P.R. Laws tit. 31, § 1252f
(1) A material adverse change to a timeshare plan or vacation club shall be deemed to include, but not be limited to the following:
(a) Any material change in the timeshare or vacation club documents which is likely to have a material adverse effect on the owners of accommodations, timeshares or vacation club rights.
(b) If a trust is established as a means of financially assuring the availability of accommodations and/or facilities pursuant to §§ 1254—1254b of this title, any resignation or proposed resignation of the trustee or any material change in the trust agreement creating such trust.
(c) Any material change in the financial condition of the developer, the association, the managing entity, or any component site managing entity, but only if such change is likely to have a material adverse effect upon the timeshare plan or vacation club or the owners of accommodations, timeshares or vacation club rights therein.
(d) Any governmental action or proposed governmental action which is likely to have a material adverse effect on the timeshare plan or vacation club, the owners of accommodations, timeshares or vacation club rights therein, or the developer.
(e) Any action or proposed action by the developer or any other person which would likely have a material adverse effect on the timeshare plan or vacation club, the owners of accommodations, timeshares or vacation club rights therein, the vacation club’s reservation system, or any of the accommodations or facilities which are included as part of the timeshare plan or vacation club.
(f) The addition to, substitution of, or deletion from the timeshare plan or vacation club of any accommodations or facilities if such occurrence is likely to have a material adverse effect on the owners of accommodations, timeshares or vacation club rights.
(g) The termination of any affiliation between the timeshare plan or vacation club and an exchange program; Provided, however, That the Company may by regulation establish that the termination by substitution of a specific exchange program with another specific exchange program under circumstances wherein the rights of the members of the terminated exchange program are recognized (“grandfathered”) in the substitute exchange program, and subject to such additional conditions as the Company in its reasonable discretion may establish in such regulation, shall not be deemed a material adverse change, and
(h) any other change which would result in the information contained in the developer’s application for a timeshare or vacation club permit or the approved public offering statement to be materially inaccurate, incomplete, or misleading, and which is likely to have a material adverse effect upon the timeshare plan or vacation club, the owners of accommodations, timeshares or vacation club rights therein, the vacation club’s reservation system, or any of the accommodations or facilities which are included as part of the timeshare plan or vacation club.
(2) As long as a developer is engaged in the offer or disposition of vacation club rights, it shall be unlawful for such developer to fail to notify the Company in writing of any material adverse change within thirty (30) days from the date upon which the developer first knew or reasonably should have known of such change.
(3) Upon the occurrence of a material adverse change to a timeshare plan or vacation club, the Company may:
(a) Request that offers and dispositions of accommodations, timeshares or vacation club rights be suspended by the developer pending a determination of the effect of the material adverse change upon the timeshare plan or vacation club and the owners of accommodations, timeshares or vacation club rights therein and/or pending the Company’s approval of an amendment to the developer’s timeshare or vacation club permit or public offering statement, and
(b) if the material adverse change is not reversed within sixty (60) days of notice to the developer, invoke any of the remedies or initiate any of the procedures provided for in §§ 1260—1261h of this title.
(4) Upon approval of an amended timeshare or vacation club permit by the Company, a true, accurate, and complete copy thereof shall be given to each purchaser adversely affected by the material adverse change(s) and to all prospective purchasers prior to their execution of a purchase contract and receipt thereof shall be obtained from such purchaser(s) in the form prescribed by § 1252e of this title.
History —Dec. 26, 1995, No. 252, § 2-107; —July 5, 1996, No. 66, § 4.