Z-255 _______________________________________________
HOUSE BILL NO. 791
_______________________________________________
State of Washington 50th Legislature 1987 Regular Session
By Representatives Crane, Ballard, Wineberry and P. King
Read first time 2/9/87 and referred to Committee on Judiciary.
AN ACT Relating to camping resorts; amending RCW 19.105.300, 19.105.310, 19.105.320, 19.105.330, 19.105.350, 19.105.360, 19.105.370, 19.105.380, 19.105.390, 19.105.400, 19.105.420, 19.105.430, 19.105.440, 19.105.450, 19.105.470, 19.105.480, 19.105.510, 19.105.520, and 19.105.530; reenacting and amending RCW 42.17.310; adding new sections to chapter 19.105 RCW; creating a new section; repealing RCW 19.105.340 and 19.105.410; making an appropriation; and declaring an emergency.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1. Section 1, chapter 69, Laws of 1982 and RCW 19.105.300 are each amended to read as follows:
As used in this chapter, unless the context clearly requires otherwise:
(1)
"Camping ((club)) resort" means any enterprise, other
than one that is tax exempt under section 501(c)(3) of the Internal Revenue
Code of 1954, as amended, that has as its primary purpose camping or outdoor
recreation and includes or will ((including [include])) include camping
sites.
(2)
"Camping ((club)) resort contract" means an agreement
evidencing a purchaser's title to, estate, interest in, or right or
license to use for more than thirty days the camping or outdoor recreation
facilities of a camping ((club)) resort.
(3) "Camping site" means a space designed and promoted for the purpose of locating a trailer, tent, tent trailer, pick-up camper, or other similar device used for land-based portable housing. The term does not apply to any space containing a fixed structure for housing camping resort members or to a space containing a form of land-based portable housing that has become a fixture and is used for housing camping resort members.
(4)
"Purchaser" means a person who enters into a camping ((club)) resort
contract and thereby obtains title to, estate, interest in, license, or
the right to use the camping or outdoor recreation facilities of a camping ((club))
resort.
(5) "Person" means any individual, corporation, partnership, trust, association, or other organization other than a government or a subdivision thereof.
(6) "Director" means the director of licensing.
(7)
"Camping ((club)) resort operator" means any person who
establishes, promotes owns, or operates a camping ((club)) resort.
In any instance where a person other than a natural person is an operator
registered under this chapter, any natural person who owns a ten percent or
greater interest in, or share of, such registered operator shall be deemed an
operator or co-operator for purposes of providing the written disclosures and
establishing responsibility and liability under this chapter.
(8)
"Advertisement" means any written, printed, audio, or visual offer ((by
general solicitation)).
(9)
"Offer" means any solicitation ((reasonably)) or advertisement
designed to result in the entering into of a camping ((club)) resort
contract.
(10)
"Sale" or "sell" means entering into, or other disposition,
of a camping ((club)) resort contract for value, but the term
value does not include a reasonable fee to offset the ministerial costs of
transfer of a camping ((club)) resort contract, provided that,
in transferring the contract or membership, the terms of the original contract
or membership are not changed.
(11)
"Salesperson" means any individual, other than a camping ((club))
resort operator, who is engaged in obtaining commitments of persons to
enter into camping ((club)) resort contracts by making a ((direct))
sales presentation or negotiating sales to the persons, but does not
include individuals engaged in the referral of persons without making a ((direct))
sales presentation to the persons and who receive no commission or
remuneration predicated upon whether or not there is a sale.
(12)
"Affiliate" means any person who, directly or indirectly through one
or more intermediaries, controls or is controlled by or is under common control
((with the person specified)) of a registrant or camping resort
operator.
(13) "Proprietary camping resort contracts" means any camping resort contract in a project structured other than as a fee, leasehold, condominium, or real estate cooperative, and wherein ownership or beneficial interest of the camping resort properties is to remain with the promoting or sponsoring operator, its heirs, assigns, or successors in interest.
(14) "Camping resort program" means the rights and obligations of a purchaser and the methods and procedures for occupying or using camping resort facilities and properties, as established by the purchase contracts and other written instruments, such as covenants, declarations, by-laws, or rules.
(15) "Home-base resorts" means the camping resorts in the camping resort program located within this state or in an adjacent state or province, if the marketing program is centered around resorts in this state or adjacent states; or the essential body or grouping of resorts in the program if the marketing program is centered around a resort or resorts in other states that are not adjacent to the borders of this state. The department shall study, determine, and promulgate by rule the geographic area to be used in defining home-base resorts. A primary purpose for defining home-base resorts is to determine those resorts in the program that are essential to assuring and securing the interests of purchasers residing or buying in this state under section 7 of this 1987 act and the documentation to be required for registration purposes.
(16) "Department" means the department of licensing.
(17) "Resale camping resort contract" means a camping resort contract offered or sold which is not the original offer, transfer, or sale of such contract, and not a forfeited contract being reoffered by an operator.
(18) "Start-up camping resort contract" means a camping resort contract that is being offered or sold for the first time or a forfeited contract being resold by a camping resort operator.
(19) "Commercial promotional programs" means the packaging or organizing for purposes of soliciting prospective purchasers to purchase a camping resort contract, advertising and promotional materials that involve promises to the prospects of gifts, prizes, awards, or other items of value.
(20)(a) "Stand-by authority" refers to a members' common-interest association whose members are not accorded all of the authority and rights normally accorded members in members' common-interest associations, but who shall be provided, at the minimum, the following:
(i) An operational common-interest association pursuant to the filing of articles of incorporation and by-laws under chapter 24.03 RCW; and
(ii) Authority granted in the articles of incorporation to do the following:
(A) Hold membership and board meetings;
(B) Vote for and elect its officers and directors;
(C) Provide information to its members and to serve in advisory capacity in its relations with the operator or sponsor;
(D) Standing to sue and petition in the courts of this state in representing the interests of its members in instances in which there is or appears to be a hazard to the interests of the members or a loss of the camping resort properties for the members; and
(E) The right to vote on matters affecting the interests of the members, or to petition the courts, wherever accorded in this chapter;
(b) The department shall examine the articles of incorporation and by-laws establishing any members' owners association required in this chapter, to determine compliance.
(c) Nothing in this subsection shall preclude a person establishing a members' common-interest association from granting the association or its members powers and authority beyond those stated in this subsection.
(21) "Nondisturbance agreement" means any instrument by which the holder of a blanket encumbrance agrees that: (a) Its rights in any property made available to purchasers by the membership camping operator shall be subordinate to the rights of purchasers from and after the recording of the instrument; (b) the holder and all successors and assigns, and any person who acquires the property through foreclosure or by deed in lieu of foreclosure of such blanket encumbrance, take the property subject to the rights of purchasers; and (c) the holder or any successor acquiring the property through the blanket encumbrance shall not use or cause use of the property for purposes other than those defined and proposed for the use and occupancy of purchasers in the camping resort contract and governing instruments.
Sec. 2. Section 2, chapter 69, Laws of 1982 and RCW 19.105.310 are each amended to read as follows:
Except in
transactions exempt under RCW 19.105.320 (2) or (3), it is unlawful for any
person to offer or sell a camping ((club)) resort contract in
this state unless the camping ((club)) resort contracts or
offering of resale contracts is registered and the operator or
registrant has received a permit to market the registered contracts under
this chapter.
Sec. 3. Section 3, chapter 69, Laws of 1982 and RCW 19.105.320 are each amended to read as follows:
(1) To apply for registration an applicant shall file with the director:
(a) An
application for registration on such a form as may be prescribed by the
director. The director may, by rule or order, prescribe the contents of the
application to include information (including financial statements) reasonably
necessary for the director to determine if the requirements of this chapter
have been met, whether any of the ((events specified in RCW 19.105.380(7)))
grounds for which a registration may be denied have occurred, and what
conditions, if any, should be imposed under ((RCW 19.105.340 or 19.105.350))
sections 7 and 17 of this 1987 act and elsewhere in this chapter in
connection with the registration;
(b) The
applicant's first draft of the proposed written disclosures, in any format
the director is satisfied accurately, completely, and clearly
communicates the required information, which at a minimum shall
include((s)):
(i) The
name and address of the camping ((club operator and)) resort
applicant or operator, any material affiliate, and, if the operator or
registrant is other than a natural person, the identity of each person owning a
ten percent or greater share or interest;
(ii) A
brief description of the camping ((club operator's)) resort
applicant's experience in the camping ((club)) resort
business;
(iii) A
brief description of the nature of the purchaser's title to, estate, or
interest in((, or right or license to use)) the camping ((club)) resort
property or facilities and((,)) if the purchaser will obtain any form
of legally recognized estate or title to or interest in specified
real property((, the legal description of the property));
(iv) For
each of the camping resorts in the applicant's program that is a home-base
resort, the identity and location of each home-base resort
and a brief description of the significant facilities and recreation services
then available for use by purchasers and those which are represented to
purchasers as being ((planned)) the commitment of the applicant or
operator, together with a ((brief description of any significant)) statement
whether any of the resort facilities or recreation services ((that are
or)) will be available to nonpurchasers ((and the price to nonpurchasers
therefor)) or the general public;
(v) A brief
description of the camping ((club's)) resort's ownership of or
other right to use the home-base camping ((club)) resort
properties or facilities represented to be available for use by purchasers,
together with a brief description of any material encumbrance, the duration of
any lease, real estate contract, license, franchise, reciprocal agreement, or
other agreement entitling the camping ((club)) resort applicant or
operator to use the property in the home-base camping resorts, and any
material provisions of the agreements which restrict a purchaser's use of the
property;
(vi) ((A
brief statement or summary of what required material land use permits have not
been obtained for each camping club)) Information assuring the director
that all local and state health, environmental, subdivision, zoning
requirements, and permits have been complied with for each home-base resort
property or facility represented to purchasers as planned for the program;
(vii) ((A
summary or)) For actual purchasers, a copy of the articles, by-laws,
rules, restrictions, or covenants regulating the purchaser's use of each
property((, the facilities located on each property, and any recreation
services provided, including));
(viii) A
statement ((of)) whether and how the articles, declarations,
by-laws, rules, restrictions, or covenants used in structuring the project
may be changed and whether and how the members may participate in the
decision on the changes;
(((viii)))
(ix) A brief description of all payments of a purchaser under a camping
((club)) resort contract, including initial fees and any further
fees, charges, or assessments, together with any provisions for changing the
payments;
(((ix)))
(x) A description of any restraints on the transfer of camping ((club))
resort contracts;
(((x)))
(xi) A brief description of the policies relating to the availability of
camping sites and ((whether)) conditions under which reservations
are required and the availability of the sites to guests and family members;
(((xi) A
brief description of)) (xii) A disclosure covering the right of the
camping ((club operator's right)) resort operator or the registrant
and their heirs, assigns, and successors in interest to change or withdraw
from use all or a portion of the home-base camping ((club)) resort
properties or facilities and the extent to which the operator is obligated to
replace home-base camping ((club)) resort facilities or
properties withdrawn;
(((xii)))
(xiii) A brief description of any grounds for forfeiture of a
purchaser's camping ((club)) resort contract; ((and
(xiii) A
copy of the camping club contract form;))
(xiv) A statement fully disclosing the possibility, if any, of loss or effect on membership home-base camping resort contracts if there is a foreclosure on any of the operator's properties, a bankruptcy, or other creditor or lienholder action affecting the operator or the camping resort properties; and
(xv) Any other information, in any format, deemed necessary by the department for the protection of the public health, safety, and welfare;
(c) The prescribed registration fees;
(d) By
affidavit, a statement of the total number of camping ((club)) resort
contracts then in ((effect, both within and without this state;)) and
to be in the camping resort program in the home-base resorts, and a
statement of the total number of camping ((club)) resort
contracts intended to be sold((, both within and without this state)) in
the program and in the home-base resorts, together with a commitment that
the ((total number)) ratio of contracts sold in the home-base area to
camping sites available in the home-base resorts will not be exceeded ((unless
disclosed by post-effective amendment to the registration as provided in RCW
19.105.420; and));
(e) Copies or prototypes of all camping resort contracts, and addendums thereto, and membership certificates, deeds, leases, or other evidences of interest, title, or estate, to be registered;
(f) An affidavit on a form prepared by the department covering the right or lack of right of the applicant or operator, their heirs, assigns, and successors in interest, to withdraw, replace, or change existing camping resort properties in or to be in the program, sited in the home-base area. This affidavit shall also cover the right or lack of right to plat or carve out new camping sites in existing camping resort acreages;
(g) An irrevocable consent to service of process on the director or the department, effective for the term of the statute of limitations covering the last sale in this state of a camping resort contract by the applicant or operator. If the applicant or operator is other than a natural person, each natural person who owns a ten percent or greater share or interest in the operator or applicant shall sign the consent to service.
(h) Any
other material information the director ((may, by rule or order, require))
deems necessary for the protection of the ((purchasers)) public
health, welfare, or safety, or to effectively conduct an examination of an application.
(2) ((The
following transactions are exempt from registration:
(a) An
offer, sale, or transfer by any one person of not more than one camping club
contract for any given camping club in any twelve-month period, but any agent
for the person is not exempt from registration as a camping club salesperson
under this chapter if he receives a commission or similar payment for the sale
or transfer;
(b) An
offer or sale by a government or governmental agency; and
(c) A bona
fide pledge of a camping club contract.
(3) The
director may, by rule or order, exempt any person from any or all requirements
of this chapter if the director finds the requirements unnecessary for the
protection of purchasers and the offering of camping club contracts is
essentially noncommercial.)) The director shall by rule prescribe the requirements for
registering persons in the business of offering camping resort resale
contracts.
(3) The director may waive any of the information required in this section if the operator has supplied the same information under chapter 58.19 or 64.36 RCW.
NEW SECTION. Sec. 4. (1) The following transactions are exempt from registration:
(a) The offering and selling of resale camping resort contracts by an owner for that owner's own account, provided that any such offering or selling is noncommercial in nature and that registration is not necessary for the protection of the public health, welfare, or safety. "Noncommercial" means that the owner of the resale contracts is not in the business of offering or selling camping resort contracts and such offering or selling is only incidental to any profession, occupation, or business of the owner; and
(b) An offer or sale by a government or governmental agency.
(2) The director may, by rule or order, exempt any person, wholly or partially, from any or all requirements of this chapter if the director finds the requirements unnecessary for the protection of the public health, safety, and welfare.
Sec. 5. Section 4, chapter 69, Laws of 1982 and RCW 19.105.330 are each amended to read as follows:
((Unless
an order denying effectiveness under RCW 19.105.380 is in effect, or unless
declared effective by order of the director prior thereto, the application for
registration shall automatically become effective upon the expiration of the
fifteenth full business day)) (1) Once an application for an initial,
renewal, or amendment of registration has been filed in a complete and proper
form, the department shall give the filing an in-depth examination. The
department shall have twenty full business days, excluding the date of filing,
following a filing ((with the director)) in complete and
proper form, to conduct its examination, but an applicant may consent to
the delay of effectiveness until such time as the director may by order declare
registration effective or issue a permit to market.
(2) An application for registration, renewal of registration, amendment, or consolidation of inventory is not in completed form and there has been no statutory filing until such time as all required fees, completed application forms, and the information and documents required pursuant to RCW 19.105.320(1) and departmental rules have been filed.
It is the operator's responsibility to see that required filing materials and fees arrive at the appropriate mailing address of the department. Within seven business days, excluding the date of receipt, of receiving an application or initial request for registration and the filing fees, the department shall notify the applicant of receipt of the application and whether or not the application is complete and in proper form. If the application is incomplete, the department shall at the same time inform the applicant what additional documents or information is required.
No application shall be deemed filed or be examined for any purpose until all fees required have been received.
Once the application is in a completed form, the agency shall give immediate notice to the applicant. On the date the application is complete and properly filed, the statutory period for an in-depth examination of the filing, prescribed in subsection (1) of this section, shall begin to run, unless the applicant and the department have agreed to a stay of effectiveness, or the department has issued a denial of the application or a permit to market.
NEW SECTION. Sec. 6. (1) Applications, consents to service, all affidavits required in connection with applications, and all final permits to market shall be signed by the operator, unless a trustee or power of attorney specifically granted such powers has signed on behalf of the operator. If a power of attorney or trustee signature is used, the filing shall contain a copy of the authorization, power of attorney, or trustee authorization. No operator or other registrant may disclaim personal responsibility or liability under this chapter in situations in which a power of attorney or trustee signature is used.
(2) If the operator or other applicant or registrant is other than a natural person, each natural person with a ten percent or greater interest or share in the operator shall also sign documents designated in subsection (1) of this section. Such persons shall not disclaim their liability and responsibilities under this chapter because the operator is other than a natural person.
NEW SECTION. Sec. 7. (1) For purposes of registration and as a condition to registration, the director may require by permit, rule, or order, impounds, escrows, or trusts (of titles, funds, and/or receivables); subordination agreements, nondisturbance agreements, or any other arrangement or agreements, or combinations thereof, that will ensure that camping resort contract purchasers have the future quiet enjoyment and availability of all the home-base camping resort properties included in the program for the term of the program as promised by the operator in its advertising and the sale documents.
(2) No offering of camping resort contracts may be made until such agreements, devices, or arrangements are in place that will reasonably assure purchasers protection from future contingencies such as bankruptcies, foreclosures, actions by creditors or lienholders, and unauthorized withdrawals or encumbering of properties by operators, registrants, or others.
(3) Impounds shall not be required in those projects offering fee, condominium, or long-term leasehold estates, where by other means titles to such estates can be assured.
(4) Camping resort registrants and applicants, as a condition to initial registration and continued registration with the department, shall arrange for or provide the following:
(a) An operational, on-going common-interest member association with, at a minimum, advisory and stand-by powers in instances of contingencies such as bankruptcies, foreclosures, creditor actions, or other contingencies that might adversely affect or threaten member or owner interests and the continued availability of the home-base properties;
(b) Assurances that purchasers are protected from loss of properties, titles, estates, interests, or use of the properties because of blanket encumbrances or liens affecting, or that might affect, the home-base properties;
(c) Assurances that annual dues or other funds, fees, or assessments collected from owners or members beyond the purchase price are used to operate the home-base resorts, fund home-base resort reserve accounts, or manage the home-base resorts, the facilities, and the program. It is a violation of this chapter for any operator or other person to use such member funds, fees, dues, or assessments for purposes other than those designated in this subsection. Members' common-interest associations, with stand-by or greater authority, or any representative group of the members organizing under this chapter for the purposes of assuring for themselves availability of camping resort properties covered under this chapter, shall have standing to sue in the courts of this state for purposes of enforcing this chapter. The department may require that such fees, dues, or assessments be held in trust for the purposes stated and may implement other rules to assure compliance;
(d) The camping resort properties in the program and within the home-base area are and will continue to be available to the purchasers and members for the term of the program in the manner and form promised by or required of the operator under this chapter. Protection from loss of interests, titles, or estates in such properties from bankruptcy, foreclosure, creditor actions, liens, withdrawals, and unauthorized encumbering must be assured;
(e) Evidence that the camping resort contracts are formatted in the manner and contain the provisions required under section 11 of this act.
(5) Operators registered with the department prior to March 1, 1987, offering proprietary camping resort contracts, shall be in compliance with this section by means of one of the following alternative arrangements:
(a) Operators may convey titles to the home-base camping resorts in the program to a trustee who shall hold the titles for the benefit of purchasers and the operator for the term of the program, for purposes of assuring the future availability of the properties for purchasers:
(i) Such trustee shall have those additional duties and responsibilities needed in order to assure compliance with this chapter and to assist the operator in operations, such as maintaining records, servicing contracts, keeping membership lists current, effecting membership transfers, and, where necessary, serving as the impound or escrow agent for the retiring of encumbrances, as provided for in (a)(ii) of this subsection;
(ii) Subsequent to conveyance of titles to the trustee, the trustee has the responsibility of assuring that no additional blanket encumbrances are knowingly placed on the camping resort properties held in trust unless the encumbrance holder has signed and there is in place a nondisturbance agreement, acceptable to the department, covering the encumbered properties;
(iii) An encumbrance transacted subsequent or prior to March 1, 1987, by an operator or others, affecting the home-base camping resort properties, whether or not title to the properties is held in the name of a trustee, shall be retired by means of an impound or true escrow, in which membership receivables, or other assets acceptable to the department, are deposited for purposes of collecting, holding, and disbursing funds for the purposes of the debts affecting the properties;
(iv) As provided in section 11(2) of this act, operators placing their camping resort properties in a title trust may elect, as an alternative to the recording requirements of section 12 of this act, to file copies of their camping resort contracts with the title trustee;
(b) As an alternative to the title trust provided for in (a) of this subsection, operators may, with the approval of the department and any lender or encumbrance holder whose interests are affected by such a decision, elect to structure a camping resort or resorts and provide its purchasers with an interest, estate, title to, or membership in, any one or combination of the following:
(i) A real estate cooperative;
(ii) An open-space condominium;
(iii) A fee estate;
(iv) A long-term leasehold estate;
(v) A percentage of undivided fee interest;
(vi) A percentage of undivided interest as a tenancy-in-common; or
(vii) Other estates, titles, interests, or entities acceptable to the department to assure future availability of the properties to purchasers.
Operators electing a security arrangement under (b) of this subsection shall secure the properties to assure retirement of existing encumbrances in the manner provided for in subsection (5)(a) of this section.
(6) Operators shall have six months from the effective date of this section to comply with subsection (5) of this section: PROVIDED, That no new encumbrances may knowingly be placed on camping resort properties subsequent to March 1, 1987, without there being a nondisturbance agreement in place and acceptable to the department.
(7) Operators are entitled to an administrative hearing under chapter 34.04 RCW to determine compliance with subsection (5) of this section, as provided in section 21 of this act.
NEW SECTION. Sec. 8. (1) If the title to a camping resort is conveyed or is to be conveyed to a trustee pursuant to the requirements of this chapter, the operator must provide the director with satisfactory evidence that:
(a) Title to the camping resort has been or will be conveyed to a trustee regulated under the laws of this state or other competent jurisdiction; and
(b) Proceeds received by the operator from the sale of memberships are being delivered to the trustee and deposited in a fund which has been established to provide for the payment of operating costs or the discharge of any encumbrance or lien recorded against the camping resort.
(2) The trustee is required to pay all charges against the trust in the following order:
(a) Trustee's fees and costs;
(b) Taxes;
(c) Payments due to any holder of a lien recorded against the camping resort;
(d) Any other payments authorized by the document creating the trust.
(3) If a trust is created by an operator to hold title, the:
(a) Trustee must be approved by the director;
(b) Trust must be irrevocable, unless otherwise provided by the director;
(c) Trustee must not be permitted to encumber the property unless permission to do so has been given in the trust agreement by the department;
(d) The trust must provide that the trust and not the operator is the contracting party in all matters involving the trust assets; and
(e) Trustee must give at least thirty days' notice in writing of an intention to resign to:
(i) The common-interest association;
(ii) The operator; and
(iii) The department.
(4) The director must approve a substitute trustee before the resignation of the trustee may be accepted.
(5) The department may inspect the records relating to the trust during normal business hours or whenever it deems it necessary to do so for the protection of the public health, safety, and welfare.
NEW SECTION. Sec. 9. (1) The director may require inspections of camping resorts registered under this chapter. Operators or owners of such resorts and their agents shall cooperate with the staff of the department in conducting the inspections.
(2) The director may perform "spot checks" or inspections of sales offices, during tours or sales presentations or normal business hours, for purposes of enforcing this chapter and determining compliance by the operator and salespersons in the sales, advertising, and promotional activities regulated under this chapter. These inspections or spot checks may be conducted during or at the time of sales presentations or during the hours during which sales are ordinarily scheduled.
(3) The department employee making the inspections shall show identification upon request. It is a violation of this chapter for the operator or its sales representatives to refuse an inspection or refuse to cooperate with employees of the department conducting the inspection.
NEW SECTION. Sec. 10. (1) It is unlawful and a violation of this chapter for any operator, association, camping resort, board of directors of an association, or other person with such responsibilities, to fail to provide a membership list (names, addresses, and unit, site, or member number), covering persons residing in the home-base area and for home-base resorts, to the following persons under the following circumstances:
(a) Upon demand, either a list of home-base members or a list of all members in the program, to the department for purposes of administering or amending this chapter;
(b) Upon request, to the appropriate officer or director of any board of a members' common-interest association authorized under this chapter or the project documentation; and
(c) Upon written request from any member of a common-interest association in the home-base area who agrees to pay reasonable costs for preparing the list and who signs an affidavit agreeing to liability to the association or operator if the list is used for any commercial purpose without prior approval of the board of directors or the operator if the common-interest association is for any reason operator-controlled.
(2) It is a violation of this chapter and chapter 19.86 RCW for any person to use a membership list for commercial purposes unless authorized to do so by the operator or the appropriate officer or director of a common-interest association if the common-interest association is no longer operator-controlled.
NEW SECTION. Sec. 11. (1) Subsequent to the effective date of this section, all proprietary camping resort contracts entered into in this state or subject to this chapter, other than contracts entered into prior to the effective date of this section, shall contain provisions that:
(a) Clearly state that the purchaser has an interest or estate in or a title to a camping site or the camping sites and in the other properties and facilities designated by contract as being part of the program for all home-base resorts. Projects structured as real estate cooperatives shall automatically qualify for such purposes. Contracts shall not be entitled "installment sales contracts" and shall not disclaim an interest in the properties with reference to purchasers and owners of the contracts;
(b) Clearly designate each of the home-base camping resorts and those located elsewhere that are in or to be in the camping resort program, and provide, as attachments, legal descriptions of each of the home-base resorts;
(c) Contain acknowledgements of the seller's signature(s) and any other legal requirements for recording;
(d) State clearly in twelve-point type or larger, the ratio of contracts to be sold in the home-base area to sites available in the home-base resorts and the operator's commitments thereto pursuant to the affidavits filed under RCW 19.105.320;
(e) State clearly the responsibility and legal obligation of the operator and the operator's heirs, assigns, and successors in interest, to or not to withdraw, substitute, delete from, or add to the camping resort properties;
(f) State clearly in twelve-point type or larger the terms and conditions and limitations under which memberships, certificates, titles, or camping resort contracts may be sold or transferred to others;
(g) State clearly the cancellation notice, in type, size, and location as required in RCW 19.105.390;
(h) Disclose clearly in twelve-point type or larger, all facilities, amenities, or sites that are to be made available to members in each of the home-base resorts and the conditions under which fees will be charged for such use; and
(i) Are in ten-point type or larger, unless a twelve-point minimum is prescribed elsewhere in this section.
(2) With the approval of the department under section 7 of this act, operators or registrants may elect to have their proprietary camping resort contracts filed with and held by a trustee holding title in lieu of filing and recording with the county auditor or other recording agency.
(3) Proprietary camping resort contracts shall be for determinable terms, not exclusive of others, such as a term for years, a fee, or running until a specific date.
(4) Contracts shall contain any other provisions that the department may, by rule, deem necessary for the protection of the public health, welfare, and safety.
(5) The department shall reject, suspend, or revoke the registration of any offering of camping resort contracts that does not satisfy these requirements.
NEW SECTION. Sec. 12. (1) Unless exempted from doing so under section 7 of this act, camping resort registrants shall be responsible for recording with the county auditors of this state or the appropriate recording agency in the state in which the home-base camping resort properties are located, within thirty days of the transactions, copies of all camping resort contracts and membership agreements for the use or occupancy of home-base resorts transacted subsequent to the effective date of this section. Contracts shall be recorded in each local jurisdiction in which a home-base resort is sited. If acceptable to local recording agencies, these filings may be accomplished by the filing of a master prototype of the camping resort contract form, with a follow-up list of purchasers using that contract form being recorded every thirty days thereafter. (2) If the necessary legal descriptions and acknowledgements have been complied with, it is unlawful for any person in this state with such responsibilities to decline to record a camping resort contract entered into subsequent to the effective date of this section because of the characterization of the contract or any question that the owner's interest therein is other than a legally recognized estate or interest in the property.
(3) Upon written request, an operator or affiliated members' common-interest association, if the association is no longer operator-controlled, shall provide any member so requesting, a legal description of each home-base property sited within the state of Washington that is part of the program, and seller acknowledgments on any camping resort contracts transacted subsequent to the effective date of this section. If the necessary legal descriptions and acknowledgements have been obtained, county auditors in this state shall record a camping resort contract executed subsequent to the effective date of this section regardless of the characterization of the contract or the applicant's interest therein.
NEW SECTION. Sec. 13. (1) If for any reason the provisions of camping resort contracts do not clearly designate the nature of the estate or interest therein, the courts of this state, upon being properly petitioned, shall construe the nature of the members' interests in the properties as a tenancy in common or, alternatively, upon petition of the membership, may order that the project be converted into a real estate cooperative, with title to the property held in the name of a real estate cooperative association or with a trustee on behalf of the members, for the term of the program.
(2) The recording requirements or the characterization of proprietary contracts under this chapter shall not render an owner or holder of a proprietary camping resort contract liable for any contract entered into by the operator, its successors, or other owners or holders of proprietary camping resort contracts, nor shall an owner or holder of a proprietary camping resort contract be liable for any tort committed by the operator, its successors, third parties, or other owners or holders of proprietary camping resort contracts.
(3) Camping resort contract purchasers with interests as tenants in common or in cooperatives in camping resort properties have no right of partition of their individual undivided interests or estates in the camping resort properties. However, nothing in this subsection shall preclude the courts from making a partition and ordering distribution of assets under circumstances requiring such partitioning for the protection of the camping resort purchasers, such as and not exclusive of others, eminent domain, termination of the period of years prescribed for the program, or abandonment by the operator, its creditors, or successors in interest. If for any reason a partition and distribution of assets is necessary prior to the time the operator completely disposes of all of the camping resort contracts authorized in its program, disposition of the net assets to the operator, its heirs, assigns, or successors in interest shall be, after an appraisal of the properties to determine value and a plan of distribution arranged by a court-appointed trustee, in direct proportion to the number of unsold contracts owned by the operator, to the number of memberships sold.
NEW SECTION. Sec. 14. The legislature declares that the primary purpose of sections 11, 12, and 13 of this act is to protect the public health, safety, and welfare, in that purchasers of proprietary camping resort contracts have not received protections assuring future availability of promised properties and facilities. The requirements and provisions of sections 11, 12, and 13 of this act and this chapter are not intended to limit operators and developers from structuring their projects in more traditionally recognized estates or interests in land if such structurings or estates assure to the purchasers future quiet enjoyment and availability of the properties to purchasers and are found acceptable by the department for such purposes under section 7 of this act.
NEW SECTION. Sec. 15. (1) Operators shall not sell, lease, assign, or otherwise transfer their interests or titles to any of the camping resort properties in the program which are sited within the home-base area unless the transferee agrees in writing to honor the members' and owners' interest therein and their rights to the use and occupancy of the camping resort properties, honor cancellation rights, and comply with this chapter.
(2) Operators shall provide the department with prior notice of intent to sell, lease, or assign their interests and the department may require a review of proposed transfer documents to assure compliance with this chapter.
(3) The operator shall provide the department with notice and a copy of the proposed contract prior to entering into any agreement with third parties for the pledging, selling, discounting, or hypothecation of membership receivables resulting from disposition under this chapter. The department may require prior review of the documentation proposed to be used in such transactions to determine compliance with this chapter. Registrants shall provide any person to whom camping resort contracts or membership receivables are proposed to be sold, pledged, or hypothecated, with a copy of the written disclosures required in this chapter. Failure to provide such disclosures shall be a violation of this chapter.
NEW SECTION. Sec. 16. (1)(a) The parties to a camping resort agreement shall deal with one another in good faith.
(b) Wilful breaching of the provisions of camping resort contracts by either of the parties shall be cause for anticipatory breach by the other party and termination of the contract. In instances where an affiliated or stand-by association files suit in the courts of this state for alleged wilful breaching of contracts by an operator or its successors, and the members as a class or the common-interest association prevails, the association or members as a class shall be entitled to damages, costs, and reasonable attorneys' fees.
(c) Proprietary contract purchasers or members of a real estate cooperative shall not have their contracts or memberships permanently canceled by an operator or the common-interest association solely for failure to pay annual or periodic assessments. Persons who are delinquent in such payments may, however, be precluded from using facilities, transferring memberships, voting, or other benefits until such time as any arrearages in the payment of periodic dues or assessments have been made current.
(2) No person may require any purchaser to agree to a release, assignment, novation, waiver, or any other provision which relieves any person from a duty imposed by this chapter.
(3) Any provision in a camping resort contract or agreement which requires or designates venue or jurisdiction in a forum outside this state is void with respect to any cause of action which is enforceable in this state.
(4) If operators or affiliated common-interest members' associations engage in the following activities, they are engaging in the offering of camping resort contracts, which requires registration and compliance with this chapter:
(a) An offer to members of a new, amended, or different form of a camping resort contract for any reason other than as a result of a reorganization under the bankruptcy laws;
(b) The offering of a substitute contract when a member or owner sells, assigns, or transfers his or her camping resort contract or membership in the manner prescribed in the contract or membership certificate and the operator or affiliated owners' or members' association declines the sale, assignment, or transfer of the contract or membership certificate without good cause;
(c) The operator sells, assigns, or by any other means transfers, start-up camping resort contracts in bulk to third parties who propose to market them, either on their own behalf or for the operator; or
(d) The registrant or operator regains title or possession of previously sold contracts through foreclosure or by other means, and proposes to offer such contracts.
Sec. 17. Section 6, chapter 69, Laws of 1982 and RCW 19.105.350 are each amended to read as follows:
(1) For
home-base resorts, if the ((purchaser will own or acquire title to
specified real property)) applicant or registrant is promising or
committed to facilities or improvements to be acquired ((by the)) or
constructed at a later date for its camping ((club)) resort,
the director may by order require to the extent necessary to protect the
interests of the purchasers or owners of home-base camping ((club))
resort contracts, that an appropriate portion of the proceeds paid under
those camping ((club)) resort contracts be set aside in a
separate reserve fund to be applied toward the purchase price, completion,
or acquisition of the real property ((or)), improvements,
or facilities.
(2) The director may decline or suspend a registration wherein the registrant is proposing discrepancies or differences in obligations to pay annual or periodic dues or assessments by members within a class, if it appears that such differences may result in the registrant's future inability to fund operating costs.
Sec. 18. Section 7, chapter 69, Laws of 1982 and RCW 19.105.360 are each amended to read as follows:
(1) The
camping ((club)) resort operator or other registrant of
offerings of camping resort contracts shall file with the director at least
five business days prior to the first use thereof in the state of Washington (((1)))
(a) the proposed text of all advertisements and sales promotion
literature, (((2))) (b) its proposed form of camping ((club))
resort contract, and (((3))) (c) the text of any
supplements or amendments to the written disclosures required to be
furnished prospective purchasers under RCW 19.105.370: PROVIDED, That if the
text in lieu of definitive copies of any materials are filed, definitive copies
shall be filed with the director within five business days following the date
of first use of the materials.
(2) The director shall review all registrant advertising and promotional materials prior to use thereof to determine that they are not false, misleading, or deceptive and that they are in conformity with the facts and information in the applicant or registrant's registration file and the written disclosures.
(3) A fee shall be charged and collected in advance for each item of advertising, sales, or promotional material submitted, in the manner provided in RCW 43.24.086 and section 24 of this 1987 act.
NEW SECTION. Sec. 19. (1) No person, including an operator or other registrant or applicant, may advertise, sell, contract for, arrange, or promise a free gift, award, prize, or other item of value, in this state, for purposes of advertising a camping resort, or inducing persons to purchase a camping resort contract, or attend sales presentations, tour camping resort facilities for purposes of selling camping resort contracts, without first providing the director with evidence of a bond, letter of credit, cash or security deposit, or other security arrangement, with an escrow or depositary acceptable to the director to assure performance and secure delivery of any promised gift, award, sweepstakes, prize, or other item of value.
(2) Operators or other registrants are to be held strictly liable for any failure of the operator or registrants, their employees, agents, or affiliates, to deliver in the manner represented, tours, gifts, prizes, awards, or other items of value, which were advertised.
(3) Persons who do not receive promised tours, gifts, prizes, awards, or other items of value as advertised shall be entitled, in any cause of action in the courts of this state, to treble the value of the promised item as well as court costs and reasonable attorneys' fees if they prevail in legal proceedings to secure compliance.
(4) The department may require that any fees or funds of any description collected in advance from persons for purposes of obtaining promised gifts, awards, prizes, or other items of value, be placed in trust in a depository in this state until after delivery of the promised gift, prize, award, or other item of value.
(5) The director may require that persons offering or selling commercial promotional programs covered under this section to provide the department with information (including financial information) the director deems necessary to protect the public health, welfare, and safety.
(6) Operators or other registrants or persons promising gifts, prizes, awards, or other items of consideration as part of a membership referral program, shall be included within the definition of a person offering or selling commercial promotional programs to be regulated under this section.
(7) No operator, registrant, or other person may take possession of promotional materials covered under this section, provided to prospective purchasers for purposes of touring a project or attending a sales presentation, from the prospective purchaser, unless a signed photocopy of the material is first provided the prospective purchaser by the operator or its salesperson. The department shall by rule enforce this subsection.
(8) Persons offering or selling commercial promotional programs covered under this section shall be required to sign a consent to service of process for a term of five years subsequent to the last disposition of their materials in this state and authorizing the director as their agent for receipt of service of legal process in any civil action alleging violations of this chapter.
Sec. 20. Section 8, chapter 69, Laws of 1982 and RCW 19.105.370 are each amended to read as follows:
(1) Except
in a transaction exempt under RCW 19.105.320 (((2) or (3))) (4),
any person who offers, pledges, hypothecates, or sells ((a))
camping ((club)) resort contracts or membership receivables
consisting of camping resort contracts in this state shall provide the
prospective purchaser with the written disclosures required to be filed
under RCW 19.105.320(1)(b) in a final form reviewed, approved, and
prescribed by the department that is materially accurate and complete
before the prospective purchaser signs a camping ((club)) resort
contract or gives any item of value for the purchase of a camping ((club))
resort contract. The department shall prescribe by rule the time,
method, and format for providing the disclosures. The department is authorized
to provide its own disclosures, supplementing those of the operator, in any
format it deems appropriate. The department shall not be held liable for any
alleged failure to disclose information or for deficiencies in the content of
the disclosures provided in that document by either itself, the operator, or a
registrant.
(2) The department shall by rule prescribe the time, method, and format for providing written disclosures covering the registrations and offerings of contracts by persons in the business of offering camping resort resale contracts.
Sec. 21. Section 9, chapter 69, Laws of 1982 and RCW 19.105.380 are each amended to read as follows:
((The
effectiveness of)) (1) A registration or an application ((or))
for registration of a start-up or resale offering of camping resort
contracts or renewal thereof may by order be denied, suspended, or revoked
((or a fine of not more than one thousand dollars imposed by the director)),
or the right of the registrant, applicant, or affiliate to do camping resort
business in this state permanently revoked, as a corporation or other business
form, as a natural person, or as a natural person with a ten percent or greater
interest in a corporate or other business entity, if the director finds
that ((the order is for the protection of purchasers or owners of camping
club contracts and that)):
(((1)))
(a) The ((camping club operator's advertising or sales techniques or
trade practices)) advertising, sales techniques, or trade practices of
the applicant, registrant, or its affiliate or agent have been or are
deceptive, false, or misleading;
(((2)))
(b) The ((camping club operator)) applicant, registrant, or an
agent, has failed to file copies of ((its)) the
advertisements or promotion literature or ((its)) the camping ((club))
resort contract form under RCW 19.105.360;
(((3)))
(c) The ((camping club operator)) applicant, registrant, or
affiliate has failed to comply with any provision of this chapter ((or)),
the rules adopted or the conditions of a permit granted under this
chapter ((that materially affect or would affect the rights of purchasers,
prospective purchasers, or owners of camping club contracts or the
administration of this chapter;
(4) The
camping club operator is not financially responsible or has insufficient
capital, as the director may find under RCW 19.105.340, to warrant its offering
or selling camping club contracts;
(5) The camping
club operator's)), or a
stipulation or final order previously entered into by the operator or issued by
the department under this chapter;
(d) The
applicant's, registrant's, or affiliate's offering of camping ((club))
resort contracts has worked or would work a fraud upon purchasers or
owners of camping ((club)) resort contracts;
(((6)
The camping club operator's application or any amendment thereto is incomplete
in any material respect;
(7))) (e) The camping ((club)) resort
operator or any officer, director, ((or other)) affiliate of the camping
((club)) resort operator, or natural person owning greater
than a ten percent share or interest in the operator if the operator is other
than a natural person, has been within the last five years convicted of or
pleaded nolo contendre to any misdemeanor or felony involving conversion,
embezzlement, theft, fraud, or dishonesty, has been enjoined from or had
any civil penalty assessed for a finding of fraud in a civil suit, or
found to have engaged in any violation of any act designed to protect
consumers, or has been engaged in dishonest practices in any industry involving
sales to consumers;
(((8)
The camping club operator)) (f) The applicant or registrant has
represented or is representing to purchasers in connection with the offer or
sale of a camping ((club)) resort contract that ((any)) a
camping ((club)) resort property, facility, amenity, camp
site, or other development within the home-base area is not presently built
or available, but is planned ((without reasonable grounds to believe
that the camping club property, facility, camp site, or other development will
be completed within a reasonable time; or
(9))), promised, or required and the applicant or
registrant has not provided the director with a security or assurance of
performance as required by this chapter;
(g) The applicant or registrant has not provided or is no longer providing the director with the necessary security arrangements to assure future availability of titles or properties as required in section 7 of this 1987 act, or agreed to in the permit to market;
(h) The applicant or registrant is or has been employing unregistered salespersons or offering or proposing a membership referral program not in compliance with this chapter;
(i) The applicant, registrant, or any of its officers, directors, employees, or its shareholders or partners owning greater than a ten percent interest or share, if the operator is other than a natural person, have wilfully done or are proposing to do any of the following or permitted or propose to permit any of their salespersons or agents to do any of the following:
(i) Breaching any escrow, impound, reserve account, or trust arrangement or the conditions of an order or permit to market required by this chapter;
(ii) Breaching any stipulation or order entered into in settlement of the department's filing of a previous administrative action;
(iii) Making an untrue or misleading statement of a material fact, or omitted to state a material fact in order to make the statement made, in light of the circumstances under which it was made, appear not to be misleading;
(iv) Employing any device, scheme, or artifice to defraud purchasers or members;
(v) Filing or causing to be filed with the director any document or affidavit, or made any statement during the course of a registration or exemption procedure with the director, that was untrue or misleading;
(vi) Failing to provide the written disclosures to purchasers or prospective purchasers as required under this chapter;
(vii) Offering a proprietary form of contract that characterizes the nature of the interest therein in a manner that is contrary to the provisions of sections 11 and 12 of this act;
(viii) Failing to provide a bond, letter of credit, or other arrangement to assure delivery of promised gifts, prizes, awards, or other items of consideration, as required under this chapter, breaching such a security arrangement, or such a security arrangement is no longer in effect because of a resignation or loss of a trustee, impound, or escrow agent;
(ix) Offering or selling contracts in excess of the number registered, using amendments or codicils to contracts that are not registered, or that are the consequences of breaches or alterations in previously filed contracts;
(x) Selling or proposing to sell contracts in a ratio of contracts to sites available in excess of that filed in the affidavit required by this chapter;
(j) The
camping ((club)) resort operator has withdrawn, ((or)) has
the right to withdraw, or is proposing to withdraw, from use all or any
((substantial camping or recreation)) portion of any of its home-base
camping ((club)) resort property devoted to the camping ((or
recreational activities, unless !se (a) adequate provision has been made)) resort
program, unless: (i) A majority vote of approval by at least two-thirds of the
membership residing in the home-base area has first been obtained, under the
supervision of the department, and adequate provision has been made to
provide within a reasonable time thereafter a substitute property in the same
general area that is at least as desirable for the purpose of camping and
outdoor recreation,!se (((b) the property is withdrawn because, despite good
faith efforts by the camping club operator, a nonaffiliate of the camping club
has exercised a right of withdrawal from use by the camping club (such as
withdrawal following expiration of a lease of the property to the camping club)
and the terms of the withdrawal right have been disclosed in writing to all
purchasers at or prior to the time of any sales of camping club contracts after
the camping club has represented to purchasers that the property is or will be
available for camping or recreation purposes,!se (c))) (ii) the
specific date upon which the withdrawal becomes effective has been disclosed in
writing to all purchasers ((at or)) and members prior to the time
of ((any)) the vote of approval by the members or sales of
camping ((club)) resort contracts after the camping ((club))
resort has represented to purchasers that the property is or will be
available for camping or recreation purposes,!se (((d))) (iii)
the rights of ((the purchaser or)) members and owners of
the camping ((club)) resort contracts under the express
terms of the camping ((club)) resort contract have expired, or
have been specifically limited, upon the lapse of a stated or determinable
period of time,!se ((or (e))) and (iv) the director by order has
found that the withdrawal is not otherwise inconsistent with the protection of
purchasers or the desire of the majority of the owners of camping ((club))
resort contracts, as expressed in their previously obtained vote of
approval;
(k) The format, form, or content of the written disclosures are not current or in proper form, or the information provided therein is not complete, full, or accurate, or statements made therein are false, misleading, or deceptive;
(l) The applicant or registrant has failed or declined to respond to any subpoena lawfully issued and served by the department under this chapter;
(m) The applicant or registrant has failed to file an amendment for a material change, in the manner or at the time required under this chapter or its implementing rules;
(n) The applicant or registrant has filed voluntarily or been placed involuntarily into a federal bankruptcy or is proposing to do so;
(o) A camping resort in the home-base area has been foreclosed upon or if for any reason operations in a camping resort in the home-base program have been terminated in a manner contrary to contract provisions; or
(p) Annual or periodic dues or assessments required of members are being used by the registrant, applicant, or others in a manner contrary to the provisions of the project instruments or the requirements of this chapter.
(2) Any applicant or registrant who has violated subsection (1) (a), (b), (c), (f), (h), (i), (j), (l), (m), (n), or (p) of this section, may be fined by the director in an amount not to exceed one thousand dollars for each such violation. Proceedings seeking such fines shall be held in accordance with chapter 34.04 RCW and may be filed either separately or in conjunction with other administrative proceedings to deny, suspend, or revoke registrations authorized under this chapter. Fines collected from such proceedings shall be deposited in the state general fund.
(3) An operator, registrant, applicant, or natural person owning a ten percent or greater interest of a corporate entity, against whom administrative or legal proceedings have been filed, shall be individually or collectively responsible for and reimburse to the state, by payment into the general fund, all administrative and legal costs actually incurred by the department in the issuance, processing, and conducting of any such administrative or legal proceeding, authorized under this chapter that results in a final legal or administrative determination of any type or degree in favor of the department.
(4) No
order may be entered under this section without appropriate ((prior))
notice to the applicant or registrant of opportunity for a hearing and written
findings of fact and conclusions of law, except that the director may by order
summarily deny an application for registration or renewal under any of
the above subsections and may summarily suspend or revoke a registration under
subsection((s (1), (3), (5), or (6))) (1) (d), (f), (g), (i)(i), (k),
(l), (m), (n), (r), (s), and (t) of this section. No fine may be imposed
by summary order ((or by reason of violation of subsection (4) or (7) of
this section. If no hearing is requested within fifteen days of receipt of
notice of opportunity for a hearing, and none is ordered by the director, the
director may enter the order. Upon entry of a summary order, the applicant or
registrant shall have an opportunity within ten days entry of the summary order
to appear before the director and show cause why the summary order should not
remain in effect. If good cause is shown, the director shall vacate the
summary order. If good cause is not shown, the summary order shall remain in
effect and the director shall give notice of opportunity for hearing and within
fifteen days of the receipt of a written request the matter shall be set down
for hearing within a time that is reasonable under the circumstances. Any fine
imposed under this section shall be deposited in the general fund of the state
treasurer)).
(5) The proceedings to deny an application or renewal, suspend or revoke a registration or permit, whether summarily or otherwise, or impose a fine shall be held in accordance with chapter 34.04 RCW.
(6) The director may enter into assurances of discontinuance in lieu of issuing a statement of charges or a cease and desist order or conducting a hearing under this chapter. The assurances shall consist of a statement of the law in question and an agreement to not violate the stated provision. The applicant or registrant shall not be required to admit to any violation of the law, nor shall the assurance be construed as such an admission. Violation or breaching of an assurance under this subsection shall be grounds for a suspension, revocation of registration, or imposition of a fine.
Sec. 22. Section 10, chapter 69, Laws of 1982 and RCW 19.105.390 are each amended to read as follows:
Any camping
((club)) resort contract, other than a resale contract being
offered through a business registered to offer resales, may be canceled at
the option of the purchaser, if the purchaser sends notice of the cancellation
by certified mail (return receipt requested) to the camping ((club)) resort
operator and if the notice is posted not later than midnight of the ((third))
fifth business day following the day on which the contract is signed.
In addition to this cancellation right, any purchaser who signs a camping ((club))
resort contract of any description required to be registered with the
department without ((inspecting a camping club property or facility with
camping sites or proposed camping sites may by written notice by certified mail
(return receipt requested) cancel the camping club)) having received the
written disclosures required by this chapter shall have cancellation rights
until five business days following eventual receipt of the written
disclosures. Persons shall request cancellation of contracts by
posting the notice not later than midnight of the ((sixth)) fifth
business day following the day on which the contract is signed ((if the
purchaser makes such an inspection before sending the notice)) or the
disclosures received, whichever event is later. In computing the number of
business days, the day on which the contract was signed shall not be included
as a "business day," nor shall Saturday, Sunday, or legal holidays be
included. The camping ((club)) resort operator shall promptly refund
any money or other consideration paid by the purchaser ((upon)) and
provide evidence of a canceled contract within five business days of
receipt of timely notice of cancellation by the purchaser. The director may
by rule require that down payments, credit card slips, and purchase agreements
be placed in escrow for eight business days following the day of sale.
Every
camping ((club)) resort contract, other than those being
offered and registered as resales, shall include the following statement in
at least ((ten)) twelve point boldface type immediately
prior to the space for the purchaser's signature:
"Purchaser's
right to cancel: You may cancel this contract without any cancellation fee or
other penalty or stated reason for doing so, by sending notice of
cancellation by certified mail, return receipt requested, to .......... (insert
name of camping ((club)) resort operator). The notice must be
postmarked by midnight of the ((third)) fifth business day
following the day on which the contract is signed. In computing the ((three))
five business days, the day on which the contract is signed shall not be
included as a "business day," nor shall Saturday, Sunday, or legal
holidays be included."
((If the
purchaser has not inspected a camping club property or facility at which
camping club sites are located or planned, the notice must contain the
following additional language:
"If
you sign this contract without having first inspected a property at which
camping sites are located or planned, you may also cancel this contract by
giving this notice within six business days following the day on which you
signed if you inspect such a property prior to sending the notice."))
Sec. 23. Section 11, chapter 69, Laws of 1982 and RCW 19.105.400 are each amended to read as follows:
(1) Any
camping ((club)) resort contract entered into in violation of RCW
19.105.310 ((or)), 19.105.370, 19.105.390, or sections 11, 12,
15(1), or 16(1), (2), or (4)(b) of this 1987 act, may be voided by the
purchaser and the purchaser's entire consideration recovered at the option
of the purchaser((, but no suit under this section may be brought after two
years from the date the contract is signed)).
(2) In any legal proceeding for cancellation instituted by a purchaser who did not receive the written disclosures required under RCW 19.105.370, a timely refund as provided under RCW 19.105.390, or a contract containing the provisions required by sections 11 and 12 of this 1987 act or the other protections afforded in sections 15(1) and 16(1), (2) and (4)(b) of this 1987 act, in which the purchaser prevails, the court may order reimbursement to the purchaser for all funds paid, interest thereon at twelve percent per annum, court costs, and reasonable attorneys' fees. In addition, the court may award damages.
NEW SECTION. Sec. 24. Applicants or registrants under this chapter shall be required to pay fees determined by the director as provided in RCW 43.24.086. These fees shall be prepaid and the director may determine fees for the following activities or events:
(1) A fee for the initial application and an additional fee for each camping resort contract registered;
(2) Consolidations or adding camping resorts or camping sites to a program or an added inventory of contracts;
(3) Renewals of camping resort registrations;
(4) An initial and annual fee for processing and administering any required impound, trust, reserve, or escrow arrangement;
(5) The review and processing of advertising or promotional materials;
(6) Registering persons in the business of selling promotional programs or in the business of offering camping resort resales;
(7) Registration and renewal of registrations of salespersons;
(8) The transfer of a salesperson's permit from one operator to another;
(9) Administering examinations for salespersons;
(10) Conducting site inspections;
(11) Granting exemptions under this chapter;
(12) The processing and review of documentation concerning new resorts added to a home-base program; and
(13) Penalties for registrants in any situation where a registrant has failed to file an amendment to the registration or the public offering statement in a timely manner for material changes, as required in this chapter and its implementing rules.
Sec. 25. Section 13, chapter 69, Laws of 1982 and RCW 19.105.420 are each amended to read as follows:
A
registration of camping ((club)) resort contracts shall be
effective for a period of one year and may, upon application, be renewed for
successive periods of one year each, unless the director prescribes a
shorter period of a permit or registration. A camping ((club)) resort
contract registration ((may)) shall be amended ((at any time
to)) if there is to be an increase in inventory or consolidation
to the number of camping ((club)) resort contracts
registered, or ((for any other reason, by the filing of an amended
application therefor, which amended application)) in instances in which
new contract forms are to be offered. Consolidations, new contract forms, the
adding of resorts to the program, or amendments for material changes shall
become effective in the manner provided by RCW 19.105.330. The written
disclosures required to be furnished prospective purchasers under RCW
19.105.370 shall be supplemented by an amendment request in writing as
necessary to keep the required information reasonably current((, and the
written supplements)) and reflective of material changes. Amendments
shall be filed with the director as provided in RCW 19.105.360. The foregoing
notwithstanding, however, the camping ((club)) resort operator or
registrant shall file an amendment to the ((application for))
registration disclosing any event which will or may have a material
effect on the conduct of the operation of the camping ((club)) resort,
the financial condition of the camping resort or the future availability of the
camping resort properties to purchasers. The amendment shall be filed ((within
thirty days following the event)) as soon as the operator is reasonably
certain of the change or occurrence of the event. The filing of certain
material changes, designated in departmental rules, which are amendments,
shall be treated administratively as an original application for
registration, except that until the director has acted upon the application
for amendment ((or until the amendment becomes effective under RCW
19.105.330 by lapse of time)) or taken administrative action indicating
a rejection or denial of the application for amendment, the applicant's
registration shall continue to be deemed effective for the purposes of RCW
19.105.310.
Any permit
to sell camping ((club)) resort memberships issued prior to
November 1, 1982, shall be deemed a camping ((club)) resort
registration subject to the renewal provisions of this chapter upon the
anniversary date of the issuance of the original permit.
Sec. 26. Section 14, chapter 69, Laws of 1982 and RCW 19.105.430 are each amended to read as follows:
Unless the
transaction is exempt under RCW 19.105.320 (((2) or (3))) (4) or the
person is registered with the department as a person in the business of
offering camping resort contracts, it is unlawful for any person to act as
a camping ((club)) resort salesperson in this state for the
sale of either start-up or resale contracts on behalf of others, without
first registering under this chapter as a salesperson or, alternatively,
being licensed as a salesperson under chapter 18.85 RCW for a broker licensed
under that chapter, offering camping resort contracts under a licensed
brokerage.
Sec. 27. Section 15, chapter 69, Laws of 1982 and RCW 19.105.440 are each amended to read as follows:
(1) A salesperson may apply for registration by filing in a complete and readable form with the director an application form provided by the director which includes the following information:
(a) A statement
whether or not the applicant within the past five years has been convicted of,
pleaded nolo contendre to, or been ordered to serve probation for a period of a
year or more for any misdemeanor or felony involving conversion,
embezzlement, theft, fraud, or dishonesty or ((whether or not)) the
applicant has been enjoined from, had any civil penalty assessed for, or been
found to have engaged in any violation of any act designed to protect
consumers; ((and))
(b) A
statement fully describing the applicant's employment history for the
past five years and whether or not any termination of employment during the
last five years was ((occasioned by)) a result of any theft,
fraud, or act of dishonesty;
(c) A consent to service comparable to that required of operators under this chapter; and
(d)
Required filing fees. (2) The director may by order deny, suspend, or revoke a camping
resort salesperson's registration or application for registration under
this chapter or the ((salesperson's registration)) person's
license or application under chapter 18.85 RCW, or impose a fine not exceeding
two hundred dollars per violation, if the director finds that the order is
necessary for the protection of ((purchasers or owners of camping club
contracts)) the public health, welfare, or safety and the applicant
or registrant within the past five years (a) has been convicted of, pleaded
nolo contendre to, or served probation for any misdemeanor or felony
involving conversion, embezzlement, theft, fraud, or dishonesty or has
been enjoined from, had any civil penalty assessed for, or been found to have
engaged in any violation of any act designed to protect consumers, (b) has
violated any provision of this chapter or the rules adopted thereunder,
((or)) (c) has engaged in unethical or dishonest practices in any
industry involving sales to consumers, (d) has engaged in deceptive
activities or made misrepresentations under this chapter, (e) has failed to
cooperate with the department during the course of any investigation conducted
by the department to determine violations of this chapter, or (f) has filed any
false statement in his or her applications for registration or renewal thereof,
or made false or deceptive statements during any investigation or taking of
testimony by the department.
(3) No
order may be entered under this section without appropriate prior notice to the
applicant or registrant of opportunity for a hearing and written findings of
fact and conclusions of law, except that the director may by order summarily
deny an application for registration under this subsection. ((If no hearing
is requested within fifteen days of receipt of notice of opportunity for a
hearing, and none is ordered by the director, the director may enter the
order. Upon entry of a summary order, the applicant shall have an opportunity
within ten days of entry of the summary order to appear before the director and
show cause why the summary order should not remain in effect. If good cause is
shown, the director shall vacate the summary order. If good cause is not
shown, the summary order shall remain in effect and the director shall give
notice of opportunity for hearing and within fifteen days of the receipt of a
written request the matter shall be set down for hearing within a time that is
reasonable under the circumstances.
(3))) (4) The proceedings to deny an application or
renewal, or suspend or revoke a registration or permit whether summarily or
otherwise, or impose a fine shall be held in accordance with chapter 34.04 RCW.
(5) The director, subsequent to any complaint filed against a salesperson or registrant or an investigation to determine violations, may enter into stipulated assurances of discontinuances in lieu of issuing a statement of charges or a cease and desist order or conducting a hearing. The assurance shall consist of a statement of the law in question and an agreement not to violate the stated provision. The salesperson shall not be required to admit to any violation of the law, nor shall the assurance be construed as such an admission. Violation of an assurance under this subsection is grounds for a disciplinary action, a suspension of registration, or a fine not to exceed one thousand dollars.
(6)
The director may by rule require such further information or conditions for
registration, including qualifying examinations and fingerprint cards
prepared by authorized law enforcement agencies, as a camping ((club))
resort salesperson as the director deems necessary to protect the
interests of purchasers.
(((4)))
(7) Registration as a camping ((club)) resort salesperson
shall be effective for a period of one year unless the director specifies
otherwise or the salesperson transfers employment to a different registrant.
Registration as a camping ((club)) resort salesperson shall be
renewed annually, or at the time of transferring employment, whichever
occurs first, by the filing of a form prescribed by the director for that
purpose. ((Unless an order denying effectiveness under subsection (2) of
this section is in effect, or unless declared effective by order of the
director prior thereto, the application for registration or renewal shall
automatically become effective upon the expiration of the fifteenth full
business day following filing with the director, but an applicant or registrant
may consent to the delay of effectiveness until such time as the director may
by order declare registration or renewal effective.))
(8) It is unlawful and a violation of this chapter for a registrant of camping resort contracts to employ or a person to act as a camping resort salesperson covered under this section unless the salesperson has in effect with the department and displays in a conspicuous location at each of the sales offices at which the salesperson is employed, a valid and current registration. It is the responsibility of both the operator and the salesperson to notify the department when and where a salesperson is employed, his or her responsibilities and duties, and when the salesperson's employment or reported duties are changed or terminated.
(9) No operator or registrant under this chapter, employing camping resort salespersons, may employ, hire, solicit, or retain legal counsel to represent such employed or previously employed camping resort salespersons under circumstances in which the salespersons have been subpoenaed by the department to give testimony in an investigation of possible violations of this chapter by the operator or registrant. To do so shall be a violation of this chapter and cause for administrative action by the department. This subsection shall not be construed to prohibit salespersons from retaining legal counsel of their own choosing to represent them during the course of an investigative hearing.
Sec. 28. Section 16, chapter 69, Laws of 1982 and RCW 19.105.450 are each amended to read as follows:
The
director may make such public or private investigations or may make such
requests for information, within or without this state, as he deems necessary
to determine whether any registration should be granted, denied, or revoked,
or a fine imposed, or whether any person has violated or is about to
violate any of the provisions of this chapter or any rule ((or)),
order, or permit under this chapter, or to aid in the enforcement of
this chapter or in prescribing of rules and forms under, and amendments to,
this chapter and may publish information concerning any violation of this
chapter or any rule or order under this chapter.
Sec. 29. Section 18, chapter 69, Laws of 1982 and RCW 19.105.470 are each amended to read as follows:
(1)
Whenever it appears to the director that any person has engaged or is about to
engage in any act or practice constituting a violation of any provision of this
chapter((, any withdrawal of a camping club property in violation of RCW
19.105.380(9),)) or any rule ((or)), order, or permit
issued under this chapter, the director may in his or her discretion
issue an order directing the person to cease and desist from continuing the act
or practice: PROVIDED, That reasonable notice of and opportunity for a hearing
shall be given: PROVIDED FURTHER, That the director may issue a temporary
order pending the hearing which shall be effective immediately upon
delivery to the person affected and which shall remain in effect until ten days
after the hearing is held and which shall become final if the person to whom
notice is addressed does not request a hearing within fifteen days after
receipt of notice.
(2) If
it appears necessary in order to protect the interests of members and
purchasers, whether or not the director has issued a cease and desist
order, the attorney general, in the name of the state, or the director,
or the proper prosecuting attorney, or an affiliated members'
common-interest association, may bring an action in any court of competent
jurisdiction to enjoin any such acts or practices and to enforce compliance
with this chapter or any rule or order or permit granted under this
chapter. Upon a proper showing, a permanent or temporary injunction,
restraining order, or writ of mandamus shall be granted and a receiver or
conservator may be appointed for the defendant ((or)), the
defendant's assets, or to protect the interests or assets of a members'
common-interest association. The state ((or)), director,
or members' common-interest association, shall not be required to post a
bond in such proceedings.
Sec. 30. Section 19, chapter 69, Laws of 1982 and RCW 19.105.480 are each amended to read as follows:
Any person
who wilfully ((violates any provision of)) fails to register an
offering of camping resort contracts under this chapter is guilty of a
gross misdemeanor. It is a gross misdemeanor for any person, an operator or
owner of a greater than ten percent interest in an operator or registrant,
in connection with the offer or sale of any camping club contracts ((wilfully)):
(1) To make any untrue or misleading statement of a material fact, or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading;
(2) To employ any device, scheme, or artifice to defraud;
(3) To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person;
(4) To file, or cause to be filed, with the director any document which contains any untrue or misleading information;
(5) To breach any impound, escrow, trust, or other security arrangement provided for by this chapter;
(6) To cause the breaching of any trust, escrow, impound, or other arrangement placed in a registration for compliance with section 7 of this 1987 act;
(7) To employ unlicensed salespersons or to permit salespersons or employees to make misrepresentations or violate provisions of this chapter.
No
indictment or information may be returned under this chapter more than five
years after the ((alleged)) date of the event alleged to have been a
violation.
Sec. 31. Section 22, chapter 69, Laws of 1982 and RCW 19.105.510 are each amended to read as follows:
Camping ((club))
resort contracts registered under this chapter are exempt from the
provisions of chapters 21.20 and 58.19 RCW and any act in this state regulating
the offer and sale of land developments, real estate cooperatives, or
time shares. However the director may make a finding of fact and order that
a registration under any of those statutes in lieu of this chapter is in the
best interests of the public health, welfare, and safety. ((A camping
club shall not be considered a subdivision under RCW 58.17.020(1).))
Nothing in this chapter prevents counties or cities from enacting ordinances or
resolutions setting platting or subdivision requirements solely for camping ((clubs))
resorts or for camping resorts as subdivisions or binding site plans if
appropriate to chapter 58.17 RCW or local ordinances.
Sec. 32. Section 24, chapter 69, Laws of 1982 and RCW 19.105.520 are each amended to read as follows:
Neither the
fact that an application for registration nor the written disclosures required
by this chapter have been filed, nor the fact that a camping ((club)) resort
contract offering has been effectively registered or exempted, constitutes a
finding by the director that the offering or any document filed under this
chapter is true, complete, and not misleading, nor does the fact mean that the
director has determined in any way the merits or qualifications of or recommended
or given approval to any person, camping ((club)) resort
operator, or camping ((club)) resort contract transaction. It is
a gross misdemeanor to make or cause to be made to any prospective purchaser
any representation inconsistent with this section.
Sec. 33. Section 25, chapter 69, Laws of 1982 and RCW 19.105.530 are each amended to read as follows:
(1) The director may make, amend, and repeal rules, forms, and orders when necessary to carry out the provisions of this chapter.
(2) The director may appoint those persons within the department of licensing deemed necessary to administer this chapter. The director may delegate to such persons any powers, subject to the authority of the director, that may be necessary to carry out this chapter, including the issuance and processing of administrative proceedings and entering into stipulations under RCW 19.105.380.
NEW SECTION. Sec. 34. This chapter shall be known as and may be cited as the Washington state camping resort act.
Sec. 35. Section 31, chapter 1, Laws of 1973 as last amended by section 7, chapter 276, Laws of 1986 and by section 25, chapter 299, Laws of 1986 and RCW 42.17.310 are each reenacted and amended to read as follows:
(1) The following are exempt from public inspection and copying:
(a) Personal information in any files maintained for students in public schools, patients or clients of public institutions or public health agencies, welfare recipients, prisoners, probationers, or parolees.
(b) Personal information in files maintained for employees, appointees, or elected officials of any public agency to the extent that disclosure would violate their right to privacy.
(c) Information required of any taxpayer in connection with the assessment or collection of any tax if the disclosure of the information to other persons would (i) be prohibited to such persons by RCW 82.32.330 or (ii) violate the taxpayer's right to privacy or result in unfair competitive disadvantage to the taxpayer.
(d) Specific intelligence information and specific investigative records compiled by investigative, law enforcement, and penology agencies, and state agencies vested with the responsibility to discipline members of any profession, the nondisclosure of which is essential to effective law enforcement or for the protection of any person's right to privacy.
(e) Information revealing the identity of persons who file complaints with investigative, law enforcement, or penology agencies, other than the public disclosure commission, if disclosure would endanger any person's life, physical safety, or property: PROVIDED, That if at the time the complaint is filed the complainant indicates a desire for disclosure or nondisclosure, such desire shall govern: PROVIDED, FURTHER, That all complaints filed with the public disclosure commission about any elected official or candidate for public office must be made in writing and signed by the complainant under oath.
(f) Test questions, scoring keys, and other examination data used to administer a license, employment, or academic examination.
(g) Except as provided by chapter 8.26 RCW, the contents of real estate appraisals, made for or by any agency relative to the acquisition or sale of property, until the project or prospective sale is abandoned or until such time as all of the property has been acquired or the property to which the sale appraisal relates is sold, but in no event shall disclosure be denied for more than three years after the appraisal.
(h) Valuable formulae, designs, drawings, and research data obtained by any agency within five years of the request for disclosure when disclosure would produce private gain and public loss.
(i) Preliminary drafts, notes, recommendations, and intra-agency memorandums in which opinions are expressed or policies formulated or recommended except that a specific record shall not be exempt when publicly cited by an agency in connection with any agency action.
(j) Records which are relevant to a controversy to which an agency is a party but which records would not be available to another party under the rules of pretrial discovery for causes pending in the superior courts.
(k) Records, maps, or other information identifying the location of archaeological sites in order to avoid the looting or depredation of such sites.
(l) Any library record, the primary purpose of which is to maintain control of library materials, or to gain access to information, which discloses or could be used to disclose the identity of a library user.
(m) Financial information supplied by or on behalf of a person, firm, or corporation for the purpose of qualifying to submit a bid or proposal for (a) a ferry system construction or repair contract as required by RCW 47.60.680 through 47.60.750 or (b) highway construction or improvement as required by RCW 47.28.070.
(n) Railroad company contracts filed with the utilities and transportation commission under RCW 81.34.070, except that the summaries of the contracts are open to public inspection and copying as otherwise provided by this chapter.
(o) Financial and commercial information and records supplied by private persons pertaining to export services provided pursuant to chapter 53.31 RCW.
(p) Financial disclosures filed by private vocational schools under chapter 28C.10 RCW.
(q) Lists of members or owners of common-interest communities, condominiums, subdivisions, camping resorts, and timeshare properties regulated by the department of licensing in the possession of the department.
(2) Except for information described in subsection (1)(c)(i) of this section and confidential income data exempted from public inspection pursuant to RCW 84.40.020, the exemptions of this section are inapplicable to the extent that information, the disclosure of which would violate personal privacy or vital governmental interests, can be deleted from the specific records sought. No exemption may be construed to permit the nondisclosure of statistical information not descriptive of any readily identifiable person or persons.
(3) Inspection or copying of any specific records exempt under the provisions of this section may be permitted if the superior court in the county in which the record is maintained finds, after a hearing with notice thereof to every person in interest and the agency, that the exemption of such records is clearly unnecessary to protect any individual's right of privacy or any vital governmental function.
(4) Agency responses refusing, in whole or in part, inspection of any public record shall include a statement of the specific exemption authorizing the withholding of the record (or part) and a brief explanation of how the exemption applies to the record withheld.
NEW SECTION. Sec. 36. Sections 4, 6 through 16, 19, 24, and 34 of this act are each added to chapter 19.105 RCW.
NEW SECTION. Sec. 37. (1) Sections 11, 12(1), and 13 of this act do not apply to any offering of camping resort contracts registered with the department of licensing and offered to the public prior to the effective date of this section. Sections 12 (2), (3), and (4) and 16 (1), (2), and (3) of this act apply to camping resort contracts transacted prior to the effective date of this section.
(2) Operators or other persons who have offerings of camping resort contracts registered with the department of licensing as of February 1, 1987, shall have a six-month period subsequent to the effective date of this section to comply with section 7 (1), (2), (3), and (4) (b) and (d) of this act.
NEW SECTION. Sec. 38. The following acts or parts of acts are each repealed:
(1) Section 5, chapter 69, Laws of 1982 and RCW 19.105.340; and
(2) Section 12, chapter 69, Laws of 1982 and RCW 19.105.410.
NEW SECTION. Sec. 39. There is appropriated from the general fund to the department of licensing for the biennium ending June 30, 1989, the sum of .......... dollars, or so much thereof as may be necessary, to carry out the purposes of this act.
NEW SECTION. Sec. 40. This act is necessary for the immediate preservation of the public peace, health, and safety, the support of the state government and its existing public institutions, and shall take effect immediately.