(a)
An exchange program is not a part of a time-share plan offering and, except as provided in this section and Section 11238, shall not be subject to either this chapter or the regulations of the commissioner adopted pursuant to this chapter.
(b)
If a developer offers a purchaser the opportunity to subscribe to or to become a member of an exchange program, the developer shall provide to the purchaser in writing or in a digital format at the discretion of the purchaser all of the information set forth in paragraphs (1) to (17), inclusive. If the exchange company is offering directly to the purchaser the opportunity to
subscribe to or become a member of an exchange company, the exchange company shall provide to the purchaser in writing all of the information set forth in paragraphs (1) to (17), inclusive. In either case, the written information shall be provided prior to or concurrently with the execution of any contract or subscription for membership in the exchange program.
(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 or managing entity for any time-share plan participating in the exchange program and, if so, the identity of the time-share plan and the nature of the interest.
(4)
A copy of the form of the contract between the purchaser and the exchange company, along with 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 time-share interests.
(5)
Whether the purchaser’s participation in the exchange program is dependent upon the continued affiliation of the applicable time-share plan with the exchange program.
(6)
Whether the purchaser’s participation in the exchange program is voluntary.
(7)
A fair 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 fair and accurate description of the procedures necessary to qualify for and effectuate exchanges.
(9)
A fair 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. If those limitations, restrictions, or priorities are not uniformly applied by the exchange company, the information shall include 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 time-share 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 time-share plan participating in the exchange program.
(14)
The number of accommodations in each time-share 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 time-share 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 time-share 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 subparagraph (C) 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.
(c)
All written, visual, and electronic communications relating to an exchange company or an exchange program shall be filed with the commissioner upon its request.
(d)
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 chapter.
(e)
An exchange company may elect to deny exchange privileges to any owner whose use of the accommodations of the owner’s time-share 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.