 |
ARIZONA STATE SENATE
Fifty-Fourth Legislature, Second Regular Session
timeshares; public reports; purchase contracts
Purpose
Extends the time frame before termination of a timeshare interest reservation (timeshare reservation) for a prospective buyer and seller to enter into a contract to purchase a timeshare interest and modifies the required statement in a timeshare plan public report on a purchaser's right to cancel to reflect the 10-day cancellation period.
Background
A timeshare plan is any arrangement, plan or similar device, whether by a membership agreement, sale, lease, deed, license, right-to-use agreement or other means, for which a purchaser receives ownership rights in or the right to use accommodations for a period of time less than a full year (A.R.S. § 32-2197). In 2019, the Legislature extended the time period for a purchaser to rescind a timeshare interest purchase agreement (purchase agreement) without cause to midnight on the 10th, rather than 7th, day after the agreement is executed (Laws 2019, Chapter 245).
The State Real Estate Commissioner approves a public report authorizing the sale or lease of timeshare interests (public report) for use by a timeshare developer and requires the developer to provide a copy of the public report to each prospective customer. The public report must include a statement that a purchaser may cancel any purchase agreement by midnight of the 7th day after a purchase agreement is executed (A.R.S. § 32-2197.08).
A deposit may be accepted for a timeshare reservation prior to approval of a public report if outlined requirements are met and the prospective seller provides the prospective buyer with a copy of the public report and proposed purchase agreement within 15 days after public report approval. A timeshare reservation automatically terminates if the prospective buyer and seller do not enter into a contract within 7 business days after the prospective buyer receives the public report and proposed purchase agreement (A.R.S. § 32-2197.10).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Grants a prospective buyer and seller 10, rather than 7, business days to enter into a purchase contract after the prospective buyer receives the public report and proposed purchase agreement, if the seller accepted a timeshare reservation deposit before public report approval.
2. Terminates a timeshare reservation 10, rather than 7, business days after a prospective buyer receives the public report and proposed purchase agreement, if the prospective buyer and seller do not enter into a contract.
3. Requires a public report to state that a purchaser may cancel a timeshare interest purchase agreement before midnight on the 10th, rather than the 7th, calendar day after the agreement is executed.
4. Requires a public report for a purchase agreement that allows for a cancellation period of more than 10, rather than more than 7, calendar days to state the allowed time period.
5. Requires the prescribed statement on the timeshare reservation form relating to the prohibition on offering to sell or purchase a timeshare interest before issuance of a public report to be above the purchaser's signature line.
6. Makes a technical change.
7. Becomes effective on the general effective date.
House Action
RA 2/3/20 DP 7-0-0-0
3rd Read 2/25/20 60-0-0
Prepared by Senate Research
March 3, 2020
LB/JDP/gs