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91_SB0435enr
SB435 Enrolled LRB9103102KSgc
1 AN ACT concerning real estate timeshare interests and
2 repealing a named Act.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Article 1. General Provisions
6 Section 1-1. Short title. This Act may be cited as the
7 Real Estate Timeshare Act of 1999.
8 Section 1-5. Intent. The intent of the General Assembly
9 in enacting this Act is to regulate the business of timeshare
10 plans, exchange programs, and resale agents for the
11 protection of the public.
12 Section 1-10. Scope of Act.
13 (a) This Act applies to all of the following:
14 (1) Timeshare plans with an accommodation or
15 component site in Illinois.
16 (2) Timeshare plans without an accommodation or
17 component site in Illinois, if those timeshare plans are
18 sold or offered to be sold to any individual located
19 within Illinois.
20 (3) Exchange programs as defined in this Act.
21 (4) Resale agents as defined in this Act.
22 (b) Exemptions. This Act does not apply to the
23 following:
24 (1) Timeshare plans, whether or not an
25 accommodation is located in Illinois, consisting of 7 or
26 fewer timeshare periods, the use of which extends over
27 any period of less than 3 years.
28 (2) Timeshare plans, whether or not an
29 accommodation is located in Illinois, under which the
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1 prospective purchaser's total financial obligation will
2 be less than $1,500 during the entire term of the
3 timeshare plan.
4 Section 1-15. Definitions. In this Act, unless the
5 context otherwise requires:
6 "Accommodation" means any apartment, condominium or
7 cooperative unit, cabin, lodge, hotel or motel room, or other
8 private or commercial structure containing toilet facilities
9 therein that is designed and available, pursuant to
10 applicable law, for use and occupancy as a residence by one
11 or more individuals, or any unit or berth on a commercial
12 cruise line ship, which is included in the offering of a
13 timeshare plan.
14 "Acquisition agent" means a person who, directly or
15 through the person's employees, agents, or independent
16 contractors, induces or attempts to induce by means of a
17 promotion or an advertisement any individual located within
18 the State of Illinois to attend a sales presentation for a
19 timeshare plan.
20 "Advertisement" means any written, oral, or electronic
21 communication that is directed to or targeted to persons
22 within the State of Illinois and contains a promotion,
23 inducement, or offer to sell a timeshare plan, including but
24 not limited to brochures, pamphlets, radio and television
25 scripts, electronic media, telephone and direct mail
26 solicitations, and other means of promotion.
27 "Association" means the organized body consisting of the
28 purchasers of interests in a timeshare plan.
29 "Assessment" means the share of funds required for the
30 payment of common expenses which is assessed from time to
31 time against each purchaser by the managing entity.
32 "Commissioner" means the Commissioner of Banks and Real
33 Estate, or a natural person authorized by the Commissioner,
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1 the Office of Banks and Real Estate Act, or this Act to act
2 in the Commissioner's stead.
3 "Component site" means a specific geographic location
4 where accommodations which are part of a multi-site timeshare
5 plan are located. Separate phases of a single timeshare
6 property in a specific geographic location and under common
7 management shall be deemed a single component site.
8 "Developer" means and includes any person or entity,
9 other than a sales agent, acquisition agent, or resale agent,
10 who creates a timeshare plan or is in the business of selling
11 timeshare interests, or employs agents to do the same, or any
12 person or entity who succeeds to the interest of a developer
13 by sale, lease, assignment, mortgage, or other transfer, but
14 the term includes only those persons who offer timeshare
15 interests for disposition in the ordinary course of
16 business.
17 "Dispose" or "disposition" means a voluntary transfer or
18 assignment of any legal or equitable interest in a timeshare
19 plan, other than the transfer, assignment, or release of a
20 security interest.
21 "Exchange company" means any person owning or operating,
22 or both owning and operating, an exchange program.
23 "Exchange program" means any method, arrangement, or
24 procedure for the voluntary exchange of timeshare interests
25 or other property interests. The term does not include the
26 assignment of the right to use and occupy accommodations to
27 owners of timeshare interests within a single-site timeshare
28 plan. Any method, arrangement, or procedure that otherwise
29 meets this definition, wherein the purchaser's total
30 contractual financial obligation exceeds $3,000 per any
31 individual, recurring timeshare period, shall be regulated as
32 a timeshare plan in accordance with this Act.
33 "Managing entity" means the person who undertakes the
34 duties, responsibilities, and obligations of the management
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1 of a timeshare plan.
2 "Offer" means any inducement, solicitation, or other
3 attempt, whether by marketing, advertisement, oral or written
4 presentation, or any other means, to encourage a person to
5 acquire a timeshare interest in a timeshare plan, other than
6 as security for an obligation.
7 "Person" means a natural person, corporation, limited
8 liability company, partnership, joint venture, association,
9 estate, trust, government, governmental subdivision or
10 agency, or other legal entity, or any combination thereof.
11 "Promotion" means a plan or device, including one
12 involving the possibility of a prospective purchaser
13 receiving a vacation, discount vacation, gift, or prize, used
14 by a developer, or an agent, independent contractor, or
15 employee of any of the same on behalf of the developer, in
16 connection with the offering and sale of timeshare interests
17 in a timeshare plan.
18 "Purchaser" means any person, other than a developer, who
19 by means of a voluntary transfer acquires a legal or
20 equitable interest in a timeshare plan other than as security
21 for an obligation.
22 "Purchase contract" means a document pursuant to which a
23 person becomes legally obligated to sell, and a purchaser
24 becomes legally obligated to buy, a timeshare interest.
25 "Resale agent" means a person who, directly or through
26 the person's employees or agents, sells or offers to sell a
27 timeshare interest previously sold to a purchaser or solicits
28 an owner of a timeshare interest to list the owner's
29 timeshare interest for sale.
30 "Reservation system" means the method, arrangement, or
31 procedure by which a purchaser, in order to reserve the use
32 or occupancy of any accommodation of a multi-site timeshare
33 plan for one or more timeshare periods, is required to
34 compete with other purchasers in the same multi-site
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1 timeshare plan, regardless of whether the reservation system
2 is operated and maintained by the multi-site timeshare plan
3 managing entity, an exchange company, or any other person.
4 In the event that a purchaser is required to use an exchange
5 program as the purchaser's principal means of obtaining the
6 right to use and occupy accommodations, that arrangement
7 shall be deemed a reservation system. When an exchange
8 company utilizes a mechanism for the exchange of use of
9 timeshare periods among members of an exchange program, that
10 utilization is not a reservation system of a multi-site
11 timeshare plan.
12 "Sales agent" means a person, other than a resale agent,
13 who, directly or through the person's employees, agents, or
14 independent contractors, sells or offers to sell timeshare
15 interests in a timeshare plan to any individual located in
16 the State of Illinois.
17 "Timeshare instrument" means one or more documents, by
18 whatever name denominated, creating or governing the
19 operation of a timeshare plan.
20 "Timeshare interest" means and includes either:
21 (1) a "timeshare estate", which is the right to
22 occupy a timeshare property, coupled with a freehold
23 estate or an estate for years with a future interest in a
24 timeshare property or a specified portion thereof; or
25 (2) a "timeshare use", which is the right to
26 occupy a timeshare property, which right is neither
27 coupled with a freehold interest, nor coupled with an
28 estate for years with a future interest, in a timeshare
29 property.
30 "Timeshare period" means the period or periods of time
31 when the purchaser of a timeshare plan is afforded the
32 opportunity to use the accommodations of a timeshare plan.
33 "Timeshare plan" means any arrangement, plan, scheme, or
34 similar device, other than an exchange program, whether by
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1 membership agreement, sale, lease, deed, license, or
2 right-to-use agreement or by any other means, whereby a
3 purchaser, in exchange for consideration, receives ownership
4 rights in or the right to use accommodations for a period of
5 time less than a full year during any given year, but not
6 necessarily for consecutive years. A timeshare plan may be:
7 (1) a "single-site timeshare plan", which is the
8 right to use accommodations at a single timeshare
9 property; or
10 (2) a "multi-site timeshare plan", which includes:
11 (A) a "specific timeshare interest", which is
12 the right to use accommodations at a specific
13 timeshare property, together with use rights in
14 accommodations at one or more other component sites
15 created by or acquired through the timeshare plan's
16 reservation system; or
17 (B) a "non-specific timeshare interest", which
18 is the right to use accommodations at more than one
19 component site created by or acquired through the
20 timeshare plan's reservation system, but including
21 no specific right to use any particular
22 accommodations.
23 "Timeshare property" means one or more accommodations
24 subject to the same timeshare instrument, together with any
25 other property or rights to property appurtenant to those
26 accommodations.
27 Section 1-20. Estates and interests in property.
28 Each timeshare estate constitutes, for purposes of title, a
29 separate estate or interest in property except for real
30 property tax purposes.
31 Section 1-25. Local powers; construction.
32 (a) Except as specifically provided in this Section, the
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1 regulation of timeshare plans and exchange programs is an
2 exclusive power and function of the State. A unit of local
3 government, including a home rule unit, may not regulate
4 timeshare plans and exchange programs. This subsection is a
5 denial and limitation of home rule powers and functions under
6 subsection (h) of Section 6 of Article VII of the Illinois
7 Constitution.
8 (b) Notwithstanding subsection (a), no provision of this
9 Act invalidates or modifies any provision of any zoning,
10 subdivision, or building code or other real estate use law,
11 ordinance, or regulation.
12 Further, nothing in this Act shall be construed to affect
13 or impair the validity of Section 11-11.1-1 of the Illinois
14 Municipal Code or to deny to the corporate authorities of any
15 municipality the powers granted in that Code to enact
16 ordinances (i) prescribing fair housing practices, (ii)
17 defining unfair housing practices, (iii) establishing fair
18 housing or human relations commissions and standards for the
19 operation of such commissions in the administration and
20 enforcement of such ordinances, (iv) prohibiting
21 discrimination based on age, ancestry, color, creed, mental
22 or physical handicap, national origin, race, religion, or sex
23 in the listing, sale, assignment, exchange, transfer, lease,
24 rental, or financing of real property for the purpose of the
25 residential occupancy thereof, and (v) prescribing penalties
26 for violations of such ordinances.
27 Section 1-30. Creation of timeshare plans. A timeshare
28 plan may be created in any accommodation unless otherwise
29 prohibited. All timeshare plans must maintain a one-to-one
30 purchaser-to-accommodation ratio, which means the ratio of
31 the number of purchasers eligible to use the accommodations
32 of a timeshare plan on a given day to the number of
33 accommodations available for use within the plan on that day,
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1 such that the total number of purchasers eligible to use the
2 accommodations of the timeshare plan during a given calendar
3 year never exceeds the total number of accommodations
4 available for use in the timeshare plan during that year. For
5 purposes of the calculation under this Section, each
6 purchaser must be counted at least once, and no individual
7 accommodation may be counted more than 365 times per calendar
8 year (or more than 366 times per leap year). A purchaser who
9 is delinquent in the payment of timeshare plan assessments
10 shall continue to be considered eligible to use the
11 accommodations of the timeshare plan for purposes of
12 calculating the one-to-one purchaser-to-accommodation ratio.
13 Article 5. Registration Requirements and Fees
14 Section 5-5. Exemptions from developer registration. A
15 person shall not be required to register as a developer under
16 this Act if:
17 (1) the person is an owner of a timeshare interest
18 who has acquired the timeshare interest for the person's
19 own use and occupancy and who later offers it for resale;
20 or
21 (2) the person is a managing entity or an
22 association that is not otherwise a developer of a
23 timeshare plan in its own right, solely while acting as
24 an association or under a contract with an association to
25 offer or sell a timeshare interest transferred to the
26 association through foreclosure, deed in lieu of
27 foreclosure, or gratuitous transfer, if such acts are
28 performed in the regular course of, or as an incident to,
29 the management of the association for its own account in
30 the timeshare plan; or
31 (3) the person offers a timeshare plan in a
32 national publication or by electronic media, as
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1 determined by the Office of Banks and Real Estate and
2 provided by rule, which is not directed to or targeted to
3 any individual located in Illinois; or
4 (4) the person is conveyed, assigned, or transferred
5 more than 7 timeshare periods from a developer in a
6 single voluntary or involuntary transaction and
7 subsequently conveys, assigns, or transfers all of the
8 timeshare interests received from the developer to a
9 single purchaser in a single transaction.
10 Section 5-10. Exempt communications.
11 (a) The following communications are exempt from the
12 provisions of this Act:
13 (1) Any stockholder communication such as an annual
14 report or interim financial report, proxy material, a
15 registration statement, a securities prospectus, a
16 registration, a property report, or other material
17 required to be delivered to a prospective purchaser by an
18 agency of any state or the federal government.
19 (2) Any oral or written statement disseminated by a
20 developer to broadcast or print media, other than paid
21 advertising or promotional material, regarding plans for
22 the acquisition or development of timeshare property.
23 However, any rebroadcast or any other dissemination of
24 such oral statements to a prospective purchaser by a
25 seller in any manner, or any distribution of copies of
26 newspaper magazine articles or press releases, or any
27 other dissemination of such written statements to a
28 prospective purchaser by a seller in any manner, shall
29 constitute an advertisement.
30 (3) Any advertisement or promotion in any medium to
31 the general public if such advertisement or promotion
32 clearly states that it is not an offer in any
33 jurisdiction in which any applicable registration
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1 requirements have not been fully satisfied.
2 (4) Any audio, written, or visual publication or
3 material relating to the availability of any
4 accommodations for transient rental, so long as a sales
5 presentation is not a term or condition of the
6 availability of such accommodations and so long as the
7 failure of any transient renter to take a tour of a
8 timeshare property or attend a sales presentation does
9 not result in any reduction in the level of services
10 which would otherwise be available to such transient
11 renter.
12 (b) The following communications are exempt from the
13 provisions of this Act, provided they are delivered to any
14 person who has previously executed a contract for the
15 purchase of or is an existing owner of a timeshare interest
16 in a timeshare plan:
17 (1) Any communication addressed to and relating to
18 the account of any person who has previously executed a
19 contract for the sale or purchase of a timeshare period
20 in a timeshare plan to which the communication relates.
21 (2) Any audio, written, or visual publication or
22 material relating to an exchange company or exchange
23 program provided to an existing member of that exchange
24 company or exchange program.
25 (3) Any communication by a developer to encourage a
26 person who has previously acquired a timeshare interest
27 from the developer to acquire additional use or occupancy
28 rights or benefits, or additional timeshare interests,
29 offered by the same developer.
30 Section 5-15. Developer registration requirements.
31 (a) Registration required. Any person who, to any
32 individual located in Illinois, sells, offers to sell, or
33 attempts to solicit prospective purchasers to purchase a
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1 timeshare interest, or any person who creates a timeshare
2 plan with an accommodation in the State of Illinois, shall
3 register as a developer with the Office of Banks and Real
4 Estate and shall comply with the provisions of subsection (c)
5 of this Section.
6 (b) Items to be registered. A developer shall be
7 responsible for registering with the Office of Banks and Real
8 Estate, on forms provided by the Office of Banks and Real
9 Estate, the following:
10 (1) All timeshare plans which have accommodations
11 located in Illinois or which are sold or offered for sale
12 to any individual located in Illinois.
13 (2) All sales agents who sell or offer to sell any
14 timeshare interests in any timeshare plan offered by the
15 developer to any individual located in Illinois.
16 (3) All acquisition agents who, by means of
17 inducement, promotion, or advertisement, attempt to
18 encourage or procure prospective purchasers located in
19 Illinois to attend a sales presentation for any timeshare
20 plan offered by the developer.
21 (4) All managing entities who manage any timeshare
22 plan offered or sold by the developer to any individual
23 located in Illinois, without limitation as to whether the
24 location of the accommodation site managed is within
25 Illinois.
26 (c) Escrow. The developer shall comply with the
27 following escrow requirements:
28 (1) A developer of a timeshare plan shall deposit
29 into an escrow account in a federally insured depository
30 100% of all funds which are received during the
31 purchaser's rescission period. The deposit of such funds
32 shall be evidenced by an executed escrow agreement
33 between the escrow agent and the developer, which shall
34 include provisions that:
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1 (A) funds may be disbursed to the developer by
2 the escrow agent from the escrow account only after
3 expiration of the purchaser's rescission period and
4 in accordance with the purchase contract, subject to
5 paragraph (2) of this subsection; and
6 (B) if a purchaser properly cancels the
7 purchase contract pursuant to its terms, the funds
8 shall be paid to the purchaser or paid to the
9 developer if the purchaser's funds have been
10 previously refunded by the developer.
11 (2) If a developer contracts to sell a timeshare
12 interest and the construction of any property in which
13 the timeshare interest is located has not been completed,
14 the developer, upon expiration of the rescission period,
15 shall continue to maintain in an escrow account all funds
16 received by or on behalf of the developer from the
17 purchaser under his or her purchase contract. The
18 Office of Banks and Real Estate shall establish, by rule,
19 the types of documentation which shall be required for
20 evidence of completion, including but not limited to a
21 certificate of occupancy, a certificate of substantial
22 completion, or an inspection by the Office of the State
23 Fire Marshal or the State Fire Marshal's designee or an
24 equivalent public safety inspection agency in the
25 applicable jurisdiction. Funds shall be released from
26 escrow as follows:
27 (A) If a purchaser properly cancels the
28 purchase contract pursuant to its terms, the funds
29 shall be paid to the purchaser or paid to the
30 developer if the purchaser's funds have been
31 previously refunded by the developer.
32 (B) If a purchaser defaults in the performance
33 of the purchaser's obligations under the purchase
34 contract, the funds shall be paid to the developer.
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1 (C) If the funds of a purchaser have not been
2 previously disbursed in accordance with the
3 provisions of this paragraph (2), they may be
4 disbursed to the developer by the escrow agent upon
5 the issuance of acceptable evidence of completion of
6 construction as provided herein.
7 (3) In lieu of the provisions in paragraphs (1) and
8 (2), the Office of Banks and Real Estate may accept from
9 the developer a surety bond, irrevocable letter of
10 credit, or other financial assurance acceptable to the
11 Office of Banks and Real Estate, as provided by rule.
12 Any acceptable financial assurance must be in an amount
13 equal to or in excess of the funds which would otherwise
14 be placed in escrow, or in an amount equal to the cost to
15 complete the incomplete property in which the timeshare
16 interest is located.
17 (4) The developer shall provide escrow account
18 information to the Office of Banks and Real Estate and
19 shall execute in writing an authorization consenting to
20 an audit or examination of the account by the Office of
21 Banks and Real Estate on forms provided by the Office of
22 Banks and Real Estate. The developer shall comply with
23 the reconciliation and records requirements established
24 by rule by the Office of Banks and Real Estate. The
25 developer shall make documents related to the escrow
26 account or escrow obligation available to the Office of
27 Banks and Real Estate upon the Office's request. The
28 developer shall maintain any disputed funds in the escrow
29 account until either:
30 (A) receipt of written direction agreed to by
31 signature of all parties; or
32 (B) deposit of the funds with a court of
33 competent jurisdiction in which a civil action
34 regarding the funds has been filed.
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1 (d) Comprehensive registration. In registering a
2 timeshare plan, the developer shall be responsible for
3 providing information on the following:
4 (1) The developer's legal name, any assumed names
5 used by the developer, principal office street address,
6 mailing address, primary contact person, and telephone
7 number;
8 (2) The name of the developer's authorized or
9 registered agent in the State of Illinois upon whom
10 claims can be served or service of process be had, the
11 agent's street address in Illinois, and telephone number;
12 (3) The name, street address, mailing address,
13 primary contact person, and telephone number of any
14 timeshare plan being registered;
15 (4) The name, street address, mailing address and
16 telephone number of any sales agent and acquisition agent
17 utilized by the developer, and any managing entity of the
18 timeshare plan;
19 (5) A public offering statement which complies with
20 the requirements of Sections 5-25; and
21 (6) Any other information regarding the developer,
22 timeshare plan, sales agents, acquisition agents, or
23 managing entities as reasonably required by the Office of
24 Banks and Real Estate and established by rule.
25 (e) Abbreviated registration. The Office of Banks and
26 Real Estate may accept, as provided for by rule, an
27 abbreviated registration application of a developer of a
28 timeshare plan in which all accommodations are located
29 outside of the State of Illinois. The developer shall file a
30 written notice of intent to register under this Section at
31 least 15 days prior to submission. A developer of a
32 timeshare plan with any accommodation located in the State of
33 Illinois may not file an abbreviated filing, with the
34 exception of a succeeding developer after a merger or
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1 acquisition when all of the developers' timeshare plans were
2 registered in Illinois immediately preceding the merger or
3 acquisition.
4 The developer shall provide a certificate of registration
5 or other evidence of registration from the appropriate
6 regulatory agency of any other jurisdiction within the United
7 States in which some or all of such accommodations are
8 located. The other jurisdiction must have disclosure
9 requirements that are substantially equivalent to or greater
10 than the information required to be disclosed to purchasers
11 by the State of Illinois. A developer filing an abbreviated
12 registration application shall provide the following:
13 (1) The developer's legal name, any assumed names
14 used by the developer, and the developer's principal
15 office location, mailing address, primary contact person,
16 and telephone number.
17 (2) The name, location, mailing address, primary
18 contact person, and telephone number of the timeshare
19 plan.
20 (3) The name of the authorized agent or registered
21 agent in Illinois upon whom claims can be served or
22 service of process can be had, and the address in
23 Illinois of the authorized agent or registered agent.
24 (4) The names of any sales agent, acquisition
25 agent, and managing entity, and their principal office
26 location, mailing address, and telephone number.
27 (5) The certificate of registration or other
28 evidence of registration from any jurisdiction in which
29 the timeshare plan is approved or accepted.
30 (6) A declaration as to whether the timeshare plan
31 is a single-site timeshare plan or a multi-site
32 timeshare plan and, if a multi-site timeshare plan,
33 whether it consists of specific timeshare interests or
34 non-specific timeshare interests.
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1 (7) Disclosure of each jurisdiction in which the
2 developer has applied for registration of the timeshare
3 plan, and whether the timeshare plan, its developer, or
4 any of its acquisition agents, sales agents, or managing
5 entities utilized were denied registration or were the
6 subject of any disciplinary proceeding.
7 (8) Copies of any disclosure documents required to
8 be given to purchasers or required to be filed with the
9 jurisdiction in which the timeshare plan is approved or
10 accepted as may be requested by the Office of Banks and
11 Real Estate.
12 (9) The appropriate fee.
13 (10) Such other information reasonably required by
14 the Office of Banks and Real Estate and established by
15 rule.
16 (f) Preliminary permits. Notwithstanding anything in
17 this Section to the contrary, the Office of Banks and Real
18 Estate may grant a 6-month preliminary permit, as established
19 by rule, allowing the developer to begin offering and selling
20 timeshare interests while the registration is in process. To
21 obtain a preliminary permit, the developer shall do all of
22 the following:
23 (1) Submit a formal written request to the Office
24 of Banks and Real Estate for a preliminary permit.
25 (2) Submit a substantially complete application for
26 registration to the Office of Banks and Real Estate,
27 including all appropriate fees and exhibits required
28 under this Article.
29 (3) Provide evidence acceptable to the Office of
30 Banks and Real Estate that all funds received by the
31 developer will be placed into an independent escrow
32 account with instructions that funds will not be released
33 until a final registration has been granted.
34 (4) Give to each purchaser and potential purchaser a
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1 copy of the proposed public offering statement that the
2 developer has submitted to the Office of Banks and Real
3 Estate with the initial application.
4 (5) Give to each purchaser the opportunity to cancel
5 the purchase contract in accordance with Section 10-10.
6 The purchaser shall have an additional opportunity to
7 cancel upon the issuance of an approved registration if
8 the Office of Banks and Real Estate determines that there
9 is a substantial difference in the disclosures contained
10 in the final public offering statement and those given to
11 the purchaser in the proposed public offering statement.
12 (g) Alternative registration; letter of credit or other
13 assurance; recovery.
14 (1) Notwithstanding anything in this Act to the
15 contrary, the Office of Banks and Real Estate may accept,
16 as established by rule, a registration from a developer
17 for a timeshare plan if the developer provides all of the
18 following:
19 (A) A written notice of intent to register
20 under this Section at least 15 days prior to
21 submission of the alternative registration.
22 (B) An irrevocable letter of credit or other
23 acceptable assurance, as established by rule, in an
24 amount of $1,000,000, from which an Illinois
25 purchaser aggrieved by any act, representation,
26 transaction, or conduct of a duly registered
27 developer or his or her acquisition agent, sales
28 agent, managing entity, or employee, which violates
29 any provision of this Act or the rules promulgated
30 under this Act, or which constitutes embezzlement
31 of money or property or results in money or property
32 being unlawfully obtained from any person by false
33 pretenses, artifice, trickery, or forgery or by
34 reason of any fraud, misrepresentation,
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1 discrimination, or deceit by or on the part of any
2 developer or agent or employee of the developer and
3 which results in actual monetary loss as opposed to
4 a loss in market value, may recover.
5 (C) The developer's legal name, any assumed
6 names used by the developer, and the developer's
7 principal office location, mailing address, main
8 contact person, and telephone number.
9 (D) The name, location, mailing address, main
10 contact person, and telephone number of the
11 timeshare plan included in the filing.
12 (E) The name of the authorized agent or
13 registered agent in Illinois upon whom claims can be
14 served or service of process can be had, and the
15 address in Illinois of the authorized agent or
16 registered agent.
17 (F) The names of any sales agent, acquisition
18 agent, and managing entity, and their principal
19 office location, mailing address, and telephone
20 number.
21 (G) A declaration as to whether the timeshare
22 plan is a single-site timeshare plan or a multi-site
23 timeshare plan and, if a multi-site timeshare plan,
24 whether it consists of specific timeshare interests
25 or non-specific timeshare interests.
26 (H) Disclosure of each jurisdiction in which
27 the developer has applied for registration of the
28 timeshare plan, and whether the timeshare plan, its
29 developer, or any of its acquisition agents, sales
30 agents, or managing entities utilized were denied
31 registration or were the subject of any disciplinary
32 proceeding.
33 (I) The required fee.
34 (J) Such other information reasonably required
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1 by the Office of Banks and Real Estate and
2 established by rule.
3 (2) Any letter of credit or other acceptable
4 assurance shall remain in effect with the Office of Banks
5 and Real Estate for a period of 12 months after the date
6 the developer does not renew or otherwise cancel his or
7 her registration with the State of Illinois or 12 months
8 after the Office of Banks and Real Estate revokes,
9 suspends, or otherwise disciplines such developer or his
10 or her registration, provided there is no pending
11 litigation alleging a violation of any provision of this
12 Act known by the Office of Banks and Real Estate and
13 certified by the developer.
14 (3) The Office of Banks and Real Estate shall
15 establish procedures, by rule, to satisfy claims by any
16 Illinois purchaser pursuant to this Section.
17 (4) The Office of Banks and Real Estate shall
18 automatically suspend the registration of any developer
19 pursuant to Section 15-25 of this Act in the event the
20 Office authorizes or directs payment to an Illinois
21 purchaser from the letter of credit or other acceptable
22 assurance pursuant to this Section and as established by
23 rule.
24 (h) A developer who registers a timeshare plan pursuant
25 to this Act shall provide the purchaser with a public
26 offering statement that complies with Section 5-25 and any
27 disclosures or other written information required by this
28 Act.
29 (i) Nothing contained in this Section shall affect the
30 Office of Banks and Real Estate's ability to initiate any
31 disciplinary action against a developer in accordance with
32 this Act.
33 (j) For purposes of this Section, "Illinois purchaser"
34 means a person who, within the State of Illinois, is
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1 solicited, offered, or sold a timeshare interest in a
2 timeshare plan registered pursuant to this Section.
3 Section 5-20. Developer supervisory duties. The
4 developer shall have the duty to supervise, manage, and
5 control all aspects of the offering of the timeshare plan,
6 including, but not limited to, promotion, advertising,
7 contracting, and closing. The developer shall have
8 responsibility for each timeshare plan registered with the
9 Office of Banks and Real Estate and for the actions of any
10 sales agent, managing entity, and acquisition agent utilized
11 by the developer in the offering or selling of any registered
12 timeshare plan. Any violation of this Act which occurs
13 during the offering activities shall be deemed to be a
14 violation by the developer as well as by the acquisition
15 agent, sales agent, or managing entity who actually committed
16 such violation. Notwithstanding anything to the contrary in
17 this Act, the developer shall be responsible for the actions
18 of the association and managing entity only while they are
19 subject to the developer's control.
20 Section 5-25. Timeshare plan public offering statement
21 requirements.
22 (a) A developer shall prepare a public offering
23 statement, shall provide the statement to each purchaser of a
24 timeshare interest in any timeshare plan at the time of
25 purchase, and shall fully and accurately disclose those facts
26 concerning the timeshare developer and timeshare plan that
27 are required by this Act or by rule. The public offering
28 statement shall be in writing and dated and shall require the
29 purchaser to certify in writing the receipt thereof.
30 (b) With regard to timeshare interests offered in a
31 timeshare plan, a public offering statement shall fully and
32 accurately disclose the following:
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1 (1) The name of the developer and the principal
2 address of the developer.
3 (2) A description of the type of timeshare
4 interests being offered.
5 (3) A general description of the existing and
6 proposed accommodations and amenities of the timeshare
7 plan, including their type and number, personal property
8 furnishing the accommodation, any use restrictions, and
9 any required fees for use.
10 (4) A description of any accommodations and
11 amenities that are committed to be built, including,
12 without limitation:
13 (A) the developer's schedule of commencement
14 and completion of all accommodations and amenities;
15 and
16 (B) the estimated number of accommodations per
17 site that may become subject to the timeshare plan.
18 (5) A brief description of the duration, phases,
19 and operation of the timeshare plan.
20 (6) The current annual budget, if available, or the
21 projected annual budget for the timeshare plan. The
22 budget shall include, without limitation:
23 (A) a statement of the amount, or a statement
24 that there is no amount, included in the budget as a
25 reserve for repairs and replacement;
26 (B) the projected common expense liability, if
27 any, by category of expenditures for the timeshare
28 plan; and
29 (C) a statement of any services or expenses
30 not reflected in the budget that the developer
31 provides or pays.
32 (7) Any initial or special fee due from the
33 purchaser at closing, together with a description of the
34 purpose and method of calculating the fee.
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1 (8) A description of any liens, defects, or
2 encumbrances on or affecting the title to the timeshare
3 interests.
4 (9) A description of any financing offered by or
5 available through the developer.
6 (10) A statement that within 5 calendar days after
7 receipt of the public offering statement or after
8 execution of the purchase contract, whichever is later, a
9 purchaser may cancel any purchase contract for a
10 timeshare interest from a developer together with a
11 statement providing the name and street address to which
12 the purchaser should mail any notice of cancellation.
13 However, if by agreement of the parties by and through
14 the purchase contract, the purchase contract allows for
15 cancellation of the purchase contract for a period of
16 time exceeding 5 calendar days, then the public offering
17 statement shall include a statement that the cancellation
18 of the purchase contract is allowed for that period of
19 time exceeding 5 calendar days.
20 (11) A statement of any pending suits,
21 adjudications, or disciplinary actions material to the
22 timeshare interests of which the developer has knowledge.
23 (12) Any restrictions on alienation of any number
24 or portion of any timeshare interests.
25 (13) A statement describing liability and casualty
26 insurance for the timeshare property.
27 (14) Any current or expected fees or charges to be
28 paid by timeshare purchasers for the use of any amenities
29 related to the timeshare property.
30 (15) The extent to which financial arrangements
31 have been provided for completion of all promised
32 improvements.
33 (16) The developer or managing entity must notify
34 the Office of Banks and Real Estate of the extent to
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1 which an accommodation may become subject to a tax or
2 other lien arising out of claims against other purchasers
3 in the same timeshare plan. The Office of Banks and Real
4 Estate may require the developer or managing entity to
5 notify a prospective purchaser of any such potential tax
6 or lien which would materially and adversely affect the
7 prospective purchaser.
8 (17) A statement indicating that the developer and
9 timeshare plan are registered with the State of Illinois.
10 (18) If the timeshare plan provides purchasers with
11 the opportunity to participate in an exchange program, a
12 description of the name and address of the exchange
13 company and the method by which a purchaser accesses the
14 exchange program.
15 (19) Such other information reasonably required by
16 the Office of Banks and Real Estate and established by
17 administrative rule necessary for the protection of
18 purchasers of timeshare interests in timeshare plans.
19 (20) Any other information that the developer, with
20 the approval of the Office of Banks and Real Estate,
21 desires to include in the public offering statement.
22 (c) A developer offering a multi-site timeshare plan
23 shall also fully and accurately disclose the following
24 information, which may be disclosed in a written, graphic, or
25 tabular form:
26 (1) A description of each component site, including
27 the name and address of each component site.
28 (2) The number of accommodations and timeshare
29 periods, expressed in periods of 7-day use availability,
30 committed to the multi-site timeshare plan and available
31 for use by purchasers.
32 (3) Each type of accommodation in terms of the
33 number of bedrooms, bathrooms, and sleeping capacity, and
34 a statement of whether or not the accommodation contains
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1 a full kitchen. For purposes of this description, a
2 "full kitchen" means a kitchen having a minimum of a
3 dishwasher, range, sink, oven, and refrigerator.
4 (4) A description of amenities available for use by
5 the purchaser at each component site.
6 (5) A description of the reservation system, which
7 shall include the following:
8 (A) The entity responsible for operating the
9 reservation system.
10 (B) A summary of the rules and regulations
11 governing access to and use of the reservation
12 system.
13 (C) The existence of and an explanation
14 regarding any priority reservation features that
15 affect a purchaser's ability to make reservations
16 for the use of a given accommodation on a
17 first-come, first-served basis.
18 (6) A description of any right to make any
19 additions, substitutions, or deletions of accommodations
20 or amenities, and a description of the basis upon which
21 accommodations and amenities may be added to, substituted
22 in, or deleted from the multi-site timeshare plan.
23 (7) A description of the purchaser's liability for
24 any fees associated with the multi-site timeshare plan.
25 (8) The location and the anticipated relative use
26 demand of each component site in a multi-site timeshare
27 plan, as well as any periodic adjustment or amendment to
28 the reservation system which may be needed in order to
29 respond to actual purchaser use patterns and changes in
30 purchaser use demand for the accommodations existing at
31 that time within the multi-site timeshare plan.
32 (9) Such other information reasonably required by
33 the Office of Banks and Real Estate and established by
34 administrative rule necessary for the protection of
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1 purchasers of timeshare interests in timeshare plans.
2 (10) Any other information that the developer, with
3 the approval of the Office of Banks and Real Estate,
4 desires to include in the public offering statement.
5 (d) If a developer offers a non-specific timeshare
6 interest in a multi-site timeshare plan, the developer shall
7 disclose the information set forth in subsection (b) as to
8 each component site.
9 Section 5-30. Exchange company registration and
10 disclosure requirements.
11 (a) Each exchange company offering an exchange program
12 to purchasers in this State shall register with the Office of
13 Banks and Real Estate by July 1 of each year. The
14 registration shall consist of the information specified in
15 this Section. However, an exchange company shall make its
16 initial registration at least 20 calendar days prior to
17 offering membership in an exchange program to any purchaser
18 in this State.
19 (b) If a purchaser is offered the opportunity to become
20 a member of an exchange program, the developer shall deliver
21 to the purchaser, together with the public offering statement
22 and any other materials required to be furnished under this
23 Section, and prior to the offering or execution of any
24 contract between the purchaser and the exchange company
25 offering membership in the exchange program, or, if the
26 exchange company is dealing directly with the purchaser, the
27 developer or the exchange company shall deliver to the
28 purchaser, prior to the initial offering or execution of any
29 contract between the purchaser and the exchange company, the
30 following written information regarding the exchange program,
31 the form and substance of which shall first be approved by
32 the Office of Banks and Real Estate in accordance with this
33 Section:
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1 (1) The name and address of the exchange company.
2 (2) The names of all officers, directors, and
3 shareholders of the exchange company.
4 (3) Whether the exchange company or any of its
5 officers or directors have any legal or beneficial
6 interest in any developer, seller, or managing entity for
7 any timeshare plan participating in the exchange program
8 and, if so, the identity of the timeshare plan and the
9 nature of the interest.
10 (4) Unless otherwise stated, a statement that the
11 purchaser's contract with the exchange company is a
12 contract separate and distinct from the purchaser's
13 contract with the seller of timeshare interests.
14 (5) Whether the purchaser's participation in the
15 exchange program is dependent upon the continued
16 affiliation of the applicable timeshare plan with the
17 exchange program.
18 (6) A statement that the purchaser's participation
19 in the exchange program is voluntary.
20 (7) A complete and accurate description of the
21 terms and conditions of the purchaser's contractual
22 relationship with the exchange program and the procedure
23 by which changes thereto may be made.
24 (8) A complete and accurate description of the
25 procedures necessary to qualify for and effectuate
26 exchanges.
27 (9) A complete and accurate description of all
28 limitations, restrictions, and priorities employed in the
29 operation of the exchange program, including but not
30 limited to limitations on exchanges based on seasonality,
31 accommodation size, or levels of occupancy, expressed in
32 conspicuous type, and, in the event that those
33 limitations, restrictions, or priorities are not
34 uniformly applied by the exchange company, a clear
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1 description of the manner in which they are applied.
2 (10) Whether exchanges are arranged on a
3 space-available basis and whether any guarantees of
4 fulfillment of specific requests for exchanges are made
5 by the exchange company.
6 (11) Whether and under what circumstances an owner,
7 in dealing with the exchange program, may lose the right
8 to use and occupy an accommodation of the timeshare plan
9 during a reserved use period with respect to any properly
10 applied-for exchange without being provided with
11 substitute accommodations by the exchange program.
12 (12) The fees or range of fees for participation by
13 owners in the exchange program, a statement of whether
14 any such fees may be altered by the exchange company, and
15 the circumstances under which alterations may be made.
16 (13) The name and address of the site of each
17 accommodation included within a timeshare plan
18 participating in the exchange program.
19 (14) The number of accommodations in each timeshare
20 plan that are available for occupancy and that qualify
21 for participation in the exchange program, expressed
22 within the following numerical groups: 1-5; 6-10; 11-20;
23 21-50; and 51 and over.
24 (15) The number of currently enrolled owners for
25 each timeshare plan participating in the exchange
26 program, expressed within the following numerical groups:
27 1-100; 101-249; 250-499; 500-999; and 1,000 and over; and
28 a statement of the criteria used to determine those
29 owners who are currently enrolled with the exchange
30 program.
31 (16) The disposition made by the exchange company
32 of use periods deposited with the exchange program by
33 owners enrolled in the exchange program and not used by
34 the exchange company in effecting exchanges.
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1 (17) The following information for the preceding
2 calendar year, which shall be independently audited by a
3 certified public accountant in accordance with the
4 standards of the Accounting Standards Board of the
5 American Institute of Certified Public Accountants and
6 reported annually no later than August 1 of each year:
7 (A) The number of owners currently enrolled in
8 the exchange program.
9 (B) The number of timeshare plans that have
10 current affiliation agreements with the exchange
11 program.
12 (C) The percentage of confirmed exchanges,
13 which is the number of exchanges confirmed by the
14 exchange program divided by the number of exchanges
15 properly applied for, together with a complete and
16 accurate statement of the criteria used to determine
17 whether an exchange request was properly applied
18 for.
19 (D) The number of use periods for which the
20 exchange program has an outstanding obligation to
21 provide an exchange to an owner who relinquished a
22 use period during a particular year in exchange for
23 a use period in any future year.
24 (E) The number of exchanges confirmed by the
25 exchange program during the year.
26 (F) A statement in conspicuous type to the
27 effect that the percentage described in subdivision
28 (17)(C) of this subsection is a summary of the
29 exchange requests entered with the exchange program
30 in the period reported and that the percentage does
31 not indicate the probabilities of an owner's being
32 confirmed to any specific choice or range of
33 choices.
34 (18) Such other information as may be reasonably
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1 required by the Office of Banks and Real Estate of any
2 exchange company as established by rule.
3 (c) No developer shall have any liability with respect
4 to any violation of this Act arising out of the publication
5 by the developer of information provided to it by an exchange
6 company pursuant to this Article. No exchange company shall
7 have any liability with respect to any violation of this Act
8 arising out of the use by a developer of information relating
9 to an exchange program other than that provided to the
10 developer by the exchange company.
11 (d) All written, visual, and electronic communications
12 relating to an exchange company or an exchange program shall
13 be filed with the Office of Banks and Real Estate upon its
14 request.
15 (e) The failure of an exchange company to observe the
16 requirements of this Section, and the use of any unfair or
17 deceptive act or practice in connection with the operation of
18 an exchange program, is a violation of this Act.
19 (f) An exchange company may elect to deny exchange
20 privileges to any owner whose use of the accommodations of
21 the owner's timeshare plan is denied, and no exchange program
22 or exchange company shall be liable to any of its members or
23 any third parties on account of any such denial of exchange
24 privileges.
25 Section 5-35. Resale agent registration requirements.
26 (a) Every resale agent as defined in this Act shall
27 register with the Office of Banks and Real Estate.
28 (b) Every resale agent shall be responsible for
29 registering the following information with the Office of
30 Banks and Real Estate on forms provided by the Office of
31 Banks and Real Estate:
32 (1) A description of the resale program offered by
33 the resale agent.
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1 (2) The legal name, any assumed names, and the
2 mailing address, street address, contact person, and
3 telephone number of the resale agent.
4 (3) A properly executed consent-to-audit form,
5 which allows the Office of Banks and Real Estate to audit
6 any escrow accounts held by the resale agent.
7 (4) Any other information required by the Office of
8 Banks and Real Estate to be filed by resale agents, as
9 established by rule.
10 (c) The following shall be exempt from registration
11 under this Section:
12 (1) Any developer, sales agent, acquisition agent,
13 or managing entity that is currently registered pursuant
14 to this Act.
15 (2) Any purchaser that sells or offers to sell his
16 or her own timeshare interest.
17 (3) Any homeowners' association that sells or
18 offers to sell its own timeshare interests acquired
19 through foreclosure, deed in lieu of foreclosure, or
20 gratuitous transfer.
21 (4) Any person who is licensed under the Real
22 Estate License Act of 1983 or its successor Act.
23 Section 5-40. Resale agent duties. Whether registered
24 or exempt from registration under Section 5-35, a resale
25 agent shall comply with all of the following:
26 (a) Prior to engaging in any resale activities on behalf
27 of any owner of a timeshare interest, a resale agent shall
28 enter into a listing agreement with that owner. Every
29 listing agreement shall be in writing and signed by both the
30 resale agent and the timeshare interest owner. The
31 requirements of the written listing agreement shall be
32 established by rule, but at a minimum the listing agreement
33 shall disclose the method of compensation, a definite date of
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1 termination, whether any fees are non-refundable, and whether
2 the agreement permits the timeshare resale agent or any other
3 person to make any use whatsoever of the owner's timeshare
4 interest or receive any rents or profits generated from such
5 use of the timeshare interest.
6 (b) A resale agent shall maintain records as required by
7 rule. The records required to be maintained include, but are
8 not limited to, all listing agreements, copies of
9 disbursement authorizations in accordance with subsection
10 (c), and resale contracts.
11 (c) A resale agent who collects any fees prior to a
12 transfer of an interest from any owner shall deposit the fees
13 in an escrow account. Any fees that are to be paid to the
14 resale agent prior to closing may be disbursed from the
15 escrow account only upon receipt of a disbursement
16 authorization, signed by the owner, in the following form:
17 "I, (name of owner), am the owner of a timeshare
18 interest in (name of timeshare plan). I understand that
19 for my protection I can require the entire fee to be held
20 in escrow until the closing on the resale of my timeshare
21 interest, but I am authorizing a release before the
22 transfer in the following amount: (amount written in
23 words) ($ (amount in numbers)), for the following purpose
24 or purposes (description of purpose or purposes). I
25 understand that the resale agent is regulated by the
26 Office of Banks and Real Estate under the Real Estate
27 Timeshare Act of 1999. The Office of Banks and Real
28 Estate requires the resale agent to obtain this
29 disbursement authorization with my signature before
30 disbursement of my funds."
31 (d) A resale agent shall utilize a purchase agreement
32 that discloses to a purchaser of a timeshare interest all of
33 the following:
34 (1) A legally sufficient description of the
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1 timeshare interest being purchased.
2 (2) The name and address of the managing entity of
3 the timeshare property.
4 (3) The current year's assessment for the common
5 expenses allocated to the timeshare interest being
6 purchased including the time period to which the
7 assessment relates and the date on which it is due. If
8 not included in the applicable common expense assessment,
9 the amount of any real or personal property taxes
10 allocated to the timeshare interest being purchased.
11 (4) A complete and accurate disclosure of the terms
12 and conditions of the purchase and closing, including the
13 obligations of the owner, the purchaser, or both for
14 closing costs and the title insurance.
15 (5) The entity responsible for providing
16 notification to the managing entity of the timeshare plan
17 and the applicable exchange company regarding any change
18 in the ownership of the timeshare interest.
19 (6) A statement of the first year in which the
20 purchaser is entitled to receive the actual use rights
21 and occupancy of the timeshare interest, as determined by
22 the managing entity of the timeshare plan and any
23 exchange company.
24 (7) In making the disclosures required by this
25 subsection (d), the timeshare resale agent may rely upon
26 information provided in writing by the owner or managing
27 entity of the timeshare plan.
28 (8) The purchaser's 5-day cancellation period as
29 required by Section 10-10.
30 (9) Any other information determined by the Office
31 of Banks and Real Estate and established by rule.
32 Section 5-45. Amendment to registration information or
33 public offering statement. The developer, resale agent, and
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1 exchange company shall amend or supplement their disclosure
2 documents and registration information to reflect any
3 material change in any information required by this Act or
4 the rules implementing this Act. All such amendments,
5 supplements, and changes shall be filed with the Office of
6 Banks and Real Estate within 20 calendar days of the material
7 change.
8 Section 5-50. Registration review time frames. Every
9 registration required to be filed with the Office of Banks
10 and Real Estate under this Act shall be reviewed and issued a
11 certificate of registration in accordance with the following
12 schedule:
13 (1) Comprehensive registration. Registration shall
14 be effective only upon the issuance of a certificate of
15 registration by the Office of Banks and Real Estate,
16 which, in the ordinary course of business, should occur
17 no more than 60 calendar days after actual receipt by the
18 Office of Banks and Real Estate of the properly completed
19 application. The Office of Banks and Real Estate must
20 provide a list of deficiencies in the application, if
21 any, within 60 calendar days of receipt.
22 (2) Abbreviated registration. Registration shall
23 be effective only upon the issuance of a certificate of
24 registration by the Office of Banks and Real Estate,
25 which, in the ordinary course of business, should occur
26 no more than 30 calendar days after actual receipt by the
27 Office of Banks and Real Estate of the properly completed
28 application. The Office of Banks and Real Estate must
29 provide a list of deficiencies in the application, if
30 any, within 30 calendar days of receipt.
31 (3) Alternative assurance registration.
32 Registration shall be deemed effective within 15 calendar
33 days of receipt, unless the Office of Banks and Real
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1 Estate provides to the applicant a written list of
2 deficiencies in the application, if any, within 15
3 calendar days of receipt.
4 (4) Preliminary permit registration. A preliminary
5 permit shall be issued within 15 calendar days of
6 receipt, unless the Office of Banks and Real Estate
7 provides to the applicant a written list of deficiencies
8 in the application, if any, within 15 calendar days of
9 receipt.
10 (5) Exchange company registration. Registration
11 shall be effective upon receipt by the Office of Banks
12 and Real Estate of a properly completed application. The
13 Office of Banks and Real Estate must provide a list of
14 deficiencies in the application, if any, within 30
15 calendar days of receipt.
16 Section 5-55. Fees. The Office of Banks and Real Estate
17 shall provide, by rule, for fees to be paid by applicants and
18 registrants to cover the reasonable costs of the Office of
19 Banks and Real Estate in administering and enforcing the
20 provisions of this Act. The Office of Banks and Real Estate
21 may also provide, by rule, for general fees to cover the
22 reasonable expenses of carrying out other functions and
23 responsibilities under this Act.
24 Section 5-60. Registration; offer or disposal of
25 interest. A developer, exchange company, or resale agent, or
26 any of their agents, shall not sell, offer, or dispose of a
27 timeshare interest unless all necessary registrations are
28 filed and approved by the Office of Banks and Real Estate, or
29 while an order revoking or suspending a registration is in
30 effect.
31 An applicant for registration under this Act shall submit
32 the necessary information to complete the application, as
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1 required by the Office of Banks and Real Estate, within 6
2 months from the date the initial registration application was
3 received by the Office of Banks and Real Estate. If the
4 applicant fails to submit the information necessary to
5 complete the application as required by the Office of Banks
6 and Real Estate within the six month period, said application
7 shall be voided, and a new registration application with
8 applicable fees must be submitted.
9 Section 5-65. Securities. The offer or disposition of
10 a timeshare interest in a timeshare plan which satisfies all
11 the requirements of this Act shall not be deemed to
12 constitute the offer and sale of a security under the
13 Illinois Securities Law of 1953.
14 Article 10. Business Practices
15 Section 10-5. Management and operation provisions.
16 (a) Before the first sale of a timeshare interest, the
17 developer shall create or provide for a managing entity,
18 which shall be either the developer, a separate manager or
19 management firm, the board of directors of an owners'
20 association, or some combination thereof.
21 (b) The duties of the managing entity include, but are
22 not limited to:
23 (1) Management and maintenance of all
24 accommodations constituting the timeshare plan.
25 (2) Collection of all assessments as provided in
26 the timeshare instrument.
27 (3) Providing to all purchasers each year an
28 itemized annual budget, which shall include all estimated
29 revenues and expenses.
30 (4) Maintenance of all books and records concerning
31 the timeshare plan.
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1 (5) Scheduling occupancy of accommodations, when
2 purchasers are not entitled to use specific timeshare
3 periods, so that all purchasers will be provided the
4 opportunity to use and possession of the accommodations
5 of the timeshare plan which they have purchased.
6 (6) Performing any other functions and duties that
7 are necessary and proper to maintain the accommodations
8 or that are required by the timeshare instrument.
9 (c) In the event a developer, managing entity, or
10 association files a complaint in a foreclosure proceeding
11 involving timeshare interests, the developer, managing
12 entity, or association may join in the same action multiple
13 defendant obligors and junior interest holders of separate
14 timeshare interests, provided:
15 (1) the foreclosure proceeding involves a single
16 timeshare plan;
17 (2) the foreclosure proceeding is filed by a single
18 plaintiff;
19 (3) the default and remedy provisions in the written
20 instruments on which the foreclosure proceeding is based
21 are substantially the same for each defendant; and
22 (4) the nature of the defaults alleged is the same
23 for each defendant.
24 (d) In any foreclosure proceeding involving multiple
25 defendants filed under subsection (c), the court shall sever
26 for separate trial any count of the complaint in which a
27 defense or counterclaim is timely raised by a defendant.
28 Section 10-10. Cancellation of purchase contract. Any
29 purchase contract entered into by a purchaser of a time share
30 interest under this Act shall be voidable by the purchaser,
31 without penalty, within 5 calendar days after the receipt of
32 the public offering statement or the execution of the
33 purchase contract, whichever is later. The purchase contract
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1 shall provide notice of the 5-day cancellation period,
2 together with the name and mailing address to which any
3 notice of cancellation shall be delivered. Notice of
4 cancellation shall be deemed timely if the notice is
5 deposited with the United States Postal Service not later
6 than midnight of the fifth calendar day.
7 Upon such cancellation, the developer or resale agent
8 shall refund to the purchaser all payments made by the
9 purchaser, less the amount of any benefits actually received
10 pursuant to the purchase contract. The refund shall be made
11 within 20 calendar days after the receipt of the notice of
12 cancellation, or receipt of funds from the purchaser's
13 cleared check, whichever occurs later.
14 If a purchaser elects to cancel a purchase contract
15 pursuant to this Section, the purchaser may do so by hand
16 delivering a written notice of cancellation or by mailing a
17 notice of cancellation by certified mail, return receipt
18 requested, to the developer or resale ent, as applicable, at
19 an address set forth in the purchase contract.
20 Section 10-15. Interests, liens, and encumbrances;
21 alternative assurances.
22 (a) Excluding any encumbrance placed against the
23 purchaser's timeshare interest securing the purchaser's
24 payment of purchase-money financing for such purchase, the
25 developer shall not be entitled to the release of any funds
26 escrowed under subsection (c) of Section 5-15 with respect to
27 each timeshare interest and any other property or rights to
28 property appurtenant to the timeshare interest, including any
29 amenities represented to the purchaser as being part of the
30 timeshare plan, until the developer has provided satisfactory
31 evidence to the Office of Banks and Real Estate of one of the
32 following:
33 (1) The timeshare interest together with any other
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1 property or rights to property appurtenant to the
2 timeshare interest, including any amenities represented
3 to the purchaser as being part of the timeshare plan, are
4 free and clear of any of the claims of the developer, any
5 owner of the underlying fee, a mortgagee, judgment
6 creditor, or other lienor, or any other person having an
7 interest in or lien or encumbrance against the timeshare
8 interest or appurtenant property or property rights.
9 (2) The developer, any owner of the underlying fee,
10 a mortgagee, judgment creditor, or other lienor, or any
11 other person having an interest in or lien or encumbrance
12 against the timeshare interest or appurtenant property or
13 property rights, including any amenities represented to
14 the purchaser as being part of the timeshare plan, has
15 recorded a subordination and notice to creditors document
16 in the appropriate public records of the jurisdiction in
17 which the timeshare interest is located. The
18 subordination document shall expressly and effectively
19 provide that the interest holder's right, lien, or
20 encumbrance shall not adversely affect, and shall be
21 subordinate to, the rights of the owners of the timeshare
22 interests in the timeshare plan regardless of the date of
23 purchase, from and after the effective date of the
24 subordination document.
25 (3) The developer, any owner of the underlying fee,
26 a mortgagee, judgment creditor, or other lienor, or any
27 other person having an interest in or lien or encumbrance
28 against the timeshare interest or appurtenant property or
29 property rights, including any amenities represented to
30 the purchaser as being part of the timeshare plan, has
31 transferred the subject accommodations or amenities or
32 all use rights therein to a nonprofit organization or
33 owners' association to be held for the use and benefit of
34 the owners of the timeshare plan, which entity shall act
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1 as a fiduciary to the purchasers, provided that the
2 developer has transferred control of such entity to the
3 owners or does not exercise its voting rights in such
4 entity with respect to the subject accommodations or
5 amenities. Prior to the transfer, any lien or other
6 encumbrance against the accommodation or facility shall
7 be made subject to a subordination and notice to
8 creditors instrument pursuant to paragraph (2).
9 (4) Alternative arrangements have been made which
10 are adequate to protect the rights of the purchasers of
11 the timeshare interests and approved by the Office of
12 Banks and Real Estate.
13 (b) Nothing in this Section shall prevent a developer
14 from accessing any escrow funds if the developer has complied
15 with subsection (c) of Section 5-15.
16 Section 10-20. Licenses. Any sales or resale agent
17 shall comply with the provisions of the Real Estate License
18 Act of 1983, or its successor Act and the rules adopted
19 pursuant to that Act, including licensure, unless otherwise
20 exempt under the Real Estate License Act of 1983, or its
21 successor Act and the rules adopted pursuant to that Act.
22 Section 10-25. Liability; material misrepresentation.
23 (a) A developer or other person offering a timeshare
24 plan may not do any of the following:
25 (1) Misrepresent a fact material to a purchaser's
26 decision to buy a timeshare interest.
27 (2) Predict specific or immediate increases in the
28 value of a timeshare interest represented over a period
29 of time, excluding bona fide pending price increases by
30 the developer.
31 (3) Materially misrepresent the qualities or
32 characteristics of accommodations or the amenities
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1 available to the occupant of those accommodations.
2 (4) Misrepresent the length of time accommodations
3 or amenities will be available to the purchaser of a
4 timeshare interest.
5 (5) Misrepresent the conditions under which a
6 purchaser of a timeshare interest may exchange the right
7 of his or her occupancy for the right to occupy other
8 accommodations.
9 (b) A developer or other person using a promotion in
10 connection with the offering of a timeshare interest shall
11 clearly disclose all of the following:
12 (1) That the purpose of the promotion is to sell
13 timeshare interests, which shall appear in bold face or
14 other conspicuous type.
15 (2) That any person whose name or address is
16 obtained during the promotion may be solicited to
17 purchase a timeshare interest.
18 (3) The name of each developer or other person
19 trying to sell a timeshare interest through the
20 promotion, and the name of each person paying for the
21 promotion.
22 (4) The complete rules of the promotion.
23 (5) The method of awarding prizes, gifts,
24 vacations, discount vacations, or other benefits under
25 the promotion; a complete and fully detailed description,
26 including approximate retail value, of all prizes, gifts,
27 or benefits under the promotion; the quantity of each
28 prize, gift, or benefit to be awarded or conferred; and
29 the date by which each prize, gift, or benefit will be
30 awarded or conferred.
31 (6) Any other disclosures provided by rule.
32 (c) If a person represents that a prize, gift, or
33 benefit will be awarded in connection with a promotion, the
34 prize, gift, or benefit must be awarded or conferred in the
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1 manner represented, and on or before the date represented.
2 Section 10-30. Records. The managing entity shall keep
3 detailed financial records directly related to the operation
4 of the association. All financial and other records shall be
5 made reasonably available for examination by any purchaser,
6 or the authorized agent of the purchaser, and the Office of
7 Banks and Real Estate. For purposes of this Section, the
8 books and records of the timeshare plan shall be considered
9 "reasonably available" if copies of the requested portions
10 are delivered to the purchaser or the purchaser's agent or
11 the Office of Banks and Real Estate within 7 days of the date
12 the managing entity receives a written request for the
13 records signed by the purchaser or the Office of Banks and
14 Real Estate. The managing entity may charge the purchaser a
15 reasonable fee for copying the requested information.
16 Section 10-35. Maintenance of records. Every
17 developer, exchange company, or resale agent shall maintain,
18 for a period of 2 years, records of any individuals employed
19 by the developer, exchange company, or resale agent,
20 including the last known address of each of those
21 individuals.
22 Section 10-40. Partition. No action for partition of a
23 timeshare interest may be initiated except as permitted by
24 the timeshare instrument.
25 Article 15. Disciplinary Provisions
26 Section 15-5. Investigation. The Office of Banks and
27 Real Estate may investigate the actions or qualifications of
28 any person or persons holding or claiming to hold a
29 certificate of registration under this Act. Such a person
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1 is referred to as "the respondent" in this Article.
2 Section 15-10. Disciplinary hearings; record;
3 appointment of administrative law judge.
4 (a) The Office of Banks and Real Estate has the authority
5 to conduct hearings before an administrative law judge on
6 proceedings to revoke, suspend, place on probation,
7 reprimand, or refuse to issue or renew registrants registered
8 under this Act, or to impose a civil penalty not to exceed
9 $25,000 upon any registrant registered under this Act.
10 (b) The Office of Banks and Real Estate, at its expense,
11 shall preserve a record of all proceedings at the formal
12 hearing of any case involving the refusal to issue or the
13 revocation, suspension, or other discipline of a registrant.
14 The notice of hearing, complaint, and all other documents in
15 the nature of pleadings and written motions filed in the
16 proceedings, the transcript of testimony, the report of the
17 Board, and the orders of the Office of Banks and Real Estate
18 shall be the record of proceeding. At all hearings or
19 prehearing conferences, the Office of Banks and Real Estate
20 and the respondent shall be entitled to have a court reporter
21 in attendance for purposes of transcribing the proceeding or
22 prehearing conference.
23 (c) The Commissioner has the authority to appoint any
24 attorney duly licensed to practice law in the State of
25 Illinois to serve as an administrative law judge in any
26 action for refusal to issue or renew a certificate of
27 registration or to discipline a registrant or person holding
28 a certificate of registration. The administrative law judge
29 has full authority to conduct the hearing. The
30 administrative law judge shall report his or her findings and
31 recommendations to the Commissioner. If the Commissioner
32 disagrees with the recommendation of the administrative law
33 judge, the Commissioner may issue an order in contravention
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1 of the recommendation.
2 Section 15-15. Notice of proposed disciplinary action;
3 hearing.
4 (a) Before taking any disciplinary action with regard to
5 any registrant, the Office of Banks and Real Estate shall:
6 (1) notify the respondent in writing, at least 30
7 calendar days prior to the date set for the hearing, of
8 any charges made, the time and place for the hearing of
9 the charges, and that testimony at the hearing will be
10 heard under oath; and
11 (2) inform the respondent that upon failure to file
12 an answer and request a hearing before the date
13 originally set for the hearing, default will be taken
14 against the respondent and the respondent's registration
15 may be suspended or revoked, or the respondent may be
16 otherwise disciplined, as the Office of Banks and Real
17 Estate may deem proper.
18 (b) If the respondent fails to file an answer after
19 receiving notice, the respondent's registration may, in the
20 discretion of the Office of Banks and Real Estate, be revoked
21 or suspended, or the respondent may be otherwise disciplined
22 as deemed proper, without a hearing, if the act or acts
23 charged constitute sufficient grounds for that action under
24 this Act.
25 (c) At the time and place fixed in the notice, the Office
26 of Banks and Real Estate shall proceed to hearing of the
27 charges. Both the respondent and the complainant shall be
28 accorded ample opportunity to present in person, or by
29 counsel, statements, testimony, evidence, and argument that
30 may be pertinent to the charges or any defense to the
31 charges.
32 Section 15-20. Disciplinary consent orders.
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1 Notwithstanding any other provisions of this Act concerning
2 the conduct of hearings and recommendations for disciplinary
3 actions, the Office of Banks and Real Estate has the
4 authority to negotiate agreements with registrants and
5 applicants resulting in disciplinary consent orders. Any
6 such consent order may provide for any form of discipline
7 provided for in the Act. Any such consent order shall provide
8 that it is not entered into as a result of any coercion by
9 the Office of Banks and Real Estate. Any such consent order
10 shall be accepted by signature or rejected by the
11 Commissioner in a timely manner.
12 Section 15-25. Disciplinary action; civil penalty.
13 The Office of Banks and Real Estate may refuse to issue or
14 renew any registration, or revoke or suspend any registration
15 or place on probation or administrative supervision, or
16 reprimand any registrant, or impose a civil penalty not to
17 exceed $25,000, for any one or any combination of the
18 following causes:
19 (1) A registrant's disregard or violation of any
20 provision of this Act or of the rules adopted by the
21 Office of Banks and Real Estate to enforce this Act.
22 (2) A conviction of the registrant or any principal
23 of the registrant of (i) a felony under the laws of any
24 U.S. jurisdiction, (ii) a misdemeanor under the laws of
25 any U.S. jurisdiction if an essential element of the
26 offense is dishonesty, or (iii) a crime under the laws of
27 any U.S. jurisdiction if the crime relates directly to
28 the practice of the profession regulated by this Act.
29 (3) A registrant's making any misrepresentation for
30 the purpose of obtaining a registration or certificate of
31 registration.
32 (4) A registrant's discipline by another U.S.
33 jurisdiction, state agency, or foreign nation regarding
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1 the practice of the profession regulated by this Act, if
2 at least one of the grounds for the discipline is the
3 same as or substantially equivalent to one of those set
4 forth in this Act.
5 (5) A finding by the Office of Banks and Real
6 Estate that the registrant, after having his or her
7 registration placed on probationary status, has violated
8 the terms of probation.
9 (6) A registrant's practicing or attempting to
10 practice under a name other than the name as shown on his
11 or her registration or any other legally authorized name.
12 (7) A registrant's failure to file a return, or to
13 pay the tax, penalty, or interest shown in a filed
14 return, or to pay any final assessment of tax, penalty,
15 or interest, as required by any tax Act administered by
16 the Illinois Department of Revenue, until the
17 requirements of any such tax Act are satisfied.
18 (8) A registrant's engaging in dishonorable,
19 unethical, or unprofessional conduct of a character
20 likely to deceive, defraud, or harm the public.
21 (9) A registrant's aiding or abetting another person
22 or persons in disregarding or violating any provision of
23 this Act or of the rules adopted by the Office of Banks
24 and Real Estate to enforce this Act.
25 (10) Any representation in any document or
26 information filed with the Office of Banks and Real
27 Estate which is false or misleading.
28 (11) A registrant's disseminating or causing to be
29 disseminated any false or misleading promotional
30 materials or advertisements in connection with a
31 timeshare plan.
32 (12) A registrant's concealing, diverting, or
33 disposing of any funds or assets of any person in a
34 manner that impairs the rights of purchasers of timeshare
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1 interests in the timeshare plan.
2 (13) A registrant's failure to perform any
3 stipulation or agreement made to induce the Office of
4 Banks and Real Estate to issue an order relating to the
5 timeshare plan.
6 (14) A registrant's engaging in any act that
7 constitutes a violation of Section 3-102, 3-103, 3-104,
8 or 3-105 of the Illinois Human Rights Act.
9 (15) A registrant's failure to provide information
10 requested in writing by the Office of Banks and Real
11 Estate, within 30 days of the request, either as the
12 result of a formal or informal complaint to the Office of
13 Banks and Real Estate or as a result of a random audit
14 conducted by the Office of Banks and Real Estate, which
15 would indicate a violation of this Act.
16 (16) A registrant's failure to account for or remit
17 any escrow funds coming into his or her possession which
18 belonged to others.
19 (17) A registrant's failure to make available to
20 Office of Banks and Real Estate personnel during normal
21 business hours all escrow records and related documents
22 maintained in connection therewith, within 24 hours after
23 a request from the Office of Banks and Real Estate
24 personnel.
25 Section 15-30. Subpoenas; attendance of witnesses;
26 oaths.
27 (a) The Office of Banks and Real Estate has the power to
28 issue subpoenas ad testificandum and to bring before it any
29 persons, and to take testimony either orally or by
30 deposition, or both, with the same fees and mileage and in
31 the same manner as prescribed in civil cases in the courts of
32 this State. The Office of Banks and Real Estate has the
33 power to issue subpoenas duces tecum and to bring before it
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1 any documents, papers, files, books, and records, with the
2 same costs and in the same manner as prescribed in civil
3 cases in the courts of this State.
4 (b) Upon application of the Office of Banks and Real
5 Estate or its designee or of the applicant, registrant, or
6 person holding a certificate of registration against whom
7 proceedings under this Act are pending, any circuit court may
8 enter an order compelling the enforcement of any subpoena
9 issued by the Office of Banks and Real Estate in connection
10 with any hearing or investigation.
11 (c) The Commissioner and the designated administrative
12 law judge have power to administer oaths to witnesses at any
13 hearing that the Office of Banks and Real Estate is
14 authorized to conduct and any other oaths authorized in any
15 Act administered by the Office of Banks and Real Estate.
16 Section 15-35. Administrative law judge's findings of
17 fact, conclusions of law, and recommendations. At the
18 conclusion of the hearing, the administrative law judge shall
19 present to the Commissioner a written report of the
20 administrative law judge's findings of fact, conclusions of
21 law, and recommendations regarding discipline or a civil
22 penalty. The report shall contain a finding of whether or
23 not the respondent violated this Act or failed to comply with
24 conditions required in this Act. The administrative law
25 judge shall specify the nature of the violation or failure to
26 comply.
27 If the Commissioner disagrees in any regard with the
28 report of the administrative law judge, the Commissioner may
29 issue an order in contravention of the report. The
30 Commissioner shall provide a written report to the
31 administrative law judge on any deviation and shall specify
32 with particularity the reasons for that action in the final
33 order.
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1 Section 15-40. Rehearing. After any hearing involving
2 disciplinary action against a registrant, a copy of the
3 administrative law judge's report shall be served on the
4 respondent by the Office of Banks and Real Estate, either
5 personally or as provided in this Act for the service of the
6 notice of hearing. Within 20 calendar days after the
7 service, the respondent may present to the Office of Banks
8 and Real Estate a motion in writing for a rehearing. The
9 motion shall specify the particular grounds for rehearing. If
10 the respondent orders a transcript of the record from the
11 reporting service and pays for it within the time for filing
12 a motion for rehearing, the 20 calendar day period within
13 which a motion for rehearing may be filed shall commence upon
14 the delivery of the transcript to the respondent.
15 If no motion for rehearing is filed, then upon the
16 expiration of the time specified for filing a motion, or if a
17 motion for rehearing is denied, then upon denial, the
18 Commissioner may enter an order in accordance with the
19 recommendations of the administrative law judge, except as
20 otherwise provided in this Article. Whenever the
21 Commissioner is not satisfied that substantial justice has
22 been done in the hearing or in the administrative law judge's
23 report, the Commissioner may order a rehearing by the same or
24 some other duly qualified administrative law judge.
25 Section 15-45. Order or certified copy. An order or a
26 certified copy of an order, over the seal of the Office of
27 Banks and Real Estate and purporting to be signed by the
28 Commissioner, shall be prima facie proof of the following:
29 (1) That the signature is the genuine signature of
30 the Commissioner.
31 (2) That the Commissioner is duly appointed and
32 qualified.
33 (3) That the administrative law judge is duly
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1 appointed and qualified.
2 Section 15-50. Restoration of certificate of
3 registration. At any time after the suspension or revocation
4 of any certificate of registration, the Office of Banks and
5 Real Estate may restore the certificate of registration to
6 the respondent upon the written recommendation of the
7 Commissioner, unless after an investigation and a hearing the
8 Commissioner determines that restoration is not in the public
9 interest.
10 Section 15-55. Surrender of certificate of registration.
11 Upon the revocation or suspension of a certificate of
12 registration, the registrant shall immediately surrender the
13 certificate of registration to the Office of Banks and Real
14 Estate. If the registrant fails to do so, the Office of
15 Banks and Real Estate has the right to seize the certificate
16 of registration.
17 Section 15-60. Administrative Review Law. All final
18 administrative decisions of the Office of Banks and Real
19 Estate under this Act are subject to judicial review under
20 the Administrative Review Law and the rules implementing
21 that Law. The term "administrative decision" is defined as
22 in Section 3-101 of the Code of Civil Procedure. Proceedings
23 for judicial review shall be commenced in the circuit court
24 of the county in which the party applying for review resides,
25 but if the party is not a resident of this State, the venue
26 shall be in Cook or Sangamon County.
27 Pending the court's final decision on administrative
28 review, the acts, orders, sanctions, and rulings of the
29 Office of Banks and Real Estate regarding any registration
30 shall remain in full force and effect unless modified or
31 stayed by court order pending a final judicial decision.
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1 The Office of Banks and Real Estate shall not be required
2 to certify any record to the court or file any answer in
3 court or otherwise appear in any court in a judicial review
4 proceeding unless there is filed in the court, with the
5 complaint, a receipt from the Office of Banks and Real Estate
6 acknowledging payment of the costs of furnishing and
7 certifying the record. Failure on the part of the plaintiff
8 to file a receipt in the court is grounds for dismissal of
9 the action.
10 Section 15-65. Public interest, safety, or welfare;
11 summary suspension. The Commissioner may temporarily suspend
12 any registration pursuant to this Act, without hearing,
13 simultaneously with the institution of proceedings for a
14 hearing provided for in this Section, if the Commissioner
15 finds that the evidence indicates that the public interest,
16 safety, or welfare imperatively requires emergency action.
17 If the Commissioner temporarily suspends any registration
18 without a hearing, a hearing must be held within 30 calendar
19 days after the suspension. The person whose registration is
20 suspended may seek a continuance of the hearing, during which
21 the suspension shall remain in effect. The proceeding shall
22 be concluded without appreciable delay.
23 Section 15-70. Non-registered practice; civil penalty;
24 injunction.
25 (a) Any person who practices, offers to practice,
26 attempts to practice, or holds himself or herself out to
27 practice as a registrant under this Act without being
28 registered under this Act shall, in addition to any other
29 penalty provided by law, pay a civil penalty to the Office of
30 Banks and Real Estate in an amount not to exceed $25,000 for
31 each offense as determined by the Office of Banks and Real
32 Estate. The civil penalty shall be assessed by the Office of
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1 Banks and Real estate after a hearing is held in accordance
2 with the provisions set forth in this Act regarding the
3 provision of a hearing for the discipline of a registrant.
4 (b) The Office of Banks and Real Estate has the
5 authority and power to investigate any and all non-registered
6 activity.
7 (c) A civil penalty imposed under subsection (a) shall
8 be paid within 60 days after the effective date of the order
9 imposing the civil penalty. The order shall constitute a
10 judgment and may be filed, and execution may be had thereon,
11 in the same manner as any judgment from any court of record.
12 (d) Engaging in timeshare practices in Illinois by any
13 entity not holding a valid and current certificate of
14 registration under this Act is declared to be inimical to the
15 public welfare, to constitute a public nuisance, and to cause
16 irreparable harm to the public welfare. The Commissioner,
17 the Attorney General, the State's Attorney of any county in
18 the State, or any person may maintain an action in the name
19 of the People of the State of Illinois, and may apply for
20 injunctive relief in any circuit court to enjoin such entity
21 from engaging in such practice. Upon the filing of a
22 verified petition in the court, the court, if satisfied by
23 affidavit or otherwise that such entity has been engaged in
24 such practice without a valid and current certificate of
25 registration, may enter a temporary restraining order without
26 notice or bond, enjoining the defendant from such further
27 practice. Only the showing of nonregistration, by affidavit
28 or otherwise, is necessary in order for a temporary
29 injunction to issue. A copy of the verified complaint shall
30 be served upon the defendant and the proceedings shall
31 thereafter be conducted as in other civil cases except as
32 modified by this Section. If it is established that the
33 defendant has been or is engaged in such unlawful practice,
34 the court may enter an order or judgment perpetually
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1 enjoining the defendant from further practice. In all
2 proceedings hereunder, the court, in its discretion, may
3 apportion the costs among the parties interested in the
4 action, including cost of filing the complaint, service of
5 process, witness fees and expenses, court reporter charges
6 and reasonable attorneys' fees. In the case of a violation
7 of any injunctive order entered under the provisions of this
8 Section, the court may summarily try and punish the offender
9 for contempt of court. Proceedings for an injunction under
10 this Section shall be in addition to, and not in lieu of, all
11 penalties and other remedies provided in this Act.
12 Section 15-75. Action for compensation; proof of
13 registration. No action or counterclaim may be maintained by
14 any person in any court in this State with respect to any
15 agreement, contract, or services for which registration is
16 required by this Act, or to recover the agreed price or any
17 compensation under any such agreement, or to recover for
18 services for which a registration is required by this Act,
19 without alleging and proving that the person had a valid
20 certificate of registration at the time of making the
21 agreement or doing the work.
22 Section 15-80. Cease and desist orders. The Office of
23 Banks and Real Estate may issue a cease and desist order to
24 any person who engages in any activity prohibited by this
25 Act. Any person in violation of a cease and desist order
26 entered by the Office of Banks and Real Estate is subject to
27 all of the remedies provided by law.
28 Section 15-85. Statute of limitations. Any action or
29 proceeding to enforce any provision of this Act must be
30 commenced within 5 years following the date of the claim upon
31 which the action or proceeding is based accrues.
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1 Article 20. Administration
2 Section 20-5. Administration of Act. The Office of
3 Banks and Real Estate shall exercise the powers and duties
4 prescribed by the Civil Administrative Code of Illinois and
5 shall exercise other powers and duties necessary for
6 effectuating the purposes of this Act. The Office of Banks
7 and Real Estate may contract with third parties for services
8 necessary for the proper administration of this Act. The
9 Office of Banks and Real Estate has the authority to
10 establish public policies and procedures necessary for the
11 administration of this Act.
12 Section 20-10. Administrative rules. The Office of
13 Banks and Real Estate shall adopt rules for the
14 implementation and enforcement of this Act.
15 Section 20-15. Real Estate License Administration Fund.
16 All fees collected for registration and for civil
17 penalties pursuant to this Act and administrative rules
18 adopted under this Act shall be deposited into the Real
19 Estate License Administration Fund. The moneys deposited in
20 the Real Estate License Administration Fund shall be
21 appropriated to the Office of Banks and Real Estate for
22 expenses for the administration and enforcement of this Act.
23 Section 20-20. Forms. The Office of Banks and Real
24 Estate may prescribe forms and procedures for submitting
25 information to the Office of Banks and Real Estate.
26 Section 20-25. Site inspections. The Office of Banks
27 and Real Estate shall thoroughly investigate all matters
28 relating to an application for registration under this Act
29 and may require a personal inspection of any developer,
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1 timeshare plan, accommodation, exchange company, or resale
2 company and any offices where any of the foregoing may
3 transact business. All reasonable expenses incurred by the
4 Office of Banks and Real Estate in investigating such matters
5 shall be borne by the registrant, and the registrant shall
6 reimburse the Office of Banks and Real Estate for those
7 expenses within 30 calendar days of receipt of notice of the
8 expenses from the Office. The Office of Banks and Real
9 Estate may require a deposit sufficient to cover the expenses
10 prior to incurring the expenses.
11 Article 25. Transition
12 Section 25-5. Registrations under preceding Act. All
13 registrations of developers, timeshare plans, acquisition
14 agents, exchange companies, managing agents, resale agents,
15 and sales agents under the Illinois Real Estate Time-share
16 Act in effect on the effective date of this Act shall remain
17 in full force and effect after the effective date of this Act
18 and be considered registered under this Act.
19 The provisions of this Act, insofar as they are the same
20 or substantially the same as those of any prior law, shall be
21 construed as a continuation of such prior law and not as a
22 new enactment. Any existing injunction or temporary
23 restraining order validly obtained under the Illinois Real
24 Estate Time-share Act which prohibits unregistered practice
25 of timeshare developers, timeshare plans, and their agents
26 shall not be invalidated by the enactment of this Act and
27 shall continue to have full force and effect on and after the
28 effective date of this Act.
29 Any existing disciplinary action or investigation
30 pursuant to a violation under the Illinois Real Estate
31 Time-share Act shall not be invalidated by the enactment of
32 this Act and shall continue to have full force and effect on
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1 and after the effective date of this Act.
2 Article 90. Amendatory Provisions
3 Section 90-5. The Real Estate License Act of 2000 is
4 amended, if and only if that Act becomes law, by changing
5 Sections 1-10 and 5-20 as follows:
6 Sec. 1-10. Definitions. In this Act, unless the context
7 otherwise requires:
8 "Act" means the Real Estate License Act of 2000.
9 "Advisory Council" means the Real Estate Education
10 Advisory Council created under Section 30-10 of this Act.
11 "Agency" means a relationship in which a real estate
12 broker or licensee, whether directly or through an affiliated
13 licensee, represents a consumer by the consumer's consent,
14 whether express or implied, in a real property transaction.
15 "Applicant" means any person, as defined in this Section,
16 who applies to OBRE for a valid license as a real estate
17 broker, real estate salesperson, or leasing agent.
18 "Blind advertisement" means any real estate advertisement
19 that does not include the sponsoring broker's business name
20 and that is used by any licensee regarding the sale or lease
21 of real estate, including his or her own, licensed
22 activities, or the hiring of any licensee under this Act.
23 The broker's business name in the case of a franchise shall
24 include the franchise affiliation as well as the name of the
25 individual firm.
26 "Board" means the Real Estate Administration and
27 Disciplinary Board of OBRE.
28 "Branch office" means a sponsoring broker's office other
29 than the sponsoring broker's principal office.
30 "Broker" means an individual, partnership, limited
31 liability company, corporation, or registered limited
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1 liability partnership other than a real estate salesperson or
2 leasing agent who for another and for compensation either
3 directly or indirectly:
4 (1) Sells, exchanges, purchases, rents, or leases
5 real estate.
6 (2) Offers to sell, exchange, purchase, rent, or
7 lease real estate.
8 (3) Negotiates, offers, attempts, or agrees to
9 negotiate the sale, exchange, purchase, rental, or
10 leasing of real estate.
11 (4) Lists, offers, attempts, or agrees to list real
12 estate for sale, lease, or exchange.
13 (5) Buys, sells, offers to buy or sell, or
14 otherwise deals in options on real estate or improvements
15 thereon.
16 (6) Supervises the collection, offer, attempt, or
17 agreement to collect rent for the use of real estate.
18 (7) Advertises or represents himself or herself as
19 being engaged in the business of buying, selling,
20 exchanging, renting, or leasing real estate.
21 (8) Assists or directs in procuring or referring of
22 prospects, intended to result in the sale, exchange,
23 lease, or rental of real estate.
24 (9) Assists or directs in the negotiation of any
25 transaction intended to result in the sale, exchange,
26 lease, or rental of real estate.
27 (10) Opens real estate to the public for marketing
28 purposes.
29 "Brokerage agreement" means a written or oral agreement
30 between a sponsoring broker and a consumer for licensed
31 activities to be provided to a consumer in return for
32 compensation or the right to receive compensation from
33 another. Brokerage agreements may constitute either a
34 bilateral or a unilateral agreement between the broker and
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1 the broker's client depending upon the content of the
2 brokerage agreement. All exclusive brokerage agreements shall
3 be in writing.
4 "Client" means a person who is being represented by a
5 licensee.
6 "Commissioner" means the Commissioner of Banks and Real
7 Estate or a person authorized by the Commissioner, the Office
8 of Banks and Real Estate Act, or this Act to act in the
9 Commissioner's stead.
10 "Compensation" means the valuable consideration given by
11 one person or entity to another person or entity in exchange
12 for the performance of some activity or service.
13 Compensation shall include the transfer of valuable
14 consideration, including without limitation the following:
15 (1) commissions;
16 (2) referral fees;
17 (3) bonuses;
18 (4) prizes;
19 (5) merchandise;
20 (6) finder fees;
21 (7) performance of services;
22 (8) coupons or gift certificates;
23 (9) discounts;
24 (10) rebates;
25 (11) a chance to win a raffle, drawing, lottery, or
26 similar game of chance not prohibited by any other law or
27 statute;
28 (12) retainer fee; or
29 (13) salary.
30 "Confidential information" means information obtained by
31 a licensee from a client during the term of a brokerage
32 agreement that (i) was made confidential by the written
33 request or written instruction of the client, (ii) deals with
34 the negotiating position of the client, or (iii) is
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1 information the disclosure of which could materially harm the
2 negotiating position of the client, unless at any time:
3 (1) the client permits the disclosure of
4 information given by that client by word or conduct;
5 (2) the disclosure is required by law; or
6 (3) the information becomes public from a source
7 other than the licensee.
8 "Confidential information" shall not be considered to
9 include material information about the physical condition of
10 the property.
11 "Consumer" means a person or entity seeking or receiving
12 licensed activities.
13 "Continuing education school" means any person licensed
14 by OBRE as a school for continuing education in accordance
15 with Section 30-15 of this Act.
16 "Credit hour" means 50 minutes of classroom instruction
17 in course work that meets the requirements set forth in rules
18 adopted by OBRE.
19 "Customer" means a consumer who is not being represented
20 by the licensee but for whom the licensee is performing
21 ministerial acts.
22 "Designated agency" means a contractual relationship
23 between a sponsoring broker and a client under Section 15-50
24 of this Act in which one or more licensees associated with or
25 employed by the broker are designated as agent of the client.
26 "Designated agent" means a sponsored licensee named by a
27 sponsoring broker as the legal agent of a client, as provided
28 for in Section 15-50 of this Act.
29 "Director" means the Director of the Real Estate
30 Division, OBRE.
31 "Dual agency" means an agency relationship in which a
32 licensee is representing both buyer and seller or both
33 landlord and tenant in the same transaction. When the agency
34 relationship is a designated agency, the question of whether
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1 there is a dual agency shall be determined by the agency
2 relationships of the designated agent of the parties and not
3 of the sponsoring broker.
4 "Employee" or other derivative of the word "employee",
5 when used to refer to, describe, or delineate the
6 relationship between a real estate broker and a real estate
7 salesperson, another real estate broker, or a leasing agent,
8 shall be construed to include an independent contractor
9 relationship, provided that a written agreement exists that
10 clearly establishes and states the relationship. All
11 responsibilities of a broker shall remain.
12 "Escrow moneys" means all moneys, promissory notes or any
13 other type or manner of legal tender or financial
14 consideration deposited with any person for the benefit of
15 the parties to the transaction. A transaction exists once an
16 agreement has been reached and an accepted real estate
17 contract signed or lease agreed to by the parties. Escrow
18 moneys includes without limitation earnest moneys and
19 security deposits, except those security deposits in which
20 the person holding the security deposit is also the sole
21 owner of the property being leased and for which the security
22 deposit is being held.
23 "Inoperative" means a status of licensure where the
24 licensee holds a current license under this Act, but the
25 licensee is prohibited from engaging in licensed activities
26 because the licensee is unsponsored or the license of the
27 sponsoring broker with whom the licensee is associated or by
28 whom he or she is employed is currently expired, revoked,
29 suspended, or otherwise rendered invalid under this Act.
30 "Leasing Agent" means a person who is employed by a real
31 estate broker to engage in licensed activities limited to
32 leasing residential real estate who has obtained a license as
33 provided for in Section 5-5 of this Act.
34 "License" means the document issued by OBRE certifying
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1 that the person named thereon has fulfilled all requirements
2 prerequisite to licensure under this Act.
3 "Licensed activities" means those activities listed in
4 the definition of "broker" under this Section.
5 "Licensee" means any person, as defined in this Section,
6 who holds a valid unexpired license as a real estate broker,
7 real estate salesperson, or leasing agent.
8 "Listing presentation" means a communication between a
9 real estate broker or salesperson and a consumer in which the
10 licensee is attempting to secure a brokerage agreement with
11 the consumer to market the consumer's real estate for sale or
12 lease.
13 "Managing broker" means a broker who has supervisory
14 responsibilities for licensees in one or, in the case of a
15 multi-office company, more than one office and who has been
16 appointed as such by the sponsoring broker of the real estate
17 firm.
18 "Medium of advertising" means any method of communication
19 intended to influence the general public to use or purchase a
20 particular good or service or real estate.
21 "Ministerial acts" means those acts that a licensee may
22 perform for a consumer that are informative or clerical in
23 nature and do not rise to the level of active representation
24 on behalf of a consumer. Examples of these acts include
25 without limitation (i) responding to phone inquiries by
26 consumers as to the availability and pricing of brokerage
27 services, (ii) responding to phone inquiries from a consumer
28 concerning the price or location of property, (iii) attending
29 an open house and responding to questions about the property
30 from a consumer, (iv) setting an appointment to view
31 property, (v) responding to questions of consumers walking
32 into a licensee's office concerning brokerage services
33 offered or particular properties, (vi) accompanying an
34 appraiser, inspector, contractor, or similar third party on a
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1 visit to a property, (vii) describing a property or the
2 property's condition in response to a consumer's inquiry,
3 (viii) completing business or factual information for a
4 consumer on an offer or contract to purchase on behalf of a
5 client, (ix) showing a client through a property being sold
6 by an owner on his or her own behalf, or (x) referral to
7 another broker or service provider.
8 "OBRE" means the Office of Banks and Real Estate.
9 "Office" means a real estate broker's place of business
10 where the general public is invited to transact business and
11 where records may be maintained and licenses displayed,
12 whether or not it is the broker's principal place of
13 business.
14 "Person" means and includes individuals, entities,
15 corporations, limited liability companies, registered limited
16 liability partnerships, and partnerships, foreign or
17 domestic, except that when the context otherwise requires,
18 the term may refer to a single individual or other described
19 entity.
20 "Personal assistant" means a licensed or unlicensed
21 person who has been hired for the purpose of aiding or
22 assisting a sponsored licensee in the performance of the
23 sponsored licensee's job.
24 "Pocket card" means the card issued by OBRE to signify
25 that the person named on the card is currently licensed under
26 this Act.
27 "Pre-license school" means a school licensed by OBRE
28 offering courses in subjects related to real estate
29 transactions, including the subjects upon which an applicant
30 is examined in determining fitness to receive a license.
31 "Pre-renewal period" means the period between the date of
32 issue of a currently valid license and the license's
33 expiration date.
34 "Real estate" means and includes leaseholds as well as
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1 any other interest or estate in land, whether corporeal,
2 incorporeal, freehold, or non-freehold, including timeshare
3 interests, and whether the real estate is situated in this
4 State or elsewhere.
5 "Real Estate Administration and Disciplinary Board" or
6 "Board" means the Real Estate Administration and Disciplinary
7 Board created by Section 25-10 of this Act.
8 "Salesperson" means any individual, other than a real
9 estate broker or leasing agent, who is employed by a real
10 estate broker or is associated by written agreement with a
11 real estate broker as an independent contractor and
12 participates in any activity described in the definition of
13 "broker" under this Section.
14 "Sponsoring broker" means the broker who has issued a
15 sponsor card to a licensed salesperson, another licensed
16 broker, or a leasing agent.
17 "Sponsor card" means the temporary permit issued by the
18 sponsoring real estate broker certifying that the real estate
19 broker, real estate salesperson, or leasing agent named
20 thereon is employed by or associated by written agreement
21 with the sponsoring real estate broker, as provided for in
22 Section 5-40 of this Act.
23 (Source: 91HB902ham01.)
24 Sec. 5-20. Exemptions from broker, salesperson, or
25 leasing agent license requirement. The requirement for
26 holding a license under this Article 5 shall not apply to:
27 (1) Any person, partnership, or corporation that as
28 owner or lessor performs any of the acts described in the
29 definition of "broker" under Section 1-10 of this Act with
30 reference to property owned or leased by it, or to the
31 regular employees thereof with respect to the property so
32 owned or leased, where such acts are performed in the regular
33 course of or as an incident to the management, sale, or other
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1 disposition of such property and the investment therein,
2 provided that such regular employees do not perform any of
3 the acts described in the definition of "broker" under
4 Section 1-10 of this Act in connection with a vocation of
5 selling or leasing any real estate or the improvements
6 thereon not so owned or leased.
7 (2) An attorney in fact acting under a duly executed and
8 recorded power of attorney to convey real estate from the
9 owner or lessor or the services rendered by an attorney at
10 law in the performance of the attorney's duty as an attorney
11 at law.
12 (3) Any person acting as receiver, trustee in
13 bankruptcy, administrator, executor, or guardian or while
14 acting under a court order or under the authority of a will
15 or testamentary trust.
16 (4) Any person acting as a resident manager for the
17 owner or any employee acting as the resident manager for a
18 broker managing an apartment building, duplex, or apartment
19 complex, when the resident manager resides on the premises,
20 the premises is his or her primary residence, and the
21 resident manager is engaged in the leasing of the property of
22 which he or she is the resident manager.
23 (5) Any officer or employee of a federal agency in the
24 conduct of official duties.
25 (6) Any officer or employee of the State government or
26 any political subdivision thereof performing official duties.
27 (7) Any multiple listing service or other information
28 exchange that is engaged in the collection and dissemination
29 of information concerning real estate available for sale,
30 purchase, lease, or exchange along with which no other
31 licensed activities are provided.
32 (8) Railroads and other public utilities regulated by
33 the State of Illinois, or the officers or full time employees
34 thereof, unless the performance of any licensed activities is
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1 in connection with the sale, purchase, lease, or other
2 disposition of real estate or investment therein not needing
3 the approval of the appropriate State regulatory authority.
4 (9) Any medium of advertising in the routine course of
5 selling or publishing advertising along with which no other
6 licensed activities are provided.
7 (10) Any resident lessee of a residential dwelling unit
8 who refers for compensation to the owner of the dwelling
9 unit, or to the owner's agent, prospective lessees of
10 dwelling units in the same building or complex as the
11 resident lessee's unit, but only if the resident lessee (i)
12 refers no more than 3 prospective lessees in any 12-month
13 period, (ii) receives compensation of no more than $1,000 or
14 the equivalent of one month's rent, whichever is less, in any
15 12-month period, and (iii) limits his or her activities to
16 referring prospective lessees to the owner, or the owner's
17 agent, and does not show a residential dwelling unit to a
18 prospective lessee, discuss terms or conditions of leasing a
19 dwelling unit with a prospective lessee, or otherwise
20 participate in the negotiation of the leasing of a dwelling
21 unit.
22 (11) An exchange company registered under the Real
23 Estate Timeshare Act of 1999 and the regular employees of
24 that registered exchange company but only when conducting an
25 exchange program as defined in that Act.
26 (12) An existing timeshare owner who, for compensation,
27 refers prospective purchasers, but only if the existing
28 timeshare owner (i) refers no more than 20 prospective
29 purchasers in any calendar year, (ii) receives no more than
30 $1,000, or its equivalent, for referrals in any calendar year
31 and (iii) limits his or her activities to referring
32 prospective purchasers of timeshare interests to the
33 developer or the developer's employees or agents, and does
34 not show, discuss terms or conditions of purchase or
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1 otherwise participate in negotiations with regard to
2 timeshare interests.
3 (Source: 91HB902 as introduced.)
4 (765 ILCS 100/Act rep.)
5 Section 90-10. The Illinois Real Estate Time-Share Act is
6 repealed.
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