HAR §16-106-4.6. Purchaser protections required for resales by developer

(a) Any developer who reacquires a time share interest and resells the same shall meet and adhere to all sales registration requirements under chapter 514E, HRS; provided that the reacquired time share interest need not be re-registered if the same has previously been registered and there has been no material changes in the 106-25 status of the time share program. For the purposes of this section, the term "reacquired time share interest" shall mean that the time share interest was previously sold by or through the developer and reacquired by the developer through foreclosure, repurchase, or other means whereby title to that interest becomes vested in the developer or the developer’s agent. (b) Any developer who resells reacquired time share interests without conforming to the requirements of chapter 514E, HRS, and this chapter shall be subject to the sanctions provided by chapter 514E, HRS, and this chapter. (c) The developer must notify the department of its intention to sell reacquired time share interests on a form prescribed by the director which shall include, but not be limited to, the following: (1) The name of the time share plan under which the reacquired time share interest was previously registered; (2) The unit number of the reacquired time share interest; and (3) The number of interests being offered for sale in each unit. [Eff and comp 3/7/88; comp 9/15/90] (Auth: HRS §514E-13) (Imp: HRS §514E-10) §16-106-5 Responsible managing employee; designation, duties, and change. (a) No application of a corporate developer, corporate acquisition agent, corporate sales agent, corporate plan manager, or corporate exchange agent shall be accepted unless the corporation has designated a responsible managing employee (RME) and prescribed the RME’s duties, responsibilities, and obligations with respect to the corporation’s time share operation. (b) The RME shall be responsible for the direct management of the corporation’s affairs with respect to the corporation’s time share operation. The RME shall not be deemed to have the direct management of the corporation’s time share operation unless the RME: (1) Is a bona fide employee of the corporation and has direct control, supervision, and management of the corporation’s time share operation; (2) Has full knowledge and control of the corporation’s accounting practices; (3) Has full knowledge and control over the moneys belonging to and in the custody of the corporation in connection with the time share operation; and (4) Has full access to all books, records, and documents materially relative to the corporation’s part in the time share operation, whether these materials are kept in the State or out-of-state. 106-26 (c) The name, address, and telephone number of the RME shall be provided to the director. (d) A plan manager may designate one or more RMEs. (e) When there is a change in RME, the name of the new RME shall be reported to the director in writing within twenty days of the change. (f) Where a developer or plan manager of two or more time share plans, at least one of which plans includes time share units located in this State, maintains its principal office or has primary management and accounting functions out-of-state, the duties of the RME specified in subsection (b) may be divided between two or more RMEs of the developer or plan manager, with no one RME being vested with all of these duties; provided that at least one RME is located within the State; and provided further that the RME located within the State shall be responsible for all activities conducted in the State with respect to the corporation’s time share operation. [Eff 11/15/80; am and comp 3/28/85; comp 8/30/85; comp 11/29/85; comp 6/5/87; comp 3/7/88; comp 9/15/90] (Auth: HRS §514E-13) (Imp: HRS §514E-10) §16-106-6 Copy of disclosure statement to be given to prospective purchasers. (a) A prospective purchaser of any interest or interests in a time share plan shall, before signing a sales contract, be: (1) Provided with a copy of the disclosure statement which shall be a true, accurate, and complete reproduction or printing of the statement filed with and accepted by the director; and (2) Given an opportunity to read the statement. (b) Prospective purchasers receiving a copy of the disclosure statement shall sign a statement acknowledging receipt of the same on a form prescribed by the director; provided that: (1) The receipt shall be kept at the principal office of the developer, whether the office is located in the State or out-of-state, for a period of two years from the date thereof; and (2) Upon reasonable notice, the receipt shall be made available for inspection in the State by the director or a representative of the director. If the receipt is not made available, inspection shall be made at the place where the receipt is kept and any and all costs, including travel expense, per diem, and salary of the inspector, shall be borne by the developer. The director may require the developer to remit in advance the amount of the estimated cost prior to inspection. Failure on the part of the developer to comply with the director’s request to remit the amount of the estimated cost may be grounds for cancellation, suspension, or revocation of a registration. [Eff 11/15/80; am and comp 3/28/85; 106-27 comp 8/30/85; comp 11/29/85; comp 6/5/87; comp 3/7/88; comp 9/15/90] (Auth: HRS §514E-13) (Imp: HRS §514E-9)