§34-27-57. Acts constituting violation of article - Sell, etc., interest in plan to third person that substantially affects rights of other owners.

(a) It shall be a violation of this article for any seller of vacation time-sharing plans to sell, lease, assign, or otherwise transfer the seller's interest in the vacation time-sharing plan or the accommodations or facilities to a third party when such a sale, lease, assignment, or other transfer substantially affects the rights of other owners or lessees of the time-share units, unless:

(1) The third party agrees in writing to:

a. Fully honor the rights of purchasers of the vacation time-sharing plan to occupy and use the accommodations or facilities; and

b. Fully honor rights of purchasers of the vacation time-sharing plan to cancel their contracts and receive an appropriate refund as provided in this article; and

c. Comply with the provisions of this article for as long as the third party continues to sell the vacation time-sharing plan, or for as long as purchasers of the vacation time-sharing plan are entitled to occupy the accommodations or use the facilities, whichever is longer in time; and

(2) The commission receives prior written notice of the intent to transfer the seller's interest; and

(3) Written notice is given to each purchaser of a vacation time-sharing plan affected thereby, by certified mail within 30 days of the transfer.

(b) The commission shall reserve the right to demand such additional information regarding the transfer as is reasonably necessary to determine to what extent the rights of other owners of units or unit weeks within the subject time-sharing plan shall be affected and to determine whether the registration of the plan should continue, should be amended, or should be suspended or revoked.

(c) The provisions of this section shall not be construed to apply to the sale of a single unit or to prevent the seller's right to sell, discount, or hypothecate for value receivables in favor of any bank, mortgage company, or other lending institution and such transactions shall be exempt from the requirements of the section.

(Acts 1983, No. 83-670, p. 1035, §8; Acts 1985, No. 85-750, p. 1204, §1.)