Md. Code, Real Property, Title 11A

Md. Code, Real Property, Title 11A
in effect

Md. Code, Real Property § 11A-101

(a) In this title the following terms have the meanings indicated, unless the context requires a different meaning. (b) “Association” means a nonstock corporation consisting only of time-share estate owners formed according to Title 5, Subtitle 2 of the Corporations and Associations Article. (c) “Commission” means the State Real Estate Commission. (d) “Common elements” means all of a time-share project except for the time-share units located in the project. (e) “Common expenses” means the costs of management and operation of the time-share project, maintenance of, and improvements to the common elements, maintenance of the units, and repair and replacement of personalty located in the project owned by the association. (f) “Conversion building” means a building that at any time before the disposition of any time-share was occupied by any person for residential purposes. (g) (1) “Developer” means any person in the business of creating or disposing of that person’s time-shares in time-share projects. (2) “Developer” does not include an association reselling time-shares acquired by the association: (i) Through foreclosure of a lien for nonpayment of assessments or other charges by a time-share owner as provided in § 11A-110 of this title; or (ii) By deed in lieu of foreclosure from a time-share owner who is delinquent in payment of assessments or other charges as provided in § 11A-110 of this title. (h) “Developer control period” is as defined in § 11A-106 of this title. (i) “Exchange company” means any person operating an exchange program. (j) “Exchange program” means any arrangement for the exchange of occupancy rights of time-share owners. (k) “Facility fees” means fees for recreational or other facilities charged on a use basis. (l) “Managing entity” means any person or association, including the developer, designated in or employed pursuant to a time-share instrument or project instrument to manage a time-share project. (m) “Occupancy expenses” means costs occasioned by use of individual time-share units such as housekeeping or cleaning. (n) “Project” means real property all or a portion of which is subject to a project instrument. A project may include units that are not time-share units. (o) “Project instrument” means 1 or more recordable documents, by whatever name denominated, applying to a project and containing restrictions or covenants regulating the use, occupancy, enjoyment, or disposition of units or amenities in or other aspects of a time-share project. (p) “Purchaser” means any person, other than a developer, who by means of a voluntary transfer acquires a legal or equitable interest in a time-share other than as security for an obligation. (q) “Sales contract” means any agreement transferring the rights and obligations of the time-share plan to the purchaser. (r) “Time-share” means a time-share estate or time-share license. (s) “Time-share estate” means the ownership during separated time periods, over a period of at least 5 years, including renewal options, of a time-share unit or any of several time-share units, whether the ownership is a freehold estate, an estate for years, or an undivided interest. (t) “Time-share estate project” means that portion of the project set aside for the use and enjoyment by time-share purchasers as described in the time-share plan or time-share instrument, and as acquired by the time-share purchaser in the execution of a sales contract. (u) “Time-share expenses” means common expenses and occupancy expenses, but does not include facility fees. (v) “Time-share instrument” means a document that describes the time-share as provided in §§ 11A-103 and 11A-107 of this title. (w) “Time-share license” means a right to use or occupy 1 or more units or any of several units during 5 or more separated time periods over a period of at least 5 years, including renewal options, in a time-share project. (x) “Time-share plan” means any arrangement other than an exchange program, whether by membership, agreement, tenancy in common, sale, lease, license, or right to use agreement or by any other means, whereby a time-share purchaser, in exchange for a consideration, receives a time-share, and attendant rights and obligations. (y) “Time-share project” means that portion of the project set aside for the use and enjoyment by time-share purchasers as described in the time-share plan or time-share instrument, and as acquired by the time-share purchaser in the execution of a sales contract. (z) “Time-share unit” means a unit subject to a time-share plan. (aa) “Undivided interest” means ownership of an interest in a project in common with not fewer than 25 other purchasers or prospective purchasers, that entitles each owner to use or occupy 1 or more units or any of several units during 5 or more separated time periods over a period of at least 5 years, including renewal options, whether or not the exercise of the right to use or occupy depends upon the availability of any unit or units. (bb) “Unit” means real property, or a portion thereof, designated for separate use.

Md. Code, Real Property § 11A-102

(a) Except as otherwise provided in this title, the recordation of a time-share instrument creates a time-share estate either as a freehold estate or an estate for years, as specified in the time-share instrument. (b) A document transferring or encumbering a time-share estate shall be recorded among the land records of the county in which the unit is located and may not be rejected for recordation because of the nature or duration of that estate. A document transferring a time-share license may be recorded. (c) Each time-share estate constitutes, for purposes of title, a separate estate or interest in a unit.

Md. Code, Real Property § 11A-103

A time-share instrument shall be recorded among the land records of every county in which any portion of the project is situated and shall contain in addition to other provisions required by this title the following: (1) The name of the county or counties in which the project is situated; (2) The legal description sufficient to identify the project with reasonable certainty and may include a street address; (3) When the project contains more than 1 unit, a time-share plat containing the information required by § 11-105(b) of this article, the identification and location of each time-share unit and the common elements, and a certificate from a professional land surveyor or property line surveyor that the plat and description in the time-share instrument are correct representations of the time-share project; (4) Identification of time periods by letter, name, number, or combination thereof; (5) Where applicable, the method whereby additional time-shares may be created or withdrawn from the time-share plan; (6) The portion of common expenses and any voting rights assigned to each time-share, if any, and the method for reallocation if time-shares are added to or withdrawn from the time-share plan; (7) Any restrictions on the use, occupancy, enjoyment, alteration, or alienation of time-shares; (8) A description of the amenities if any at the project made available for a time-share purchaser’s use and the ownership, care, and replacement thereof; (9) The length of time the time-shares are committed to the time-share plan and the status of title of time-share units at the end of the period of time; (10) The method of designating the insurance trustee required by § 11A-111 of this title; (11) A description and authorization of the methods, if any, by which the time-share documents may be enforced, including the collection of time-share expenses; (12) Specification of the events, including condemnation and damage or destruction, and the procedures by which the time-share plan may be terminated before the expiration of its full term and the consequences of such termination, including the manner in which the time-share project assets will be held and distributed among owners; (13) Provision for the amendment of the time-share instrument; and (14) If any of the time-shares are time-share licenses, a statement of what rights a time-share licensee will have if the license is terminated or a statement that such licensee will have no rights.

Md. Code, Real Property § 11A-104

(a) (1) Time–shares may be created in any unit in existence before January 1, 1985, unless prohibited by a project instrument. If time–shares are not prohibited by the project instrument, the owners of at least 34 percent of the units in the project may sign and record a document among the land records of the county where the project is located, stating an intent to limit time–shares in the project, and referring to this section. Thereafter, no person or other entity may become a developer with respect to more than 1 unit in the project, but this limitation will not apply to units of which the developer was owner of record prior to the recording of the aforementioned document. (2) (i) In this paragraph, “recorded covenants and restrictions” has the meaning stated in § 11B–101 of this article. (ii) The owners of property in a residential community governed by recorded covenants and restrictions may prohibit time–shares on any property subject to the recorded covenants and restrictions by amending the recorded covenants and restrictions by a vote of the owners in accordance with the majority requirements of the recorded covenants and restrictions. (iii) The provisions of subparagraph (ii) of this paragraph do not apply to an existing time–share unit in a project. (b) The limitations on time–shares created by the recording of a document as provided in subsection (a) of this section may be removed by the recordation among the land records of the county where the project is located of a document removing time–share limitations signed by owners of at least 80 percent of the units in the project. (c) For the purposes of signing a document provided for in subsection (a) or subsection (b) of this section, any person designated by the owners of a majority of the time–shares in a unit may sign as the owner of that unit unless the relevant time–share instrument provides otherwise. (d) All documents provided for in this section shall be under oath or affirmed under penalty of perjury.

Md. Code, Real Property § 11A-105

In addition to the requirements of § 11A–103 of this title, with respect to a time–share estate, the time–share instrument shall describe arrangements for the management and operation of the time–share estate project and for the maintenance, repair, and furnishing of time–share units in the project, which shall include provisions for the following: (1) Creation of an association; (2) Assessment and collection of time–share expenses; (3) Employment and termination of the managing entity for the time–share estate project. No agreement between the developer and the managing entity shall be longer than 2 years; (4) Preparation and dissemination to time–share estate owners of an annual budget, operating statements, and other financial information concerning the time–share project; (5) Adoption of standards and rules of conduct for the use, enjoyment, and occupancy of units by the time–share estate owners. Unless otherwise provided in a project instrument, a time–share estate owner’s right of access to the time–share estate project shall be limited to the time period in his time–share; (6) Comprehensive general liability insurance for death, bodily injury, and property damage arising out of, or in connection with, the use and enjoyment of units by time–share estate owners, their guests, and other users. The insurance required by this paragraph shall be in addition to the insurance required by § 11A–111 of this title. The developer shall pay the costs of securing and maintaining the insurance until the developer control period ends, after which time the costs will be paid by the association. Nothing herein shall be construed to obligate the developer to secure insurance on the conduct, personal effects, or property of the time–share estate owners, their guests, and other users; (7) Compensation or alternate use periods to a time–share estate owner if his contracted–for unit cannot be made available for the period to which the owner is entitled by schedule or by confirmed reservation; (8) Procedures for imposing a monetary penalty or suspension of a time–share estate owner’s rights and privileges in the time–share estate project for failure of such owner to comply with the provisions of the time–share instrument or the rules and regulations of the association. Under these procedures, a time–share estate owner must be given notice and the opportunity to refute the charges against him in person or in writing to the board of directors of the association before a decision to impose discipline is rendered; and (9) Employment of attorneys, accountants, and other persons as necessary to assist in the management of the time–share estate project.

Md. Code, Real Property § 11A-106

(a) (1) The time-share instrument for a time-share estate project shall provide for a period of time, to be called the “developer control period”, during which the developer or a managing entity selected by the developer shall manage and control the time-share project. (2) The developer shall be responsible for common expenses during the developer control period. Occupancy expenses shall be allocated only to the time-share estate owners. Nothing shall preclude the developer, during the developer control period, from collecting a periodic charge from the time-share estate owners for the payment of occupancy expenses. However, any such funds received and not spent or any other funds received and allocated to the benefit of the association, shall be transferred to the association by the developer immediately upon termination of the developer control period. (3) Upon termination of the developer control period, the association shall be responsible for time-share expenses except that the developer shall be responsible for common expenses associated with his proportionate share of the time-share project. However, no time-share expense, dues, or assessment levied by the association shall discriminate against the developer. (b) The time-share instrument for a time-share estate project shall also include provisions for the following: (1) Termination of leases and contracts for goods and services entered into during the developer control period. Any such contract shall become voidable at the option of the association no later than 2 years after the developer sells the first time-share estate in the project; and (2) A regular accounting by the developer to the association of matters that significantly affect the interest of time-share estate owners. (c) Title to the common elements, if any, of the time-share estate project shall be transferred to the association, free of charge, no later than at such time as the developer either transfers to purchasers legal or equitable ownership of at least 75 percent of the time-share estates or completes all of the amenities and facilities comprising the time-share project, whichever shall occur later, but the developer may elect not to convey sooner than 2 years from the date the developer sells the first time-share estate. The developer control period shall terminate on the date of transfer of the common elements to the association.

Md. Code, Real Property § 11A-107

The time-share instrument for a time-share license plan shall prescribe and outline reasonable arrangements for the management and operation of the time-share license plan and for the maintenance, repair, and furnishing of time-share units, which arrangements shall include provisions for the following: (1) Standards and procedures for housekeeping, repair, and interior furnishing of time-share units; (2) Adoption of standards and rules of conduct governing the use, enjoyment, and occupancy of time-share units by licensees; (3) Payment by the developer of time-share expenses; (4) Selection of a managing entity to act for and on behalf of the developer should the developer elect not to undertake the duties, responsibilities, and obligations of being the managing entity for the time-share license plan; (5) Procedures for establishing the rights of time-share licensees to occupancy, use, and enjoyment of time-share units by prearrangement or under a first reserved, first served priority system; (6) Procedures for assessment and collection of time-share expenses from time-share licensees; (7) Comprehensive general liability insurance for death, bodily injury, and property damage arising out of, or in connection with, the occupancy, use, and enjoyment of time-share units by time-share licensees, their guests, and other users. The insurance required by this subsection shall be in addition to the insurance required by § 11A-111 of this title. The developer shall pay the costs of securing and maintaining the insurance. Nothing herein shall be construed to obligate the developer to secure insurance on the conduct, personal effects, or property of the time-share licensees, their guests, and other users; (8) Methods of providing an alternate use period or monetary compensation to a time-share licensee if a time-share unit cannot be made available for the period to which the licensee is entitled by schedule or by a confirmed reservation; and (9) Procedures for imposing a monetary penalty or a suspension of a time-share licensee’s rights upon failure to comply with the provisions of the time-share instrument, to obey rules and regulations established by the developer, or to pay time-share expenses charged against the time-share licensee. The licensee shall be given notice and the opportunity to answer in person or in writing to the Commission before a decision to impose a monetary penalty or a suspension of rights is rendered.

Md. Code, Real Property § 11A-108

(a) Time-shares shall terminate at the end of the term of the time-share plan as set forth in the time-share instrument. Prior to the termination date in the time-share instrument, all time-shares in a time-share project may be terminated only by agreement of the time-share owners of at least 80 percent of the time-shares, or such larger percentage as the time-share instrument may specify. (b) An agreement to terminate all time-shares in a time-share project must be evidenced by a termination agreement executed in the same manner as a deed, by the requisite number of time-share owners. The termination agreement must specify a date after which the agreement will be void unless recorded. An executed termination agreement is effective only when recorded in the land records of every county in which a portion of the time-share project is situated. (c) Foreclosure or enforcement of a lien or encumbrance against all time-shares in a time-share project does not terminate the project unless the lienor elects that the project be terminated and the advertisement of foreclosure or enforcement sale so provides. (d) (1) The termination agreement may provide for the sale of time-share units and designate a trustee to effect a sale so long as the proceeds of the sale are distributed to individual time-share owners less a sales commission of 5 percent and reasonable sales expenses to be paid to the trustee. On the termination date, the interests of a time-share owner vests in the trustee for the benefit of owners. Proceeds from a sale shall be distributed in the normal order of priority to creditors, lienholders, and to time-share owners in proportion to their shares as provided in the termination agreement or as provided in paragraph (4) of this subsection if the termination agreement does not establish proportionate shares. (2) On or after the termination date, any owner of a time-share may maintain an action for partition or for allotment or sale in lieu of partition. (3) Except as otherwise provided in the termination agreement, a time-share owner’s right to occupy a time-share unit continues until the termination sale occurs. (4) If the termination agreement does not specify the respective time-share owner shares in the time-share project, within 180 days prior to the termination date an appraisal must be made of the fair market value of each time-share as of the date of the termination sale by an appraiser designated in the termination agreement or by the trustee. The appraisal shall be sent to each time-share owner. The appraisal determines the value of each time-share owner’s interest unless at least 25 percent of the owners disapprove in writing within 60 days after the appraisals are sent or the final judgment of a court prevents the appraisal from being used to determine a value.

Md. Code, Real Property § 11A-108.1

§11A–108.1. (a) An association by a two-thirds majority vote of the members present at any regular or special meeting may amend its time-share instrument to provide that the time-shares in a time-share project will not terminate at the end of the term of the time-share plan as provided in § 11A-108 of this title. (b) In determining that the time-shares will not terminate at the end of the term of the time-share plan, an association may: (1) Establish a later termination date or decide that there will be no termination date; and (2) Provide that on or after the original termination date as set forth in the time-share instrument, a time-share owner shall continue to: (i) Have exclusive rights to use, occupy, sell, convey, assign, mortgage, exchange, or pass by will or inheritance, any time-shares owned by the person; (ii) Use and enjoy all the common elements of the time-share project; and (iii) Have the previously existing rights and duties in the association including the right to vote and the duty to pay charges and assessments. (c) A person to whom a time-share is transferred by sale, conveyance, assignment, mortgage, devise, bequest, or inheritance shall have the rights and duties of the person from whom the time-share was transferred. (d) The provisions of this section apply even if, under the terms of a time-share deed or time-share instrument, the time-share owners have or will become owners as tenants in common of a time-share unit or project. (e) An association may not take an action provided for in subsection (a) of this section unless the notice of the meeting sent to the time-share owners expressly states that the action may be considered at the meeting.

Md. Code, Real Property § 11A-109

(a) If the number of time–shares in a time–share project is more than 12, the developer, before the first transfer of a time–share, shall provide a managing entity. The managing entity may be the developer during the developer control period or the association. If the time–share project is part of a larger project containing time–share units and other units, the managing entity may be the entity that manages the larger project. If the larger project is a condominium regime, the managing entity may be the condominium council with the consent of all condominium owners. If the number of time–shares in the time–share project is 12 or fewer and there is no managing entity, 3 or more time–share owners may form an association. (b) In the absence of a managing entity required by this section, a court upon application of a party in interest, may appoint and prescribe the powers of a managing entity. (c) Except as otherwise provided in the time–share instrument, the managing entity has the power to: (1) Institute, defend, or intervene in litigation or other legal proceedings in its own name on behalf of itself or 2 or more time–share owners on matters affecting time–shares, time–share units, or the time–share project; (2) Adopt and amend reasonable rules and regulations; (3) Indemnify its directors and officers and maintain directors’ and officers’ liability insurance with respect to the time–share project; (4) Impose charges for late payments of assessments and, after notice and an opportunity to be heard, levy reasonable fines for violation of the time–share instrument, bylaws, and rules and regulations of the time–share project; and (5) Exercise any other powers necessary and proper for the governance and operation of the time–share project. (d) Except to the extent otherwise provided in the time–share instrument, and to the extent of funds available to it for such purposes, the managing entity is responsible for the maintenance and repair of and replacements to the time–share units and any personal property available for use by time–share owners, other than personal property separately owned by a time–share owner. Each time–share owner shall afford access through his time–share unit reasonably necessary for these purposes, but if damage is inflicted on such time–share unit through which access is afforded, then in such event the managing entity shall promptly repair such damage. (e) Subject to the limitations of this section, the association shall be subject to Title 5, Subtitle 2 of the Corporations and Associations Article. (f) A director of an association may be removed from office in accordance with the articles of incorporation of the association. If the articles of incorporation do not provide for removal, a director may be removed at a meeting called for that purpose, with or without cause, by such vote as would suffice for his election. The costs for reproduction and mailing of the proxies used to remove any director shall be reimbursed to the member incurring such costs if the member requests such reimbursement and the director is in fact removed. (g) (1) The association shall maintain and make available on written request to a member in good standing of the association at reasonable cost, a list of the names and addresses of all members. (2) A list provided to a member under paragraph (1) of this subsection: (i) Shall be used only for purposes of conducting association business; and (ii) May not be: 1. Used for commercial gain or other pecuniary benefit for the member, the member’s agent, or any other person or entity; or 2. Copied, sold, or otherwise delivered or disseminated. (h) (1) (i) If an association has not held a meeting for 3 years, a special meeting shall be called by the directors. Notice of the meeting and sample proxy forms shall be sent to all members at least 30 days prior to the meeting. (ii) Unless a smaller number is provided for in the articles of incorporation or bylaws, the presence of 25 percent of the members, in person or by proxy, shall constitute a quorum. (2) (i) If the number of members present at the special meeting is insufficient to constitute a quorum, not more than 6 months thereafter a second special meeting shall be called. (ii) Notice of the meeting and sample proxy forms shall be sent to all members at least 30 days before the meeting. (iii) Notice of a second special meeting shall contain a statement that any business may be considered at the meeting, including amendment of the association’s articles of incorporation or bylaws. (iv) At this special meeting, the presence of 5 percent of the members, in person or by proxy shall constitute a quorum. (3) At any special meeting held under this subsection, any action may be taken by simple majority vote, including amendment of the association’s articles of incorporation or bylaws.

Md. Code, Real Property § 11A-110

(a) Time-share expenses must be assessed against all time-shares in accordance with the time-share instrument. Any past due assessment shall bear interest at the rate established by the managing entity or time-share instrument not to exceed 18 percent per year. (b) To the extent required by the time-share instrument, any time-share expense benefiting fewer than all of the time-share owners must be assessed exclusively against the time-share owners benefited. (c) Assessments to pay a judgment against the association may be made only against the time-share estate owners of record in the time-share estate project at the time the judgment was entered, in proportion to their time-share expense liabilities. (d) If any time-share expense is caused by the misconduct of any time-share owner, the association may assess that expense exclusively against that owner. (e) (1) (i) If the applicable time-share instrument so provides, a person who has a duty to make assessments for time-share expenses has a lien on a time-share for any assessment levied against that time-share or fines imposed against its owner from the time the assessment or fine becomes due, effective upon recording. (ii) As to a time-share estate, assessments, interest, late charges, costs of collection, and reasonable attorney’s fees may be enforced by the imposition of a lien under the Maryland Contract Lien Act. Liens may be enforced and foreclosed in a separate proceeding against an individual time-share estate or enforced and foreclosed in a single proceeding against some or all time-share estates in the same project whose owners are in arrears in payment of assessments. Enforcement and foreclosure of a number of liens under a single proceeding does not alter the individual rights of an owner, including the right to receive any surplus from the sale that the owner would be entitled to receive under a separate proceeding against an individual time-share estate, or the rights of the person enforcing the liens. Suit for any deficiency following foreclosure may be maintained in the same proceeding, and suit for any money judgment for unpaid assessments may also be maintained in the same proceeding without waiving the right to seek a lien under the Maryland Contract Lien Act. (iii) As to a time-share license, the person who has the duty to make assessments shall have the rights of a secured party under § 9-504 of the Commercial Law Article to sell, lease, or dispose of the time-share license. Unless the time-share instrument otherwise provides, fees, charges, late charges, fines, and interest charged are enforceable as assessments under this section. (iv) If an assessment is payable in installments, the full amount of the assessment is a lien from the time the first installment becomes due provided that within 15 days of an owner’s failure to pay an installment, that person who has a duty to make assessments notifies the owner that, if the owner fails to pay any installment within 15 days of the notice, full payment of the remaining annual assessment will then be due and shall constitute a lien on the unit as provided in this section. (2) The lien is perfected upon recordation of a claim of lien, with respect to the time-share estate, among the land records of the county in which the time-share unit is situate, or with respect to the time-share license, among the financing records in the county in which the time-share unit is situated. The claim of lien shall state the description of the time-share unit, the name of the record owner, the amount due, and the period for which the assessment was due. The claim of lien shall also state that notice of intent to perfect the lien, giving the time-share owner an opportunity to dispute the amount of the assessment, was sent to the last known address of the owner not less than 10 days prior to recordation. The claim of lien shall be signed and verified by an officer or agent of the association. On full payment of the assessment and other permitted amounts for which the lien is claimed, the unit owner shall be entitled to a recordable satisfaction of the lien in any form used for the release of mortgages in the county in which the condominium is located. Fees and charges imposed under this section are enforceable as assessments under this section. (3) A lien for unpaid assessments is extinguished unless proceedings to enforce the lien are instituted within 3 years after the assessments become payable. (4) An action may not be brought to foreclose a lien except after 10-days’ written notice to the time-share owner given by registered mail, return receipt requested, to the last known address of the owner. Notice shall be deemed given even if delivery of the letter is refused by the addressee or any co-owner of the time-share. (5) A judgment or decree in any action brought under this section may include costs and reasonable attorney’s fees for the prevailing party. (6) A person who has a duty to make assessments for time-share expenses shall furnish a time-share owner upon written request as often as quarter annually a recordable statement setting forth the amount of unpaid assessments currently levied against his time-share. The statement shall be furnished within 10 business days after receipt of the request and is binding in favor of persons reasonably relying thereon.

Md. Code, Real Property § 11A-111

(a) (1) Prior to the sale of any time-share, and while there exist any time-shares, the managing entity shall maintain for the benefit of the developer, association, and owners property insurance on the time-share project and any personal property available for use by time-share owners, other than personal property separately owned by a time-share owner, insuring against all risks of direct physical loss commonly insured against, in a total amount, after application of any deductibles, of not less than 80 percent of the actual cash value of the insured property, exclusive of land excavations, foundations, and other items normally excluded from property policies. (2) If such a policy is reasonably obtainable, the policy shall provide that the insurer shall waive its right to subrogation under the policy against any time-share owner or members of his household. (3) No act or omission by any time-share owner, unless acting within the scope of his authority on behalf of an association, shall void the policy or be a condition to recovery by any other person under the policy. (4) If, at the time of a loss under the policy, there is other insurance in the name of a time-share owner covering the same risk covered by the policy, the policy maintained pursuant to this section is primary insurance not contributing with the other insurance, and other insurance in the name of a time-share owner applies only to loss in excess of the primary coverage. (b) Any loss covered by insurance shall be adjusted with, and the insurance proceeds from that loss shall be payable to, the insurance trustee, who may be a party in interest, designated in accordance with the time-share instrument. If none has been designated or if the designated trustee fails to serve, the managing entity shall be the insurance trustee. The insurance trustee shall hold any insurance proceeds in trust for time-share owners and lienholders. The proceeds must be disbursed for the repair or restoration of the property in accordance with this section, and time-share owners and lienholders are not entitled to receive payment of any portion of the proceeds unless there is: (1) A surplus of proceeds after the property has been repaired or restored; or (2) The project is terminated. (c) An insurer under this section shall issue certificates or memoranda of insurance to the association and, upon written request, to any time-share owner, mortgagee, or beneficiary under a deed of trust. The insurance may not be canceled until 30 days after notice of the proposed cancellation has been mailed to the managing entity and each person to whom a certificate or memorandum of insurance has been issued. (d) (1) Except to the extent that a project instrument requires otherwise and to the extent of the proceeds available, any portion of the time-share project damaged or destroyed shall be repaired or replaced promptly by the managing entity unless: (i) Another person repairs or replaces it; (ii) There is a termination of the time-share project; (iii) Repair or replacement would be illegal under any State or local health or safety statute or ordinance; (iv) 50 percent of the time-share owners, including 80 percent of owners of every time-share in a time-share unit that will not be rebuilt, vote not to rebuild; or (v) A decision not to rebuild the damaged property is made by another person empowered to make that decision. (2) The cost of repair or replacement in excess of insurance proceeds and reserves shall be a time-share expense. (3) If the entire time-share project need not be repaired or replaced, unless the time-share instrument provides otherwise: (i) The insurance proceeds attributable to the damaged area must be used to restore the damaged area to a condition compatible with the remainder of the project; and (ii) The insurance proceeds attributable to time-share units that are not rebuilt shall be distributed as if those units constituted a time-share project in which all time-shares are terminated.

Md. Code, Real Property § 11A-112

(a) Any developer or the developer’s designated project broker shall deliver a public offering statement to the purchaser before transfer of the time-share and no later than the date of the contract. (b) (1) A public offering statement together with a fee equal to $1 for each time-share to be offered for sale, not to exceed $500, must be filed with, and approved by, the Secretary of State prior to being delivered to any time-share purchaser. The Secretary of State shall determine whether the public offering statement satisfies the requirements of this title, and shall either approve or reject within 45 days of receipt. After approval, the Secretary of State shall promptly issue an order of approval. If the Secretary of State rejects a public offering statement, he shall promptly issue a written order stating the reasons for rejection. The Secretary of State’s failure to act within 45 days of receipt shall be deemed an approval of the public offering statement. A developer may consent in writing to an extension of the review period for approval or rejection. (2) Rejection of a public offering statement shall not act as a bar to reapplication. A reapplication which amends the original statement to comply with the stated reasons for rejection and which is accomplished by an additional fee of $100 shall be approved by the Secretary of State upon determination that the amended public offering statement satisfies the requirements of this title. (c) (1) A developer shall file copies of any changes to the information required by this section. Those changes must be approved by the Secretary of State before the changes are distributed to the public. (2) The Secretary of State shall either approve or reject the changes within 10 days of receipt. The Secretary of State’s failure to act within said 10 days shall be deemed an approval of such changes. (d) (1) The Secretary of State may adopt any regulations necessary to implement and enforce this section. (2) The Secretary of State may prescribe forms and procedures for submitting public offering statements. (3) The Secretary of State shall require the applicant to identify all persons who prepared any part of the public offering statement. (e) Any person who provides significant information contained in the public offering statement is liable for any false or misleading statement or for any omission of material fact in the statement which he provided or should have provided. In addition to other applicable penalties, any person who knowingly violates this subsection, or who disseminates to the public and had actual knowledge of such statement or omission, or who, in the exercise of reasonable care, should have known of such statement or omission, shall be deemed guilty of a misdemeanor, punishable by a fine of not more than $10,000, 6 months imprisonment, or both. (f) A public offering statement shall contain: (1) A cover page stating only: (i) The name and location of the time-share project; (ii) A statement that the project is a time-share project; and (iii) The following, in conspicuous type: “This public offering statement contains important matters to be considered in acquiring a time-share. The statements contained herein are only summary in nature. A prospective purchaser should refer to all references, exhibits thereto, contract documents, and sales materials. You should not rely upon oral representations as being correct. Refer to this document and accompanying exhibits for correct representations. The seller is prohibited from making any representations which conflict with those contained in the contract, this public offering statement, and the time-share instrument.”; (2) A summary of all statements required to be in conspicuous type in all exhibits to the offering statement; (3) A separate index of the contents and exhibits of the public offering statement; (4) A description of the time-share plan, including: (i) The name and principal address of the developer and the location of the time-share project; (ii) A general description of the time-share project and the time-share units, including the number of units in the time-share project and any larger project of which it is a part, and the schedule of commencement and completion dates of all improvements; (iii) As to all units owned or offered by the developer in the same project: 1. The types and numbers of units; 2. Identification of units that are time-share units; 3. The types and durations of the time-share; 4. The maximum number of units that may become part of the time-share project, if known; and 5. A statement of the maximum number of time-shares that may be created or that there is no maximum; (iv) Copies and a brief narrative description of the significant features of the time-share instrument and any documents referred to in the instrument other than any plats and plans, copies of any contracts or leases to be signed by the purchaser at closing, and a brief narrative description of any contract or lease that will or may be subject to cancellation by the owner of a time-share under § 11A-114 of this title; (v) The identity of the managing entity and the manner, if any, whereby the developer may change the managing entity or its control; (vi) A balance sheet for the time-share estate project, that is prepared by an independent certified public accountant, containing information effective as of the close of the immediately preceding fiscal year, or the fiscal year immediately before the last one if the statement is distributed within 90 days of the end of a fiscal year, and a projected budget for the association, either within or as an exhibit to the public offering statement, for 1 year after the date of the first transfer to a purchaser, a statement of who prepared the budget, and a statement of the budgetary assumptions concerning occupancy and inflation factors. The budget shall include: 1. A statement of the amount, or a statement that there is no amount, included in the budget as a reserve for repairs and replacements; 2. A statement of any other reserves; 3. The projected time-share expense liability by category of expenditures for the time-share units; and 4. The projected time-share expense liability for each time-share; (vii) A description of time-share expenses, the current amounts assessed, and the method and formula for changes; (viii) Any services which the developer provides or expenses he pays and which he expects may become at any subsequent time a time-share expense and the projected time-share expense liability attributable to each of those services or expenses for each time-share; (ix) Any initial or special fee due from the time-share purchaser at closing, together with a description of the purpose of the fee and the method of its calculation; (x) A statement of any liens, defects, or encumbrances on or affecting the title to the time-share units; (xi) A description of any financing offered by the developer; (xii) The terms and significant limitations of any warranties provided by the developer, including statutory warranties and limitations on enforcement of damages; (xiii) A statement that: 1. Subject to the provisions of § 11A-114(a)(3) of this title, within 10 days after receipt of a public offering statement or signing a contract or the time-share unit meets all building requirements and is ready for occupancy, whichever is latest, a purchaser may cancel the contract for purchase of the time-share from the developer; and 2. If a developer fails to provide a public offering statement to the time-share purchaser before transferring the time-share and the purchaser elects to cancel the contract, the purchaser is entitled to recover from the developer 110 percent of the sales price of the time-share actually paid by the purchaser; (xiv) A description of any unsatisfied judgments against the developer or the managing entity, the status of any pending suits involving the sale or management of real estate to which the developer or an affiliate of the developer or the managing entity is a defending party, and the status of any pending suits, of which the developer has actual knowledge, of significance to the time-share project; (xv) A statement that a bond or letter of credit is required under § 11A-116 of this title, and that any deposit made in connection with the purchase of a time-share will be held in an escrow account or a trust account until expiration of the rescission period or any later time specified in the contract, and will be returned to the purchaser if the purchaser cancels the contract; (xvi) Any restraints on transfer of time-shares or portions thereof; (xvii) A description of the insurance coverage provided for the benefit of time-share owners; (xviii) Any facility fees; (xix) The extent to which financial arrangements have been provided for completion of all promised improvements; (xx) The extent to which a time-share unit may become subject to a tax or other lien arising out of claims against other time-share owners of the same time-share unit or the developer, managing entity, or association; and (xxi) A description of the rights and remedies provided in the time-share instrument for a time-share owner who is prevented from enjoying exclusive occupancy of a time-share unit, or a statement that none is provided in the instrument; and (5) If the time-share owners are to be permitted or required to become members of or to participate in any exchange program, a statement containing the information set forth in § 11A-120 of this title. (g) A developer shall promptly amend the public offering statement to report any material change in the required information. Insofar as the developer relies in good faith on information provided by others in making the required disclosures about exchange programs, he is responsible for a misrepresentation only if he has knowledge of its falsity. (h) (1) At any time that a time-share project is registered with the Securities and Exchange Commission of the United States, a developer satisfies all requirements relating to the preparation of a public offering statement under this section if he delivers to the time-share purchaser and files with the Secretary of State and the Commission a copy of the public offering statement filed with the Securities and Exchange Commission if that contains substantially the same information as is required in a public offering statement under this title. (2) The mere offering of a time-share or the offering of an exchange program in conjunction with the offering or sale of a time-share in this State shall not constitute a security under the laws of this State. (i) (1) (i) In the case of a time-share situated wholly outside of this State, an application for registration of a public offering statement with the Secretary of State that has been approved by an agency in the state where the time-share is located and that substantially complies with the requirements of this title may be accepted for registration at the discretion of the Secretary. (ii) The Secretary of State may require additional information, before accepting a registration under this subsection, to assure adequate disclosure. (2) If there is no out-of-state agency where the time-share is located that has approved the public offering statement, the application for registration of the out-of-state time-share shall consist of the public offering statement described under this section and the application form prescribed by the Secretary of State.

Md. Code, Real Property § 11A-113

(a) If a conversion building is more than 5 years old, and the developer owns or controls time-shares in more than 50 percent of all units in the building, the public offering statement shall contain, in addition to other required information, a statement of the physical condition and state of repair of the major structural, mechanical, electrical, and plumbing systems of the conversion building, to the extent reasonably ascertainable, and estimated costs of repair for which a present need is disclosed in such statement. The developer is entitled to rely on the reports of architects and engineers who examine the conversion building. This requirement applies only to units in which use as a dwelling or for recreational purposes, or both, is permissible. (b) (1) The developer of a time-share project which includes all or any part of a conversion building, and any person in the business of selling real estate for his own account who intends to offer time-share in a conversion building, shall give each of the residential tenants and any residential subtenant in possession of each proposed time-share unit notice of the conversion no later than 120 days before such developer will require the tenants and any subtenant in possession to vacate. The notice must set forth generally the rights of tenants and subtenants under this section and be hand delivered to the unit or mailed to the tenant and subtenant at the address of the unit or any other mailing address provided by the tenant or subtenant. (2) No tenant or subtenant may be required by the developer to vacate upon less than 120 days’ notice, except by reason of nonpayment of rent, waste, normal expiration of the term of the lease, or conduct that disturbs other tenants’ peaceful enjoyment of the premises, and the terms of the tenancy may not be altered during that period without the consent of the tenant or subtenant. Failure to give notice as required by this subsection is a defense to an action for possession.

Md. Code, Real Property § 11A-114

(a) A time-share purchaser shall have the right to cancel the sales contract until midnight of the tenth calendar day following whichever occurs latest: (1) The contract date; (2) The day on which the time-share purchaser received the last of all documents required to be provided as part of the public offering statement; or (3) The time-share unit meets all building requirements and is ready for occupancy. However, if the developer obtains a payment and performance bond from a surety to insure completion of the project as represented in the public offering statement and contract of sale, and files the bond with the Commission, this item does not apply. (b) The right of cancellation cannot be waived by the purchaser or by any other person. No closing shall occur until the purchaser’s cancellation period has expired. Any false representation made by or on behalf of a developer that a purchaser may not exercise the right of cancellation, or any attempt to obtain a waiver of the purchaser’s cancellation rights, or a closing prior to the expiration of the cancellation period, shall be unlawful and such closing shall be voidable at the option of the purchaser for a period of 1 year after the expiration of the cancellation period. Nothing in this section shall preclude the execution of documents in advance of closing for delivery after expiration of the cancellation period. (c) Any notice of cancellation given by mail or telegraphic communication shall be considered given on the date postmarked, if mailed, or when transmitted from the place of origin, if telegraphed, so long as the notice is actually received by the developer. If notice is given by means of a writing transmitted other than by mail or telegraph, it shall be considered given at the time of receipt at the principal place of business of the developer. (d) In the event of a timely cancellation, or in the event the time-share plan is one in which time-share licenses are sold and at any time the time-share project is no longer available to such licensees, the developer shall honor the rights of any purchaser to cancel the sales contract. Upon such cancellation, the developer shall refund to the purchaser all payments made which exceed the proportionate amount of benefits made available under the plan, using the number of years of the proposed plan as the base. Such refund shall be made within 20 business days of demand or within 5 days after receipt of funds from the purchaser’s cleared check, whichever is later.

Md. Code, Real Property § 11A-115

(a) In this section, “time-share owner” includes an association reselling time-shares acquired by the association: (1) Through foreclosure of a lien for nonpayment of assessments or other charges by a time-share owner as provided in § 11A-110 of this title; or (2) By deed in lieu of foreclosure from a time-share owner who is delinquent in payment of assessments or other charges as provided in § 11A-110 of this title. (b) In the event of the resale of a time-share by a time-share owner, the selling time-share owner shall furnish to the purchaser before the execution of any sales contract, or, if there is no sales contract, before the transfer of title or use, a copy of the time-share instrument, other than plats and plans, and a certificate containing: (1) A statement disclosing the effect on the proposed transfer of any right of first refusal or other restraint on transfer of the time-share or any portion thereof; (2) A statement setting forth the amount of the periodic time-share expense liability and any unpaid time-share expense or other sums currently due and payable from the selling time-share owner in respect of the time-share; (3) A statement of any other facility fees payable by time-share owners; and (4) A statement of any judgments or other matters that are or may become liens against the time-share being sold or the time-share unit of which it is a part and the status of any pending suits that may result in those liens. (c) The managing entity, within 10 days after a written request by the selling time-share owner, shall for a reasonable fee furnish a certificate containing the information necessary to enable the selling time-share owner to comply with this section. A selling time-share owner providing a certificate from the managing entity is not liable to the purchaser for any erroneous information provided by the managing entity, other than for judgment liens against the time-share or the time-share unit of which it is a part, but the managing entity shall be liable therefor. (d) The purchaser is not liable for any unpaid time-share expense or facility fee greater than the amount set forth in a certificate prepared by the managing entity. The selling time-share owner is not liable to the purchaser for the failure or delay of a managing entity to provide the certificate in a timely manner. (e) Any purchaser may at any time within 7 days following receipt of all information required by this section, cancel the sales contract without reason and without liability. The purchaser, upon cancellation, is entitled to the return of any deposits made on account of the contract. The rights of the purchaser under this section may not be waived, and any attempted waiver is void.

Md. Code, Real Property § 11A-116

(a) (1) In this section, “purchase money” includes any money, note, security, or other monetary consideration paid by a purchaser for a time–share. (2) All purchase money received by or on behalf of a developer from a purchaser for the purchase or reservation of a time–share shall be deposited in an escrow account designated solely for that purpose with a financial institution whose accounts are insured by a government agency until the expiration of the time for cancellation or any later time provided in the contract. (3) After the expiration of the cancellation period or that provided in the contract, if no notice of cancellation is received, such funds or instruments may be released as provided in subsection (b). (b) Any purchase money received by or on behalf of a developer from purchasers of time–shares may be released to the developer, provided he maintains a surety bond for the benefit of each purchaser of a time–share, until the happening of the earlier of: (1) The conveying of good and merchantable title to the time–share estate or the granting of an unencumbered right to use the time–share project pursuant to a time–share license; (2) The return of the purchase money to the purchaser; or (3) The forfeiture of the purchase money by the purchaser, under the terms of the contract. (c) As used in this section the word “bond” includes a bond issued by a surety or a letter of credit issued by a financial institution acceptable to the Commission and in a form acceptable to the Commission. (d) The bond may not be canceled by the surety until 30 days after the surety gives notice of cancellation to the Commission. (e) The penalty of the bond shall be adjusted from time to time in accordance with the following schedule: Total Amount of Purchase Money Held Penalty of Bond (1) Zero to $200,000 $ 100,000 (2) $200,001 to $500,000 200,000 (3) $500,001 to $1,000,000 500,000 (4) Over $1,000,000 1,000,000 (f) (1) The amount of purchase money from sales of time–shares held at any one time by the time–share developer shall not exceed the amount for which the developer is bonded in accordance with the schedule set forth in this section. (2) If a developer is required to be bonded with respect to more than one project that the developer owns or controls, directly or indirectly, the developer shall obtain a separate bond in the appropriate penalty amount for the purchase money held on each project which becomes registered with the Commission on or after July 1, 1987. (g) A developer who fails to maintain an escrow account or a surety bond as required by this section shall be guilty of a misdemeanor and, upon conviction, shall be sentenced to pay a fine of not more than $1,000 or to undergo imprisonment for a term of not more than 1 year, or both, for each violation. (h) The requirements of this section may be waived by the Commission with respect to a time–share project located outside this State provided: (1) Compliance and enforcement of the specific provisions are impractical or impossible; (2) The laws of the state or country in which the time–share project is located require escrow or bonding protection for purchases of time–shares, and the developer has complied with such law; or (3) Any other reason the Commission finds relevant to permitting an alternative arrangement. (i) No claim shall be made for reimbursement from the Real Estate Guaranty Fund under Title 17, Subtitle 4 of the Business Occupations and Professions Article if the claim can be successfully maintained against the surety bond. Under no circumstances shall the surety be entitled to reimbursement from the Real Estate Guaranty Fund. (j) A developer of a project located outside this State shall secure a bond only for the benefit of purchasers who are residents of this State or whose contract to purchase a time–share was negotiated or executed in whole or in part in this State. (k) The insurance company or financial institution issuing a bond shall remain liable, after cancellation or termination of the bond, for any purchase money paid prior to the cancellation or termination. (l) By the issuance of a bond, a foreign insurance company or financial institution shall be deemed to have consented to being sued in this State regarding any dispute or claim against the bond.

Md. Code, Real Property § 11A-117

(a) Sections 10–201, 10–202, and 10–203 of this article apply to all sales by developers under this title. For purposes of this section, a newly constructed unit means a newly constructed or converted unit. (b) In addition to the implied warranties set forth in § 10–203 of this article, there is an implied warranty on every time–share unit from the developer to a purchaser that the developer will correct any defects in materials or workmanship in the construction of walls, ceilings, floors, and heating and air conditioning systems in the unit. The warranty on the unit commences with the transfer of either title or use to the unit and extends to each time–share owner for a period of 1 year. In addition, a developer shall warrant to a purchaser of a time–share that any existing use of the time–share unit that will continue does not violate applicable law or the project instrument. (c) (1) In addition to the implied warranties set forth in Section 10–203 of this article, there is an implied warranty from the developer to the association that the developer will correct any defect in material or workmanship in the common elements, including the roof, foundation, external and bearing walls, mechanical, electrical, and plumbing systems, and other structural elements of the common elements, and that the common elements are within acceptable industry standards in effect when such common elements were constructed. (2) The warranty of this subsection commences when a given common element is completed or when it is made available to a time–share purchaser, whichever shall later occur, and shall continue for a period of 3 years. (d) (1) A suit for enforcement of a warranty may be brought by a time–share owner or by the association. If any warranty is breached, the court may award legal or equitable relief, or both. (2) Notice of a defect shall be given within the warranty period and suit for enforcement shall be brought within 1 year of the end of the warranty period. (3) (i) Except as provided in subparagraph (ii) of this paragraph, a cause of action for breach of warranty, regardless of the purchaser’s lack of knowledge of the breach, accrues, unless extended by agreement: 1. As to a unit, 6 months after the time the unit is first occupied by a purchaser; and 2. As to other improvements, at the time each is completed. (ii) If a warranty explicitly extends to future performance or duration of any improvement or component of the time–share project, the cause of action accrues at the time the breach is discovered or at the end of the period for which the warranty explicitly extends, whichever is earlier. (e) Warranties shall not apply to any defects caused through abuse or failure to perform maintenance by a time–share owner, the association, or managing entity, if other than the developer.

Md. Code, Real Property § 11A-118

(a) A developer shall furnish each purchaser a copy of the sales contract which contains the following information: (1) The date the contract is executed by each party; (2) The name and address of the developer; (3) The total financial obligation of the purchaser, including the initial purchase price and any additional charges, time-share expenses, or facility fees; (4) A description of the time-share period being sold, including whether any interest in real property is being conveyed and the number of years constituting the term of the time-share plan; (5) The estimated date of completion of construction of each unit or common element which is not completed at the time the sales contract is executed; and (6) Immediately before the space for the signature of the purchaser, in conspicuous type, subject to the provisions of § 11A-114(a)(3), the following statements are to be inserted: “You may cancel this contract without any penalty or obligation within 10 days from the date of this contract, or until 10 days after you receive the public offering statement, or the time-share unit meets all building requirements and is ready for occupancy, whichever last occurs. If you decide to cancel this contract, you must notify the developer in writing, in which case, your notice of cancellation shall be effective on the date sent provided it is actually received by the developer and shall be sent to (name of developer) at (address of developer). Any attempt to obtain a waiver of your cancellation rights is unlawful. While you may execute all documents in advance, the closing, as evidenced by delivery of the deed or other document, before expiration of your 10 day cancellation period, is prohibited.” (b) If a time-share license is being conveyed, the contract shall also contain, in conspicuous type, the following statement: “You may also cancel this contract, at any time after the accommodations or facilities at the time-share project are no longer available as provided in this contract and the public offering statement.” (c) A statement that, in the event of cancellation of the contract within the 10-day period, a refund shall be made within 20 business days after receipt of notice of cancellation, or within 5 days after receipt of funds from the purchaser’s cleared check, whichever is later.

Md. Code, Real Property § 11A-119

(a) It is unlawful for any person when selling time-shares in the State, to authorize, use, direct, or aid in the dissemination, publication, distribution, or circulation of any statement, advertisement, radio broadcast, or telecast concerning the time-share project in which the time-shares are offered which contains any statement or sketch which is false or misleading or contains any representation or pictorial representation of proposed improvements or nonexistent scenes without clearly indicating that the improvements are proposed and the scenes do not exist. (b) No advertising for the offer or disposition of time-shares shall: (1) Contain any representation as to the availability of a resale program or rental program offered by or on behalf of the developer unless the resale program or rental program has been made a part of the offering and submitted to the Commission; (2) Contain an offer or inducement to purchase which purports to be limited as to quantity or restricted as to time unless the numerical quantity or time applicable to the offer or inducement is clearly and conspicuously disclosed; (3) Contain statements concerning the availability of time-shares at a particular minimum price if the number of time-shares available at that price comprises less than 10 percent of the unsold inventory of the developer, unless the number of time-shares then for sale at the minimum price is set forth in the advertisement; (4) Contain any statement that the time-shares being offered for sale can be further divided unless a full disclosure of the legal requirements for further division of the time-share is included; (5) Contain any asterisk or other reference symbol as a means of contradicting or changing the ordinary meaning of any previously made statement in the advertisement; (6) Misrepresent the size, nature, extent, qualities, or characteristics of the accommodations or facilities which comprise the time-share project; (7) Misrepresent the nature or extent of any services incident to the time-share project; (8) Misrepresent or imply that a facility or service is available for the exclusive use of purchasers or owners if a public right of access or of use of the facility or service exists; (9) Make any misleading or deceptive representation with respect to the contents of the time-share instrument, the sales contract, or this title; (10) Misrepresent the conditions under which a purchaser or owner may participate in an exchange program; (11) Describe any proposed or uncompleted private facilities over which the developer has no control unless the estimated date of completion is set forth and evidence has been presented to the Commission that the completion and operation of the facilities are reasonably assured within the time represented in the advertisement; or (12) Describe or portray any improvement which is not required to be built unless the description or portrayal of the improvement is conspicuously labeled or identified as “need not be built”. (c) It is unlawful for any person to use any promotional device, including sweepstakes, gift awards, lodging certificates or discounts, with the intent to solicit the acquisition of time-shares without disclosing that purpose. (d) A person may not utilize a promotional device to solicit the purchase of a time-share or offer merchandise or services to any prospective purchaser without clearly disclosing the retail value of such merchandise or services. No promotional device may involve any elements of chance as to the selection or award of particular merchandise or services to any prospective purchaser. (e) It is unlawful for any person using a promotional device to solicit the purchase of a time-share to fail to award all items promised in such promotion by the date and year specified in the promotion. (f) A public offering statement may not be used for promotional purpose before the developer is registered and afterwards only if used in its entirety. No person may advertise or represent that the Commission or the Secretary of State has approved or recommended the time-shares or any of the documents contained in the application for registration.

Md. Code, Real Property § 11A-120

(a) If at the time of purchase of a time-share, the purchaser is permitted through any arrangement of the developer to become a member of or to participate in any program for the exchange of occupancy rights with other time-share projects, the public offering statement or a supplement delivered with the public offering statement shall disclose: (1) The name and address of the exchange company; (2) The names of all officers, directors, and shareholders holding more than 10 percent of the voting stock of the exchange company; (3) Whether the exchange company or any of its officers or directors has any legal or beneficial interest in any developer or managing entity for any time-share project participating in the exchange program, and if so, the name and location of the time-share project and the nature of the interest; (4) Whether the purchaser’s participation in the exchange program is dependent upon the time-share project’s continued affiliation with the exchange program; (5) That the purchaser’s participation in the exchange program is voluntary; (6) The terms and conditions of the purchaser’s contractual relationship with the exchange program, and the procedure by which changes may be made; (7) The procedure to qualify for and effectuate exchanges; (8) All limitations, restrictions, or priorities employed in the operation of the exchange program, including limitations on exchanges based on season, unit size, or levels of occupancy, expressed in bold-faced type; and in the event that such limitations, restrictions, or priorities are not uniformly applied by the exchange program, the manner in which they are applied; (9) Whether exchanges are arranged on a space available basis, and whether any guarantees of fulfillment of specific requests for exchanges are made by the exchange program; (10) Whether and under what circumstances a purchaser may, in dealing with the exchange program, lose the use and occupancy of his time-share period in any properly applied for exchange without being provided with substitute accommodations by the exchange program; (11) The fees for participation by purchasers in the exchange program, whether any such fees may be altered by the exchange company, and the circumstances under which alterations may be made; (12) The name and address of the site of each accommodation or facility in the time-share projects participating in the exchange program; (13) The number of time-share units in each participating time-share project which are available for occupancy expressed within the following numerical groupings: 1-5; 6-10; 11-20; 21-50; 51 and over; (14) The number of currently enrolled purchasers at each time-share project participating in the exchange program, expressed within the following numerical groupings: 1-100; 101-249; 250-499; 500-999; 1,000 and over; and a statement of the criteria used to determine those purchasers who are currently enrolled in the exchange program; (15) The disposition made by the exchange company of time-share periods deposited with the exchange program by purchasers enrolled in the exchange program and not used by the exchange company in effecting exchanges; (16) The following information which shall be independently audited by a certified public accountant or accounting firm in accordance with the standards of the Accounting Standards Board of the American Institute of Certified Public Accountants, and reported on an annual basis on or before July 1 of the succeeding year but prepared not more than 18 months before the information is delivered: (i) The number of purchasers currently enrolled in the exchange program; (ii) The number of accommodations and facilities that have current affiliation agreements with the exchange program; (iii) The percentage of confirmed exchanges which shall be based on the number of exchanges properly applied for, together with the criteria used to determine whether an exchange request was properly applied for; (iv) The number of time-share periods for which the exchange program has an outstanding obligation to provide an exchange to purchasers who relinquished a time-share period during the year in exchange for a time-share period in any future year; and (v) The number of exchanges confirmed by the exchange program during the year; and (17) A statement in bold-faced type to the effect that the percentage described in paragraph (16)(iii) of this subsection is a summary of the exchange requests entered with the exchange program in the period reported, and that the percentage does not indicate a purchaser’s probabilities of being confirmed to any specific choice or range of choices. (b) Any exchange company offering an exchange program to purchasers in this State shall file with the Commission on an annual basis the information required to be included in the public offering statement. If at any time the Commission determines that any of the information supplied by an exchange company fails to meet the requirements of this section, the Commission may undertake enforcement action against the exchange company in accordance with the provisions of this title. No developer shall have any liability with respect to any violation of this section arising out of the publication by the developer of written information provided by an exchange company. No exchange company shall have any liability with respect to any violation of this title arising out of the use by a developer of information relating to an exchange program other than written information provided to the developer by the exchange company.

Md. Code, Real Property § 11A-121

(a) (1) A developer may not offer a time-share to the public until the developer has received a certificate of registration as a time-share developer. (2) Every application for registration shall be on a form prepared by the Commission and shall provide such information as may be reasonably required by the Commission. The developer shall file with the Commission the following documents and information: (i) Copies of all project instruments and time-share instruments; (ii) A copy of the proposed public offering statement which shall be supplemented by the public offering statement as finally approved by the Secretary of State; (iii) Copies of the forms of the deed, sales contract, and all other written materials to be used in the normal course of the sale of the time-shares; (iv) Evidence that time-share use complies with the zoning laws of the municipality in which the time-share project is located; (v) If the time-share units are subject to any project instrument, evidence that the project instruments do not prohibit the use of units for time-sharing purposes and, if the project instruments do not expressly authorize time-share use, a copy of a letter to the president of the governing entity of the project stating the developer’s intent to use units for time-share purposes, together with evidence of its receipt by the addressee; and (vi) The name and address of any project broker. (3) A registration application may not be approved until the applicant has: (i) Executed an irrevocable appointment of the Commission to receive service of process in any legal proceeding brought against the applicant arising out of the sale of time-share estates in this State provided that a duplicate copy of all papers regarding the applicant filed with the Commission is sent to the applicant at its last known address within 5 days thereafter; (ii) Paid a registration fee of $100; (iii) Provided the Commission with a list of the time-share estates and licenses to be offered and the name of the licensed broker of record representing the developer; and (iv) Posted with the Commission a surety bond or letter of credit in an amount of $100,000 issued by an issuer and in a form acceptable to the Commission conditioned on the return of all money paid by a purchaser in the event the purchaser becomes entitled to the return of the money. (4) The Commission shall approve or disapprove the application within the later to occur of 30 days after receipt of all required information or 5 days after approval by the Secretary of State of the public offering statement. Should the application be disapproved, a hearing shall be afforded the applicant in conformance with § 17-324 of the Business Occupations and Professions Article. Approved registrations shall expire on the 30th day of April in each even numbered year or on such other day as the Commission may designate. (b) It shall be unlawful for any person to submit any information to the Commission which that person knows to be untrue or misleading or to fail to submit information which that person knows to be material. Any information submitted to the Commission may be disseminated to and relied upon by each purchaser. (c) The Commission may review the materials submitted, except the public offering statement, pursuant to this section to determine compliance by the developer with this title. The Commission shall notify the developer within 30 days after receipt of the application of any deficiency in the materials submitted. (d) A developer shall promptly amend and supplement its registration with the Commission to report any material change in the information required by this section. (e) The Commission, after notice and hearing, may issue an order revoking a registration upon determination that a developer has: (1) Failed to comply with a cease and desist order issued by the Commission; (2) Concealed, diverted, or disposed of any funds or assets of any person in a manner impairing rights of purchasers of those time-shares; (3) Failed to perform any stipulation or agreement made to induce the Commission to issue an order relating to those time-shares; (4) Misrepresented or failed to disclose a material fact in the application for registration; (5) Failed to meet any of the requirements for registration; (6) Violated any provisions of this title; or (7) Committed an unfair or deceptive trade practice. (f) (1) Subject to the provisions of paragraph (2) of this subsection, the Commission may order summarily the suspension of the registration of a developer if the developer: (i) Fails to account promptly for any funds held in trust; or (ii) On demand, fails to display to the Commission all records, books, and accounts of the funds held in trust. (2) The Commission may order summarily a suspension under this subsection only if it gives the developer: (i) Written notice of the suspension and the finding on which the suspension is based; and (ii) After the summary suspension is effective, an opportunity to be heard promptly before the Commission. (3) A summary suspension ordered by the Commission under this subsection: (i) May start immediately or at any later date, as set by the order; and (ii) Shall continue until: 1. The developer complies with the conditions set forth by the Commission in its order; or 2. The Commission orders a different disposition after a hearing held under this section. (4) (i) Rather than order summarily a suspension of the registration of a developer under this subsection, the Commission may elect not to suspend the registration until after the developer is given an opportunity for a hearing. (ii) If the Commission elects to give the developer an opportunity for a hearing before suspending the registration for the grounds set forth in this subsection, notice shall be given and the hearing shall be held in the same manner as required in comparable proceedings under the Maryland Real Estate Brokers Act for violation of trust money provisions by a real estate broker. (g) A developer shall maintain all records of trust money, as defined in Title 17, Subtitle 5 of the Business Occupations and Professions Article, in a secured area within the office of the developer. (h) A developer may not transfer, cause to be transferred, or contract for the transfer of a time-share while an order revoking registration is in effect, without the consent of the Commission. (i) (1) Each registered developer shall file with the Commission an annual report to update any information contained in the application for registration. (2) If an annual report reveals that a developer owns or controls time-shares representing less than 25 percent of the total time-shares in the time-share project and that a developer has no power to increase the number of time-shares he owns or controls, the Commission shall issue an order relieving the developer of any further obligation to file annual reports. Thereafter, so long as the developer is offering any time-shares for sale, the Commission has jurisdiction over the developer’s activities, but has no other authority to regulate the time-shares. (j) In the case of the time-share project situated wholly outside the State, no application for registration filed with the Commission which has been approved by an agency of the state in which the time-share project is located and substantially complies with the requirements of this title may be rejected by the Commission on the grounds of noncompliance with any different or additional requirements imposed by this title or by the Commission’s regulations. However, the Commission may require additional documents or information to assure adequate and accurate disclosure to prospective purchasers. (k) (1) The Commission, after notice and hearing, may levy a civil penalty against a developer of not more than $1,000 for any violation by the developer of this section or § 11A–112, § 11A–113, § 11A–114, § 11A–116, § 11A–118, § 11A–119, § 11A–120, or § 11A–124 of this title. (2) In determining the amount of the penalty, the Commission shall give due consideration to: (i) The seriousness of the violation; (ii) The lack of good faith on the part of the developer; (iii) The adverse impact, if any, on other persons; (iv) Any efforts made by the developer to remedy or correct the violation; and (v) The developer’s history of prior violations, particularly violations of the same or similar nature. (3) (i) If any penalty is not paid in full within 30 days after becoming final, the Commission may summarily revoke the developer’s registration, and the Commission or the State Central Collection Unit may bring suit in the District Court or other court of competent jurisdiction to enforce payment. (ii) A judgment shall be entered against the developer upon a showing that: 1. The penalty was assessed against the developer; 2. The penalty has become final; 3. No appeal is pending; 4. The penalty remains unpaid in whole or part; and 5. The developer contested the charge for which the penalty was assessed, or was duly served with a copy of the charge under any applicable rules and regulations of the Commission.

Md. Code, Real Property § 11A-122

(a) The Commission may issue regulations and orders consistent with this title. (b) The Commission may bring suit in the appropriate court to enforce this title and may intervene in any action involving a registered developer. (c) The Commission may accept grants in aid from any governmental source and may contract with agencies charged with similar functions in furtherance of the objectives of this title. (d) The Commission may cooperate with agencies performing similar functions to develop uniform filing procedures and forms, disclosure standards, and administrative practices. (e) If the Commission determines, after notice and hearing, that any person has disseminated or caused to be disseminated any false or misleading promotional materials in connection with a time-share, or that any person has otherwise violated any provision of this title or the Commission’s regulations or orders, the Commission may issue an order to cease and desist from that conduct, to comply with the provisions of this title and the Commission’s regulations and orders, or to take affirmative action to correct conditions resulting from that conduct or failure to comply. (f) (1) The Commission may initiate investigations to determine whether any representation in any document or information filed with the Commission is false or misleading or whether any person has engaged, is engaging, or is about to engage in any unlawful act or practice. (2) In the course of any investigation or hearing, the Commission may subpoena witnesses and documents, administer oaths and affirmations, and adduce evidence. If a person fails to comply with a subpoena or to answer questions propounded during the investigation or hearing, the Commission may apply to an appropriate court to secure compliance. (g) (1) If the applicant or developer fails to demonstrate financial solvency, the Commission may deny an application for a certificate of registration or revoke a certificate of registration already granted. (2) The Commission may adopt regulations under paragraph (1) of this subsection requiring an applicant or developer to: (i) Provide information; (ii) Grant access to records; and (iii) Otherwise demonstrate financial solvency.

Md. Code, Real Property § 11A-123

Persons engaged in the following transactions involving time–shares are not required to register with the Commission, to prepare a public offering statement, or to deliver documents described in § 11A–115 of this title: (1) A gratuitous disposition; (2) A disposition pursuant to court order; (3) A disposition by a government or governmental agency; (4) A disposition by foreclosure or deed in lieu of foreclosure or by enforcement of a lien or security interest; (5) A disposition that may be canceled at any time and for any reason by the purchaser without penalty; (6) A disposition of a time–share in a unit situated wholly outside this State pursuant to a contract executed and negotiated wholly outside this State; or (7) A disposition of a time–share project or all time–shares therein to one purchaser.

Md. Code, Real Property § 11A-124

(a) It is unlawful for any developer to sell or offer to sell a time-share in this State unless the developer has designated a person as the project broker for the time-share project. The time-share project shall be considered a separate real estate office for purposes of the real estate licensing laws of this State. (b) It is unlawful for any person to act as project broker for a time-share project unless such person is a licensed real estate broker. (c) It is unlawful for any person to sell, advertise, or offer for sale any time-share unless such person is a licensed real estate broker, associate real estate broker, or real estate salesperson, or is exempt from licensure under the Maryland Real Estate Brokers Act. (d) Notwithstanding subsection (c) of this section, any person who is not a licensed real estate broker, associate real estate broker, or real estate salesperson may be employed by the developer or project broker to contact but not solicit, in person or by telephone, any person to attend any sales presentation concerning a time-share project, provided however, that the person so employed: (1) Performs only clerical tasks; (2) Merely arranges appointments induced by others; or (3) Only prepares or distributes promotional materials.

Md. Code, Real Property § 11A-125

(a) Remedies provided by this title shall be liberally administered to the end that the aggrieved party is put in as good a position as if the other party had fully performed. However, consequential, special, or punitive damages may not be awarded except as specifically provided in this title or by other rule of law. (b) A court, upon finding as a matter of law that a sales contract or a clause in a contract was unconscionable at the time the contract was made, may refuse to enforce the entire contract or refuse to enforce the remainder of the contract without such unconscionable clause or limit the application of any unconscionable clause in order to avoid an unconscionable result. (c) If a developer or any other person fails to comply with any provision of this title or the time-share instrument, any person adversely affected by the failure to comply has a claim for appropriate relief. Punitive damages may be awarded for the willful and wanton failure to comply with this title. The court may also award reasonable attorney’s fees to the prevailing party. (d) Any purported conveyance, encumbrance, judicial sale, foreclosure sale, or other voluntary or involuntary transfer of a time-share made without the use period which is part of that time-share is void. (e) Penalties and remedies provided in this title are in addition to penalties and remedies available under any other law. (f) If any provision of this title or the application thereof to any person or circumstances is held invalid, the invalidity shall not affect the other provisions or applications of this title which can be given effect without the invalid provisions or application, and to this end the provisions of this title are severable.

Md. Code, Real Property § 11A-126

In the event of any conflict between this title and Title 11 of this article, the provisions of this title shall prevail, but this title does not invalidate or otherwise affect rights or obligations vested under Title 11 of this article before January 1, 1985, or prior to the recording of a time-share instrument.

Md. Code, Real Property § 11A-127

(a) This title applies to all time–share projects in the State except to the extent of any inconsistent right or obligation under a preexisting project instrument, document transferring an interest in real estate, or contract. (b) The project instrument of any time–share project in existence before January 1, 1985, may be amended in accordance with this title. If an amendment grants to any person any rights, powers, or privileges permitted by this title, all correlative obligations, liabilities, and restrictions shall also apply to that person. (c) (1) The requirements of §§ 11A–102, 11A–103, 11A–104, 11A–105, 11A–106, 11A–107, 11A–108, 11A–109, 11A–110, 11A–111, 11A–115, and 11A–117 of this title apply only to projects located in this State. (2) The requirements of §§ 11A–112, 11A–113, 11A–114, 11A–116, 11A–118, 11A–119, 11A–120, 11A–121, 11A–122, 11A–124, and 11A–125 of this title apply to any developer required to register under this title with the Commission, whether or not the project is located in this State. (d) Except for the developer of the project or an employee, officer, agent, or assign of the developer of the project where the time–shares are located, a person engaged in the business of selling time–shares owned by that person is required to comply with §§ 11A–115, 11A–116, 11A–119, 11A–121, 11A–122, 11A–124, and 11A–125 of this title, but is not required to comply with § 11A–112 of this title.

Md. Code, Real Property § 11A-128

(a) The association, or developer during the developer control period, shall keep books and records in accordance with generally accepted accounting principles. (b) (1) On the request of the owners of at least 5 percent of the time-shares, the association, or developer during the developer control period, shall cause an audit of the books and records to be made by an independent certified public accountant at common expense. (2) An audit may not be required more than once in any consecutive 12-month period. (c) Every record of the association kept by the association, or by the developer during the developer control period, shall be available at some place designated by the association or developer within the county where the time-share is located for inspection and copying by any time-share owner, the owner’s mortgagee, or their duly authorized agents or attorneys, during normal business hours, and after reasonable notice. (d) A meeting of the board of directors or governing body of the association may be held in closed session only for the following purposes: (1) Discussion of matters pertaining to employees and personnel; (2) Protection of the privacy or reputation of individuals in matters not related to the council of unit owners’ business; (3) Consultation with legal counsel; (4) Consultation with staff personnel, consultants, attorneys, or other persons in connection with pending or potential litigation; (5) Investigative proceedings concerning possible or actual criminal misconduct; (6) Complying with a specific constitutional, statutory, or judicially imposed requirement protecting particular proceedings or matters from public disclosure; or (7) On an individually recorded affirmative vote of two-thirds of the board members present, for some other exceptional reason so compelling as to override the general public policy in favor of open meetings. (e) If a meeting is held in closed session under subsection (d) of this section: (1) An action may not be taken and a matter may not be discussed if it is not permitted by subsection (d) of this section; and (2) A statement of the time, place, and purpose of any closed meeting, the record of the vote of each board member by which any meeting was closed, and the authority under this section for closing any meeting shall be included in the minutes of the next meeting of the board of directors.
Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://mgaleg.maryland.gov/mgawebsite/Laws/StatutesFetched: 10/16/2026