agent shall be responsible for
registering the following information with the Office of
Banks and Real Estate on forms provided by the Office of
Banks and Real Estate:
(1) A description of the resale program offered by
the resale agent.
(2) The legal name, any assumed names, and the
mailing address, street address, contact person, and
telephone number of the resale agent.
(3) A properly executed consent-to-audit form,
which allows the Office of Banks and Real Estate to audit
any escrow accounts held by the resale agent.
(4) Any other information required by the Office of
Banks and Real Estate to be filed by resale agents, as
established by rule.
(c) The following shall be exempt from registration
under this Section:
(1) Any developer, sales agent, acquisition agent,
or managing entity that is currently registered pursuant
to this Act.
(2) Any purchaser that sells or offers to sell his
or her own timeshare interest.
(3) Any homeowners' association that sells or
offers to sell its own timeshare interests acquired
through foreclosure, deed in lieu of foreclosure, or
gratuitous transfer.
(4) Any person who is licensed under the Real
Estate License Act of 1983 or its successor Act.
Section 5-40. Resale agent duties. Whether registered
or exempt from registration under Section 5-35, a resale
agent shall comply with all of the following:
(a) Prior to engaging in any resale activities on behalf
of any owner of a timeshare interest, a resale agent shall
enter into a listing agreement with that owner. Every
listing agreement shall be in writing and signed by both the
resale agent and the timeshare interest owner. The
requirements of the written listing agreement shall be
established by rule, but at a minimum the listing agreement
shall disclose the method of compensation, a definite date of
termination, whether any fees are non-refundable, and whether
the agreement permits the timeshare resale agent or any other
person to make any use whatsoever of the owner's timeshare
interest or receive any rents or profits generated from such
use of the timeshare interest.
(b) A resale agent shall maintain records as required by
rule. The records required to be maintained include, but are
not limited to, all listing agreements, copies of
disbursement authorizations in accordance with subsection
(c), and resale contracts.
(c) A resale agent who collects any fees prior to a
transfer of an interest from any owner shall deposit the fees
in an escrow account. Any fees that are to be paid to the
resale agent prior to closing may be disbursed from the
escrow account only upon receipt of a disbursement
authorization, signed by the owner, in the following form:
"I, (name of owner), am the owner of a timeshare
interest in (name of timeshare plan). I understand that
for my protection I can require the entire fee to be held
in escrow until the closing on the resale of my timeshare
interest, but I am authorizing a release before the
transfer in the following amount: (amount written in
words) ($ (amount in numbers)), for the following purpose
or purposes (description of purpose or purposes). I
understand that the resale agent is regulated by the
Office of Banks and Real Estate under the Real Estate
Timeshare Act of 1999. The Office of Banks and Real
Estate requires the resale agent to obtain this
disbursement authorization with my signature before
disbursement of my funds."
(d) A resale agent shall utilize a purchase agreement
that discloses to a purchaser of a timeshare interest all of
the following:
(1) A legally sufficient description of the
timeshare interest being purchased.
(2) The name and address of the managing entity of
the timeshare property.
(3) The current year's assessment for the common
expenses allocated to the timeshare interest being
purchased including the time period to which the
assessment relates and the date on which it is due. If
not included in the applicable common expense assessment,
the amount of any real or personal property taxes
allocated to the timeshare interest being purchased.
(4) A complete and accurate disclosure of the terms
and conditions of the purchase and closing, including the
obligations of the owner, the purchaser, or both for
closing costs and the title insurance.
(5) The entity responsible for providing
notification to the managing entity of the timeshare plan
and the applicable exchange company regarding any change
in the ownership of the timeshare interest.
(6) A statement of the first year in which the
purchaser is entitled to receive the actual use rights
and occupancy of the timeshare interest, as determined by
the managing entity of the timeshare plan and any
exchange company.
(7) In making the disclosures required by this
subsection (d), the timeshare resale agent may rely upon
information provided in writing by the owner or managing
entity of the timeshare plan.
(8) The purchaser's 5-day cancellation period as
required by Section 10-10.
(9) Any other information determined by the Office
of Banks and Real Estate and established by rule.
Section 5-45. Amendment to registration information or
public offering statement. The developer, resale agent, and
exchange company shall amend or supplement their disclosure
documents and registration information to reflect any
material change in any information required by this Act or
the rules implementing this Act. All such amendments,
supplements, and changes shall be filed with the Office of
Banks and Real Estate within 20 calendar days of the material
change.
Section 5-50. Registration review time frames. Every
registration required to be filed with the Office of Banks
and Real Estate under this Act shall be reviewed and issued a
certificate of registration in accordance with the following
schedule:
(1) Comprehensive registration. Registration shall
be effective only upon the issuance of a certificate of
registration by the Office of Banks and Real Estate,
which, in the ordinary course of business, should occur
no more than 60 calendar days after actual receipt by the
Office of Banks and Real Estate of the properly completed
application. The Office of Banks and Real Estate must
provide a list of deficiencies in the application, if
any, within 60 calendar days of receipt.
(2) Abbreviated registration. Registration shall
be effective only upon the issuance of a certificate of
registration by the Office of Banks and Real Estate,
which, in the ordinary course of business, should occur
no more than 30 calendar days after actual receipt by the
Office of Banks and Real Estate of the properly completed
application. The Office of Banks and Real Estate must
provide a list of deficiencies in the application, if
any, within 30 calendar days of receipt.
(3) Alternative assurance registration.
Registration shall be deemed effective within 15 calendar
days of receipt, unless the Office of Banks and Real
Estate provides to the applicant a written list of
deficiencies in the application, if any, within 15
calendar days of receipt.
(4) Preliminary permit registration. A preliminary
permit shall be issued within 15 calendar days of
receipt, unless the Office of Banks and Real Estate
provides to the applicant a written list of deficiencies
in the application, if any, within 15 calendar days of
receipt.
(5) Exchange company registration. Registration
shall be effective upon receipt by the Office of Banks
and Real Estate of a properly completed application. The
Office of Banks and Real Estate must provide a list of
deficiencies in the application, if any, within 30
calendar days of receipt.
Section 5-55. Fees. The Office of Banks and Real Estate
shall provide, by rule, for fees to be paid by applicants and
registrants to cover the reasonable costs of the Office of
Banks and Real Estate in administering and enforcing the
provisions of this Act. The Office of Banks and Real Estate
may also provide, by rule, for general fees to cover the
reasonable expenses of carrying out other functions and
responsibilities under this Act.
Section 5-60. Registration; offer or disposal of
interest. A developer, exchange company, or resale agent, or
any of their agents, shall not sell, offer, or dispose of a
timeshare interest unless all necessary registrations are
filed and approved by the Office of Banks and Real Estate, or
while an order revoking or suspending a registration is in
effect.
An applicant for registration under this Act shall submit
the necessary information to complete the application, as
required by the Office of Banks and Real Estate, within 6
months from the date the initial registration application was
received by the Office of Banks and Real Estate. If the
applicant fails to submit the information necessary to
complete the application as required by the Office of Banks
and Real Estate within the six month period, said application
shall be voided, and a new registration application with
applicable fees must be submitted.
Section 5-65. Securities. The offer or disposition of
a timeshare interest in a timeshare plan which satisfies all
the requirements of this Act shall not be deemed to
constitute the offer and sale of a security under the
Illinois Securities Law of 1953.
Article 10. Business Practices
Section 10-5. Management and operation provisions.
(a) Before the first sale of a timeshare interest, the
developer shall create or provide for a managing entity,
which shall be either the developer, a separate manager or
management firm, the board of directors of an owners'
association, or some combination thereof.
(b) The duties of the managing entity include, but are
not limited to:
(1) Management and maintenance of all
accommodations constituting the timeshare plan.
(2) Collection of all assessments as provided in
the timeshare instrument.
(3) Providing to all purchasers each year an
itemized annual budget, which shall include all estimated
revenues and expenses.
(4) Maintenance of all books and records concerning
the timeshare plan.
(5) Scheduling occupancy of accommodations, when
purchasers are not entitled to use specific timeshare
periods, so that all purchasers will be provided the
opportunity to use and possession of the accommodations
of the timeshare plan which they have purchased.
(6) Performing any other functions and duties that
are necessary and proper to maintain the accommodations
or that are required by the timeshare instrument.
(c) In the event a developer, managing entity, or
association files a complaint in a foreclosure proceeding
involving timeshare interests, the developer, managing
entity, or association may join in the same action multiple
defendant obligors and junior interest holders of separate
timeshare interests, provided:
(1) the foreclosure proceeding involves a single
timeshare plan;
(2) the foreclosure proceeding is filed by a single
plaintiff;
(3) the default and remedy provisions in the written
instruments on which the foreclosure proceeding is based
are substantially the same for each defendant; and
(4) the nature of the defaults alleged is the same
for each defendant.
(d) In any foreclosure proceeding involving multiple
defendants filed under subsection (c), the court shall sever
for separate trial any count of the complaint in which a
defense or counterclaim is timely raised by a defendant.
Section 10-10. Cancellation of purchase contract. Any
purchase contract entered into by a purchaser of a time share
interest under this Act shall be voidable by the purchaser,
without penalty, within 5 calendar days after the receipt of
the public offering statement or the execution of the
purchase contract, whichever is later. The purchase contract
shall provide notice of the 5-day cancellation period,
together with the name and mailing address to which any
notice of cancellation shall be delivered. Notice of
cancellation shall be deemed timely if the notice is
deposited with the United States Postal Service not later
than midnight of the fifth calendar day.
Upon such cancellation, the developer or resale agent
shall refund to the purchaser all payments made by the
purchaser, less the amount of any benefits actually received
pursuant to the purchase contract. The refund shall be made
within 20 calendar days after the receipt of the notice of
cancellation, or receipt of funds from the purchaser's
cleared check, whichever occurs later.
If a purchaser elects to cancel a purchase contract
pursuant to this Section, the purchaser may do so by hand
delivering a written notice of cancellation or by mailing a
notice of cancellation by certified mail, return receipt
requested, to the developer or resale ent, as applicable, at
an address set forth in the purchase contract.
Section 10-15. Interests, liens, and encumbrances;
alternative assurances.
(a) Excluding any encumbrance placed against the
purchaser's timeshare interest securing the purchaser's
payment of purchase-money financing for such purchase, the
developer shall not be entitled to the release of any funds
escrowed under subsection (c) of Section 5-15 with respect to
each timeshare interest and any other property or rights to
property appurtenant to the timeshare interest, including any
amenities represented to the purchaser as being part of the
timeshare plan, until the developer has provided satisfactory
evidence to the Office of Banks and Real Estate of one of the
following:
(1) The timeshare interest together with any other
property or rights to property appurtenant to the
timeshare interest, including any amenities represented
to the purchaser as being part of the timeshare plan, are
free and clear of any of the claims of the developer, any
owner of the underlying fee, a mortgagee, judgment
creditor, or other lienor, or any other person having an
interest in or lien or encumbrance against the timeshare
interest or appurtenant property or property rights.
(2) The developer, any owner of the underlying fee,
a mortgagee, judgment creditor, or other lienor, or any
other person having an interest in or lien or encumbrance
against the timeshare interest or appurtenant property or
property rights, including any amenities represented to
the purchaser as being part of the timeshare plan, has
recorded a subordination and notice to creditors document
in the appropriate public records of the jurisdiction in
which the timeshare interest is located. The
subordination document shall expressly and effectively
provide that the interest holder's right, lien, or
encumbrance shall not adversely affect, and shall be
subordinate to, the rights of the owners of the timeshare
interests in the timeshare plan regardless of the date of
purchase, from and after the effective date of the
subordination document.
(3) The developer, any owner of the underlying fee,
a mortgagee, judgment creditor, or other lienor, or any
other person having an interest in or lien or encumbrance
against the timeshare interest or appurtenant property or
property rights, including any amenities represented to
the purchaser as being part of the timeshare plan, has
transferred the subject accommodations or amenities or
all use rights therein to a nonprofit organization or
owners' association to be held for the use and benefit of
the owners of the timeshare plan, which entity shall act
as a fiduciary to the purchasers, provided that the
developer has transferred control of such entity to the
owners or does not exercise its voting rights in such
entity with respect to the subject accommodations or
amenities. Prior to the transfer, any lien or other
encumbrance against the accommodation or facility shall
be made subject to a subordination and notice to
creditors instrument pursuant to paragraph (2).
(4) Alternative arrangements have been made which
are adequate to protect the rights of the purchasers of
the timeshare interests and approved by the Office of
Banks and Real Estate.
(b) Nothing in this Section shall prevent a developer
from accessing any escrow funds if the developer has complied
with subsection (c) of Section 5-15.
Section 10-20. Licenses. Any sales or resale agent
shall comply with the provisions of the Real Estate License
Act of 1983, or its successor Act and the rules adopted
pursuant to that Act, including licensure, unless otherwise
exempt under the Real Estate License Act of 1983, or its
successor Act and the rules adopted pursuant to that Act.
Section 10-25. Liability; material misrepresentation.
(a) A developer or other person offering a timeshare
plan may not do any of the following:
(1) Misrepresent a fact material to a purchaser's
decision to buy a timeshare interest.
(2) Predict specific or immediate increases in the
value of a timeshare interest represented over a period
of time, excluding bona fide pending price increases by
the developer.
(3) Materially misrepresent the qualities or
characteristics of accommodations or the amenities
available to the occupant of those accommodations.
(4) Misrepresent the length of time accommodations
or amenities will be available to the purchaser of a
timeshare interest.
(5) Misrepresent the conditions under which a
purchaser of a timeshare interest may exchange the right
of his or her occupancy for the right to occupy other
accommodations.
(b) A developer or other person using a promotion in
connection with the offering of a timeshare interest shall
clearly disclose all of the following:
(1) That the purpose of the promotion is to sell
timeshare interests, which shall appear in bold face or
other conspicuous type.
(2) That any person whose name or address is
obtained during the promotion may be solicited to
purchase a timeshare interest.
(3) The name of each developer or other person
trying to sell a timeshare interest through the
promotion, and the name of each person paying for the
promotion.
(4) The complete rules of the promotion.
(5) The method of awarding prizes, gifts,
vacations, discount vacations, or other benefits under
the promotion; a complete and fully detailed description,
including approximate retail value, of all prizes, gifts,
or benefits under the promotion; the quantity of each
prize, gift, or benefit to be awarded or conferred; and
the date by which each prize, gift, or benefit will be
awarded or conferred.
(6) Any other disclosures provided by rule.
(c) If a person represents that a prize, gift, or
benefit will be awarded in connection with a promotion, the
prize, gift, or benefit must be awarded or conferred in the
manner represented, and on or before the date represented.
Section 10-30. Records. The managing entity shall keep
detailed financial records directly related to the operation
of the association. All financial and other records shall be
made reasonably available for examination by any purchaser,
or the authorized agent of the purchaser, and the Office of
Banks and Real Estate. For purposes of this Section, the
books and records of the timeshare plan shall be considered
"reasonably available" if copies of the requested portions
are delivered to the purchaser or the purchaser's agent or
the Office of Banks and Real Estate within 7 days of the date
the managing entity receives a written request for the
records signed by the purchaser or the Office of Banks and
Real Estate. The managing entity may charge the purchaser a
reasonable fee for copying the requested information.
Section 10-35. Maintenance of records. Every
developer, exchange company, or resale agent shall maintain,
for a period of 2 years, records of any individuals employed
by the developer, exchange company, or resale agent,
including the last known address of each of those
individuals.
Section 10-40. Partition. No action for partition of a
timeshare interest may be initiated except as permitted by
the timeshare instrument.
Article 15. Disciplinary Provisions
Section 15-5. Investigation. The Office of Banks and
Real Estate may investigate the actions or qualifications of
any person or persons holding or claiming to hold a
certificate of registration under this Act. Such a person
is referred to as "the respondent" in this Article.
Section 15-10. Disciplinary hearings; record;
appointment of administrative law judge.
(a) The Office of Banks and Real Estate has the authority
to conduct hearings before an administrative law judge on
proceedings to revoke, suspend, place on probation,
reprimand, or refuse to issue or renew registrants registered
under this Act, or to impose a civil penalty not to exceed
$25,000 upon any registrant registered under this Act.
(b) The Office of Banks and Real Estate, at its expense,
shall preserve a record of all proceedings at the formal
hearing of any case involving the refusal to issue or the
revocation, suspension, or other discipline of a registrant.
The notice of hearing, complaint, and all other documents in
the nature of pleadings and written motions filed in the
proceedings, the transcript of testimony, the report of the
Board, and the orders of the Office of Banks and Real Estate
shall be the record of proceeding. At all hearings or
prehearing conferences, the Office of Banks and Real Estate
and the respondent shall be entitled to have a court reporter
in attendance for purposes of transcribing the proceeding or
prehearing conference.
(c) The Commissioner has the authority to appoint any
attorney duly licensed to practice law in the State of
Illinois to serve as an administrative law judge in any
action for refusal to issue or renew a certificate of
registration or to discipline a registrant or person holding
a certificate of registration. The administrative law judge
has full authority to conduct the hearing. The
administrative law judge shall report his or her findings and
recommendations to the Commissioner. If the Commissioner
disagrees with the recommendation of the administrative law
judge, the Commissioner may issue an order in contravention
of the recommendation.
Section 15-15. Notice of proposed disciplinary action;
hearing.
(a) Before taking any disciplinary action with regard to
any registrant, the Office of Banks and Real Estate shall:
(1) notify the respondent in writing, at least 30
calendar days prior to the date set for the hearing, of
any charges made, the time and place for the hearing of
the charges, and that testimony at the hearing will be
heard under oath; and
(2) inform the respondent that upon failure to file
an answer and request a hearing before the date
originally set for the hearing, default will be taken
against the respondent and the respondent's registration
may be suspended or revoked, or the respondent may be
otherwise disciplined, as the Office of Banks and Real
Estate may deem proper.
(b) If the respondent fails to file an answer after
receiving notice, the respondent's registration may, in the
discretion of the Office of Banks and Real Estate, be revoked
or suspended, or the respondent may be otherwise disciplined
as deemed proper, without a hearing, if the act or acts
charged constitute sufficient grounds for that action under
this Act.
(c) At the time and place fixed in the notice, the Office
of Banks and Real Estate shall proceed to hearing of the
charges. Both the respondent and the complainant shall be
accorded ample opportunity to present in person, or by
counsel, statements, testimony, evidence, and argument that
may be pertinent to the charges or any defense to the
charges.
Section 15-20. Disciplinary consent orders.
Notwithstanding any other provisions of this Act concerning
the conduct of hearings and recommendations for disciplinary
actions, the Office of Banks and Real Estate has the
authority to negotiate agreements with registrants and
applicants resulting in disciplinary consent orders. Any
such consent order may provide for any form of discipline
provided for in the Act. Any such consent order shall provide
that it is not entered into as a result of any coercion by
the Office of Banks and Real Estate. Any such consent order
shall be accepted by signature or rejected by the
Commissioner in a timely manner.
Section 15-25. Disciplinary action; civil penalty.
The Office of Banks and Real Estate may refuse to issue or
renew any registration, or revoke or suspend any registration
or place on probation or administrative supervision, or
reprimand any registrant, or impose a civil penalty not to
exceed $25,000, for any one or any combination of the
following causes:
(1) A registrant's disregard or violation of any
provision of this Act or of the rules adopted by the
Office of Banks and Real Estate to enforce this Act.
(2) A conviction of the registrant or any principal
of the registrant of (i) a felony under the laws of any
U.S. jurisdiction, (ii) a misdemeanor under the laws of
any U.S. jurisdiction if an essential element of the
offense is dishonesty, or (iii) a crime under the laws of
any U.S. jurisdiction if the crime relates directly to
the practice of the profession regulated by this Act.
(3) A registrant's making any misrepresentation for
the purpose of obtaining a registration or certificate of
registration.
(4) A registrant's discipline by another U.S.
jurisdiction, state agency, or foreign nation regarding
the practice of the profession regulated by this Act, if
at least one of the grounds for the discipline is the
same as or substantially equivalent to one of those set
forth in this Act.
(5) A finding by the Office of Banks and Real
Estate that the registrant, after having his or her
registration placed on probationary status, has violated
the terms of probation.
(6) A registrant's practicing or attempting to
practice under a name other than the name as shown on his
or her registration or any other legally authorized name.
(7) A registrant's failure to file a return, or to
pay the tax, penalty, or interest shown in a filed
return, or to pay any final assessment of tax, penalty,
or interest, as required by any tax Act administered by
the Illinois Department of Revenue, until the
requirements of any such tax Act are satisfied.
(8) A registrant's engaging in dishonorable,
unethical, or unprofessional conduct of a character
likely to deceive, defraud, or harm the public.
(9) A registrant's aiding or abetting another person
or persons in disregarding or violating any provision of
this Act or of the rules adopted by the Office of Banks
and Real Estate to enforce this Act.
(10) Any representation in any document or
information filed with the Office of Banks and Real
Estate which is false or misleading.
(11) A registrant's disseminating or causing to be
disseminated any false or misleading promotional
materials or advertisements in connection with a
timeshare plan.
(12) A registrant's concealing, diverting, or
disposing of any funds or assets of any person in a
manner that impairs the rights of purchasers of timeshare
interests in the timeshare plan.
(13) A registrant's failure to perform any
stipulation or agreement made to induce the Office of
Banks and Real Estate to issue an order relating to the
timeshare plan.
(14) A registrant's engaging in any act that
constitutes a violation of Section 3-102, 3-103, 3-104,
or 3-105 of the Illinois Human Rights Act.
(15) A registrant's failure to provide information
requested in writing by the Office of Banks and Real
Estate, within 30 days of the request, either as the
result of a formal or informal complaint to the Office of
Banks and Real Estate or as a result of a random audit
conducted by the Office of Banks and Real Estate, which
would indicate a violation of this Act.
(16) A registrant's failure to account for or remit
any escrow funds coming into his or her possession which
belonged to others.
(17) A registrant's failure to make available to
Office of Banks and Real Estate personnel during normal
business hours all escrow records and related documents
maintained in connection therewith, within 24 hours after
a request from the Office of Banks and Real Estate
personnel.
Section 15-30. Subpoenas; attendance of witnesses;
oaths.
(a) The Office of Banks and Real Estate has the power to
issue subpoenas ad testificandum and to bring before it any
persons, and to take testimony either orally or by
deposition, or both, with the same fees and mileage and in
the same manner as prescribed in civil cases in the courts of
this State. The Office of Banks and Real Estate has the
power to issue subpoenas duces tecum and to bring before it
any documents, papers, files, books, and records, with the
same costs and in the same manner as prescribed in civil
cases in the courts of this State.
(b) Upon application of the Office of Banks and Real
Estate or its designee or of the applicant, registrant, or
person holding a certificate of registration against whom
proceedings under this Act are pending, any circuit court may
enter an order compelling the enforcement of any subpoena
issued by the Office of Banks and Real Estate in connection
with any hearing or investigation.
(c) The Commissioner and the designated administrative
law judge have power to administer oaths to witnesses at any
hearing that the Office of Banks and Real Estate is
authorized to conduct and any other oaths authorized in any
Act administered by the Office of Banks and Real Estate.
Section 15-35. Administrative law judge's findings of
fact, conclusions of law, and recommendations. At the
conclusion of the hearing, the administrative law judge shall
present to the Commissioner a written report of the
administrative law judge's findings of fact, conclusions of
law, and recommendations regarding discipline or a civil
penalty. The report shall contain a finding of whether or
not the respondent violated this Act or failed to comply with
conditions required in this Act. The administrative law
judge shall specify the nature of the violation or failure to
comply.
If the Commissioner disagrees in any regard with the
report of the administrative law judge, the Commissioner may
issue an order in contravention of the report. The
Commissioner shall provide a written report to the
administrative law judge on any deviation and shall specify
with particularity the reasons for that action in the final
order.
Section 15-40. Rehearing. After any hearing involving
disciplinary action against a registrant, a copy of the
administrative law judge's report shall be served on the
respondent by the Office of Banks and Real Estate, either
personally or as provided in this Act for the service of the
notice of hearing. Within 20 calendar days after the
service, the respondent may present to the Office of Banks
and Real Estate a motion in writing for a rehearing. The
motion shall specify the particular grounds for rehearing. If
the respondent orders a transcript of the record from the
reporting service and pays for it within the time for filing
a motion for rehearing, the 20 calendar day period within
which a motion for rehearing may be filed shall commence upon
the delivery of the transcript to the respondent.
If no motion for rehearing is filed, then upon the
expiration of the time specified for filing a motion, or if a
motion for rehearing is denied, then upon denial, the
Commissioner may enter an order in accordance with the
recommendations of the administrative law judge, except as
otherwise provided in this Article. Whenever the
Commissioner is not satisfied that substantial justice has
been done in the hearing or in the administrative law judge's
report, the Commissioner may order a rehearing by the same or
some other duly qualified administrative law judge.
Section 15-45. Order or certified copy. An order or a
certified copy of an order, over the seal of the Office of
Banks and Real Estate and purporting to be signed by the
Commissioner, shall be prima facie proof of the following:
(1) That the signature is the genuine signature of
the Commissioner.
(2) That the Commissioner is duly appointed and
qualified.
(3) That the administrative law judge is duly
appointed and qualified.
Section 15-50. Restoration of certificate of
registration. At any time after the suspension or revocation
of any certificate of registration, the Office of Banks and
Real Estate may restore the certificate of registration to
the respondent upon the written recommendation of the
Commissioner, unless after an investigation and a hearing the
Commissioner determines that restoration is not in the public
interest.
Section 15-55. Surrender of certificate of registration.
Upon the revocation or suspension of a certificate of
registration, the registrant shall immediately surrender the
certificate of registration to the Office of Banks and Real
Estate. If the registrant fails to do so, the Office of
Banks and Real Estate has the right to seize the certificate
of registration.
Section 15-60. Administrative Review Law. All final
administrative decisions of the Office of Banks and Real
Estate under this Act are subject to judicial review under
the Administrative Review Law and the rules implementing
that Law. The term "administrative decision" is defined as
in Section 3-101 of the Code of Civil Procedure. Proceedings
for judicial review shall be commenced in the circuit court
of the county in which the party applying for review resides,
but if the party is not a resident of this State, the venue
shall be in Cook or Sangamon County.
Pending the court's final decision on administrative
review, the acts, orders, sanctions, and rulings of the
Office of Banks and Real Estate regarding any registration
shall remain in full force and effect unless modified or
stayed by court order pending a final judicial decision.
The Office of Banks and Real Estate shall not be required
to certify any record to the court or file any answer in
court or otherwise appear in any court in a judicial review
proceeding unless there is filed in the court, with the
complaint, a receipt from the Office of Banks and Real Estate
acknowledging payment of the costs of furnishing and
certifying the record. Failure on the part of the plaintiff
to file a receipt in the court is grounds for dismissal of
the action.
Section 15-65. Public interest, safety, or welfare;
summary suspension. The Commissioner may temporarily suspend
any registration pursuant to this Act, without hearing,
simultaneously with the institution of proceedings for a
hearing provided for in this Section, if the Commissioner
finds that the evidence indicates that the public interest,
safety, or welfare imperatively requires emergency action.
If the Commissioner temporarily suspends any registration
without a hearing, a hearing must be held within 30 calendar
days after the suspension. The person whose registration is
suspended may seek a continuance of the hearing, during which
the suspension shall remain in effect. The proceeding shall
be concluded without appreciable delay.
Section 15-70. Non-registered practice; civil penalty;
injunction.
(a) Any person who practices, offers to practice,
attempts to practice, or holds himself or herself out to
practice as a registrant under this Act without being
registered under this Act shall, in addition to any other
penalty provided by law, pay a civil penalty to the Office of
Banks and Real Estate in an amount not to exceed $25,000 for
each offense as determined by the Office of Banks and Real
Estate. The civil penalty shall be assessed by the Office of
Banks and Real estate after a hearing is held in accordance
with the provisions set forth in this Act regarding the
provision of a hearing for the discipline of a registrant.
(b) The Office of Banks and Real Estate has the
authority and power to investigate any and all non-registered
activity.
(c) A civil penalty imposed under subsection (a) shall
be paid within 60 days after the effective date of the order
imposing the civil penalty. The order shall constitute a
judgment and may be filed, and execution may be had thereon,
in the same manner as any judgment from any court of record.
(d) Engaging in timeshare practices in Illinois by any
entity not holding a valid and current certificate of
registration under this Act is declared to be inimical to the
public welfare, to constitute a public nuisance, and to cause
irreparable harm to the public welfare. The Commissioner,
the Attorney General, the State's Attorney of any county in
the State, or any person may maintain an action in the name
of the People of the State of Illinois, and may apply for
injunctive relief in any circuit court to enjoin such entity
from engaging in such practice. Upon the filing of a
verified petition in the court, the court, if satisfied by
affidavit or otherwise that such entity has been engaged in
such practice without a valid and current certificate of
registration, may enter a temporary restraining order without
notice or bond, enjoining the defendant from such further
practice. Only the showing of nonregistration, by affidavit
or otherwise, is necessary in order for a temporary
injunction to issue. A copy of the verified complaint shall
be served upon the defendant and the proceedings shall
thereafter be conducted as in other civil cases except as
modified by this Section. If it is established that the
defendant has been or is engaged in such unlawful practice,
the court may enter an order or judgment perpetually
enjoining the defendant from further practice. In all
proceedings hereunder, the court, in its discretion, may
apportion the costs among the parties interested in the
action, including cost of filing the complaint, service of
process, witness fees and expenses, court reporter charges
and reasonable attorneys' fees. In the case of a violation
of any injunctive order entered under the provisions of this
Section, the court may summarily try and punish the offender
for contempt of court. Proceedings for an injunction under
this Section shall be in addition to, and not in lieu of, all
penalties and other remedies provided in this Act.
Section 15-75. Action for compensation; proof of
registration. No action or counterclaim may be maintained by
any person in any court in this State with respect to any
agreement, contract, or services for which registration is
required by this Act, or to recover the agreed price or any
compensation under any such agreement, or to recover for
services for which a registration is required by this Act,
without alleging and proving that the person had a valid
certificate of registration at the time of making the
agreement or doing the work.
Section 15-80. Cease and desist orders. The Office of
Banks and Real Estate may issue a cease and desist order to
any person who engages in any activity prohibited by this
Act. Any person in violation of a cease and desist order
entered by the Office of Banks and Real Estate is subject to
all of the remedies provided by law.
Section 15-85. Statute of limitations. Any action or
proceeding to enforce any provision of this Act must be
commenced within 5 years following the date of the claim upon
which the action or proceeding is based accrues.
Article 20. Administration
Section 20-5. Administration of Act. The Office of
Banks and Real Estate shall exercise the powers and duties
prescribed by the Civil Administrative Code of Illinois and
shall exercise other powers and duties necessary for
effectuating the purposes of this Act. The Office of Banks
and Real Estate may contract with third parties for services
necessary for the proper administration of this Act. The
Office of Banks and Real Estate has the authority to
establish public policies and procedures necessary for the
administration of this Act.
Section 20-10. Administrative rules. The Office of
Banks and Real Estate shall adopt rules for the
implementation and enforcement of this Act.
Section 20-15. Real Estate License Administration Fund.
All fees collected for registration and for civil
penalties pursuant to this Act and administrative rules
adopted under this Act shall be deposited into the Real
Estate License Administration Fund. The moneys deposited in
the Real Estate License Administration Fund shall be
appropriated to the Office of Banks and Real Estate for
expenses for the administration and enforcement of this Act.
Section 20-20. Forms. The Office of Banks and Real
Estate may prescribe forms and procedures for submitting
information to the Office of Banks and Real Estate.
Section 20-25. Site inspections. The Office of Banks
and Real Estate shall thoroughly investigate all matters
relating to an application for registration under this Act
and may require a personal inspection of any developer,
timeshare plan, accommodation, exchange company, or resale
company and any offices where any of the foregoing may
transact business. All reasonable expenses incurred by the
Office of Banks and Real Estate in investigating such matters
shall be borne by the registrant, and the registrant shall
reimburse the Office of Banks and Real Estate for those
expenses within 30 calendar days of receipt of notice of the
expenses from the Office. The Office of Banks and Real
Estate may require a deposit sufficient to cover the expenses
prior to incurring the expenses.
Article 25. Transition
Section 25-5. Registrations under preceding Act. All
registrations of developers, timeshare plans, acquisition
agents, exchange companies, managing agents, resale agents,
and sales agents under the Illinois Real Estate Time-share
Act in effect on the effective date of this Act shall remain
in full force and effect after the effective date of this Act
and be considered registered under this Act.
The provisions of this Act, insofar as they are the same
or substantially the same as those of any prior law, shall be
construed as a continuation of such prior law and not as a
new enactment. Any existing injunction or temporary
restraining order validly obtained under the Illinois Real
Estate Time-share Act which prohibits unregistered practice
of timeshare developers, timeshare plans, and their agents
shall not be invalidated by the enactment of this Act and
shall continue to have full force and effect on and after the
effective date of this Act.
Any existing disciplinary action or investigation
pursuant to a violation under the Illinois Real Estate
Time-share Act shall not be invalidated by the enactment of
this Act and shall continue to have full force and effect on
and after the effective date of this Act.
Article 90. Amendatory Provisions
Section 90-5. The Real Estate License Act of 2000 is
amended, if and only if that Act becomes law, by changing
Sections 1-10 and 5-20 as follows:
Sec. 1-10. Definitions. In this Act, unless the context
otherwise requires:
"Act" means the Real Estate License Act of 2000.
"Advisory Council" means the Real Estate Education
Advisory Council created under Section 30-10 of this Act.
"Agency" means a relationship in which a real estate
broker or licensee, whether directly or through an affiliated
licensee, represents a consumer by the consumer's consent,
whether express or implied, in a real property transaction.
"Applicant" means any person, as defined in this Section,
who applies to OBRE for a valid license as a real estate
broker, real estate salesperson, or leasing agent.
"Blind advertisement" means any real estate advertisement
that does not include the sponsoring broker's business name
and that is used by any licensee regarding the sale or lease
of real estate, including his or her own, licensed
activities, or the hiring of any licensee under this Act.
The broker's business name in the case of a franchise shall
include the franchise affiliation as well as the name of the
individual firm.
"Board" means the Real Estate Administration and
Disciplinary Board of OBRE.
"Branch office" means a sponsoring broker's office other
than the sponsoring broker's principal office.
"Broker" means an individual, partnership, limited
liability company, corporation, or registered limited
liability partnership other than a real estate salesperson or
leasing agent who for another and for compensation either
directly or indirectly:
(1) Sells, exchanges, purchases, rents, or leases
real estate.
(2) Offers to sell, exchange, purchase, rent, or
lease real estate.
(3) Negotiates, offers, attempts, or agrees to
negotiate the sale, exchange, purchase, rental, or
leasing of real estate.
(4) Lists, offers, attempts, or agrees to list real
estate for sale, lease, or exchange.
(5) Buys, sells, offers to buy or sell, or
otherwise deals in options on real estate or improvements
thereon.
(6) Supervises the collection, offer, attempt, or
agreement to collect rent for the use of real estate.
(7) Advertises or represents himself or herself as
being engaged in the business of buying, selling,
exchanging, renting, or leasing real estate.
(8) Assists or directs in procuring or referring of
prospects, intended to result in the sale, exchange,
lease, or rental of real estate.
(9) Assists or directs in the negotiation of any
transaction intended to result in the sale, exchange,
lease, or rental of real estate.
(10) Opens real estate to the public for marketing
purposes.
"Brokerage agreement" means a written or oral agreement
between a sponsoring broker and a consumer for licensed
activities to be provided to a consumer in return for
compensation or the right to receive compensation from
another. Brokerage agreements may constitute either a
bilateral or a unilateral agreement between the broker and
the broker's client depending upon the content of the
brokerage agreement. All exclusive brokerage agreements shall
be in writing.
"Client" means a person who is being represented by a
licensee.
"Commissioner" means the Commissioner of Banks and Real
Estate or a person authorized by the Commissioner, the Office
of Banks and Real Estate Act, or this Act to act in the
Commissioner's stead.
"Compensation" means the valuable consideration given by
one person or entity to another person or entity in exchange
for the performance of some activity or service.
Compensation shall include the transfer of valuable
consideration, including without limitation the following:
(1) commissions;
(2) referral fees;
(3) bonuses;
(4) prizes;
(5) merchandise;
(6) finder fees;
(7) performance of services;
(8) coupons or gift certificates;
(9) discounts;
(10) rebates;
(11) a chance to win a raffle, drawing, lottery, or
similar game of chance not prohibited by any other law or
statute;
(12) retainer fee; or
(13) salary.
"Confidential information" means information obtained by
a licensee from a client during the term of a brokerage
agreement that (i) was made confidential by the written
request or written instruction of the client, (ii) deals with
the negotiating position of the client, or (iii) is
information the disclosure of which could materially harm the
negotiating position of the client, unless at any time:
(1) the client permits the disclosure of
information given by that client by word or conduct;
(2) the disclosure is required by law; or
(3) the information becomes public from a source
other than the licensee.
"Confidential information" shall not be considered to
include material information about the physical condition of
the property.
"Consumer" means a person or entity seeking or receiving
licensed activities.
"Continuing education school" means any person licensed
by OBRE as a school for continuing education in accordance
with Section 30-15 of this Act.
"Credit hour" means 50 minutes of classroom instruction
in course work that meets the requirements set forth in rules
adopted by OBRE.
"Customer" means a consumer who is not being represented
by the licensee but for whom the licensee is performing
ministerial acts.
"Designated agency" means a contractual relationship
between a sponsoring broker and a client under Section 15-50
of this Act in which one or more licensees associated with or
employed by the broker are designated as agent of the client.
"Designated agent" means a sponsored licensee named by a
sponsoring broker as the legal agent of a client, as provided
for in Section 15-50 of this Act.
"Director" means the Director of the Real Estate
Division, OBRE.
"Dual agency" means an agency relationship in which a
licensee is representing both buyer and seller or both
landlord and tenant in the same transaction. When the agency
relationship is a designated agency, the question of whether
there is a dual agency shall be determined by the agency
relationships of the designated agent of the parties and not
of the sponsoring broker.
"Employee" or other derivative of the word "employee",
when used to refer to, describe, or delineate the
relationship between a real estate broker and a real estate
salesperson, another real estate broker, or a leasing agent,
shall be construed to include an independent contractor
relationship, provided that a written agreement exists that
clearly establishes and states the relationship. All
responsibilities of a broker shall remain.
"Escrow moneys" means all moneys, promissory notes or any
other type or manner of legal tender or financial
consideration deposited with any person for the benefit of
the parties to the transaction. A transaction exists once an
agreement has been reached and an accepted real estate
contract signed or lease agreed to by the parties. Escrow
moneys includes without limitation earnest moneys and
security deposits, except those security deposits in which
the person holding the security deposit is also the sole
owner of the property being leased and for which the security
deposit is being held.
"Inoperative" means a status of licensure where the
licensee holds a current license under this Act, but the
licensee is prohibited from engaging in licensed activities
because the licensee is unsponsored or the license of the
sponsoring broker with whom the licensee is associated or by
whom he or she is employed is currently expired, revoked,
suspended, or otherwise rendered invalid under this Act.
"Leasing Agent" means a person who is employed by a real
estate broker to engage in licensed activities limited to
leasing residential real estate who has obtained a license as
provided for in Section 5-5 of this Act.
"License" means the document issued by OBRE certifying
that the person named thereon has fulfilled all requirements
prerequisite to licensure under this Act.
"Licensed activities" means those activities listed in
the definition of "broker" under this Section.
"Licensee" means any person, as defined in this Section,
who holds a valid unexpired license as a real estate broker,
real estate salesperson, or leasing agent.
"Listing presentation" means a communication between a
real estate broker or salesperson and a consumer in which the
licensee is attempting to secure a brokerage agreement with
the consumer to market the consumer's real estate for sale or
lease.
"Managing broker" means a broker who has supervisory
responsibilities for licensees in one or, in the case of a
multi-office company, more than one office and who has been
appointed as such by the sponsoring broker of the real estate
firm.
"Medium of advertising" means any method of communication
intended to influence the general public to use or purchase a
particular good or service or real estate.
"Ministerial acts" means those acts that a licensee may
perform for a consumer that are informative or clerical in
nature and do not rise to the level of active representation
on behalf of a consumer. Examples of these acts include
without limitation (i) responding to phone inquiries by
consumers as to the availability and pricing of brokerage
services, (ii) responding to phone inquiries from a consumer
concerning the price or location of property, (iii) attending
an open house and responding to questions about the property
from a consumer, (iv) setting an appointment to view
property, (v) responding to questions of consumers walking
into a licensee's office concerning brokerage services
offered or particular properties, (vi) accompanying an
appraiser, inspector, contractor, or similar third party on a
visit to a property, (vii) describing a property or the
property's condition in response to a consumer's inquiry,
(viii) completing business or factual information for a
consumer on an offer or contract to purchase on behalf of a
client, (ix) showing a client through a property being sold
by an owner on his or her own behalf, or (x) referral to
another broker or service provider.
"OBRE" means the Office of Banks and Real Estate.
"Office" means a real estate broker's place of business
where the general public is invited to transact business and
where records may be maintained and licenses displayed,
whether or not it is the broker's principal place of
business.
"Person" means and includes individuals, entities,
corporations, limited liability companies, registered limited
liability partnerships, and partnerships, foreign or
domestic, except that when the context otherwise requires,
the term may refer to a single individual or other described
entity.
"Personal assistant" means a licensed or unlicensed
person who has been hired for the purpose of aiding or
assisting a sponsored licensee in the performance of the
sponsored licensee's job.
"Pocket card" means the card issued by OBRE to signify
that the person named on the card is currently licensed under
this Act.
"Pre-license school" means a school licensed by OBRE
offering courses in subjects related to real estate
transactions, including the subjects upon which an applicant
is examined in determining fitness to receive a license.
"Pre-renewal period" means the period between the date of
issue of a currently valid license and the license's
expiration date.
"Real estate" means and includes leaseholds as well as
any other interest or estate in land, whether corporeal,
incorporeal, freehold, or non-freehold, including timeshare
interests, and whether the real estate is situated in this
State or elsewhere.
"Real Estate Administration and Disciplinary Board" or
"Board" means the Real Estate Administration and Disciplinary
Board created by Section 25-10 of this Act.
"Salesperson" means any individual, other than a real
estate broker or leasing agent, who is employed by a real
estate broker or is associated by written agreement with a
real estate broker as an independent contractor and
participates in any activity described in the definition of
"broker" under this Section.
"Sponsoring broker" means the broker who has issued a
sponsor card to a licensed salesperson, another licensed
broker, or a leasing agent.
"Sponsor card" means the temporary permit issued by the
sponsoring real estate broker certifying that the real estate
broker, real estate salesperson, or leasing agent named
thereon is employed by or associated by written agreement
with the sponsoring real estate broker, as provided for in
Section 5-40 of this Act.
(Source: 91HB902ham01.)
Sec. 5-20. Exemptions from broker, salesperson, or
leasing agent license requirement. The requirement for
holding a license under this Article 5 shall not apply to:
(1) Any person, partnership, or corporation that as
owner or lessor performs any of the acts described in the
definition of "broker" under Section 1-10 of this Act with
reference to property owned or leased by it, or to the
regular employees thereof with respect to the property so
owned or leased, where such acts are performed in the regular
course of or as an incident to the management, sale, or other
disposition of such property and the investment therein,
provided that such regular employees do not perform any of
the acts described in the definition of "broker" under
Section 1-10 of this Act in connection with a vocation of
selling or leasing any real estate or the improvements
thereon not so owned or leased.
(2) An attorney in fact acting under a duly executed and
recorded power of attorney to convey real estate from the
owner or lessor or the services rendered by an attorney at
law in the performance of the attorney's duty as an attorney
at law.
(3) Any person acting as receiver, trustee in
bankruptcy, administrator, executor, or guardian or while
acting under a court order or under the authority of a will
or testamentary trust.
(4) Any person acting as a resident manager for the
owner or any employee acting as the resident manager for a
broker managing an apartment building, duplex, or apartment
complex, when the resident manager resides on the premises,
the premises is his or her primary residence, and the
resident manager is engaged in the leasing of the property of
which he or she is the resident manager.
(5) Any officer or employee of a federal agency in the
conduct of official duties.
(6) Any officer or employee of the State government or
any political subdivision thereof performing official duties.
(7) Any multiple listing service or other information
exchange that is engaged in the collection and dissemination
of information concerning real estate available for sale,
purchase, lease, or exchange along with which no other
licensed activities are provided.
(8) Railroads and other public utilities regulated by
the State of Illinois, or the officers or full time employees
thereof, unless the performance of any licensed activities is
in connection with the sale, purchase, lease, or other
disposition of real estate or investment therein not needing
the approval of the appropriate State regulatory authority.
(9) Any medium of advertising in the routine course of
selling or publishing advertising along with which no other
licensed activities are provided.
(10) Any resident lessee of a residential dwelling unit
who refers for compensation to the owner of the dwelling
unit, or to the owner's agent, prospective lessees of
dwelling units in the same building or complex as the
resident lessee's unit, but only if the resident lessee (i)
refers no more than 3 prospective lessees in any 12-month
period, (ii) receives compensation of no more than $1,000 or
the equivalent of one month's rent, whichever is less, in any
12-month period, and (iii) limits his or her activities to
referring prospective lessees to the owner, or the owner's
agent, and does not show a residential dwelling unit to a
prospective lessee, discuss terms or conditions of leasing a
dwelling unit with a prospective lessee, or otherwise
participate in the negotiation of the leasing of a dwelling
unit.
(11) An exchange company registered under the Real
Estate Timeshare Act of 1999 and the regular employees of
that registered exchange company but only when conducting an
exchange program as defined in that Act.
(12) An existing timeshare owner who, for compensation,
refers prospective purchasers, but only if the existing
timeshare owner (i) refers no more than 20 prospective
purchasers in any calendar year, (ii) receives no more than
$1,000, or its equivalent, for referrals in any calendar year
and (iii) limits his or her activities to referring
prospective purchasers of timeshare interests to the
developer or the developer's employees or agents, and does
not show, discuss terms or conditions of purchase or
otherwise participate in negotiations with regard to
timeshare interests.
(Source: 91HB902 as introduced.)
(765 ILCS 100/Act rep.)
Section 90-10. The Illinois Real Estate Time-Share Act is
repealed.
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