A BILL for AN ACT TO PROVIDE FOR THE CREATION, REGULATION AND MANAGEMENT OF TIME-SHARING AND VACATION PROJECTS; FOR THE PROTECTION OF PURCHASERS OF TIME-SHARING AND VACATION PLANS; AND FOR CONNECTED PURPOSES.
Enacted by the Parliament of The Bahamas.
PART I PRELIMINARY
(1) This Act may be cited as The Bahamas Vacation and Plan and Time-Sharing Act, 1999.
(2) This Act shall come into operation on such day as the Minister may, by notice published in the Gazette,
appoint.
2. In this Act -
Board means the Investments Board referred to in the
International Persons Landholding Act, 1993, and includes any Minister authorised by the Board to carry out on its behalf any function conferred on the Board by this Act;
Chief Medical Officer has the meaning assigned to that expression in the Health Services Act;
completion means that point in time when the conditions
precedent to the time-sharing purchaser right to use and enjoy the accommodations and facilities of a time-sharing project have been satisfied and which may be simultaneous with or subsequent to the execution of the time-sharing contract;
developing means with reference to a time-sharing project the doing of any act pertaining to the construction or operation of a building for the purpose of such project and development shall be construed accordingly;
developing contractor means a person undertaking on behalf of a developing owner the duties, responsibilities and obligations of the construction and equipping, or the supervision of the construction or equipping, of a time-sharing project but does not include its developing owner;
developing owner means in the case of any given real property a person who holds an estate in fee simple or a leasehold estate for a term of forty years or such number of years, being not less than five years more than those constituting the time-sharing interests, whichever is the greater term, in the real property and who is in the business of creating and selling his own time-sharing interests in a time-sharing project but does not include a developing contractor or a marketing agent;
Director of Fire Services has the meaning assigned to that expression in the Fire Services Act;
Director of Physical Planning means the officer of that name referred to in section 5 of the Town Planning Act;
escrow fund means that fund required by and described in section 31;
exchange programme means any method, arrangement or procedure for the voluntary exchange of the right to use accommodations and facilities (whether at a time-sharing project or otherwise) between a purchaser and another person but does not include
the assignment of a right to use and occupy accommodations and facilities to purchasers within a particular time-sharing plan (such as, but not limited to, a floating use or multi-site timesharing plan);
licence means a licence granted under this Act to develop, market or manage a time-sharing project, as the case may be;
licensee means a person to whom a licence has been
granted under section 3;
managing agent means a person undertaking the duties,
responsibilities and obligations of the management of a time-sharing project;
Minister means the Minister responsible for the
Investments Board;
off-site sale means any sale and purchase of a timesharing
interest not otherwise deemed an on-site sale;
on-site sale means the consummation of a sale and purchase of a time-sharing interest occurring within the jurisdictional limits of The Bahamas, with the execution by the purchaser of documents in connection therewith taking place in The Bahamas;
purchaser means a person who has given valuable consideration or is liable therefor in exchange for the acquisition of a time-sharing interest;
regulations means regulations made under section 53;
seller means any developer or any other person, or any agent or employee thereof, who advertises, markets or offers time-sharing interests in the ordinary course of business;
sinking fund means that fund required by and described
in section 32;
time-share period means the period or periods of time,
whether pre-established at the time of completion or determined subsequent thereto pursuant to a reservation system, when a purchaser of a timeshare plan is afforded the right to use and occupy the accommodations or facilities, or both, of a
time-sharing project;
time-share plan means any arrangement, plan, scheme or
device (other than an exchange programme) whereby a purchaser receives, directly or indirectly, a right to use and occupy accommodations and any related facilities for a period of time less than six months on a recurring basis over a period of at
least three years (but not necessarily for consecutive years;
time-sharing interest means the right to use and occupy
a unit, which may be coupled with the right to use other facilities or other rights and privileges, pursuant to a time-sharing plan;
time-sharing project means any premises or complex of
premises (whether contiguous or not) and the grounds appurtenant thereto that are subject to or included within a time-share plan;
trust fund means that fund required by and described in
section 33;
unit means that part of the accommodations and facilities of a time-sharing project intended for the habitation of a purchaser during his time-share period;
year means any period of twelve consecutive months.
PART II LICENCES FOR TIME-SHARING
3. (1) A person shall not -
(a) construct a new building;
(b) effect any improvement in or repairs or alterations to an existing building; or
(c) use or change the use of an existing building,
for the purpose of such building being used in the operation
of a time-sharing project except under and in accordance with
the terms of a developing owner licence granted for that
purpose by the Board:
Provided that where a developing owner licence has been granted in accordance with this subsection, the person so licenced may appoint a development contractor to perform on his behalf functions in relation to the timesharing project under and in accordance with the terms of that licence.
(2) A person shall not engage in the advertising, marketing, offering for sale or in the management of a timesharing project except under and in accordance with the terms of a marketing agent licence or managing agent licence, as the case may be, granted for that purpose by the Board.
(3) The Board may grant a licence under this section subject to such terms and conditions as may be specified therein or as may be prescribed.
4. (1) The Minister may, if satisfied that the erection of the time-sharing project will be in the best interest of The Bahamas, enter into an agreement with the developing owner for the exemption of the developing owner from the payment of all customs duties in respect of any materials necessary for the construction of a time-sharing project which may be imported into The Bahamas and which are purchased or taken out of bond therein by the developing owner.
(2) The developing owner shall furnish the Minister with a bond in a form to be approved by the Comptroller of Customs with such sureties (if any) as may be required by the Minister of Finance in double the amount of any customs duties which would ordinarily attach on importation thereof for the payment of such customs duties on a date to be fixed by the Minister of Finance, such bond being conditioned to become null and void if, on or before the date specified in such bond, such materials are applied only for the purpose specified in such Agreement:
Provided that the Minister of Finance may accept in lieu of a bond an alternative assurance, in such amount and form as the Minister of Finance may require, including a letter of credit or a company guaranty issued by the developing owner (or its parent company) provided he is satisfied that the issuer of the guaranty has a net worth in excess of twenty five thousand dollars and is otherwise financially capable of paying upon the said guaranty.
(3) Every agreement under this section shall contain mutual covenants on the part of the Minister and the developing owner providing for the following matters, namely -
(a) that nothing contained in the said agreement shall be deemed to make the developing owner liable to pay to the
Government any payments in respect of any matter or thing done, executed or happening prior to the date on which such agreement shall cease in respect of which matter or thing payment is waived thereby, or to refund or to repay and customs duties which have been refunded to the developing owner under the
concessions granted by such agreement except in the circumstances specified in section 42;
(b) for the arbitration of all questions and differences between the Minister and the developing owner; and
(c) for the interpretation of such agreement according to the laws of The Bahamas.
(4) For the purposes of this section
materials means plumbing, electrical, mechanical and construction materials of all kinds necessary for the initial construction, furnishing and equipping of a new building so that the building is complete and ready for occupancy but does not include stoves, refrigerators, kitchen appliances or such
other items as may be prescribed by the Minister.
(5) The exemption mentioned in subsection (1)shall apply -
(a) to materials of comparable quality with a price greater than the price of such materials in The Bahamas before the
payment of customs duties;
(b) for a period of three years from the date of the commencement of this Act or such later date as the Minister may designate by order published in the Gazette; and
(c) to a time-sharing project which makes provision for the accommodation of no less than fifty units in New Providence
or Paradise Island and no less than twenty-five units in a Family Island.
(6) With respect to any time-sharing project that is part of a particular resort complex that includes a hotel, the Minister may also determine that the exemption set forth in subsection (1) shall also apply to those portions of the said complex that comprise a hotel and its appurtenant facilities, in which case such exemption shall apply to the said hotel in lieu of the exemption from customs duties set forth in the Hotel Encouragement Act.
(1) Subject to section 56, the Board shall not on the grant a licence in respect of the operation of a time-sharing project unless the applicant satisfies the Board that the purchasers of the time-sharing interests in the project will have a right to occupy and use those accommodations and facilities for certain periods not in excess of six months in any year over a period of years not exceeding forty years, or as the Board may determine, and that any agreement relating to that purchase contains such conditions as may be prescribed by this Act or the regulations.
(2) The Board shall not grant a licence for the operation of a time-sharing project whereby any legal or equitable interest other than a time-sharing interest may be conferred upon the purchasers of those rights unless the Board otherwise sees fit, having regard to the fact that the right to use and occupy the accommodations and facilities of a timesharing project is the principal benefit being conferred by the developing owner.
(3) The Board, unless it otherwise sees fit, shall
not grant a licence for the operation of a time-sharing
project until the time-sharing contract to be executed by the
purchasers of the rights to occupy and use the facilities of
the project has been submitted to and approved by the Board;
and no material variation thereof shall be subsequently made
without the written approval of the Board.
6. A developing owner licence, a marketing agent licence and a managing agent licence shall come into force on the date specified therein and shall remain in force throughout the life of the time-sharing project, unless sooner suspended or revoked, except that nothing in this Act shall be deemed to prohibit a developing owner from voluntarily divesting himself of his licence at such time as the timesharing project is completely sold out and the developing owner no longer retains any estate, right, title or interest therein.
7. (1) Where a developing owner divests himself of his licence or dies, the Board may, upon an application in that behalf made by any person claiming the right to succeed to such licence, transfer the licence to that person, subject to such terms and conditions as the Board may see fit to impose.
(2) Before transferring any licence under subsection (1), the Board shall, where practicable, give to the licensee or to his personal representatives a reasonable opportunity to make any representations that either may wish to make in relation to any such application, and shall take into account any epresentations so made by either of them or on his behalf.
8. (1) An application to the Board for the grant or transfer of a licence may be made by or on behalf of the proposed licensee or the proposed transferee, as the case may be.
(2) Where the Board decides to grant, or approve
the transfer of a licence, there shall be paid to the
Treasurer before the licence is issued or transferred, the
prescribed fee.
(3) All fees paid to the Treasurer under subsection (2) shall be paid by the Treasurer into the Consolidated Fund.
9. An applicant for a licence to develop a timeability of sharing project shall, before a licence is granted, satisfy
The Board of his financial ability to complete the development required for the time-sharing project with all the requirements necessary for the proper operation of the project and whether such development consists of the construction of a new building or the conversion of an existing building.
10. A licence granted under section 3 shall be in
such form as the Board may determine and shall specify -
(a) the name of -
(i) the developing owner and the applicant for the licence if
different from the developing owner;
(ii) the marketing agent and the applicant for the licence, if
different from the marketing agent, or
(iii) the managing agent and the applicant for the licence, if
different from the managing agent, as may be appropriate to the particular licence;
(b) the name of the person who is to be responsible for each of the three functions referred to in paragraph (a);
(c) the time-sharing project in respect of
which the licence is granted;
(d) the maximum number of persons who may at any one time be provided with sleeping accommodations in the time-sharing
project or in any unit on the premises;
(e) the rooms to be reserved as public rooms for the general use of guests or purchasers;
(f) the date -
(i) upon which the licence is to come into force,
(ii) if any, upon which the licence is to expire,
(iii) upon which the licence was
granted; and
(g) any terms or conditions attached to the
licence.
11. Before approving a grant, transfer or variation of any of the specified terms of a licence, the Board may defer consideration of the application until the respective competent authorities constituted under the Health Services Act, the Town Planning Act and the Fire Services Act, or such one or more of them as, having regard to the nature of the application, the Board may deem appropriate, have caused the accommodations and facilities of the timesharing project in respect of which application is made to be inspected and have furnished to the Board a report of such inspection in relation to such particulars as the Board may specify.
12. The Board shall neither grant a licence norapprove the transfer of a licence unless it is satisfied -
(a) that the applicant and the person responsible for the time-sharing project (if other than the applicant), the developing owner, the marketing agent and the managing agent are financially able and are fit and proper persons to perform
their respective functions under the time-sharing project;
(b) that the facilities of the time-sharing project have, where practicable, been inspected pursuant to section 11 and that
the project complies with the prescribed requirements or, in the event that it fails to so comply, that an exemption may
properly be granted under section 51;
(c) that the time-sharing project makes provision for the accommodation -
(i) in New Providence, of not less than twenty-five units, and
(ii) in a Family Island, of not less than ten units;
(d) that the applicant has complied with all
requisite requirements prescribed by this
Act; and
(e) that the applicant is not in breach of any other law relating to the carrying on of business by him in The Bahamas and which business is in the best interest of The Bahamas.
13. The Board may, of its own motion or at anytime upon an application by a licensee, vary and terms of a licence as are or required to be specified therein:
Provided that the Board shall not of its own motion vary any of the specified terms without first giving to the licensee no less than seven days notice delivered to the time-sharing project site of the intention to make such variation and shall take into account any representations made by or on behalf of the licensee.
14. Any transfer of a licence under section 7 or any variation of any of the specified terms of a licence under section 13 shall be endorsed on the licence by the Board together with the date when such transfer was approved or such variation made by the Board and the date from which the transfer or variation is to take effect.
15. (1) Without prejudice to any other provisions of this Act, where the Board is satisfied that in relation to any time-sharing project, any provision of law or, as the case may be, any condition of the licence, is alleged to be contravened -
(a) the Board may serve upon the licensee a notice specifying the provision of law or, as the case may be, the condition of
the licence that is alleged to be contravened and requiring the licensee to comply or ensure compliance therewith to the satisfaction of the Board or satisfy the Board as to why the licence should not be suspended or revoked within such reasonable period as the Board may specify in the notice, and, if at the expiry of such period the licensee has failed to so comply or ensure compliance therewith or to so satisfy the Board, the Board may suspend or revoke the licence;
or
(b) if the Board is satisfied that such alleged contravention is likely to endanger the health or safety of any of the persons in or likely to use the facilities of the time-sharing project, the Board may forthwith suspend or revoke the licence granted in respect thereof until such time as it is satisfied that such contravention has ceased.
(2) Where the Board suspends a licence the licence shall, during the period of suspension, be of no effect.
(3) The Board may also revoke a licence if it is satisfied that the premises to which the licence relates have ceased to be operated as a time-sharing project.
16. (1) Where, as a result of an inspection made under section 37, the Board determines that it is in the public interest that the licence of a managing agent should be suspended, the Board may suspend the licence of the managing agent and, by notice in writing, require the developing owner within such time as is specified in the notice to appoint, subject to its approval, an interim or other managing agent for the orderly continuation of the time-sharing project.
(2) If a developing owner fails to comply with the requirements of the notice under subsection (1), any interested party may make application to the Supreme Court for an order appointing an interim or other managing agent who shall continue in that office until the Board grants a licence to another managing agent; and all expenses incurred in connection with the appointment of an interim or successor managing agent shall be payable out of moneys standing to the credit of the trust fund as well as out of the moneys provided by the time-sharing purchasers for the operation and management of the time-sharing project.
(3) A developing owner who fails to comply with the requirements of a notice under subsection (1) is guilty of
an offence and shall be liable on summary conviction to a fine
of five thousand dollars, and in addition, to a fine of one
thousand dollars for each day during which such offence
continues, or to imprisonment for one year or to both such
fine and imprisonment.
17. Notwithstanding anything to the contrary inthis Act where -
(a) a managing agent licence has been suspended under this Act, except as under section 16;
(b) a mortgagee has foreclosed on, or otherwise acquired pursuant to a power of sale, any real property subject to a
time-sharing project; or
(c) the term of a leasehold estate in real property subject to a time-sharing project has determined, and there is not managing agent to manage the time-sharing project, any interested party may make application to the Supreme Court for an order appointing an interim managing agent for a period not exceeding three years for the orderly continuation of the time-sharing project and all expenses incurred in connection with the appointment of an interim managing agent shall be payable out of the trust fund as well as out of any moneys provided by the purchasers for the operation and maintenance of the time-sharing project.
18. (1) Where a licence has been revoked or suspended under this Act the Board shall served a notice upon the licensee notifying him of the revocation or suspension, as the case may be, and calling upon him to surrender the licence to the Board within seven days of the date of the notice .
(2) A licensee who fails to comply with a notice under subsection (1) is guilty of an offence and shall be liable on summary conviction to a fine of five hundred dollars or to imprisonment for three months or to both such fine and
imprisonment.
PART III PURCHASER RIGHTS
19. A purchaser may, subject to such conditions
and in such manner as may be prescribed, take, acquire, hold, lease, assign or dispose of his time-sharing interest in the same manner in all respects as personal property and the title
of a purchaser of a time-sharing interest may be derived
through, form or in succession to, another purchaser in the
same manner in all respects as personal property enforceable
by action.
20. (1) Within thirty days of completion of a time sharing contract, the developing owner or his managing agent shall apply to the Registrar General to register the rights of
the time-sharing purchaser.
(2) On an application under subsection (1), the Registrar General shall, upon receipt of a duly executed contract, specify the names of time-sharing purchasers of time-sharing interests, enter upon payment of the prescribed fee such particulars as may be prescribed in a register to be
maintained by the Registrar General to be called the Register
(3) The Register shall be open to inspection by any member of the public at all reasonable times upon payment of such fee as may be prescribed.
(4) The Registrar General shall, on the application of a time-sharing purchaser, developing owner or managing agent, make such alterations to the particulars in the Register as appear necessary to the Registrar General by virtue of the application.
(5) A developing owner shall provide a purchaser with a written certificate or other evidence of such purchaser time-sharing interest within thirty days after completion, and the form of such certificate or other document shall be to the satisfaction of the Board.
(6) A developing owner or managing agent who contravenes the provisions of subsection (1) or (2) is guilty of an offence and shall be liable on summary conviction to a fine of five thousand dollars or to imprisonment for one year or to both such fine and imprisonment.
21. (1) Upon the registration of any person under section 20 as the purchaser of a time-sharing interest, a charge shall be created on the time-sharing project and all estates and interests therein in favour of the time-sharing purchaser to the extent and for the duration of such purchaser interest therein.
(2) A charge upon the time-sharing project arising under subsection (1) shall prevail against any subsequent purchaser of the same whether or not he purchased in good faith, for value, and without actual notice of such charge.
22. (1) Each seller shall utilize and furnish each time-sharing purchaser with a fully completed and executed
copy of a contract pertaining to the sale, which contract
shall include the matters set out in the First Schedule.
(2) A developing owner or managing agent who contravenes the provisions of subsection (1) is guilty of an offence and shall be liable on summary conviction to a fine of five thousand dollars or to imprisonment for one year or to both such fine and imprisonment.
23. (1) Subject to subsection (2), notwithstanding anyother law to the contrary -
(a) in no event shall the foreclosure, exercise of power of sale or pursuit of other right or remedy under a mortgage or
other debt instrument covering all or any portion of a time-sharing project (whether covering real or personal property or both) extinguish or impair a purchaser time-sharing interest in the same time-sharing project, irrespective
of whether any such mortgage or other debt instrument is given or filed for record prior to completion of any such time-sharing interest;
(b) in no event shall the determination of any leasehold estate in real property subject to a time-sharing project extinguish or impair a purchaser timesharing project, irrespective of whether any such leasehold estate was created prior to completion of any such timesharing interest; and
(c) a trustee shall not, in any proceeding under the Bankruptcy Act in which a timesharing project is included among a
bankrupt property, be permitted to disclaim any time-sharing interest.
(2) Nothing in this Act is intended to prohibit the foreclosure, exercise of power of sale or pursuit of other
right or remedy pursuant to any law relating to -
(a) a chattel mortgage (or other debt instrument) covering a purchaser timesharing interest that was given at the
time of completion of any such timesharing interest in order to secure all or any portion of the unpaid purchase price thereof (including any future advances made thereafter under any such
chattel mortgage or other instrument between the same parties or their respective successors); or
(b) any charge or lien upon a time-sharing interest arising out of any law or by contract whereby any such charge or lien
arises or is given in order to secure payment of a purchaser pro-rata share of operating, maintenance or similar expenses to which such purchaser is subject under a time-sharing plan.
24. The developing owner and managing agent shall ensure that the time-sharing project with respect to which they are licensed is constituted and in fact operated such that the time-sharing interests therein shall not be oversold, which is to say that the ratio of the number of purchasers of the said time-sharing project eligible to use and occupy the units and other facilities thereof during any given calender year to the number of units and facilities available for use during that year shall not exceed one-to-one.
25. Any purported waiver by a purchaser of any of the requirements of this Act or of any of the rights or remedies of a purchaser set forth in this Act or under other law shall be invalid.
PART IV MANAGEMENT
26. (1) Before the first sale of a time-sharing interest within a time-sharing project, the developing owner shall create or provide for a managing agent, which shall be either the developing owner, a separate manager or management firm, the board of administration of an owners association, or some combination thereof.
(2) A developing owner shall be considered the managing agent of the time-share plan unless and until such developing owner clearly provides in the Public Offering Statement described in section 50 that a different party will serve as managing agent, which party has acknowledged in writing that it has accepted the duties and obligations of serving as managing agent; in the event such other party subsequently resigns or otherwise ceases to perform its duties as managing agent, any developing owner shall again be considered the managing agent until the developing owner arranges for a new managing agent pursuant to this subsection.
(3) Notwithstanding the appointment of a managing agent, the developing owner shall continue to be jointly and severally responsible for the obligations of the managing agent under this Act and under any contract with a purchaser unless and until -
(a) the time-sharing project is completely sold out;
(b) the developing owner no longer retains any estate, right, title or interest in or to the time-sharing project; and
(c) the developing owner has voluntarily divested himself of his licence.
27. The managing agent shall act in the capacity of a fiduciary to the purchasers of the time-share plan.
28. The duties of the managing agent shall include, but are not limited to -
(a) management and maintenance of all accommodations and facilities constituting the time-share project;
(b) collection of all assessments for common expenses;
(c) providing each year to all purchasers an itemized annual budget which shall include all estimated revenues and
expenses; the budget shall be in such form as may required by the Board;
(d) maintenance of all books and records concerning the time-share plan and the time-sharing project so that all such
books and records are reasonably available for inspection by any purchaser or the authorized agent of such purchaser
and -
(i) all books and financial records of the time-share plan and of the time-sharing project must be maintained in accordance
with International Accounting Standards,
(ii) all purchasers shall be notified of the location of the
books and records and the name and address of the custodian in
the copy of the annual budget provided to them pursuant to
paragraph (c);
(e) scheduling occupancy of the time-share units, when purchasers are not already entitled to use specific time-share
periods, so that all purchasers will be provided the use and possession of the accommodations and facilities of the
time-share plan with respect to which they have purchased;
(f) performing any other functions and duties which are necessary and proper to maintain the accommodations or facilities as provided in the time-share plan and as
advertised; and
(g) the managing agent shall maintain among its records and provide to the Board upon request a complete list of the names and addresses of all purchasers and owners of time-sharing interests.
29. (1) The managing agent of any time-share plan may
deny the use of the accommodations and facilities of the time
share plan to any purchaser who is delinquent in the payment
of any assessments made by the managing agent against such
purchaser for common expenses.
(2) Any denial of use shall also extend to those parties claiming under any such delinquent purchaser.
(3) For purposes of this section, a purchaser shall be considered delinquent in the payment of a given assessment only upon the expiration of sixty days after the date the assessment is billed to the purchaser or upon the expiration of sixty days after the date the assessment is declared to be due, whichever is later.
PART V INSURANCE, FUNDS, TAX AND RECORDS
30. (1) The developing owner shall provide and to maintain for the benefit of all purchasers and their guests public liability insurance in respect of the accommodations and facilities to be used under the time-share plan, and such insurance shall be in an amount of not less that one million dollars, or such greater amount as the Board may see fit to impose from time to time.
(2) The developing owner shall keep all the property of the timesharing project of an insurable nature insured against loss or damage in an amount not less than the replacement cost of such property.
(3) A developing owner may delegate or assign to a managing agent responsibility for compliance with the requirements of subsections (1) and (2), but the developing owner shall remain jointly and severally responsible for such compliance until the developing owner is no longer involved with the time-sharing project as contemplated in section 26.
(4) A developing owner or managing agent, as the case may be, who contravenes any of the provisions of this section is guilty of an offence and shall be liable on summary conviction to a fine of ten thousand dollars or to imprisonment for two years or to both such fine and imprisonment.
31. (1) A developing owner shall, forthwith on the
commencement of a time-sharing project to which his licence
relates and prior to entering into any contracts for the sale
of time-sharing interests, establish and maintain with any of
the financial institutions (in this section called the escrow
agent), doing business in The Bahamas as are approved by the
Minister of Finance by notice published in the Gazette for the
purposes of this section, and escrow fund into which the
proceeds of all on-site sales of time-sharing interests shall
be paid immediately upon receipt thereof and there kept until
disbursed as hereinafter provided:
Provided that if sale of a time-sharing interest is an off-site sale and the jurisdiction where such sale occurs does not have contemporaneous to such sale comparable statutory time-sharing escrow requirements to those provided herein, then in such event the proceeds of such offsite sale shall be paid immediately upon receipt into the aforesaid escrow fund and kept there until disbursed as hereinafter provided.
(2) The following disbursements from the escrow fund shall be made by the escrow agent upon receipt of a developing owner sworn affidavit averring the applicable circumstances as hereinafter described -
(a) to the purchaser, on the cancellation of his contract within the cancellation period allowed therein, the total amount
of all payments made by the purchaser less any contract benefits;
(b) to the developing owner, on the cancellation of a purchaser contract within the cancellation period allowed
therein, the proportion of any contract benefits the purchaser has actually received under the contract prior to the
effective date of cancellation;
(c) to the marketing agent, pursuant to a ontract in writing between the developing owner and the marketing agent
and upon the expiration of the cancellation period of a purchaser contract, up to an amount not exceeding thirty-five per centum of the gross amount realized from the sale of the
time-sharing interest of that purchaser for the purpose of paying the costs of marketing the time-sharing project;
(d) to the developing owner, where he is also the marketing agent, upon the expiration of the cancellation period of a
purchaser contract, up to an amount not exceeding thirty-five per centum of the gross amount realized from the sale of
the time-sharing interest of that purchaser for the purpose of paying the costs of marketing the time-sharing project; or (e) to the developing owner, upon the expiration of the cancellation period of a purchaser contract, five per centum
of the gross amount realized from the sale of the time-sharing interest of that purchaser; and the developing owner shall
immediately pay the same into the sinking fund established under section 32.
(3) The escrow agent shall, after making the disbursements authorised under subsection (2) and if the amount standing to the credit of the sinking fund is not less than five per centum of the total construction cost incurred to that time on the time-sharing project, transfer to the trust fund established under section 33 the balance of the amount in the escrow fund; otherwise after making such disbursements the transfer of such balance shall be made to the sinking fund until the minimum requirement thereof is satisfied.
(4) Where a payment is to be made under subsection (3) into the trust fund, that payment may, at the request of the developing owner be made to him instead if the escrow agent receivers a sworn affidavit from the developing owner averring that -
(a) construction of the time-sharing project is complete and a certificate of occupancy with respect thereto has been issued pursuant the Buildings Regulation
Act; and
(b) completion of the purchaser acquisition of his time-sharing interest has in fact occurred and the purchaser name and time-sharing interest have been duly submitted to the Registrar General in accordance with the terms of section 20.
(5) A developing owner who contravenes the provisions of subsection (1) or (2)(d) or who makes a false affidavit under subsection (2) or (4), or an escrow agent who contravenes the provisions of subsection (2) or (3) is guilty of an offence and shall be liable on summary conviction to a fine of ten thousand dollars or to imprisonment for two years or to both such fine and imprisonment.
(6) The foregoing notwithstanding, upon application the Board may consider and accept in lieu of the establishment of an escrow account as provided in this section an alternative assurance in such amount and form as the Board may accept, including a surety bond, letter of credit or a company guaranty issued by the developing owner (or its parent company), provided the Board is satisfied that the developing owner (or its parent company) has a net worth in excess of twenty-five million dollars and is otherwise financially sound.
32. (1) A developing owner shall establish and maintain with a financial institution as is referred to in section 31(1) a sinking fund into which fund shall be paid any amount disbursed from the escrow fund under section 31(2)(e), together with such amount as represents five per centum of the gross amount realized form the off-site sale of any timesharing interest by the developing owner after the operation of the respective cancellation period:
Provided, that where the sum standing to the credit of the sinking fund is not less than a sum equal to five per centum of the total construction cost of the timesharing project, the developing owner may cease to make disbursements into the fund.
(2) The sum standing to the credit of the sinking fund shall be applied in payment of any repairs, alterations or replacements necessary to the premises of the completed time-sharing project by reason of defects in materials or workmanship.
(3) Any sum paid to the sinking fund may, unless applied in payment to the purposes for which the sinking fund is established, be repaid to the developing owner anytime after three years from when construction of the time-sharing project is completed, and the sinking fund shall be held by the developing owner during such period on trust for the benefit of all purchasers for such purposes.
(4) The Advisory membership structure of any time- share owners association described in the Second Schedule shall be entitled to use the funds held in the sinking fund,
if any, for the purposes for which they are intended upon the
failure of the developing owner so to do, and in that regard
the developing owner shall at the request of the advisory body
lay over with the financial institution at which the sinking
fund is kept the signatures of two persons approved by that
body as being authorise to make any necessary withdrawals.
(5) A developing owner who contravenes the provisions of this section is guilty of an offence and shall be liable on summary conviction to a fine of five thousand dollars or to prisonment for one year or to both such fine and imprisonment.
(6) The foregoing notwithstanding, upon application the Board may consider and accept in lieu of the establishment of a sinking fund account as provided in this section an alternative assurance in such amount and form as the Board may accept, including a surety bond, letter of credit or a company guaranty issued by the developing owner (or its parent company), provided the Board is satisfied that the developing owner (or its parent company) has a net worth in excess of twenty-five million dollars and is otherwise financially sound.
33. (1) A developing owner shall establish and maintain with a financial institution as is referred to in subsection (1) of section 31(1) (in this section called the trustee) a trust fund into which fund shall be paid any amount transferred from the escrow fund under subsection (3)of section 31.
(2) Disbursements from the trust fund shall be
made by the trustee -
(a) to the developing owner, of the balance of the proceeds of sale of the timesharing interest in relation to the facilities of the time-sharing project in respect of which a certificate of
occupancy has been granted as aforesaid;
and
(b) to a time-sharing purchaser, in respect of any sum payable under a judgment obtained by him in a court of The Bahamas
for breach of contract in connection with his purchase of a time-sharing interest, provided there are moneys standing to the credit of the fund.
(3) A developing owner shall not be entitled to use the funds held in the sinking fund or the trust fund as collateral security in support of any loan or other financial
obligation incurred by him.
(4) Notwithstanding anything in this section contained, where a developing owner fails to complete the time-sharing project in accordance with the terms and conditions of his licence or is adjudged a bankrupt by a court of competent jurisdiction and his licence is revoked, any interested party may make application to the Supreme Court for an order enabling that person to complete the time-sharing project by using the funds in the trust fund, if any, or for the disbursement of such funds to the purchasers on a pro-rata basis.
(5) Where such an order has been made by the Supreme Court, moneys standing to the credit of the trust fund shall, notwithstanding anything to the contrary in any other law, be first applied for the purposes specified in that order.
(6) Any interest accruing on sums held in the
trust fund shall be for the account of the developing owner.
(7) A developing owner who contravenes the provisions of subsection (1) or (3) or a trustee who contravenes the provisions of subsection (2) is guilty of an offence and shall liable on summary conviction to a fine of five thousand dollars or to imprisonment for one year or to both such fine and imprisonment.
34. Notwithstanding section 33, upon application the Board may consider and accept in lieu of the establishment of a trust fund account as provided in section 33 an alternative assurance in such amount and form as the Board may accept, including a surety bond, letter of credit or a company guaranty issued by the developing owner (or its parent company), provided the Board is satisfied that the developing owner (or its parent company) has a net worth in excess of twenty-five million dollars and is otherwise financially sound.
35. The managing agent, or where there is no managing agent, the developing owner, shall keep such books and records as will clearly show the number of purchasers of time-sharing interests in the time-sharing project.
36. (1) Notwithstanding section 37, upon production to the managing agent or developing owner or any person acting on
behalf of the agent or owner of a duly authenticated document
by the Board showing his authority, any person (in this
section referred to as an authorised person) may enter at
any reasonable time the premises of a time-sharing project, to
inspect and to make copies of entries in any books, records or
other documents on those premises for the purpose of
ascertaining whether a contravention of section 35 is being or
has been committed.
(2) If the managing agent or developing owner, or other person acting on behalf of such agent or owner -
(a) fails without reasonable excuse to admit an authorised person who demands admission to the premises of the timesharing
project in pursuance of his functions under subsection (1);
(b) on being required by an authorised person to produce any book, record or other document in his possession or under his
control which relates to the premises of the time-sharing project and which the authorised person reasonably requires to
inspect for the purpose specified in subsection (1), fails without reasonable excuse to produce it to the authorised
person or fails to permit the authorised person to take copies of it or of any entry in it; or
(c) on being required by an authorised person to furnish any other information relating to the premises which is reasonably
required by the authorised person for the purpose of ascertaining compliance with section 35, fails without reasonable excuse to furnish that information to the
authorised person, that managing agent or developing owner or other person is guilty of an offence and shall be liable on summary conviction to a fine of five thousand dollars or to imprisonment for one year or to both such fine and imprisonment.
PART VI INSPECTION
37. The Board shall make or cause to be made periodic inspections with such scope and frequency as the Board shall determine of every time-sharing project in order to ascertain whether compliance with this Act is being made and for the purpose of investigating any complaints made by an aggrieved purchaser regarding the application of this Act to any particular project.
38. (1) Without prejudice to any other law but subject
to subsection (2), any public officer duly authorised by the
Board for such purposes or an officer of the Department of
Health, the Department of Planning or a police or fire service
officer of or above the rank of sergeant may, without a
warrant, enter upon and inspect any premises licensed as a
time-sharing project.
(2) Before an inspection is carried out under the authority of section 37 or of subsection (1) hereof, the licensee of the premises to be inspected, or some agent or servant of the licensee, shall be given notice of the intention to carry out the inspection as may, in the circumstances of the case and having regard to the objects of the inspection, be reasonable; and the licensee or, as the case may be, his agent or servant shall be given an opportunity to be present or have some person selected by him to be present at the inspection.
(3) If any person authorised under the provisions of section 37 or of subsection (1) hereof has reason to believe that a contravention of any provision of law is being committed on a time-sharing project and that the contravention is of such a nature that there is a likelihood of danger therefrom to the safety or health of persons therein if such contravention is not promptly remedied, then that person may give such directions to the person for the time being in charge of the premises as will, in his opinion, prevent or minimize such danger, and may require such persons or classes of persons as he may specify, to vacate the premises or such part of the premises as he may specify until such danger is in his opinion prevented or minimized and may, if such directions or requirements are not carried out, call to his assistance such persons as he may think fit for the purpose of enforcing
compliance therewith or carrying out such works of an emergency nature as he may think necessary.
(4) Any person giving directions or making requirements under the authority of subsection (3) shall forthwith report the action he has taken to the Board.
(5) In this section licensee means the developing owner or the managing agent.
39. Where it has been made to appear to amagistrate that premises not licensed as a time-sharing project are being operated as such, he may issue a warrant to a police officer of or above the rank of sergeant authorising him, with or without assistance, to enter upon and inspect the premises and to conduct such enquiries therein for the purpose of determining whether there is a contravention of this Act.
PART VII PROHIBITIONS AND PENALTIES
40. (1) The happening of any of the following events
occurring after the coming into operation of this Act shall,
notwithstanding anything to the contrary in this Act, be
deemed to be a prohibited transaction and a contravention of
this Act -
(a) for a developing owner or marketing agent to sell a time-sharing interest where such interest was previously sold and not
otherwise re-acquired by the developing owner into his inventory;
(b) the advertising, marketing or sale of a time-sharing interest that would expire after forty five years from the date on which the occupancy permit pertaining to that unit was issued;
(c) the advertising, marketing or sale of any time-sharing interests otherwise in contravention of the terms of this Act;
and
(d) the advertising, marketing or sale of any time-sharing interests in or from anyplace other than a place approved by the
Board or the place where the time-sharing project is located.
(2) Any person who commits a prohibited transaction is guilty of an offence and shall be liable on summary conviction to a fine of ten thousand dollars or to imprisonment for two years or to both such fine and imprisonment.
41. Where an offence alleged to have been committed against this Act relates to the alteration of a contract document pertaining to the sale of a time-sharing interest or the management or marketing of a time-sharing project, and the offence is shown to have been done by someone other than the developing owner, then the developing owner is guilty of the like offence and liable to be punished accordingly, unless he proves that the act or omission constituting the offence took place without his knowledge or consent or that he exercised all due diligence to prevent the commission of the offence.
42. (1) Any person who, in connection with an application for a licence, makes a statement which to his knowledge is false in any material particular is guilty of an offence.
(2) Any person who, in the course of developing, managing, advertising, marketing or selling a time-sharing project -
(a) makes a statement which he knows to be false; or
(b) recklessly makes a statement which is false as to any of the following matters, that is to say -
(i) the nature, extent or scope of any services, accommodations or facilities provided with respect to the time-sharing
project or the time-share plan,
(ii) the time at which, manner in which or persons by whom any
services or accommodations or facilities are so provided,
(iii) the location of the project, amenities offered or any
accommodation or facilities provided,
(iv) a prediction of any increase in the price or value of a timesharing interest, or
(v) any matter set forth in the Public Offering Statement,
is guilty of an offence and shall be liable on summary conviction to a fine of five thousand dollars or to imprisonment for one year or to both such fine and imprisonment.
(3) For the purposes of subsection (2) - (a) anything (whether or not a statement as to any of the matters specified in the
said subsection (2)) likely to be taken for such a statement as to any of those matters as would be false shall be deemed to be a false statement as to that matter; or
(b) a statement made without reasonable knowledge and investigation as to whether it is true or false shall be deemed to have been made recklessly, whether or not the person to whom the statement is made might suspect that the statement is
false.
(4) The Board may, after giving the licensee and
opportunity to be heard, suspend or revoke his licence where
the licensee is convicted of an offence under this section.
43. Every person knowingly making a false declaration for the purpose of obtaining a benefit pursuant to the provisions of this Act is guilty of an offence and shall be liable on summary conviction to a fine of five thousand dollars or to imprisonment for one year or to both such fine and imprisonment.
44. Any person applying any building materials pursuant to the provisions of this Act for any purpose other than the purpose specified in this Act is guilty of an offence and shall be liable on summary conviction to a fine or five thousand dollars or to imprisonment for one year or to both such fine and imprisonment.
45. (1) Any person who develops, markets or manages a time-sharing project when there is not in force a licence granted to him by the Board to develop, market or manage such project is guilty of an offence and shall be liable on summary conviction to a fine of five thousand dollars and, in addition, to a fine of one thousand dollars for each day during which the offence continues or to imprisonment for one year or to both such fine and imprisonment.
(2) Any licensee who develops, markets or manages a time-sharing project otherwise than in accordance with the terms and conditions of the licence that has been granted to him is guilty of an offence and shall be liable on summary conviction to a fine of one thousand dollars and, in addition, to a fine of five hundred dollars for each day during which such offence continues or to imprisonment for a term of six months or to both such fine and imprisonment.
(3) Any person to whom a licence has been granted who subsequently makes any material variation in a contract referred to in subsection (3) of section 5 without the written
approval of the Board, is guilty of an offence and shall be
liable on summary conviction to a fine of five thousand dollars for each contract so varied and executed by a timesharing purchaser.
(4) Where an offence against this Act is committed by a body corporate, every person who at the time of the commission of the offence was a director, manager or officer or any person purporting to act in any such capacity, is guilty of the like offence and liable to be punished accordingly unless he proves that the act or omission constituting the offence took place without his knowledge or consent or that he exercised all due diligence to prevent the commission of the offence.
46. Any person who obstructs any athorised officer of the Board, any officer of the Department of Health, the
Department of Planning or a police or fire service officer in
the exercise of any power conferred on him or the performance
of any duty imposed upon him by this Act is guilty of an offence and shall be liable on summary conviction to a fine of
five thousand dollars or to imprisonment for one year or to
both such fine and imprisonment.
47. (1) Proceedings in respect of an offence against this Act shall not be instituted by any person without the written consent of the Attorney-General other than an offence against subsection (4) of section 32.
(2) Proceedings in respect of a summary offence under this Act or the regulations may be commenced at any time within two years from the time the offence is committed.
48. The provisions of section 47 shall not be construed to prohibit or impair the right of any purchaser or other aggrieved person to enforce in any civil proceedings any right or remedy conferred upon any such person under this Act or under any contract.
PART VII MISCELLANEOUS
49. (1) Every developing owner, marketing agent or managing agent of a time-sharing project shall, whenever required to do so by the board, satisfy the Board that the project in relation to which such owner or agent has been granted a licence has made provision for the matters set out in the Second Schedule.
(2) Any failure of a developing owner, marketing agent or managing agent of a time-sharing project to satisfy the Board with respect to any of the matters set out in the Second Schedule shall be deemed to be a breach of the conditions of the licence and the Board may, if it considers the breach to be of a grave nature, and subject to subsection (3) suspend or revoke the licence.
(3) Before suspending or revoking the licence under subsection (2) the Board shall serve upon the licensee by delivering to the project site a notice specifying the alleged contravention and requiring the licensee to comply or ensure compliance therewith to the satisfaction of the board within such period as the Board may specify in the notice being not less than seven days from the date of delivery, and, if at the expiry of such period the licensee fails to comply or ensure compliance to the satisfaction of the Board, the Board may suspend or revoke the licence.
(4) Where the Board suspends or revokes the licence in accordance with subsection (3), it shall serve on the licensee a notice of the suspension or revocation and no licence shall during the period of suspension, be of any effect.
50. (1) The developing owner, unless exempted by the Board, shall file with the Board a Public Offering Statement, which shall be in conformity with the requirements outlined in the Third Schedule. Provided that if the developing owner
distributes to an off-site time-sharing purchaser a Public
Offering Statement (howsoever denominated) which contains in
the opinion of the Board substantially all of the information
required by that Schedule, then such Public Offering Statement
distributed in conjunction with the said off-site sale shall
be deemed in conformity with this section and that Schedule.
(2) The Public Offering Statement shall be delivered by the developing owner to the on-site time-sharing purchaser before execution of his contract of purchase.
(3) Any developing owner who contravenes the provisions of this section is guilty of an offence and shall be liable on summary conviction to a fine of five thousand dollars or to imprisonment for one year or to both such fine and imprisonment.
51. (1) The Board may, at any time, if it sees fit, exempt the holder of a licence from complying, in whole or in part, with any one or more of the provisions of this Act.
(2) An exemption may be granted for such period as the Board sees fit and may be extended from time to time.
(3) An exemption shall not have any effect unless particulars thereof have been endorsed on the licence.
(4) An exemption may be revoked in whole or in part at any time by the Board and such revocation shall be endorsed on the licence: Provided that before effecting any such revocation, the Board shall give to the licensee by delivery to the time-sharing project site written notice of its intention to revoke the exemption unless the licensee shows good cause to the satisfaction of the Board within seven days from the date of delivery as to why the revocation should not be made and the Board shall thereafter take into account any representations made by or on behalf of the licensee.
52. Without prejudice to the provisions of sections 51, with respect to any time-sharing project that is located -
(a) outside The Bahamas but which is advertised, marketed or sold within the jurisdictional limits of The Bahamas; or
(b) within The Bahamas but which is advertised, marketed and sold exclusively outside of The Bahamas, the Board may, upon application, grant the developing owner, managing agent or marketing agent of any such timesharing project a complete or partial exemption from the requirements of this Act if the Board -
(i) determines that the foreign jurisdiction in which such timesharing project is located or is advertised, marketed and sold (as the case may be) makes adequate protection for purchasers of time-sharing interests therein and that such protection will (by statute, contract or otherwise) in fact be extended to any such purchasers who purchase their time-sharing interest as a result of the aforesaid advertising,
marketing or sale activity; and
(ii) is satisfied that the person making such application is financially sound.
53. The Board may make regulations for the purpose of carrying the provisions of this Act in effect, and in particular, but without prejudice to the generality of the foregoing, for -
(a) governing the development, management, advertising, marketing, and sale of timesharing projects in such manner as to be likely to enhance the growth of tourism through fair and honest business practices and the creation of safe hygienic and sanitary facilities which are equal to the generally accepted
standards of legitimate hotels in The Bahamas;
(b) regulating the number of persons who may be accommodated in the units and facilities of a time-sharing project;
(c) prescribing standards of equipment for the sanitation of time-sharing projects, standards for the preparation and serving
of food and drink in such projects and standards for ventilation;
(d) the medical examination of employees of licensees so as to restrict and control the employment in time-sharing projects
of persons suffering from disease or infection or who have been in contact with persons suffering from disease or infection, and for prescribing standards of personal cleanliness to be observed by employees or licensees;
(e) prescribing standards for the maintenance of the exteriors and interiors of the building comprising time-sharing projects
and the roads, pathways and grounds thereof;
(f) prescribing precautions to be taken against the outbreak or spread of fire in time-sharing projects and for the
protection of persons therefrom;
(g) prescribing the furnishings and fixtures to be provided in bedrooms and other rooms provided for the use of purchasers
and the standards to be maintained in connection therewith;
(h) prescribing the manner in which any application may be made to the Board;
(i) the keeping of registers and log-books by licensees in relation to the operation of time-sharing projects;
(j) the making of reports to the Board, the Department of Health, the Department of Planning and the authority responsible
for fire services upon any matters connected with the observance of the regulations;
(k) requiring that the licence, the regulations, or any part or extract from either, shall be displayed in any prescribed place;
(l) providing for the proof of any matter in proceedings under the provisions of this Act;
(m) regulating the volume of inventory from each time-sharing project coming into the market for sale at any given time;
(n) identifying and investigating the operators of time-sharing projects;
(o) regulating generally the functions and the operations of marketing agents authorised to advertise, promote and sell
time-sharing projects;
(p) prescribing the financial requirements to be fulfilled under section 12(a) by an applicant for a licence before such
licence may be granted;
(q) requiring the developing owner, where the Board considers it necessary, to furnish the Board with a payment and performance bond or other bond executed by one or more sufficient sureties in such amount, for such periods and on such terms as the Board may prescribe to cover maintenance
obligations as well as latent and other defects and repairs likely to be necessary as a result of materials used
in the construction of the roof or other components of the premises of the timesharing project;
(r) prescribing levels of services including maid services and cleaning services to be maintained in the operation of timesharing projects;
(s) the imposition and payment of such fees as are prescribed in relation to the occupancy of time-sharing projects;
(t) providing for anything required under this Act to be prescribed.
54. Notwithstanding the provisions of subsection
(1) of section 4 of the Law of Property and Conveyancing
Condominium) Act, a time-sharing project shall satisfy the
requirements of that section if the developing owner holds a
leasehold estate with an unexpired term of not less than
twenty years and not more than forty-five years in property
which relates to a Delaration executed under seal by a
accommodations and facilities which are subject to the
Declaration are restricted to time-sharing use and such
Declaration is approved by the Board.
55. (1) Nothing in this Act shall derogate from the provisions of any other law but, in the event of any conflict between this Act and such law, the provisions of this Act, in so far as they wholly relate to the development, management, advertising, marketing or sale of a time-sharing project, or to the ownership or use of a time-sharing interest, shall prevail.
(2) Notwithstanding anything to the contrary in subsection (1), the reference to twenty-one years in subsection (1) of section 9 of the International Persons Landholding Act, 1993 shall, in its application to a timesharing project to which a developing owner licence applies, be construed and have effect as a reference to forty years.
56. Any person who, immediately before the date of commencement of this Act, was developing, marketing or managing a time-sharing project whether in the capacity of a developing owner, marketing agent, managing agent or otherwise, may continue to develop, market or manage such time-sharing project for the d
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