N.J. Admin. Code § 11:5-9A.4

Current through Register Vol. 56, No. 19, October 7, 2024

Section 11:5-9A.4 - Registration filings

(a) A developer who sells, offers to sell, or attempts to solicit prospective purchasers in this State to purchase a timeshare interest, or any person who creates a timeshare plan with an accommodation in this State, shall register with the Commission, on forms provided by the Commission or in electronic formats authorized by the Commission, all timeshare plans which have accommodations located in this State or which are sold or offered for sale to any individual located in this State.

(b) Preliminary registration requirements are as follows:

1. Upon the submission of an application approved by the Commission, the Commission may grant a 90-day preliminary registration to allow the developer to begin offering and selling timeshare interests in a timeshare plan regardless of whether the accommodations of the timeshare plan are located within or outside of the State. Upon submission to the Commission of a substantially complete application for an abbreviated or comprehensive registration under the Act, including all appropriate fees prior to the expiration date of the preliminary registration, the preliminary registration shall be automatically extended during the registration review period provided that the developer is actively and diligently pursuing registration under the Act. The preliminary registration shall automatically terminate with respect to those timeshare interests covered by an approved public offering statement and by a final order of registration that is issued before the scheduled termination date of the preliminary registration. The preliminary registration shall also terminate upon the issuance of any notice of rejection due to the developer's failure to comply with the provisions of the Act.

2. Upon termination of a preliminary registration order for any reason other than the issuance of a final order of registration and public offering statement, all reservations executed under the preliminary registration shall be null and void, and all funds obtained shall be refunded to the purchaser within 15 days of termination. Evidence of such refunds must be filed with the Commission within 30 days of the date of termination.

3. To obtain a preliminary registration, the developer shall provide all of the following:

i. The reservation instrument to be used, in a form previously approved by the Commission and supplied with the preliminary registration application, which shall, at a minimum, provide for the following:

(1) The right of both the developer and the potential purchaser to unilaterally cancel the reservation at any time;

(2) The placement by the developer of any deposit paid by the purchaser into an escrow account maintained in accordance with (b)3iv below;

(3) The repayment to the potential purchaser of his or her total deposit within 15 days following the receipt of a notice of cancellation of the reservation by either party; and

(4) A statement to the effect that the reservation concerns an offering plan that has not yet received final approval from the Commission, and that no offering of the timeshare interest referenced in the reservation instrument can be made by the developer until an offering plan has been filed with, and accepted by, the Commission;

ii. A preliminary public offering statement in a form approved by the Commission with an agreement to provide each potential purchaser with a copy of the preliminary public offering statement and an executed receipt for a copy before any money or other thing of value has been accepted by or on behalf of the developer in connection with the reservation;

iii. An agreement to provide a copy of the reservation instrument signed by the potential purchaser and by or on behalf of the developer to the potential purchaser;

iv. A fully executed escrow agreement, acceptable to the Commission, stating that all funds received by the developer shall be placed into an independent escrow account to be maintained in a financial institution located within the State of New Jersey under the control of an attorney, real estate broker or title company licensed to practice in New Jersey. This agreement must state that no funds shall be released until a final order of registration has been granted unless refunded to the purchaser upon cancellation of the reservation agreement or expiration of the preliminary registration. The name and address of the financial institution, and escrow account number must also be provided;

v. The filing fee for a preliminary registration, specified at 11:5-9A.1 0(e), which filing fee shall be in addition to the filing fees for an abbreviated or comprehensive registration as established in that subsection;

vi. Any advertisements to be utilized by the developer while the preliminary registration is in effect. All such advertisements shall be provided to the Commission before use;

vii. If the timeshare plan is located wholly or in part outside of the State of New Jersey, a fully executed consent to service of process, along with evidence of compliance with all laws governing the offering of a timeshare plan in that jurisdiction;

viii. A statement indicating whether the applicant, or a parent or a subsidiary of the applicant, or any of their current officers or principals have, during the past 10 years, or any of their former officers or principals have during the last two years, been convicted of any criminal or disorderly persons offense involving any aspect of the real estate sales or real estate securities business; and

ix. Such other information as the Commission may require from a particular developer in order to further the provisions of the Act, to assure full and fair disclosure and protect the interests of purchasers.

(c) Comprehensive registration requirements are as follows:

1. In addition to the required documentation under N.J.S.A. 45:15-16.5 7(d), to obtain a comprehensive registration, the developer shall provide all of the following:

i. The developer's legal name, any alternate names or other names under which the developer has operated or is operating, and the developer's principal office location, mailing address, primary contact person and telephone number;

ii. The name, location, mailing address, primary contact person and telephone number of the timeshare plan;

iii. The name and principal address of the developer's authorized New Jersey representative who shall be a licensed real estate broker licensed to maintain offices within this State;

iv. A declaration as to whether the timeshare plan is a single-site timeshare plan or a multi-site timeshare plan and, if a multi-site timeshare plan, whether it consists of specific timeshare interests or non-specific timeshare interests;

v. The name and principal address of all brokers within New Jersey who sell or offer to sell any timeshare interests in any timeshare plan offered by the developer to any person in this State, who shall be licensed as a real estate broker pursuant to 45:15-1 et seq., and who are the authorized representatives of the developer;

vi. The name and principal address of all affiliated and non-affiliated marketing entities who, by means of inducement, promotion or advertisement, attempt to encourage or procure prospective purchasers located in this State to attend a sales presentation for any timeshare plan offered by the developer or authorized broker;

vii. The name and principal address of all managing entities who manage the timeshare plan;

viii. A public offering statement which complies with the requirements of the Act;

ix. A form application provided by the Commission in which the applicant identifies the timeshare plan and the timeshare interests to be registered. The application shall be accompanied by an affidavit, on a form provided by the Commission and signed by the applicant, which affirms and attests that the applicant is familiar with the project being registered, the nature and content of the application for registration, the Act and the rules promulgated thereunder, and that the contents of the application are true and correct and conform with those requirements. A second affidavit, to be completed by the designated New Jersey broker of record, shall accompany the application. The broker's affidavit and application for a broker's release shall state that he or she is familiar with the registration and its contents or has physically inspected the property, or both, that he or she is familiar with the Act and the rules promulgated thereunder, and with the New Jersey Real Estate License Act, and that he or she is not aware of any information that would lead him or her to believe that the information in the registration application does not provide full and fair disclosure of the offering;

x. A statement by the applicant confirming that all monies paid by New Jersey residents to the applicant or his agents prior to closing shall be held in an escrow account pursuant to N.J.S.A. 45:15-16.5 7(e), or be guaranteed by some means acceptable to the Commission. The statement shall specify the name and location of the institution where the escrow account is maintained as well as the name and address of any trustee or escrow agent;

xi. An irrevocable appointment of the Commission to accept, on behalf of the applicant, service of any lawful process in any proceeding arising under the Act against the applicant or his agents;

xii. Copies of the developer's certificate or articles of incorporation, with all amendments thereto, if the applicant is a corporation; copies of all instruments by which the trust is created or declared, if the developer is a trust; copies of the articles of partnership or association and all other organization papers if the applicant is organized under another form. In the event the applicant is not the holder of the legal title to the property being registered, the above documents shall be submitted for both the applicant and the legal title holder;

xiii. Copies of the deed or other instruments establishing title in the developer or other record owner and any escrow agreement required pursuant to this section, and a current title search, title report, title insurance policy, title opinion from an independent attorney, or certificate or binder issued by a licensed title insurance company. The Commission may also require a copy of any agreement which grants the applicant the right to dispose of the timeshare interest on behalf of the title holder;

xiv. In the event there is, or shall be, a blanket encumbrance affecting the property or a portion thereof, a copy of the document creating it and a statement of the consequences to a purchaser of a failure of the person bound to fulfill the obligations under the instrument, and of the manner in which the interest of the purchaser is to be protected in the event of such failure;

xv. Copies of any association documents and instruments creating or affecting the timeshare plan;

xvi. A statement or listing of any pending administrative actions or litigation and pending or issued court orders, administrative orders, judgments or decrees which materially affect the sale or development of the offering or the financial stability of the applicant;

xvii. A statement that the interests in the timeshare plan shall be offered to the public and sold or alienated without regard to age, ancestry, color, creed (religion), disability (including AIDS and HIV infection), atypical hereditary cellular or blood trait, familial status, liability for military service, marital status, domestic partnership status, nationality, national origin, race, sex, and affectional or sexual orientation;

xviii. A statement of the present condition of access to the property and of the existence of any adverse conditions that affect the property, or unusual conditions relating to noise or safety which affect the property that are known to the applicant, or should reasonably be known, or are readily ascertainable;

xix. Copies of all contracts, agreements and acknowledgments which a purchaser or lessee may be required to execute in connection with this offering;

xx. The audited financial statements of the applicant for the immediately preceding fiscal year. The term "financial statements" includes, but is not limited to, the following statements: auditor's report, balance sheet, statement of income, statement of changes in retained earnings, statement of changes in financial position, statement of changes in owner's equity, notes to financial statements and current profit and loss statement. The filing of the audited consolidated financial statements of a parent company of an applicant may be permitted if the parent company is the registrant, applicant, co-registrant or guarantor. In the discretion of the Commission, it may accept or require alternative information evidencing the applicant's ability to complete the promised improvements to the development in lieu of the audited financial statements;

xxi. A statement concerning any filing for or adjudication of bankruptcy during the last five years by or with regard to the applicant, its predecessor, parent or subsidiary company and any principal owning more than a 10 percent interest in the timeshare plan at the time of the filing of the application for registration. These requirements shall not extend to limited partners or those whose interests are solely those of passive investors;

xxii. A statement as to the status of all applications for permits and/or compliance with any permits required or issued by any Federal, state, or local agencies or similar organizations which have the authority to regulate or issue permits, approvals or licenses which may be material to the development, sale or other disposition of the timeshare interests to be registered and the existing or proposed facilities, common areas or improvements thereof;

xxiii. A copy of the proposed budget for the operation and maintenance of the common elements and facilities based upon full occupancy together with the estimated annual assessment and monthly charges to be assessed to each type of unit. The budget shall specifically state the amount set aside as reserves for the replacement of the common elements and facilities, as certified by an independent public accountant or other independent expert. The budget should also indicate whether the applicant is subsidizing the maintenance fee or plans to subsidize the maintenance fee during sales prior to transfer of control to any association, and if so, the amount of the subsidy and the probable effect of the applicant's discontinuance of the subsidy payments upon the maintenance fee payable by each owner. The budget shall be accompanied by a letter of adequacy issued by an independent public accountant attesting that the budget was prepared in accordance with generally acceptable accounting principles and a letter from an independent insurance agent or broker confirming that the insurance coverage meets any standards required in the project documents and as required by situs state law;

xxiv. A covering letter specifying the following information with regard to the project:

(1) The nature of the project;

(2) The individual to whom all correspondence should be directed, with an address; and

(3) The individual to whom annual report notices and forms should be sent, with an address and telephone number;

xxv. Such additional information as the Commission may require, after review of an application for registration, to assure full and fair disclosure; and

xxvi. A statement indicating whether the applicant, or a parent or subsidiary of the applicant, or any of their current officers or principals have, during the past 10 years, or any of their former officers or principals have, during the last two years, been convicted of any criminal or disorderly persons offense involving any aspect of the real estate sales or real estate securities business in this State, the United States or any other state or foreign jurisdiction and whether the applicant has been subject to any permanent injunction or final administrative order restraining a false or misleading promotional plan involving real property disposition, or any final administrative order or judgment by any court finding that the applicant or any such persons have engaged in any unfair acts and/or fraudulent or deceptive practices involving the disposition of real property or of other products or services.

(d) Abbreviated registration requirements are as follows:

1. In addition to the required documentation under N.J.S.A. 45:15-16.5 7(f), to obtain an abbreviated registration, the developer shall provide all of the following:

i. A broker of record affidavit in which the broker states that he or she is familiar with the registration and its contents or has physically inspected the property, or both, that he or she is familiar with the Act and the rules promulgated thereunder and with the Real Estate Brokers and Salesmen Act, and that he or she is not aware of any information that would lead him or her to believe that the information in the abbreviated application does not permit full and fair disclosure of the offering;

ii. A statement confirming that all monies paid by New Jersey residents to the applicant or his agents prior to closing shall be held in an escrow account pursuant to N.J.S.A. 45:15-16.5 7(e) or be guaranteed by some other means acceptable to the Commission. The statement shall specify the name and location of the institution where the escrow account is maintained as well as the name and address of any trustee or escrow agent;

iii. An irrevocable appointment of the Commission to accept, on behalf of the developer, service of any lawful process in any proceeding arising under the Act against the applicant or his agents;

iv. A statement as to the status of all applications for permits and/or compliance with any permits required to be issued by any Federal, state or local agencies or similar organizations which have the authority to regulate or issue permits, approvals or licenses which may be material to the development, sale or other disposition of the timeshare interests to be registered and the existing or proposed facilities, common areas or improvements thereof;

v. Copies of all contracts, agreements and acknowledgements which a purchaser or lessee may be required to execute in connection with the offering. The Commission may require additional or supplemental documentation in order to resolve any discrepancies between local law and the requirements of the Act;

vi. A statement or listing of any pending administrative actions, litigation and pending or issued court orders, administrative orders, judgments or decrees which materially affect the sale or development of the offering or the financial stability of the applicant; and

vii. A statement indicating whether the applicant, or a parent or subsidiary of the applicant, or any of their current officers or principals have, during the past 10 years, or any of their former officers or principals have, during the last two years, been convicted of any criminal or disorderly persons offense involving any aspect of the real estate sales or real estate securities business in this State, the United States or any other state or foreign jurisdiction and whether the applicant has been subject to any permanent injunction or final administrative order restraining a false or misleading promotional plan involving real property disposition, or any final administrative order or judgment by any court finding that the applicant or any such persons have engaged in any unfair acts and/or fraudulent or deceptive practices involving the disposition of real property or of other products or services.

N.J. Admin. Code § 11:5-9A.4