State of CA Department of Real Estate timeshare information

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Please list links and information for CA timeshare legal issues and due diligence checks. Please post what links you have under the proper geographical heading.

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San Diego County, California

http://www.sdcounty.ca.gov/

San Diego County Tax search:

County of San Diego Treasurer - Tax Collector


San Diego County Deed search (Assessor/Recorder/County Clerk):

Gregory J. Smith - Assessor/Recorder/County Clerk


San Diego County Property Tax Sales for Timeshare Associations:

County of San Diego Treasurer - Tax Collector

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Orange County, California

OC Treasurer Tax Collector:

http://tax.ocgov.com/treas/tax_page.asp


OC Clerk-Recorder (deed search):

http://www.ocgov.com/ocgov/Clerk-Rec...-%20Tom%20Daly

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Riverside County, California

Here's the link for Riverside County property taxes:

http://www.treasurer-tax.co.riverside.ca.us/

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State of CA Department of Real Estate timeshare information

California Department of Real Estate regulations and advice regarding timeshares. More than you probably wanted to know but some good stuff if and when needed.

http://www.dre.ca.gov/pdf_docs/timeshare_manual.pdf


Timeshares

The Department of Real Estate (DRE) not only administers and enforces the laws governing the sale of subdivided lots and common interest developments, including condominiums and planned developments, it also administers and enforces laws governing the sale of timeshare interests. Many of the same laws that govern the sale of subdivided lots and common interest developments govern the sale of timeshare interests. In fact, timeshare interests in any timeshare project which are to be sold in California, whether that project is located in California or in any other state in the United States, are subject to similar regulation.

Before marketing timeshare interests in a timeshare project, the sponsors of a timeshare project are required to obtain a public report issued by the DRE which discloses many of the important aspects of the timeshare offering. That public report must be presented to prospective purchasers before purchase so they have an opportunity to read it before making a purchase decision. The sponsor, or its licensed sales agent, must also give the purchaser a receipt to be signed indicating that the purchaser received and read the public report. As required by law, attached to the face page of the public report is a notice explaining to the purchaser how he or she may rescind the purchase and have all purchase monies returned if rescission is properly requested within three days of purchase.


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What kinds of timeshare projects are regulated?

Although there are many different kinds of timeshare offerings, including timesharing of large resorts, small or large hotels, homes, boats, ocean liners and even vehicles, the DRE only regulates the sale of timeshare interests in real property. There are two basic types of timeshare interests over which DRE has jurisdiction, a timeshare estate and timeshare use.

Timeshare estate refers to the right of occupancy in a timeshare project coupled with an estate in real property. This type of timeshare interest is typically transferred to the purchaser by grant deed.

Timeshare use (or right to use) refers to an interest based on a purchase agreement between the seller and the purchaser rather than a deed to an interest. The purchase agreement may take different forms, such as a license or membership agreement. In any case, the purchaser does not receive an estate in or title to real property.

Public reports are required for both types of timeshare interests if the offering involves 12 or more timeshare interests having terms of at least five years. Timeshare uses involving property without structural dwelling places are not regulated.

There are also variations on the basic types of timeshare interests.

Multi-site timeshare projects offer the purchase of a recurring right to occupy accommodations in a timeshare project consisting of more than one resort through a reservation system on a nonpriority basis.

Single-site timeshare projects offer the purchase of a recurring right to reserve occupancy of accommodations at one site on a priority basis. This type of project may be associated with other timeshare projects or resorts by means of a contractual arrangement or membership program through a reservation system that is operated and controlled by an affiliate of the sponsor or a third party. Under this arrangement, owners of interests in all of the timeshare projects involved in this contractual or membership program would have reservation rights in all the member timeshare projects or resorts. However, owners of timeshare interests in the single-site timeshare project would have priority over other timeshare interest owners in making reservations for use of that single-site timeshare project for a period of time each year when reservations may be made for the single-site timeshare project. After that reservation priority period expires, timeshare interest owners in all the other member timeshare projects or resorts will be able to compete for occupancy on an equal basis with owners of interests in the single-site timeshare project.


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Before a public report is issued by the DRE, how does the DRE qualify the timeshare offering?

The Subdivided Lands Law (beginning with Section 11000 of the California Business and Professions Code and continuing through Section 11200) is the basis for DRE's authority over all subdivisions including timeshare projects. It specifies numerous consumer protections that must be in place before a public report is issued.

Among the most important protections are the requirements:

That the sponsor shows that it has the ability to deliver title or other interest contracted for;
That the property can be used for the purposes offered; and
That financial arrangements have been made for construction and completion of all offsite improvements such as access streets, utilities, etc. and onsite facilities including any improvements to be represented as being included within the timeshare property.
There are certain purchase money protections to ensure that before an escrow on the sale of a timeshare interest closes and the timeshare interest is conveyed to the purchaser, the timeshare interest is protected against the adverse impact from any blanket encumbrances against the property, such as an existing blanket deed of trust.

Also, there are affirmative standards, established by regulation that timeshare sponsors must meet before a public report is issued. The following are examples of affirmative standards:

The sponsor must present evidence that the timeshare dwellings are suitable for occupancy.
Arrangements must be made for transferring control of the property to an association of timeshare interest owners.
The rights of owners to use and occupy dwelling units and use of the amenities of the project must be stated in writing in an enforceable Declaration of Covenants, Conditions and Restrictions (CC&Rs).
The Business and Professions Code and the California Code of Regulations require that there be an organization of timeshare interest owners established for the purpose of operating, managing, maintaining and controlling the uses of the timeshare project. This organization is typically in the form of a non-profit incorporated owners association in which each timeshare interest owner becomes a member.

Each timeshare owner's interest in the timeshare project, including his or her rights and remedies as a member of its association, will be controlled by governing instruments which generally include a Declaration of Covenants, Conditions and Restrictions; Articles of Incorporation; and Bylaws. The provisions of these documents are, in most cases, enforceable in a court of law. Purchasers should study these documents carefully before entering into a contract to purchase. These documents control how one may use and occupy a time share interest.

In order to provide funds for both the operation and maintenance of the improvements and the administration of the timeshare project, including its management and reservation system, the association will levy assessments against your timeshare interest. You must pay these assessments whether you use the project or not. If you become delinquent in the payment of assessments, the association may enforce payment through court proceedings or lien and foreclose on your interest leading to the loss of your timeshare interest. The income and expenses of the association, including the amount of assessments you must pay on a periodic basis, usually annually, are shown in the budget of the association. You should ask to see a copy of the budget if the sponsor has not provided a copy of one to you. If you purchase a timeshare interest in a project and that project has had sales for a year or more, you should examine the current financial statements of the association to determine if the financial condition of the project is sound. For example, if the association's expenses exceed its income, if there are insufficient reserves for the payment of long-term expenses, such as roofs that may need repair or furniture that may need replacing, or if there are significant owner or sponsor assessment delinquencies, the project may be suffering problems that cannot be fixed without increases in assessments payable by non-delinquent owners.

Good management is vital to the success of a timeshare project. Because the project consists of non-resident owners, the association of timeshare owners contracts with a managing agent to perform the day-to-day tasks of running the timeshare project and administering the reservation system. A managing agent may be affiliated with the sponsor of the timeshare program or may be a third party unrelated to the sponsor.

Timeshare interest owners should consider taking an active part in the affairs of the association to insure the integrity of the timeshare interests. This can be accomplished by being elected to and serving as a member of the association's board of directors. Otherwise, a purchaser's control over the operation of the timeshare program is limited to voting as a member of the association. There are actions that have significant impact on the timeshare program that do require the vote of members. However, although the board of directors is empowered to take certain actions, including making decisions without the vote of individual members, there are actions that have significant impact on the timeshare program that do require the vote of members.

Because of the transient nature of timeshare ownership, the timeshare sponsor typically retains control of the association for a very long time. Until the project is mostly sold out, it is likely the developer will have effective control. When there is a transfer of control, It is important that the transition from sponsor to interest owner control be accomplished in an orderly manner.

DRE regulations have extensive provisions governing the establishment of an association, including but not limited to voting requirements, requirements for regular and special meetings of the members and board of directors, budgetary and assessment provisions, including limitations on assessment increases without a membership vote, and the dissemination of financial and other association documentation to members.


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What aspects of timeshare projects are not subject to DRE regulatory controls?

A single-site timeshare project in which purchasers have the right to reserve occupancy in that project is subject to comprehensive regulation by the Department. All elements of the project, including its reservation system, are subject to Business and Professions Code Section 11018.5 (d) and (e). This section requires that there be reasonable arrangements provided to the interests of the purchasers for management, maintenance, preservation, operation, use and control of their interests. The reasonable arrangements are established through the "affirmative standards" as described under the preceding topic, "Before a public report is issued by the DRE, how does the DRE qualify the timeshare offering?" All aspects of the timeshare project are subject to these affirmative standards, including the reservation system.

As mentioned earlier in this article, there is a type of single-site timeshare project that has a reservation system that not only serves that single-site timeshare project but also serves other timeshare projects. This reservation arrangement enables purchasers of timeshare interests in the single site project and timeshare owners in those other projects served by the reservation system to reserve occupancy in all timeshare projects under that reservation system. After a period of time during which only the timeshare owners of interests in the single-site timeshare project may reserve occupancy in that project, owners of interests in all the other timeshare projects served by the reservation system may compete for reservations in that single-site project. Likewise, purchasers of interests in that single-site project may request reservations in the other timeshare projects. The regulations of the Department of Real Estate require that the time period during which owners of interests in the single-site timeshare project may make reservations in that project prior to the time period which other persons may make reservations last at least three months. This is generally called a mandatory reservation system.

Typically, the developer of the single-site timeshare project or an affiliate of the developer operates this type of reservation system. In contrast, a single-site timeshare project in which the reservation system is not "mandatory" as described above, is operated and controlled by the interest owner's association.

The operator of a mandatory reservation system usually creates the reservation arrangements which become binding on all participating timeshare projects, including the single-site timeshare project, by means of a separate agreement or contract with each of the projects. Each of the timeshare projects become "members" of the reservation system. The sponsors of these kinds of offerings often characterize this arrangement as a "club."

Under present California law and regulations, the mandatory reservation system is not subject to affirmative standards, unlike other single-site timeshare project reservation systems.

California laws and regulations include only three requirements regarding a mandatory reservation system:

The first is the "priority reservation period" discussed previously.
The second requirement limits increases in costs of the reservation system to timeshare owners to not more than 10% per year without the assenting vote of a majority of members of the association of the single-site timeshare project.
The third requirement permits timeshare owners in the single-site timeshare project, under California statutes, to decide periodically whether to sever their relationship with the mandatory reservation system. Section 11003.5(h) of the Business and Professions Code requires that the owners of timeshare interests in the single-site timeshare project hold a vote every five years to consider terminating membership in the reservation system. If the requisite number of owners vote to terminate membership, the owners in that single-site project would lose their rights to reserve occupancy in the other timeshare projects that are members of the reservation system. The owners of interests in those other projects would also have no right to reserve occupancy in the single-site timeshare project. At that point the owners of interests in the single-site timeshare project, through their association, would establish, operate and control the reservation system for their project.
Other than those three regulatory requirements, timeshare purchasers in a single-site timeshare project have no control over a mandatory reservation system thus the operator may change various elements of the reservation system without the timeshare owners' consent. Furthermore, the operator of the mandatory reservation system has the right to terminate its contractual relationship with the single-site project at any time.

If the single-site timeshare project includes a mandatory reservation system and does not provide for the three requirements described above, that single-site timeshare project will be regulated under California law as a multi-site timeshare project defined under Business and Professions Code Section 11003.5(f). The reservation system for a multi-site timeshare project is subject to "affirmative standards" similar to those of a single-site timeshare project without a mandatory reservation system.

It would be unlawful for a sponsor to offer for sale timeshare interests in a single-site timeshare project subject to a mandatory reservations system unless the other affiliated timeshare projects or resorts are subject to arrangements that provide the following:

Any blanket encumbrances against those projects are subordinate to the rights of the members.
There are adequate provisions for lien-free completion of the improvements in each project.
The number of nights to which timeshare interest owners are entitled to use do not exceed the number of nights available.
Mechanisms exist for reasonable maintenance of the projects and adequate provisions for funding operations.
Maintenance costs, including reserves, are in compliance with the laws of the state in which the project is located.
Each affiliated project is in compliance with its state's laws.
Additionally, purchasers of interests in the single-site timeshare project must be given a disclosure by the sponsor that provides descriptive information about each affiliated timeshare project as described in Business and Professions Code Section 11018.11.

Pursuant to Business and Professions Code Section 11018.10, the sponsor of a single-site timeshare project affiliated with other timeshare projects through a mandatory reservation system can not represent that a purchaser is guaranteed the right to use and occupy accommodations at more than the single-site timeshare project in which he or she owns a timeshare interest. Otherwise, the offering will be regulated as a multi-site timeshare project.

In considering whether to purchase an interest in a single-site timeshare project subject to a mandatory reservation system, one should consider that the operator of the reservation system controls the reservation arrangement and may terminate the single-site timeshare project's membership in the reservation system at any time without reason. There is no assurance the arrangement will continue. Except during the priority reservation period for reserving occupancy in the single-site timeshare project, a timeshare owner will be competing with timeshare interest owners in all the other timeshare projects which are members of the reservation system for occupancy in the single-site timeshare project and other member projects.

Exchange companies - Often, the primary incentive for purchasing a timeshare interest is the opportunity for the owner to trade use of time owned in the timeshare project for the use of time in other resorts which have contractual relationships with an exchange company. Some exchange companies are operated by the developers or sponsors of the timeshare projects. Other exchange companies are independent of the timeshare developer or sponsor.

DRE does not regulate exchange companies in any way nor require any assurances of future exchange program availability. Be aware that, under Section 11003.5(d) of the Business and Professions Code, if a purchaser's total financial obligation for the exchange program exceeds $3,000 per timeshare interest, the offering is regulated as a multi-site timeshare project.

Because there is no guarantee that the project will remain affiliated with any particular exchange program and because they are basically unregulated, before entering into a contractual relationship, purchasers should use discretion in evaluating exchange programs offered in conjunction with a timeshare offering.

Incidental benefits - As defined in Business and Professions Code Section 11013.5(e), an incidental benefit is an accommodation, product, service, discount or other benefit other than an exchange program, which is offered to a prospective purchaser of a timeshare interest prior to the end of the rescission period. The incidental benefit is limited to five years or less. Incidental benefits are unregulated by the DRE and purchasers should be cautioned that the continued availability of the benefits should be carefully considered.

According to Business and Professions Code Section 11018.9, incidental benefits may be offered only if the continued availability of the incidental benefit is not necessary in order for any accommodation or facility, which is not an incidental benefit, to be used in a manner consistent with the plan of use set forth in all the timeshare documents or represented by the sponsor, including any advertisement or promotion. The use or participation in the incidental benefit must be completely voluntary and payment for use is required only upon use or participation. Finally, to qualify as an incidental benefit, no costs of acquisition, operation, maintenance or repair of the incidental benefit may be passed on to the purchasers as common expenses of the timeshare project.

Examples of incidental benefits may include discounted airline tickets, accommodations at hotels, discounts on car rentals and other items made available by the sponsor.


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What is a Timeshare "Points" Program?

There is another variation of the type of timeshare program that is becoming more prominent, especially concerning projects in which purchasers have the right to reserve occupancy in more than one resort. Rather than the purchasers having the right to reserve a week every year or every other year in a resort, a certain number of "points" are assigned at the time of purchase to each purchaser. Point systems are structures for flexible use whereby the value of the use right of a timeshare interest owner is expressed in terms of points rather than in increments of time.

The product sold to a timeshare purchaser may consist of a traditional timeshare estate or a timeshare use interest not coupled with an estate in real property. However, the value of reservation rights is entirely a function of the points the purchaser receives at the time of purchase. The number of points conveyed to a purchaser is typically shown in the purchase agreement. In some cases, they may be indicated on the Grant Deed, if the offering is a timeshare estate offering. The number of points assigned to a purchaser does not change as long as the purchaser owns the timeshare interest or unless he or she purchases additional points.

In a points based timeshare program, the more points a purchaser buys, the more flexibility he or she has in using the interest. In projects that involve more than one resort, a purchaser with a large number of points will have reservation rights to longer use periods in a wider variety of unit-types during the more popular seasons of the year than a purchaser of a smaller number of points.

Point valuations for each unit, season and resort are typically established in the governing documents for the timeshare project. Points-based programs may include the right of the operator of the reservation system for the project to make changes, subject to certain limitations, to point valuations for units in a resort. Such changes may affect the ability of timeshare interest owners to reserve occupancy in those units. Developers prefer to include the right to change point valuations in the event that use patterns in units/resorts in the timeshare project change over time.


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What should prospective timeshare purchasers keep in mind?

Prospective timeshare purchasers should inspect the timeshare property before making a purchase decision and not rely on the representations made in the sales office. At the very least, purchasers should thoroughly read all timeshare related documents concerning the purchase, including the purchase agreement, Declaration of Covenants, Conditions and Restrictions (CC&Rs), Bylaws, and Rules and Regulations so that there is a complete understanding of the rights, obligations, and restrictions of ownership.

If a purchaser is contemplating the purchase of an interest in a single-site timeshare project, he or she should not expect there to be an absolute right to use any other timeshare project that is affiliated by means of an exchange company arrangement, a reservation system through a membership program, or contract with other member timeshare projects. There is no guarantee that an exchange company or a membership program involving other timeshare projects will continue to exist in order to provide the reservation services promised. The companies offering these programs may go out of business or terminate their exchange programs or membership programs for any number of reasons. Also, they may discontinue their affiliation with the timeshare project in which a person owns a timeshare interest. A timeshare purchaser should rely only on the continuing rights he or she has with regards to the timeshare project in which he or she has an ownership interest.

Purchasers should also be cognizant of the fact that in projects where one must reserve occupancy, one is competing with other owners for occupancy. Some periods of the year are in high demand and may not be readily reserved unless the purchaser reserves space at the earliest time possible.

Any questions about a particular timeshare project that is subject to a public report or is being marketed in California should be referred to the Department of Real Estate.

[camachinist Super Moderator Find all posts View Profile Close camachinist]

Given what's going on with Marriott right now, I thought I'd bump up this excellent thread and include a newer link to the Cali DRE timeshare manual

www.dre.ca.gov/pdf_docs/timeshare_manual.pdf

[4ARedOctober Super Moderator Find all posts View Profile Close 4ARedOctober]

Thanks...I updated my link with yours.

Given what's going on with Marriott right now, I thought I'd bump up this excellent thread and include a newer link to the Cali DRE timeshare manual

www.dre.ca.gov/pdf_docs/timeshare_manual.pdf