October 2009 Developments - 23

fractional interest products. That is why in the latter case of fractional products, it is a common strategy to use trust structures and sell beneficial ownership rights in the same instead of direct ownership to the unit and an undivided interest to the common areas. A trust structure is the preferred option because it (a) allows the developer to transfer to the purchaser the use and enjoyment of the unit, subject to the applicable declaration and provisions of the trust agreement; (b) creates fractional interests, the transfer of which is subject to the provisions of those same documents; and (c) creates a structure under which the developer and/ or operator may guarantee continuity and uniformity. Finally, the current definition under the Profeco Law allows the Timeshare Entity to develop and operate the resort and sell timeshare products without the need of subjecting the property to a condominium regime—although it may be advisable in certain circumstances to do so for entirely different reasons. Timeshare Entities should also note that the Profeco Law and the Timeshare Act regard timeshare purchase contracts as “contracts of adhesion,” which needs to meet certain requirements. Per the most recent revision of the Timeshare Act, enacted early this year, these requirements include certain disclosure and registration requirements for the sale or pre-sale of timeshare products and other more specific requirements for financed transactions. Thus, contracts for the sale of timeshare products must be revised to assure their compliance with the abovementioned regulations, as amended. (2) Places particular emphasis in defining and regulating timeshare as a service without any real property interest being created; (3) Allows timeshare products to be purchased and owned directly by non-Mexicans (i.e., without the need of an individual land holding trust); (4) Sets forth, with greater detail, the requirements that the timeshare purchase agreements (deemed “contracts of adhesion”) should meet; (5) Requires the timeshare purchase agreement to include a five-day rescission period without any penalty, and the procedure and penalties in the event of purchaser’s early termination—beyond the mandatory rescission period—or breach of contract; and (6) Sets forth the requirements that apply to the offer and sale in Mexico of timeshare services to be provided in a foreign country. The Timeshare Norm may soon be replaced by the Draft Norm, which has been approved by the Mexican Ministry of Tourism and Ministry of Finance, FONATUR, the Consumer Protection Agency (“Profeco”), the Mexican Association of Developers and Tourism Promoters of Timeshare (also known as ADEPROTUR), and other private and governmental organizations. The principal contributions of the Draft Norm are (a) recognition of the purchaser’s privacy rights, prohibiting Timeshare Entities from using purchasers’ information for marketing purposes or sharing the same with third parties without the purchasers’ written consent; (b) requirement of less burdensome guarantees with respect to the performance of obligations under the timeshare purchase agreements than those required of Timeshare Entities under the Timeshare Norm; and (c) establishment of less onerous requirements for the termination of the timeshare service. These changes will require all Timeshare Entities to modify their purchase contracts and some of their business practices accordingly. Financed Transactions The TILA and TILA Regulations, enacted in May 2008 and amended on June 25, 2009, apply to timeshare purchase agreements, where the purchase was financed by the Timeshare Entity, and also to the corresponding marketing materials and Web site publications. Among other requirements, the TILA Regulations provide that all such timeshare purchase agreements must • Be drafted in Spanish; • Be divided in chapters or sections that make their reading and interpretation easier, and facilitate the Client’s Timeshare Norm/Draft Norm In essence, the Timeshare Norm does the following: (1) Sets forth the general disclosure requirements and regulatory elements applicable to Timeshare Entities, for purposes of protecting the purchasing power and the satisfaction of the purchased service; October 2009 • Developments

October 2009 Developments

Table of Contents for the Digital Edition of October 2009 Developments

October 2009 Developments - 1
October 2009 Developments - C1
October 2009 Developments - I1
October 2009 Developments - I2
October 2009 Developments - I3
October 2009 Developments - I4
October 2009 Developments - 4
October 2009 Developments - 5
October 2009 Developments - 6
October 2009 Developments - 7
October 2009 Developments - 8
October 2009 Developments - 9
October 2009 Developments - 10
October 2009 Developments - 11
October 2009 Developments - 12
October 2009 Developments - 13
October 2009 Developments - 14
October 2009 Developments - 15
October 2009 Developments - 16
October 2009 Developments - 17
October 2009 Developments - 18
October 2009 Developments - 19
October 2009 Developments - 20
October 2009 Developments - 21
October 2009 Developments - 22
October 2009 Developments - 23
October 2009 Developments - 24
October 2009 Developments - 25
October 2009 Developments - 26
October 2009 Developments - 27
October 2009 Developments - 28
October 2009 Developments - 29
October 2009 Developments - 30
October 2009 Developments - 31
October 2009 Developments - 32
October 2009 Developments - 33
October 2009 Developments - 34
October 2009 Developments - 35
October 2009 Developments - 36
October 2009 Developments - 37
October 2009 Developments - 38
October 2009 Developments - 39
October 2009 Developments - 40
October 2009 Developments - 41
October 2009 Developments - 42
October 2009 Developments - 43
October 2009 Developments - 44
October 2009 Developments - 45
October 2009 Developments - 46
October 2009 Developments - 47
October 2009 Developments - 48
October 2009 Developments - 49
October 2009 Developments - 50
October 2009 Developments - 51
October 2009 Developments - 52
October 2009 Developments - 53
October 2009 Developments - 54
October 2009 Developments - 55
October 2009 Developments - 56
October 2009 Developments - 57
October 2009 Developments - 58
October 2009 Developments - 59
October 2009 Developments - 60
October 2009 Developments - 61
October 2009 Developments - 62
https://www.nxtbookmedia.com