SENATE 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

Senate Committee on Judiciary

Senate Hearing Date(s):March 27, 1987; March 31, 1987

Majority Report:     Do pass as amended and referred to Committee on Ways & Means.

     Signed by Senators Talmadge, Chairman; McCaslin, Nelson, Newhouse.

Senate Staff:Cliff Petersen (786-7457)

                March 31, 1987

Senate Committee on Ways & Means

Senate Hearing Date(s):April 2, 1987

Majority Report:     Do pass as amended by Committee on Judiciary.

     Signed by Senators McDermott, Chairman; Gaspard, Vice Chairman; Bauer, Hayner, Kreidler, Moore, Rasmussen, Rinehart, Talmadge, Vognild, Warnke, Williams, Wojahn.

Senate Staff:Stephen Rose (786-7443)

                April 3, 1987

AS REPORTED BY COMMITTEE ON WAYS & MEANS, APRIL 2, 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 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.

SUMMARY OF PROPOSED SENATE AMENDMENT:

If the promoter is a corporation or a general partnership, an individual who owns ten percent or more of such entity may be held personally liable.

Fiscal Note:    available

Senate Committee - Testified:   JUDICIARY:  Representative Ernest Crane; Jon Pegg, Department of Licensing; Ron Weaver, Department of Licensing

Senate Committee - Testified:   WAYS & MEANS:  No one