HOUSE BILL REPORT

SHB 790

BYHouse Committee on Judiciary (originally sponsored by Representatives Crane, Wineberry, P. King and Winsley)

Strengthening the laws regulating timeshares.

House Committe on Judiciary

Majority Report:     The substitute bill be substituted therefor and the substitute bill do pass.  (15)

     Signed by Representatives Armstrong, Chair; Crane, Vice Chair; Appelwick, Brough, Hargrove, Heavey, Locke, Moyer, Niemi, Padden, Patrick, Schmidt, Scott, Wang and Wineberry.

House Staff:Bill Perry (786-7123)

AS PASSED HOUSE MARCH 12, 1987

BACKGROUND:

Promoters of timeshares often offer inducements to people who tour their facilities.  The Timeshare Act does not provide penalties for a person who fails to fulfill his promise of gifts.

The Timeshare Act provides for regulation of promoters of timeshares and management of timeshare facilities. The act does not cover some areas.  Brokers licensed under the real estate broker statutes are not required to be licensed under the Timeshare Act and are not liable for violations under the act.  Individuals who own an interest in a promotion company are not personally liable for violation of the act. Additionally the act creates ambiguity in some administrative procedures.

SUMMARY:

A promoter may not offer an award, prize or other item of value for attending a sales presentation for a timeshare or for touring a timeshare facility unless the promoter provides the director of the Department of Licensing with a security agreement which will assure performance of the promise.  A promoter who fails to fulfill a promise may be liable for treble the stated value of the gift, plus reasonable attorney fees.  An individual who owns ten percent or more of a corporation or a partnership may be held personally liable.

The director of the Department of Licensing may require an annual financial and membership disclosure from timeshare projects.  The director may exercise control over the timeshare project's budget.  In the event that a budget is found inadequate the director may appoint a consultant to prepare an alternative budget at the expense of the timeshare project.

The Department of Licensing and members of the timeshare project must be given access to membership lists.  A member may be excluded from the list if the member specifically requests omission.

A broker licensed under RCW 18.85 is not required to be licensed under the Timeshare Act as well.  However, such a broker is liable for violations of the Time Share Act in the same way as a person licensed under the Timeshare Act.

Violation of the Timeshare Act may result in an administrative or legal proceeding.  A person against whom an action is filed may be liable for administrative and legal costs, including attorney fees.

EFFECT OF SENATE AMENDMENT(S):  The amendments make two changes.  First, the liability for those with 10 percent or more ownership interest in a promotional entity is limited to entities that are corporations or general partnerships.  The House version of the bill includes 10 percent interests in all partnerships and corporations.  Second, technical changes are made in light of the failure of bills dealing with land development and camping resorts.

Fiscal Note:    Not Requested.

House Committee ‑ Testified For:     Jon Pegg, Department of Licensing.

House Committee - Testified Against: None Presented.

House Committee - Testimony For:     The legislation is needed to ensure that real estate brokers who are timeshare promotors are liable under the Timeshare Act.  It provides for fees that more directly reflect costs. Further, it allows for security arrangements for timeshare promotors who offer gifts, prizes and travel awards.

House Committee - Testimony Against: None Presented.

VOTE ON FINAL PASSAGE:

     Yeas 94; Excused 4

Excused:   Representatives Allen, Hankins, Nealey and K. Wilson