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which 40 percent are available for sale or rental; and (2) SB 1461, a bill to extend the general excise tax exemption for timeshare operators and condominium sub-managers by one year to December 31, 2010. Non-Judicial Foreclosure on Its Way in Illinois Amendments to the 1999 Illinois Real Estate Timeshare Act (SB 2112) passed both houses and was transmitted to the governor for his signature on June 26. He had 60 calendar days to sign the bill. ARDA pushed for the original Senate bill that contained some clean-up marketing provisions, additional resale disclosures, and non-judicial foreclosure provisions for timeshare mortgages and assessment liens. The Department of Financial and Professional Regulation submitted some corrective language for the 1999 act. After some negotiations with ARDA, the House attached the amendments, and the bill moved smoothly out of the House to concurrence in the Senate on May 29, with unanimous votes in both chambers. Arizona turned out to be one of two timeshare-heavy states in the United States that did not include the timeshare exception in the state’s introduced bill. (The other, very briefly, was Florida.) The federal model of the SAFE Act excludes extensions of credit to timeshare buyers from the requirement for mortgage originator licensing (which would have covered most developers offering financing to purchasers). timeshare project delegate voting in master associations. Under this new law, timeshare owners will be able to vote through delegates, no matter the size of the master association. AB 140, a foreclosure bill targeted for primary residential properties, was amended by ARDA to exempt timeshares and fractionals from additional non-judicial foreclosure requirements. Four Nevada Bills Enacted with ARDA Amendments Nevada Senator Michael Schneider sponsored SB 176, which amends Chapter 119A, allowing timeshare owners to be relocated and timeshare units withdrawn from the plan under certain circumstances—a concept of first impression. Governor Jim Gibbons signed the bill, which takes effect on October 1, 2009. ARDA staff worked extensively with Nevada legal counsel and other ARDA members to ensure that additional consumer protections were included. The large number of foreclosures in some Nevada resorts served as the impetus for the bill, as a way to “right size” the resort and deal more efficiently with maintenance responsibilities and costs. Governor Gibbons also signed AB 149 (foreclosure mediation required nonjudicial foreclosures on owner-occupied housing), effective July 1, 2009. The original bill failed to exclude timeshares and fractionals, so ARDA successfully negotiated an amendment exempting timeshares and fractionals from the mediation requirement. The governor also signed two bills of interest to ARDA on June 11, including SB 183 regarding Texas Timeshare Amendments Signed by Governor Perry SB 1036 contained several technical corrections and additions to the 2005 Timeshare Act, including permitting the Texas Real Estate Commission (TREC) to accept an abbreviated filing for any out-ofstate timeshare accommodation, allowing developers to use such terms as “vacation ownership” in disclosures and adding a new section requiring timeshare interests to be conveyed “free and clear” to consumers, similar to provisions in most other states. The requirements of SB 1036 are effective on September 1, 2009, but are not binding on timeshare developers until January 15, 2010, according to TREC. SB 1638 was also enacted in late May. The bill allows a recreational district near San Antonio (which contains several timeshare resorts) to impose a tax on transient rentals to support water-oriented recreation. ARDA and local developers had the bill amended to correct problematic language, regarding collection of the tax on rentals by the managing entity. AZ Mortgage Licensing Bill Includes Timeshare Exemption The Arizona legislature finally adopted the timeshare exemption to HB 2143, which will implement the state’s version of the federal Secure and Fair Enforcement (SAFE) Mortgage Licensing Act of 2008. Despite continued lobbying by ARDA in the House, the exemption wasn’t added until the bill reached the Senate. The bill was enacted on July 13. October 2009 • Developments

October 2009 Developments

Table of Contents for the Digital Edition of October 2009 Developments

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