HAR Chapter 106 – Timesharing

HAWAII ADMINISTRATIVE RULES
TITLE 16
DEPARTMENT OF COMMERCE AND CONSUMER AFFAIRS
CHAPTER 106
TIME SHARING
Subchapter 1 	General Provisions
§16-106-1 	Objective
§16-106-2 	Definitions
§16-106-2.5 	Conduct
Subchapter 2 	Registration Requirements
§16-106-3 	Developer registration
§16-106-4 	Registration required; developer, acquisition agent, sales agent,
OPC, plan manager, exchange agent, sales agent employees, and
independent contractors
§16-106-4.1 	Subsequent filing registration requirement
§16-106-4.2 	Biennial renewal requirement
§16-106-4.3 	Repealed
§16-106-4.4 	Resale agent disclosure requirement
§16-106-4.5 	Resale agent registration requirement
§16-106-4.6 	Purchaser protections required for resales by developer
§16-106-5 	Responsible managing employee; designation, duties, and change
§16-106-6 	Copy of disclosure statement to be given to prospective purchasers
§16-106-7 	Issuance of registration number
§16-106-8 	Filing 	names 	of 	employees 	and 	independent 	contractors 	for
acquisition agent and sales agent registration
§16-106-8.1 	Rejection by the director
§16-106-9 	Denial of registration
§16-106-10 	Demand for a hearing
§16-106-11 	Proceedings upon demand for hearing
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Subchapter 3 	Plan Manager
§16-106-12 	Plan manager or RME of plan manager designated for time share
plan
Subchapter 4 	Notification of Changes in Disclosure Statement
§16-106-16 	Material change in disclosure statement
Subchapter 5 	Cancellation of Contract
§16-106-20 	Mutual right to cancel contract
§16-106-21 	Purchaser’s right to void contract
§16-106-22 	Retention of copy of contract
Subchapter 6 	Preexisting Time Share Unit
§16-106-25 	Preexisting time share unit
§16-106-26 	Persons responsible for registration of preexisting time share plan
§16-106-27 	Plan manager for preexisting time share plan
Subchapter 7 	Mixed-Use Project
§16-106-29 	Mixed-use project containing existing time share unit or plan
Subchapter 8 	Statute and Rules Relating to Time Sharing
§16-106-31 	Statute and rules available
Subchapter 9 	Plan Manager’s Account and Escrow Account
§16-106-32 	Repealed
§16-106-33 	Plan manager’s account
§16-106-34 	Escrow account required for deposit of purchaser’s funds, notes,
and contracts
§16-106-35 	Repealed
§16-106-36 	Account open for inspection
Subchapter 10 	Advertising and Promotional Material
§16-106-38 	Filing of advertising and promotional material
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§16-106-39 	Requirements for promotional literature and other printed or written
material
Subchapter 11 	Bond
§15-106-40 	Plan manager’s bond
§16-106-40.1 Acquisition agent’s bond
§16-106-41 	Beneficiary of bond
§16-106-42 	Cancellation of bond
Subchapter 12 	County Zoning Regulations
§16-106-45 	Evidence of compliance with county regulation required
Subchapter 13 	Prohibited and Deceptive Trade Practices
§16-106-46 	Practices prohibited
§16-106-47 	Deceptive trade practices
Subchapter 14 	Suspension or Revocation of Registration
§16-106-49 	Cause for suspension or revocation
Subchapter 15 	Outside Public Contact
§16-106-50 	OPC to be employed by broker
§16-106-51 	Limitation on activity of OPC
§16-106-52 	Disclosure to be made by OPC
§16-106-53 	Location of booth
Subchapter 16 	Lien Payment Trust
§16-106-56 	Requirements for trustees
Subchapter 17 	Voting Rights for Apartment Units Designated for Time
Share Use
§16-106-58 	Voting rights for apartment units designated or sold as time share
units
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SUBCHAPTER 1
GENERAL PROVISIONS
§16-106-1 	Objective. 	This chapter is intended to clarify and implement
chapter 514E, Hawaii Revised Statutes, to the end that the provisions thereunder
may best be effectuated and the public interest most effectively served. 	[Eff
11/15/80; am and comp 3/28/85; comp 8/30/85; comp 11/29/85; comp 6/5/87;
comp 3/7/88; comp 9/15/90] (Auth: 	HRS §514E-13) 	(Imp: 	HRS §514E-13)
§16-106-2 	Definitions. 	Definitions of terms found in section 514E-1,
HRS, shall be adopted by reference. 	In addition, as used in this chapter:
"Annex" means to add any unit or units to a registered time share plan.
"Booth" means a temporary place of business, other than a licensed real
estate broker’s principal place of business, branch office, or site office, which is
established for the purpose of inviting or encouraging invitees to attend a time
share sales presentation.
"Cash bond" means a bond running to the State and executed by the
acquisition agent or plan manager, as principal; provided that in lieu of any surety
or sureties, the principal shall furnish security in certified checks or certificates of
deposit equal to the full cash value or one hundred per cent of the amount of the
bond.
"Department" means the department of commerce and consumer affairs.
"Facilities" means any structure, service, or property, whether improved or
unimproved, made available to the purchaser for recreational, social, family, or
personal use.
"Invitee" means an individual who is contacted by an OPC and invited or
encouraged to attend a time share sales presentation.
"Irrevocable letter of credit" means an irrevocable credit running to the
State, drawn upon a bank or savings and loan association in the amount required
by section 16-106-40.
"Material change" means any change of circumstance which would render
the information provided in the disclosure statement or in any application for
registration no longer accurate or misleading as to purchasers or which affects the
rights and obligations of a purchaser or a prospective purchaser of a time share
interest, including, but not limited to, change in the nature of the time share plan;
change in the period of time usage of the unit; and change in terms and increase
in the amounts of underlying encumbrances; provided that administrative changes
relating to the operation of the time share plan, including, but not limited to, a
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change in the RME or person designated for service of process for a corporate
registrant, shall not be deemed a material change for purposes of this chapter.
"Outside public contact" or "OPC" means an individual who acts as an
acquisition agent and who does not engage in the sale of time share interests.
"Preexisting time share unit" means:
(1) 	A time share unit in existence prior to June 29, 1980, in which the
actual receipt of possession, occupancy, or right of use of the unit
was obtained by the purchaser or user prior to June 29, 1980,
which receipt of possession, occupancy, or right of use may be
evidenced by, but not be limited to, tenancy in common, sale, deed,
membership 	agreement, 	lease, 	rental 	agreement, 	license, 	use
agreement, or security; or
(2) 	A time share unit which has been explicitly provided for in a
project instrument or in a declaration or other instrument describing
a 	time 	share 	plan 	for 	property 	specified 	therein 	and 	which
instrument or declaration was recorded in the State office of the
assistant 	registrar 	of 	the 	land 	court 	or 	the 	State 	bureau 	of
conveyances prior to June 29, 1980.
"Registrant" means a developer, acquisition agent, sales agent, OPC, sales
agent employee/independent contractor, plan manager, or exchange agent required
under chapter 514E, HRS, or any rule promulgated pursuant thereto, to register
with the director.
"Resale agent" means a person who, for a commission or compensation,
sells or offers to sell a resale time share interest on behalf of a third party.
"Resale time share interest" means:
(1) 	A time share interest in a registered or previously registered time
share plan that is being resold by the holder of a purchaser money
lien who acquires title or ownership to the time share interest as a
result of the default of the purchaser under the purchaser money
lien; provided, however, that time share interests that are reacquired
by currently registered developers are not included; or
(2) 	A time share interest that is being sold by a person who acquired
the time share interest for the person’s own occupancy. 	For the
purposes of this definition, the phrase "person who acquired the
time share interest for the person’s own occupancy" shall mean a
person who owns not more than two time share interests, unless the
person can prove to the satisfaction of the director that more than
two time share interests were purchased for the person’s own
occupancy.
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"Responsible 	managing 	employee" 	or 	"RME" 	means 	the 	individual
employed by a corporate registrant, which individual is responsible for the direct
management of the corporate registrant’s time share operation.
"State" means the State of Hawaii.
"Supplementary 	disclosure 	statement" 	means 	an 	amended 	disclosure
statement filed when there has been a material change in the information provided
in the original disclosure statement.
"Time share operation" means any business or operation which, for
compensation, 	solicits 	or 	encourages 	others 	to 	attend 	a 	time 	share 	sales
presentation or to contact a time share sales agent or developer; or creates a time
share plan; or sells time share units; or sells or offers to sell an interest in a time
share 	plan 	for 	a 	developer; 	or 	undertakes 	the 	duties, 	responsibilities, 	and
obligations of managing a time share plan. 	[Eff 11/15/80; am 3/19/82; am and
comp 3/28/85; comp 8/30/85; comp 11/29/85; am and comp 6/5/87; comp 3/7/88;
am and comp 9/15/90] (Auth: HRS §514E-13) (Imp: HRS §§514E-1, 514E-13)
§16-106-2.5 	Conduct. 	(a) To fully protect the general public in its time
share transactions, every registrant shall conduct business in accordance with this
section.
(b) 	The 	registrant 	shall 	protect 	the 	public 	against 	fraud,
misrepresentation, or unethical practices in the time share industry. The registrant
shall endeavor to eliminate any practices in the community which could be
damaging to the public or to the dignity and integrity of the time share industry.
The registrant shall assist the director in its efforts to regulate the practices of the
time share industry in this State.
(c) 	The 	registrant 	shall 	ascertain 	and 	disclose 	all 	material 	facts
concerning every time share interest so that the registrant may fulfill its obligation
to avoid error, misrepresentation, or concealment of material facts.
(d) 	The registrant shall not be a party to the naming of a false
consideration in any document, unless it be the naming of an obviously nominal
consideration.
(e) 	The registrant shall recommend that title be examined, survey be
conducted, or legal counsel be obtained when the interest of either party requires
it.
(f) 	The registrant, for the protection of all parties with whom the
registrant deals, shall see that financial obligations and commitments regarding
time share transactions are in writing, expressing the exact agreements of the
parties, and that copies of those agreements, at the time they are executed, are
placed in the hands of all parties involved.
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(g) 	Violation of any part of this chapter by a registrant or resale agent
may be cause for revocation or suspension of a registration of that registrant or
resale agent. 	[Eff and comp 9/15/90] (Auth: 	HRS §§514E-13, 514E-2.5) (Imp:
HRS §514E-12)
SUBCHAPTER 2
REGISTRATION REQUIREMENTS
§16-106-3 Developer registration. (a) Unless the transaction is exempt by
law, a developer shall not offer, sell, transfer, or otherwise dispose of any time
share interest in a time share plan through marketing efforts in the State, whether
the plan is comprised of any unit or units located in the State or out-of-state,
unless the developer for the plan has filed with the director an application for
registration as prescribed by section 16-106-4(a), and the application has been
accepted for registration by the director. 	The requirement for registration shall
also be satisfied before a developer may offer, sell, transfer, or otherwise dispose
of any interest in a time share plan comprised of any unit or units located in the
State through out-of-state marketing efforts. An application for registration shall
include the filing of a disclosure statement meeting the requirements set forth in
this section.
(b) 	The following shall be printed on the bottom half of the face page
of the disclosure statement, in centered capital letters in bold print one-half inch
in size, with one-half inch spaces between lines:
READ THIS
DISCLOSURE STATEMENT
BEFORE SIGNING
ANYTHING
and below it, the following shall be printed:
The disclosure statement is prepared and issued by the developer of the
time share plan. It is NOT prepared or issued by the State of Hawaii.
THE STATE OF HAWAII HAS NOT PASSED ON THE MERITS OF
THE TIME SHARE PLAN DESCRIBED HEREIN.
(c) 	Any disclosure statement distributed to the public shall:
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(1) 	Comply with the disclosure requirements set forth in section
514E-9, HRS;
(2) 	Provide a description of the number of units and types of units
being offered by the developer for the time share plan;
(3) 	Provide a summary of the provisions of the escrow agreement
required 	under 	chapter 	514E, 	HRS, 	and 	as 	provided 	for 	in
subchapter 9;
(4) 	If the developer is offering to sell any time share interest by
agreement of sale or other installment sales contract, and the time
share interest being sold is subject to a "blanket lien" (as that term
is defined in section 514E-1, HRS), provide a description of the
consequences which a subsequent foreclosure of that blanket lien
will have upon the purchaser’s interest in the agreement of sale or
sales contract and the time share interest being sold thereunder;
(5) 	Provide a brief description of the hazard and liability insurance
coverages on the project and any protection afforded purchasers
against the possible loss or destruction of the time share unit or
units;
(6) 	Provide a brief description of the method by which interests in the
time share plan will be offered, the name and address of each sales
agent through which the offering is to be made, and a statement of
any material relationship, exclusive of the marketing relationship,
between the developer and each agent;
(7) 	Disclose the major conflicts of interest which may arise on the part
of the plan manager in carrying out the duties, responsibilities, and
obligations attendant to the position of a plan manager, if the
developer or an affiliate of the developer is also designated as the
plan manager for the time share plan; and
(8) 	Disclose the major conflicts of interest which may arise on the part
of the exchange agent (if an exchange program is offered for the
time share plan) in carrying out the duties, responsibilities, and
obligations attendant to the position of an exchange agent, if the
developer or an affiliate of the developer is also designated as an
exchange agent for the time share plan.
(d) 	Any disclosure statement not in conformance with the requirements
of subsection (c) shall be void and any offer, sale, transfer, or disposition of any
interest in the time share plan which is the subject thereof shall be voidable at the
option of the purchaser pursuant to section 514E-11.3, HRS.
(e) 	The format for the disclosure statement shall be prescribed by the
director. 	[Eff 11/15/80; am and comp 3/28/85; comp 8/30/85; comp 11/29/85;
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comp 6/5/87; comp 3/7/88; comp 9/15/90] (Auth: HRS §§514E-9, 514E-13) (Imp:
HRS §§514E-9, 514E-10)
§16-106-4 Registration required; developer, acquisition agent, sales agent,
OPC, plan manager, exchange agent, sales agent employees, and independent
contractors. (a) In addition to the requirements set forth in section 514E-9, HRS,
a developer shall file the following with the director for the purpose of registering
the time share plan to be offered by the developer; provided that an application
submitted by a developer who has only an option to purchase property to be
offered under a time share plan shall not be acceptable; and provided further that
no application shall be deemed complete, nor shall the same be accepted for
registration, unless the prescribed information is provided separately tabbed and
numbered in the exact order as follows:
(1) 	An application for registration on a form prescribed by the director;
(2) 	A disclosure statement meeting the requirements of section 514E-9,
HRS, and section 16-106-3;
(3) 	A current financial statement not more than ninety days old at the
time of submission of the application, prepared in accordance with
generally accepted accounting principles 	and certified by the
developer or a certified public accountant to be true and correct in
all respects and to fairly, completely, and accurately represent the
financial condition of the subject thereof as of the respective date
thereof; provided that in lieu of this financial statement, an audited
financial report may be submitted if it is the most current report of
the subject thereof and is not more than fifteen months old at the
time of submission of the application. 	Any false, misleading, or
fraudulent financial statement or report submitted by the developer
shall be grounds for cancellation, suspension, or revocation of a
registration;
(4) 	For each unit to be registered under the time share plan, a policy
of title insurance, preliminary title report, abstract of title, or
certificate of title not more than sixty days old at the time of
submission of the application; provided that the policy of title
insurance, preliminary title report, abstract of title, or certificate of
title discloses the status of ownership of the unit and any and all
liens and encumbrances affecting the unit;
(5) 	Copies 	of 	all 	encumbrances 	against title 	to 	each 	unit to 	be
registered under the time share plan;
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(6) 	If a corporation, a certified copy of the articles of incorporation and
bylaws thereof; if a partnership or joint venture, a certified copy of
the partnership registration and partnership agreement;
(7) 	If a corporation, partnership, or joint venture, a certificate of good
standing 	issued 	by 	the 	business 	registration 	division 	of 	the
department not more than thirty days before the date of submission
of the application;
(8) 	A copy of an executed escrow agreement meeting the requirements
of chapter 514E, HRS, and as provided for in subchapter 9;
(9) 	The name and address of the person in the State authorized to
receive service of process on behalf of the developer; provided that
written notification of any change of this name or address shall be
submitted to the director within twenty days of any change;
(10) 	As required by section 16-106-45, confirmation by the respective
county that the time share plan meets the geographic limitation
requirements 	of 	section 	514E-5, 	HRS; 	provided 	that 	this
confirmation of zoning shall be obtained from the respective county
not more than thirty days before the date of submission of the
application. The director shall prescribe a form to be completed by
the proper county authority evidencing this confirmation of zoning;
(11) 	A complete statement as to the manner in which the time share
plan complies with the requirements of section 514E-6, HRS,
governing time sharing in projects;
(12) 	A 	complete 	statement, 	including 	a 	specific 	citation 	to 	the
appropriate provision of section 514E-19, HRS, of the method
which the developer intends to use to protect purchasers against
underlying blanket liens; provided that the statement required under
this subsection shall not be deemed complete unless it includes
both sufficient detail to enable the director to determine the precise
means by which the requisite protection will be provided and
copies of all pertinent agreements and materials relevant to the
proposed method of protection;
(13) 	As required by sections 16-106-25 and 	16-106-26, if the time
share plan is a "preexisting plan" as defined in this chapter,
evidence of the creation of the plan prior to June 29, 1980, and the
filing of the plan not later than December 3l, 1980, and the number
of interests in the plan, if any, which were previously sold;
(14) 	If applicable, a copy of the declaration of horizontal property
regime for the subject property, as recorded and subsequently
amended, the bylaws of the association of apartment owners and
house rules of the association, and for any project which is not
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registered with the state real estate commission under chapter
514A, HRS, a copy of the project’s condominium map;
(15) 	If applicable, a copy of the declaration of covenants, conditions and
restrictions, 	as 	recorded 	and 	subsequently 	amended, 	which
establishes the time share plan;
(16) 	A copy of the petition and charter of incorporation for the time
share 	owners 	association 	required 	by 	section 	514E-29, 	HRS,
accepted 	by 	the 	department, 	as 	well 	as 	the 	bylaws 	of 	the
association or club;
(17) 	A completed specimen copy of the notice of mutual right of
cancellation 	of 	time 	share 	purchase 	prescribed 	in 	section
16-106-20(c);
(18) 	A completed specimen copy of the reservation agreement, contract
of sale, or agreement of sale to be used in connection with the sale
of time share interests;
(19) 	If applicable, a completed specimen copy of the deed, lease, or
other 	instrument 	to 	be 	used 	to 	convey 	the 	property 	to 	the
purchaser;
(20) 	A specimen copy of the purchaser’s declaration of understanding
of the plan and the contract, if any;
(21) 	A copy of the executed management agreement;
(22) 	A copy of each executed sales agency or broker listing agreement;
provided that the commission schedule may be omitted from such
agreement;
(23) 	A copy of the executed contract with an exchange agent, if
applicable;
(24) 	As required by section 16-106-38, copies of any advertising or
promotional materials to be used in connection with the marketing
of time share interests; and
(25) 	The registration fee.
Pursuant to section 514E-10.5, HRS, the director may contract with private
consultants in connection with the review of the filing required of time share
developers under section 514E-10(a), HRS, and this section, the cost of the review
to be borne by each developer; provided that this review shall not affect the
consultant review authorized under section 514E-27, HRS, which the director may
request for filings which encompass alternative arrangements for purchaser
protection. 	The consultant fees are in addition to the registration fees specified
in chapter 16-53, Hawaii Administrative Rules.
(b) 	An acquisition agent, including the developer if it is also the
acquisition agent, conducting business in the State shall not solicit or encourage
others to attend a time share sales presentation or to contact a time share sales
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agent or developer whether the time share plan includes any unit located in the
State or out-of-state, unless the acquisition agent submits an application for
registration to the director and the director accepts the application; provided that
the acquisition agent shall submit a separate application for each time share plan
with respect to which the acquisition agent is providing prospective purchasers;
and provided further that no application shall be deemed complete, nor shall the
same be accepted for registration, unless the prescribed information is provided
separately tabbed and numbered in the exact order as follows:
(1) 	An application for registration on a form prescribed by the director;
provided that the application shall include, but not be limited to,
the following:
(A) 	The name of the time share plan with respect to which the
acquisition agent is providing prospective purchasers;
(B) 	The principal office address and telephone number of the
acquisition agent; and
(C) 	If a corporation, the name, address, and telephone number
of its responsible managing employee;
(2) 	Satisfactory evidence that the acquisition agent is bonded as
required by section 16-106-40.1 to cover any violation by the
acquisition agent of any solicitation ordinances or other regulations
governing the use of the premise or premises in which the time
share plan is promoted; or evidence that the acquisition agent is
currently licensed pursuant to chapter 467, HRS, as a real estate
salesperson or a real estate broker;
(3) 	As required by section 16-106-8(a), an alphabetized list of the
names, addresses, and telephone numbers of all employees and
independent contractors who will be engaged in contacting persons
who may be interested in purchasing time share interests in the
time share plan, and, if any of these employees and independent
contractors is licensed pursuant to chapter 467, HRS, as a real
estate 	salesperson 	or 	a 	real 	estate 	broker, 	evidence 	that 	the
employee or independent contractor is so licensed;
(4) 	A copy of the executed agency agreement applicable to the time
share plan;
(5) 	The name and address of the person in the State authorized to
receive service of process on behalf of the acquisition agent;
provided that written notification of any change of this name or
address shall be submitted to the director within twenty days of any
change;
(6) 	If a corporation, partnership, or joint venture, a certificate of good
standing 	issued 	by 	the 	business 	registration 	division 	of 	the
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department not more than thirty days before the date of submission
of the application; and
(7) 	The registration fee.
An acquisition agent shall submit, for each employee or independent
contractor who will be acting as an OPC by contacting persons who may be
interested in purchasing interests in the time share plan, an application for
registration on a form prescribed by the director and signed by the prospective
employee or independent contractor and the registration fee.
(c) 	A sales agent, including the developer if it is also the sales agent,
conducting business in the State shall not sell or offer to sell any interest or
interests in a time share plan for a developer whether the time share plan includes
any unit located in the State or out-of-state, unless the sales agent submits an
application for registration to the director and the director accepts the application;
provided that the sales agent shall submit a separate application for each time
share plan with respect to which the sales agent is offering or selling time share
interests; and provided further that no application shall be deemed complete, nor
shall the same be accepted for registration, unless the prescribed information is
provided separately tabbed and numbered in the exact order as follows:
(1) 	An application for registration on a form prescribed by the director;
provided that the application shall include, but not be limited to,
the following:
(A) 	The name of the time share plan with respect to which the
sales agent is selling time share interests;
(B) 	The principal office address and telephone number of the
sales agent; and
(C) 	If a corporation, the name, address, and telephone number
of its responsible managing employee;
(2) 	Evidence that the sales agent is currently licensed pursuant to
chapter 467, HRS, as a real estate salesperson or a real estate
broker;
(3) 	As required by section 16-106-8(a), an alphabetized list of the
names, addresses, and telephone numbers of all employees and
independent contractors who will be engaged in offering or selling
interests in the time share plan, as well as evidence that each of
these individuals is currently licensed pursuant to chapter 467,
HRS, as a real estate salesperson or a real estate broker;
(4) 	A copy of the executed sales agency or brokerage agreement
applicable to the time share plan; provided that the commission
schedule may be omitted from such agreement;
(5) 	A copy of the executed escrow agreement meeting the requirements
of chapter 514E, HRS, and as provided for in subchapter 9;
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(6) 	The name and address of the person in the State authorized to
receive service of process on behalf of the sales agent; provided
that written notification of any change of this name or address shall
be submitted to the director within twenty days of any change;
(7) 	If a corporation, partnership, or joint venture, a certificate of good
standing 	issued 	by 	the 	business 	registration 	division 	of 	the
department not more than thirty days before the date of submission
of the application; and
(8) 	The registration fee.
A sales agent shall submit, for each employee or independent contractor
who will be acting as an OPC by contacting persons who may be interested in
purchasing interests in the time share plan, an application for registration on a
form prescribed by the director and signed by the prospective employee or
independent contractor and the registration fee.
A sales agent shall also submit, for each person on the list required by
paragraph (3), an application for registration on a form prescribed by the director
and signed by the real estate salesperson or broker.
(d) 	A plan manager, including the developer if it is also the plan
manager, shall not undertake the duties, responsibilities, and obligations of
managing a time share plan sold or offered for sale in the State, whether the time
share plan contains any unit located in the State or out-of-state, unless the plan
manager submits an application for registration to the director and the director
accepts the application; provided that the plan manager shall submit a separate
application for each time share plan for which the plan manager is offering
management services; and provided further that no application shall be deemed
complete, nor shall the same be accepted for registration, unless the prescribed
information is provided separately tabbed and numbered in the exact order as
follows:
(1) 	An application for registration on a form prescribed by the director;
provided that the application shall include, but not be limited to,
the following:
(A) 	The name of the time share plan with respect to which the
plan manager is offering management services;
(B) 	The principal office address and telephone number of the
plan manager;
(C) 	If a corporation, the name, address, and telephone number
of its responsible managing employee; and
(D) 	The address at which all accounting records, including but
not limited to receipts, expenditures, and payment vouchers,
are maintained;
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(2) 	A notarized statement, signed by the developer and the plan
manager, listing the plan manager’s duties, responsibilities, and
obligations, which shall include, but not be limited to:
(A) 	Management and maintenance of each time share unit;
(B) 	Assessment and collection of maintenance fees;
(C) 	Payment of real property taxes due on each time share unit
as provided in section 514E-3(a), HRS;
(D) 	Supervising and monitoring occupancy scheduling to assure
owners or users of time share interests in each time share
unit that they will be provided with the promised use of the
unit;
(E) 	Providing time share owners or users with a copy of the
house rules of the building and supervising the enforcement
of these rules; and
(F) 	Keeping a detailed and accurate record, in chronological
order, of receipts and expenditures relating to the time share
plan with which the plan manager is affiliated;
(3) 	Satisfactory evidence that the plan manager is bonded as required
by section 16-106-40 to cover any default of the plan manager or
any of the employees of the plan manager of their duties and
responsibilities;
(4) 	A copy of the executed management agreement for the time share
plan;
(5) 	The name and address of the person in the State authorized to
receive service of process on behalf of the plan manager; provided
that written notification of any change of this name or address shall
be submitted to the director within twenty days of any change;
(6) 	If a corporation, partnership, or joint venture, a certificate of good
standing 	issued 	by 	the 	business 	registration 	division 	of 	the
department not more than thirty days before the date of submission
of the application; and
(7) 	The registration fee.
(e) 	An exchange agent, including the developer if it is also an exchange
agent, shall not operate an exchange program for a time share plan:
(1) 	If the time share plan includes any unit or units located in the
State; or
(2) 	If any time share interest in the time share plan is offered for sale
or sold in the State (whether or not any time share unit in the time
share plan is located in the State);
unless the exchange agent registers under the chapter by filing with the director
the information required in section 514E-10(e), HRS, and the registration fee.
106-15

(f) 	All applications for registration required by this section shall be
deemed accepted if the director has not acted upon the applications within sixty
days following receipt of the same; except that this subsection shall not apply to
any application which is incomplete and does not contain all of the information
required to be submitted to the director under this section.
(g) 	Any party required to register under this section shall notify the
director in writing of any material change in any information submitted to the
director within twenty days of any material change. Failure to notify the director
of any material change in the information submitted shall be grounds for
cancellation, suspension, or revocation of a registration.
(h) 	Any registration required by this section shall be renewed not later
than December 31 of each odd-numbered year. 	Failure to complete all renewal
requirements before December 31 of each odd-numbered year shall result in
forfeiture of the registration.
(i) 	The registration of a developer, acquisition agent, sales agent, OPC,
plan 	manager, 	exchange 	agent, 	or 	sales 	agent 	employees 	or 	independent
contractors, or both, may be placed on inactive status. 	The information required
by this section shall be updated before an inactive registration will be activated.
(j) 	The registration fees required by this section shall be in the form
of a cashier’s check or certified check made payable to the "Department of
Commerce and Consumer Affairs" in the amount specified in chapter 16-53,
Hawaii Administrative Rules.
(k) 	A cash bond form shall be prescribed by the director.
(l) 	The registration fee shall be paid upon submission of a registration
application. 	Applications shall not be accepted for department review unless
accompanied by the requisite fee.
(m) 	The format for registration shall be prescribed by the director. [Eff
11/15/80; am and comp 3/28/85; am and comp 8/30/85; am and comp 11/29/85;
am and comp 6/5/87; am and comp 3/7/88; comp 9/15/90] (Auth: HRS §§514E-9,
514E-13) (Imp: 	HRS §§514E-9, 514E-10)
§16-106-4.1 	Subsequent filing registration requirement. 	(a) A developer
shall submit the following to the director for the purpose of annexing any unit or
units to a registered time share plan; provided that no subsequent filing application
for registration of the additional unit or units shall be deemed complete, nor shall
the same be accepted for registration, unless the prescribed information is provided
separately tabbed and numbered in the exact order as follows:
(1) 	A 	subsequent 	filing 	application 	for 	registration 	on 	a 	form
prescribed by the director;
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(2) 	A copy of the declaration of annexation, if applicable, which
contains the following:
(A) 	A legal description of the unit or units to be annexed, as
well as the names and addresses of the record owner or
owners thereof;
(B) 	A statement submitting each annexed unit to the declaration
of covenants, conditions and restrictions for the time share
plan, which declaration shall be identified by title and
recording data; and
(C) 	A schedule of the use periods for each annexed unit;
(3) 	A revised disclosure statement reflecting the annexation of the unit
or units to the time share plan; provided that this subsection shall
not be subject to the requirements of section 16-106-16;
(4) 	A current financial statement not more than ninety days old at the
time of submission of the application, prepared in accordance with
generally accepted accounting 	principles and certified by the
developer or a certified public accountant to be true and correct in
all respects and to fairly, completely, and accurately represent the
financial condition of the subject thereof as of the respective date
thereof; provided that in lieu of this financial statement, an audited
financial report may be submitted if it is the most current report of
the subject thereof and is not more than fifteen months old at the
time of submission of the application. 	Any false, misleading, or
fraudulent financial statement or report submitted by the developer
shall be grounds for cancellation, suspension, or revocation of a
registration;
(5) 	For each unit to be annexed, a policy of title insurance, preliminary
title report, abstract of title, or certificate of title not more than
sixty days old at the time of submission of the application;
provided that the policy of title insurance, preliminary title report,
abstract of title, or certificate of title discloses the status of
ownership of the unit and any and all liens and encumbrances
affecting the unit;
(6) 	Copies of all encumbrances against title to each unit to be annexed;
provided that copies of encumbrances included with the initial
application for registration of the time share plan or any prior
subsequent 	filing 	application 	accepted 	by 	the 	department 	in
connection with the plan may be incorporated by reference;
(7) 	Confirmation by the respective county that the time share plan
meets the geographic limitation requirements of section 514E-5,
HRS; provided that this confirmation of zoning shall be obtained
106-17

from the respective county not more than thirty days before the
date of submission of the application. The director shall prescribe
a form to be completed by the proper county authority evidencing
this confirmation of zoning; and
(8) 	The registration fee.
(b) 	A developer shall notify the director in writing of any material
change in any information submitted to the director pursuant to this section within
twenty days of any material change. Failure to notify the director of any material
change in the information submitted shall be grounds for cancellation, suspension,
or revocation of a registration.
(c) 	Any subsequent filing application for registration required by this
section shall be deemed accepted if the director has not acted upon the application
within sixty days following receipt of the same; except that this subsection shall
not apply to any application which is incomplete and does not contain all of the
information required to be submitted to the director under this section.
(d) 	The registration fee required by this section shall be in the form of
a cashier’s check or certified check made payable to the "Department of
Commerce and Consumer Affairs" in the amount specified in chapter 16-53,
Hawaii Administrative Rules.
(e) 	The registration fee shall be paid upon submission of a registration
application. 	Applications shall not be accepted for department review unless
accompanied by the requisite fee.
(f) 	The format for subsequent filing registration shall be prescribed by
the director. [Eff and comp 3/28/85; am and comp 8/30/85; comp 11/29/85; comp
6/5/87; am and comp 3/7/88; comp 9/15/90] (Auth: 	HRS §§514E-9, 514E-13)
(Imp: 	HRS §§514E-9, 514E-10)
§16-106-4.2 Biennial renewal requirement. (a) A developer shall submit
the following to the director at the time of renewal of the registration for a time
share plan not later than December 31 of each odd-numbered year, as required by
section 514E-10(f), HRS, and section 16-106-4(h); provided that no application
for renewal shall be deemed complete, nor shall the same be accepted for
registration, unless the prescribed information is provided separately tabbed and
numbered in the exact order as follows:
(1) 	An application for renewal of registration on a form prescribed by
the director;
(2) 	A current disclosure statement meeting the requirements of section
514E-9, HRS, and section 16-106-3;
(3) 	A current financial statement prepared not more than one hundred
twenty 	days 	before 	the 	date 	of 	renewal 	in 	accordance 	with
106-18

generally 	accepted accounting principles and certified by the
developer or a certified public accountant to be true and correct in
all respects and to fairly, completely, and accurately represent the
financial condition of the subject thereof as of the respective date
thereof; provided that in lieu of this financial statement, an audited
financial report may be submitted if it is the most current report of
the subject thereof and is not more than fifteen months old at the
time 	of 	renewal 	of 	the 	developer’s 	registration. 	Any 	false,
misleading, or fraudulent financial statement or report submitted by
the developer shall be grounds for cancellation, suspension, or
revocation of a registration;
(4) 	With respect to any unsold interests in each registered unit in the
time share plan which are held by the developer at the time of
renewal of the registration for the plan, a policy of title insurance,
a preliminary title report, abstract of title, or certificate of title not
more than ninety days old at the time of renewal of the registration
for the time share plan; provided that the policy of title insurance,
preliminary title report, abstract of title, or certificate of title
discloses the status of ownership of the unit and any and all liens
and encumbrances affecting the unit;
(5) 	The name and address of the person in the State authorized to
receive service of process on behalf of the developer; provided that
written notification of any change of this name or address shall be
submitted to the director within twenty days of any change;
(6) 	A complete statement setting forth the number of registered units
in the time share plan and the number of time share interests being
offered for sale in each unit; provided that this statement shall also
specify the number of interests which have currently been sold in
each unit and the number of interests which remain unsold as of
the date of renewal; and provided further that this statement shall
be certified by the developer to be true and correct in all respects;
(7) 	If a corporation, partnership, or joint venture, a certificate of good
standing 	issued 	by 	the 	business 	registration 	division 	of 	the
department not more than forty-five days before the date of
submission of the application; and
(8) 	The biennial renewal fee.
A developer is prohibited from renewing the registration of sold interests
in a registered time share unit.
(b) 	An acquisition agent, including the developer if it is also the
acquisition agent, shall submit the following to the director at the time of renewal
of the acquisition agent’s registration not later than December 31 of each
106-19

odd-numbered year; provided that the acquisition agent shall submit a separate
application for renewal with respect to each time share plan with which the
acquisition agent is registered; and provided further that no application for renewal
shall be deemed complete, nor shall the same be accepted for registration, unless
the prescribed information is provided separately tabbed and numbered in the
exact order as follows:
(1) 	An application for renewal of registration on a form prescribed by
the director;
(2) 	Satisfactory evidence that the acquisition agent is currently bonded
as required by section 16-106-40.1 to cover any violation by the
acquisition agent of any solicitation ordinances or other rules
governing the use of the premise or premises in which the time
share plan is promoted; or evidence that the acquisition agent is
currently licensed pursuant to chapter 467, HRS, as a real estate
salesperson or a real estate broker;
(3) 	An 	alphabetized 	list 	of 	the 	names, 	addresses, 	and 	telephone
numbers of all employees and independent contractors who are
currently engaged in contacting persons who may be interested in
purchasing interests in the time share plan;
(4) 	A copy of the executed agency agreement currently applicable to
the time share plan;
(5) 	The name and address of the person in the State authorized to
receive service of process on behalf of the acquisition agent;
provided that written notification of any change of this name or
address shall be submitted to the director within twenty days of any
change;
(6) 	If a corporation, partnership, or joint venture, a certificate of good
standing 	issued 	by 	the 	business 	registration 	division 	of 	the
department not more than forty-five days before the date of
submission of the application; and
(7) 	The biennial renewal fee.
An OPC employed directly or indirectly by the acquisition agent shall
submit the biennial renewal fee and an application for renewal of the OPC’s
registration not later than December 31 of each odd-numbered year on a form
prescribed by the director.
(c) 	A sales agent, including the developer if it is also the sales agent,
shall submit the following to the director at the time of renewal of the sales
agent’s registration not later than December 31 of each odd-numbered year;
provided that the sales agent shall submit a separate application for renewal with
respect to each time share plan with which the sales agent is registered; and
provided further that no application shall be deemed complete, nor shall the same
106-20

be 	accepted 	for 	registration, 	unless 	the prescribed 	information 	is 	provided
separately tabbed and numbered in the exact order as follows:
(1) 	An application for renewal of registration on a form prescribed by
the director;
(2) 	Evidence that the sales agent is currently licensed pursuant to
chapter 467, HRS, as a real estate salesperson or a real estate
broker;
(3) 	An 	alphabetized 	list 	of 	the 	names, 	addresses, 	and 	telephone
numbers of all employees and independent contractors who are
currently selling or contacting persons who may be interested in
purchasing interests in the time share plan, as well as evidence that
each of these employees and independent contractors is currently
licensed pursuant to chapter 467, HRS, as a real estate salesperson
or a real estate broker;
(4) 	A copy of the executed sales agency or brokerage agreement
currently applicable to the time share plan;
(5) 	The name and address of the person in the State authorized to
receive service of process on behalf of the sales agent; provided
that written notification of any change of this name or address shall
be submitted to the director within twenty days of any change;
(6) 	If a corporation, partnership, or joint venture, a certificate of good
standing 	issued 	by 	the 	business 	registration 	division 	of 	the
department not more than forty-five days before the date of
submission of the application; and
(7) 	The biennial renewal fee.
An OPC employed directly or indirectly by the sales agent shall submit the
biennial renewal fee and an application for renewal of the OPC’s registration not
later than December 31 of each odd-numbered year on a form prescribed by the
director.
A sales agent shall submit, for each person on the list required by
paragraph (3), the biennial renewal fee and an application for renewal of the real
estate salesperson or broker’s registration not later than December 31 of each
odd-numbered year on a form prescribed by the director.
(d) 	A plan manager, including the developer if it is also the plan
manager, shall submit the following to the director at the time of renewal of the
plan manager’s registration not later than December 31 of each odd-numbered
year; provided that the plan manager shall submit a separate application for
renewal with respect to each time share plan with which the plan manager is
registered; and provided further that no application for renewal shall be deemed
complete, nor shall the same be accepted for registration, unless the prescribed
106-21

information is provided separately tabbed and numbered in the exact order as
follows:
(1) 	An application for renewal of registration on a form prescribed by
the director;
(2) 	The address at which all accounting records, including but not
limited 	to 	receipts, 	expenditures, 	and 	payment 	vouchers, 	are
currently maintained;
(3) 	Satisfactory evidence that the plan manager is currently bonded as
required by section 16-106-40 to cover any default of the plan
manager and any of the employees of the plan manager of their
duties and responsibilities;
(4) 	A copy of the executed management agreement currently applicable
to the time share plan;
(5) 	The name and address of the person in the State authorized to
receive service of process on behalf of the plan manager; provided
that written notification of any change of this name or address shall
be submitted to the director within twenty days of any change;
(6) 	If a corporation, partnership, or joint venture, a certificate of good
standing 	issued 	by 	the 	business 	registration 	division 	of 	the
department not more than forty-five days before the date of
submission of the application; and
(7) 	The biennial renewal fee.
(e) 	An exchange agent, including the developer if it is also the
exchange agent, shall submit to the director at the time of renewal of the exchange
agent’s registration not later than December 31 of each odd-numbered year the
biennial renewal fee and an application for renewal of registration on a form
prescribed 	by 	the 	director 	and 	copies 	of 	the 	exchange 	program 	materials
containing the written information set forth in section 514E-9.5, HRS, which are
currently distributed to each purchaser of a time share interest participating in the
exchange program.
(f) 	Any application required for renewal of registration by this section
shall be deemed accepted if the director has not acted upon the application within
sixty days following receipt of the same; except that this subsection shall not
apply to any application which is incomplete and does not contain all of the
information required to be submitted to the director under this section. Restoration
of a forfeited registration may be made in accordance with section 16-106-4.3(c).
(g) 	Any party required to renew a registration under this section shall
notify the director in writing of any material change in any information submitted
to the director within twenty days of any material change. 	Failure to notify the
director of any material change in the information submitted shall be grounds for
cancellation, suspension, or revocation of a registration.
106-22

(h) 	Any registration which has been forfeited may be restored within
ninety days upon written application and payment to the department of the
delinquent fee and penalty fee; provided that the registration meets all the
requirements for renewal specified in this section. The registrant shall not engage
in any time share activities in connection with the forfeited registration until the
registration has been restored.
(i) 	The registration of a developer, acquisition agent, sales agent, OPC,
plan 	manager, 	exchange 	agent, 	or 	sales 	agent 	employees 	or 	independent
contractors, or both, may be placed on inactive status upon payment of the
biennial renewal fee; provided that the registration shall be renewed biennially
before December 31 of each odd-numbered year. The information required by this
section shall be updated before an inactive registration will be activated.
(j) 	The biennial renewal fee required by this section shall be in the
form of a cashier’s check or certified check made payable to the "Department of
Commerce and Consumer Affairs" in the amount specified in chapter 16-53,
Hawaii Administrative Rules.
(k) 	The renewal fee shall be paid upon submission of a renewal
application. 	Applications shall not be accepted for department review unless
accompanied by the requisite fee.
(l) 	The format for renewal of registration shall be prescribed by the
director. [Eff and comp 3/28/85; am and comp 8/30/85; comp 11/29/85; am and
comp 6/5/87; am and comp 3/7/88; comp 9/15/90] (Auth: HRS §514E-13) (Imp:
HRS §514E-10)
§16-106-4.3 	Repealed. 	[R 3/7/88]
§16-106-4.4 Resale agent disclosure requirement. The resale agent shall
give prospective purchasers of a resale time share interest a copy of the time share
plan’s latest disclosure statement on file with the director. 	If the resale agent is
not the party who filed the most recent disclosure statement, the resale agent shall
attach to the disclosure statement the following statement: 	"This is the most
recent disclosure statement filed 	by the developer of this time share plan or by
the developer’s agent. It is not a disclosure statement filed by the resale agent."
(1) 	Notice of any liens, title defects, or encumbrances on or affecting
the resale time share interest being sold;
(2) 	Any restraints in the transfer of the purchaser’s resale time share
interest in the time share plan;
106-23

(3) 	The dues, maintenance fees, and real property taxes for the current
year, and any additional charges or periodic expenses to which the
purchaser may be subject;
(4) 	Notice of any pending or anticipated suits that are material to the
resale time share interest or time share plan; and
(5) 	Any other information required to be disclosed by real estate
licensees pursuant to chapter 467, HRS, and chapter 99, Hawaii
Administrative Rules. 	[Eff and comp 3/7/88; am and comp
9/15/90] (Auth: 	HRS §514E-13) (Imp: 	HRS §514E-10)
§16-106-4.5 	Resale agent registration requirement. 	(a) A resale agent
shall not sell or offer to sell any resale time share interest unless the resale agent
submits an application for registration to the director and the application is
accepted for registration; provided that no application shall be deemed complete,
nor shall the same be accepted for registration, unless the prescribed information
is provided separately tabbed and numbered in the exact order as follows:
(1) 	An application for registration on a form prescribed by the director;
(2) 	Evidence that the resale agent is currently licensed pursuant to
chapter 467, HRS, as a real estate broker;
(3) 	An 	alphabetized 	list 	of 	the 	names, 	addresses, 	and 	telephone
numbers of all employees and independent contractors who will be
engaged in offering or selling resale time share interests, as well as
evidence that each of these individuals is:
(A) 	Currently licensed pursuant to chapter 467, HRS, as a real
estate salesperson or broker;
(B) 	Currently 	registered 	as 	a 	time 	share 	sales 	agent
employee/independent contractor;
(C) 	Currently 	registered 	as 	an 	outside 	public 	contact, 	if
applicable.
(4) 	A specimen copy of the contract of sale to be used in connection
with the sale of resale time share interests;
(5) 	A copy of the executed escrow agreement meeting the requirements
of chapter 514E, HRS, and as provided for in subchapter 9;
(6) 	The name and address of the person in the State authorized to
receive service of process on behalf of the resale agent; provided
that written notification of any change of this name shall be
submitted to the director within twenty days of any changes;
(7) 	If a corporation, partnership, or joint venture, a certificate of good
standing 	issued 	by 	the 	business 	registration 	division 	of 	the
106-24

department not more than thirty days before the date of submission
of the application;
(8) 	A completed specimen copy of the notice of mutual right of
cancellation 	of 	time 	share 	purchase 	prescribed 	in 	section
16-106-20(c);
(9) 	A copy of the disclosure statement required by section 16-106-4.4;
(10) 	A specimen copy of the deed, lease, or other instrument to be used
to convey the resale time share interest to the purchaser; and
(11) 	The registration fee.
(b) 	If the time share plan is located in a horizontal property regime,
copies of the project instruments shall be made available to the purchaser for
review prior to closing.
(c) 	A Notice of Mutual Right of Cancellation of Time Share Purchase,
as prescribed in section 16-106-20, shall be given to each purchaser.
(d) 	Resale agents shall comply with the requirements of subchapter 10,
advertising and promotional material.
(e) 	Any application for registration required by this section shall be
deemed accepted if the director has not acted upon the application within sixty
days following receipt of the application; except that this subsection shall not
apply to any application that is incomplete and does not contain all of the
information required to be submitted to the director under this section.
(f) 	Resale agents shall notify the director in writing of any material
change in any information submitted to the director within twenty days of any
material change. 	Failure to notify the director of any material change in the
information submitted shall be grounds for cancellation, suspension, or revocation
of a registration.
(g) 	Resale agents shall ascertain that persons reselling more than two
time share interests received written confirmation from the director that the time
share interests were purchased for the person’s own occupancy.
(h) 	The 	registration 	fee 	required 	by 	this 	section 	is 	$100 	($50
application and $50 compliance resolution fund). 	Payment shall be in the form
of a certified check, cashier’s check, or money order made payable to the
"Department of Commerce and Consumer Affairs." [Eff and comp 3/7/88; am and
comp 9/15/90] (Auth: 	HRS §514E-13 (Imp: 	HRS §514E-10)
§16-106-4.6 	Purchaser protections required for resales by developer.
(a) Any developer who reacquires a time share interest and resells the same shall
meet and adhere to all sales registration requirements under chapter 514E, HRS;
provided that the reacquired time share interest need not be re-registered if the
same has previously been registered and there has been no material changes in the
106-25

status of the time share program. 	For the purposes of this section, the term
"reacquired time share interest" shall mean that the time share interest was
previously sold by or through the developer and reacquired by the developer
through foreclosure, repurchase, or other means whereby title to that interest
becomes vested in the developer or the developer’s agent.
(b) 	Any developer who resells reacquired time share interests without
conforming to the requirements of chapter 514E, HRS, and this chapter shall be
subject to the sanctions provided by chapter 514E, HRS, and this chapter.
(c) 	The developer must notify the department of its intention to sell
reacquired time share interests on a form prescribed by the director which shall
include, but not be limited to, the following:
(1) 	The name of the time share plan under which the reacquired time
share interest was previously registered;
(2) 	The unit number of the reacquired time share interest; and
(3) 	The number of interests being offered for sale in each unit. 	[Eff
and comp 3/7/88; comp 9/15/90] (Auth: 	HRS §514E-13) (Imp:
HRS §514E-10)
§16-106-5 	Responsible managing employee; designation, duties, and
change. (a) No application of a corporate developer, corporate acquisition agent,
corporate sales agent, corporate plan manager, or corporate exchange agent shall
be accepted unless the corporation has designated a responsible managing
employee 	(RME) 	and 	prescribed 	the 	RME’s 	duties, 	responsibilities, 	and
obligations with respect to the corporation’s time share operation.
(b) 	The RME shall be responsible for the direct management of the
corporation’s affairs with respect to the corporation’s time share operation. The
RME shall not be deemed to have the direct management of the corporation’s time
share operation unless the RME:
(1) 	Is a bona fide employee of the corporation and has direct control,
supervision, and management of the corporation’s time share
operation;
(2) 	Has full knowledge and control of the corporation’s accounting
practices;
(3) 	Has full knowledge and control over the moneys belonging to and
in the custody of the corporation in connection with the time share
operation; and
(4) 	Has full access to all books, records, and documents materially
relative to the corporation’s part in the time share operation,
whether these materials are kept in the State or out-of-state.
106-26

(c) 	The name, address, and telephone number of the RME shall be
provided to the director.
(d) 	A plan manager may designate one or more RMEs.
(e) 	When there is a change in RME, the name of the new RME shall
be reported to the director in writing within twenty days of the change.
(f) 	Where a developer or plan manager of two or more time share
plans, at least one of which plans includes time share units located in this State,
maintains its principal office or has primary management and accounting functions
out-of-state, the duties of the RME specified in subsection (b) may be divided
between two or more RMEs of the developer or plan manager, with no one RME
being vested with all of these duties; provided that at least one RME is located
within the State; and provided further that the RME located within the State shall
be responsible for all activities conducted in the State with respect to the
corporation’s time share operation. 	[Eff 11/15/80; am and comp 3/28/85; comp
8/30/85; comp 11/29/85; comp 6/5/87; comp 3/7/88; comp 9/15/90] (Auth: HRS
§514E-13) (Imp: 	HRS §514E-10)
§16-106-6 	Copy of disclosure statement to be given to prospective
purchasers. (a) A prospective purchaser of any interest or interests in a time share
plan shall, before signing a sales contract, be:
(1) 	Provided with a copy of the disclosure statement which shall be a
true, 	accurate, 	and 	complete 	reproduction 	or 	printing 	of 	the
statement filed with and accepted by the director; and
(2) 	Given an opportunity to read the statement.
(b) 	Prospective purchasers receiving a copy of the disclosure statement shall
sign a statement acknowledging receipt of the same on a form prescribed by the
director; provided that:
(1) 	The receipt shall be kept at the principal office of the developer,
whether the office is located in the State or out-of-state, for a
period of two years from the date thereof; and
(2) 	Upon reasonable notice, the receipt shall be made available for
inspection in the State by the director or a representative of the
director.
If the receipt is not made available, inspection shall be made at the place where
the receipt is kept and any and all costs, including travel expense, per diem, and
salary of the inspector, shall be borne by the developer. The director may require
the developer to remit in advance the amount of the estimated cost prior to
inspection. 	Failure on the part of the developer to comply with the director’s
request to remit the amount of the estimated cost may be grounds for cancellation,
suspension, or revocation of a registration. [Eff 11/15/80; am and comp 3/28/85;
106-27

comp 8/30/85; comp 11/29/85; comp 6/5/87; comp 3/7/88; comp 9/15/90] (Auth:
HRS §514E-13) (Imp: 	HRS §514E-9)
§16-106-7 	Issuance of registration number. 	(a) The director shall issue
a registration number for each time share plan in consecutive order of acceptance
of the plan for registration pursuant to section 514E-10(a), HRS, and section
16-106-4(a). The registration number and the date of acceptance of the plan shall
be printed on the upper right-hand corner of the face page of the disclosure
statement.
(b) 	The director shall issue a registration number to each acquisition
agent, sales agent, OPC, plan manager, and exchange agent in consecutive order
of acceptance of the registration application submitted by each applicant pursuant
to section 514E-10(b) to (e), HRS, and section 16-106-4(b) to (e). [Eff 11/15/80;
am and comp 3/28/85; comp 8/30/85; comp 11/29/85; comp 6/5/87; comp 3/7/88;
comp 9/15/90] (Auth: 	HRS §514E-13) (Imp: 	HRS §514E-10)
§16-106-8 	Filing names of employees and independent contractors for
acquisition agent and sales agent registration. 	(a) In accordance with the
requirements of section 16-106-4(b) and (c), an acquisition agent and sales agent
shall submit to the director an alphabetized list of the names, addresses, and
telephone numbers of all employees and independent contractors who will be
engaged in selling interests in the time share plan or in contacting persons who
may be interested in purchasing these time share interests.
The director shall not approve any employee or independent contractor who
is not of good character and who does not possess a reputation for honesty,
truthfulness, and fair dealing.
(b) 	The director shall, upon registration, issue a pocket identification
card to each employee or independent contractor acting as an OPC, which shall
be kept in the possession of the employee or independent contractor at all times.
(c) 	Acquisition agents and sales agents shall keep on file a list of
names of all current employees and independent contractors, including their
mailing addresses, and a list of the names and addresses of all previous employees
and independent contractors whose employment or services as an independent
contractor have been terminated within the preceding two years.
(d) 	Acquisition agents and sales agents shall notify the director in
writing of any personnel changes within twenty days of such change. 	Failure to
notify the director of any personnel changes shall be grounds for cancellation,
suspension, or revocation of a registration.
106-28

(e) 	This section shall not apply to clerical or administrative personnel
who have no contact with the public. [Eff 11/15/80; am and comp 3/28/85; comp
8/30/85; comp 11/29/85; am and comp 6/5/87; comp 3/7/88; comp 9/15/90] (Auth:
HRS §514E-13) (Imp: 	HRS §514E-10)
§16-106-8.1 	Rejection by the director. 	(a) The director shall reject a
developer, sales agent, or acquistion agent’s application for registration if the
director finds that the applicant does not possess a history of honesty, truthfulness,
and fair dealing. 	A rebuttable presumption that the developer, sales agent, or
acquisition agent does not possess a history of honesty, truthfulness, or fair
dealing shall arise if the applicant has:
(1) 	Been convicted of, or has pleaded nolo contendere to, any crime
involving an act of fraud or dishonesty;
(2) 	Consented to or suffered a judgment in any civil or administrative
action based upon conduct involving an act of fraud or dishonesty;
(3) 	Consented to or suffered any indictment, formal investigation,
examination, or civil or administrative proceedings that resulted in
any agreements, undertakings, consents, or orders being issued by
any federal or state court; any department, agency, or commission
of the United States government; any state or municipality; any
self-regulatory trade or professional organization; or any foreign
government or governmental entity which involves an act of fraud
or dishonesty;
(4) 	Consented to or suffered the suspension or revocation of any
professional, 	occupational, 	or 	vocational 	license 	based 	upon
conduct involving an act of fraud or dishonesty;
(5) 	Knowingly made or caused to be made in any application or report
filed with the director, or in any proceeding before the director, any
written or oral statement which was at the time and in light of the
circumstances under which it was made false or misleading with
respect to material fact;
(6) 	Wilfully omitted to state a material fact with respect to information
furnished or requested in connection with an application;
(7) 	Wilfully committed any violation of, or has wilfully aided, abetted,
counseled, commanded, induced, or procured the violation by any
other person of any provision of state law or rule;
(8) 	Been involved in unlicensed activity;
(9) 	Been the subject of a series of complaints in this state or other
jurisdictions; or
106-29

(10) 	Violated 	bonding 	requirements 	in 	this 	State 	or 	in 	other
jurisdictions.
(b) 	The director shall reject a developer’s application for registration
if the director finds that the developer does not possess a history of financial
integrity. 	The director may ask an applicant to describe the factors and
circumstances which caused or surrounded any filing by the applicant for
bankruptcy. A rebuttable presumption that a developer does not possess a history
of financial integrity shall arise if the developer:
(1) 	Has been placed in receivership or conservatorship during the
previous ten years; or
(2) 	Is liable for amounts of debt which, in the opinion of the director,
create excessive risks of default and pressure on the developer.
(c) 	The director shall reject an application if the director finds that the
history of honesty, truthfulness, and fair dealing of the developer, sales agent, or
acquisition agent, its officers or directors, or any of its proposed management
personnel; or the financial integrity of the developer, indicates that it would not
be in the interests of the public to approve the application.
(d) 	Subsections (a), (b), and (c) shall not be deemed an exclusive list
of the grounds upon which the director finds that the relevant statutory criteria
have not been met. 	[Eff and comp 3/7/88; am and comp 9/15/90] (Auth: 	HRS
§514E-13) (Imp: 	SLH 1987, Act 60)
§16-106-9 	Denial of registration. 	In the event the director denies the
registration of a developer, acquisition agent, sales agent, OPC, plan manager, or
exchange agent, the director shall notify the applicant by letter of the director’s
action which shall include a concise statement of the reasons therefor and if the
applicant is entitled to a hearing, a statement informing the applicant of the right
to a hearing if the applicant so desires. 	[Eff and comp 6/5/87; comp 3/7/88;
comp 9/15/90] (Auth: 	HRS §514E-13) (Imp: 	HRS §514E-10)
§16-106-10 	Demand for a hearing. 	Any developer, acquisition agent,
sales agent, OPC, plan manager, or exchange agent whose registration has been
denied by the director, shall be entitled to a hearing; provided that a demand for
a hearing is filed with the director within sixty days of the date of the letter
informing the applicant of the denial of registration; and provided further that this
section shall not apply to a denial based on the failure to file an application within
the period provided by this chapter. 	[Eff and comp 6/5/87; comp 3/7/88; 	comp
9/15/90] (Auth: 	HRS §514E-13) (Imp: 	HRS §514E-10)
106-30

§16-106-11 	Proceedings upon demand for hearing. 	If a demand for a
hearing is filed within the time prescribed, the director shall order a hearing
pursuant to chapters 91 and 92, HRS, and chapter 16-201, the administrative
practice and procedure rules of the department. 	[Eff and comp 6/5/87; comp
3/7/88; comp 9/15/90] (Auth: 	HRS §514E-13) (Imp: 	HRS §514E-10)
SUBCHAPTER 3
PLAN MANAGER
§16-106-12 	Plan manager or RME of plan manager designated for time
share plan. 	(a) All time share plans shall have a designated plan manager.
(b) 	Each time share plan which is comprised of any unit or units
located in the State shall have a plan manager or an RME of the plan manager in
the State, whether or not the plan is offered for sale in the State or out-of-state.
(c) 	A plan manager may manage one or more time share plans;
provided that the plan manager applies for and is accepted for registration by the
director with respect to each plan.
(d) 	A plan manager’s duties, responsibilities, and obligations shall
include, but not be limited to:
(1) 	Management and maintenance of the time share units;
(2) 	Assessment and collection of maintenance fees;
(3) 	Payment of real property taxes due on the time share units;
(4) 	Supervision of occupancy scheduling so that time share unit owners
or users will be provided with the promised use of time share units;
(5) 	Providing time share owners and users with a copy of the house
rules of the building;
(6) 	Supervision of enforcement of the house rules;
(7) 	Keeping of a detailed and accurate record, in chronological order,
of receipts and expenditures;
(8) 	Providing the time share owners with a statement of receipts and
expenditures which shall include but not be limited to:
(A) 	Management fees paid;
(B) 	Total compensation paid to the board of directors; and
(C) 	Amount of reserves set aside for refurbishment, or if no
refurbishment account, the reasons therefor.
(9) 	Providing that the minutes of the board of directors and association
meetings, and the association’s financial statements be available for
examination by time share owners at convenient hours at a place
designated by the association; and
106-31

(10) 	Providing that the minutes of meetings and association financial
statements be mailed to any time share owner upon such owner’s
request. 	A 	reasonable 	fee 	may 	be 	charged 	to 	defray 	any
administrative or duplicating cost.
(e) 	All accounting records of the plan manager shall be subject to
inspection upon reasonable notice by the director or a representative of the
director. 	Accounting records shall be kept at the principal office of the plan
manager, which may be located in the State or in another state.
(g) 	The plan manager shall keep an accurate and current list of the
names and addresses of association members, including the names and addresses
of vendors under agreements of sale, if any. If the association’s by-laws or rules
do not authorize the release of this list to a time share owner, the association shall
develop a reasonable procedure by which time share owners may solicit votes or
proxies or by which time share owners may provide information to other time
share owners with respect to association matters.
(f) 	If the accounting records are not kept in the State, the records
should be made available for inspection in the State upon reasonable notice. 	If
the records are not made available, inspection shall be made at the place where
the records are kept and any and all costs, including travel expense, per diem, and
salary of the inspector, shall be borne by the plan manager. 	The plan manager
may be required by the director to remit in advance the amount of the estimated
cost prior to inspection. 	Failure on the part of the plan manager to comply with
the director’s request to remit the amount of the estimated cost may be grounds
for cancellation, suspension, or revocation of the plan manager’s registration.
Further, if the principal office of the developer is not in the State, failure
to make available upon the director’s request any bookkeeping records, computer
records, or any other records of the developer for the time share plan within a
reasonable time, may be grounds for cancellation, suspension, or revocation of the
plan manager’s registration. [Eff 11/15/80; am and comp 3/28/85; comp 8/30/85;
comp 11/29/85; comp 6/5/87; comp 3/7/88; am and comp 9/15/90]
(Auth: 	HRS §514E-13) (Imp: 	HRS §514E-10)
SUBCHAPTER 4
NOTIFICATION OF CHANGES IN DISCLOSURE STATEMENT
§16-106-16 Material change in disclosure statement. (a) A developer shall
notify the director in writing of any material change or changes in the disclosure
statement for the developer’s time share plan.
106-32

(b) 	A developer shall amend or supplement the disclosure statement by
submitting to the director a supplemental disclosure statement which shall specify,
in detail, the material change or changes which have occurred, within twenty days
after the material change or changes become known to the developer.
(c) 	Upon acceptance of the supplemental disclosure statement by the
director, a true, accurate, and complete copy of the statement shall be given to
each purchaser adversely affected by the material change or changes and to each
prospective purchaser. 	A receipt from each purchaser and prospective purchaser
shall be 	obtained and filed as provided in section 16-106-6(b). 	The developer
shall not be in violation of this chapter if the purchaser fails to return the receipt
and the developer is able to verify that a statement was sent to the purchaser.
(d) 	The director may independently determine that a material change
has occurred and require the developer to prepare a supplemental disclosure
statement disclosing the material change or changes in a form approved by the
director.
(e) 	Where the purchaser has received title by instrument of record in
the sale of an interest in an ownership plan, the developer is under no obligation
to give the purchaser a supplemental disclosure statement. [Eff 11/15/80; am and
comp 3/28/85; comp 8/30/85; comp 11/29/85; comp 6/5/87; comp 3/7/88; comp
9/15/90] (Auth: 	HRS §514E-13) (Imp: 	HRS §§514E-9, 514E-10)
SUBCHAPTER 5
CANCELLATION OF CONTRACT
§16-106-20 Mutual right to cancel contract. (a) A developer or purchaser
may cancel the contract to purchase an interest or interests in a time share plan
by giving the other party written notification within 	seven calendar days after
execution of the sales contract or after the purchaser’s receipt of the disclosure
statement for the time share plan, whichever occurs later. 	The notice of
cancellation shall be effective upon mailing or delivery to the other party at the
address specified on the contract.
(b) 	Within fifteen business days after the date the notice of cancellation
of the contract is received, the seller shall return all payments made by the
purchaser and the purchaser shall return in good condition all materials received,
reasonable wear and tear excepted; provided that if these materials are not
returned, the developer may deduct the reasonable value of the same not to exceed
$25 and return the balance to the purchaser.
106-33

(c) 	A developer or sales agent shall furnish each purchaser at the time
the contract for purchase of an interest or interests in a time share plan is signed
the following cancellation notice prepared in ten point bold face type:
NOTICE OF MUTUAL RIGHT OF
CANCELLATION OF
TIME SHARE PURCHASE
Date contract signed
Date disclosure statement received
YOU OR THE DEVELOPER MAY CANCEL THIS TRANSACTION
WITHIN SEVEN (7) CALENDAR DAYS AFTER EXECUTION OF THE
CONTRACT 	OR 	AFTER 	YOUR 	RECEIPT 	OF 	THE 	TIME 	SHARE
DISCLOSURE STATEMENT, WHICHEVER OCCURS LATER, AND YOU
SHALL BE ENTITLED TO A REFUND WITHIN FIFTEEN (15) BUSINESS
DAYS AFTER THE DATE THE NOTICE OF CANCELLATION IS RECEIVED.
YOU ARE REQUIRED WITHIN FIFTEEN (15) BUSINESS DAYS AFTER
YOU SEND THIS CANCELLATION NOTICE TO THE DEVELOPER, TO
RETURN TO THE DEVELOPER ALL SALES MATERIALS (SUCH AS YOUR
SALES 	CONTRACT, 	DISCLOSURE 	STATEMENT, 	ETC.), 	IN 	GOOD
CONDITION, REASONABLE WEAR AND TEAR EXCEPTED. 	IF YOU DO
NOT 	RETURN 	THESE 	MATERIALS 	BY 	THIS 	DATE, 	THEN 	THE
DEVELOPER IS ENTITLED TO DEDUCT UP TO $25 FROM YOUR REFUND.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
TO CANCEL THIS TRANSACTION, MAIL OR DELIVER A SIGNED
AND DATED COPY OF THIS CANCELLATION NOTICE OR ANY OTHER
WRITTEN NOTICE, OR SEND A TELEGRAM TO
, at 	,
Name of seller 	Address of seller
NO LATER THAN MIDNIGHT OF 	.
106-34

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
I HEREBY CANCEL THIS TRANSACTION.
Purchaser’s signature
Date 	Purchaser’s signature
The developer or sales agent shall complete all of the information required in the
notice of cancellation, except for the date of cancellation and purchaser’s
signature. 	[Eff 11/15/80; am and comp 3/28/85; am and comp 8/30/85; am and
comp 	11/29/85; 	comp 	6/5/87; 	comp 	3/7/88; 	comp 	9/15/90] 	(Auth: 	HRS
§514E-13) (Imp: 	HRS §§514E-8, 514E-9, 514E-11.1)
§16-106-21 	Purchaser’s right to void contract. 	The right to cancel a
contract of purchase pursuant to section 16-106-20 does not preclude the purchaser
from seeking appropriate relief from the contract in any court of competent
jurisdiction. [Eff 11/15/80; am and comp 3/28/85; comp 8/30/85; comp 11/29/85;
comp 6/5/87; comp 3/7/88; comp 9/15/90] 	(Auth: 	HRS §514E-13) (Imp: 	HRS
§§514E-8, 514E-9, 514E-12.5)
§16-106-22 Retention of copy of contract. A copy of the contract for each
sale of an interest or interests in a time share plan shall be retained by the
developer for a period of at least one year after the parties to the contract have
completely performed all of their respective obligations under the contract. 	[Eff
11/15/80; am and comp 3/28/85; comp 8/30/85; comp 11/29/85; comp 6/5/87;
comp 3/7/88; comp 9/15/90] (Auth: 	HRS §514E-13) (Imp: 	HRS §§514E-8,
514E-11.3)
SUBCHAPTER 6
PREEXISTING TIME SHARE UNIT
106-35

§16-106-25 	Preexisting time share unit. 	(a) Except as to the geographic
limitation set forth in section 514E-5, HRS, preexisting time share units and time
share plans for preexisting time share units shall comply with the requirements of
this chapter and 	chapter 514E, HRS, by January 1, 1981.
(b) 	Time 	share 	units 	not 	qualifying 	for 	preexisting 	status 	by
June 29, 1980, shall be subject to the provisions of section 514E-5, HRS.
(c) 	A developer, sales agent, or plan manager shall submit evidence,
such as an agreement, contract, or document, at the time of registration of any
preexisting time share units or preexisting time share plan to show that each unit
or plan was created prior to June 29, 1980.
(d) 	A form for registration of any preexisting time share units or
preexisting time share plan shall be prescribed by the director. [Eff 11/15/80; am
and comp 3/28/85; comp 8/30/85; comp 11/29/85; comp 6/5/87; comp 3/7/88;
comp 9/15/90] (Auth: 	HRS §514E-13) (Imp: 	HRS §514E-14)
§16-106-26 	Persons responsible for registration of preexisting time share
plan. 	In addition to the requirements of chapter 514E, HRS, and this chapter, a
developer, sales agent, or plan manager shall submit to the director at the time of
registration of the preexisting time share plan a certified statement setting forth the
location of the plan, the number of time share units in the plan, the nature of
ownership of the units, the ownership or use periods, the date and an explanation
of the manner in which the time share plan was created, the number of purchasers
who purchased time share interests in the plan, and the name and address of the
plan manager for the plan. 	[Eff 11/15/80; am and comp 3/28/85; comp 8/30/85;
comp 11/29/85; comp 6/5/87; comp 3/7/88; comp 9/15/90] (Auth: HRS §514E-13)
(Imp: 	HRS §514E-14)
§16-106-27 	Plan manager for preexisting time share plan. 	A preexisting
time share plan shall have a plan manager. 	Any provision relating to a plan
manager in this chapter shall be applicable to the plan manager for a preexisting
time share plan. 	[Eff 11/15/80; am and comp 3/28/85; comp 8/30/85; comp
11/29/85; comp 6/5/87; comp 3/7/88; comp 9/15/90] (Auth: 	HRS §514E-13)
(Imp: 	HRS §514E-14)
SUBCHAPTER 7
MIXED-USE PROJECT
106-36

§16-106-29 Mixed-use project containing existing time share unit or plan.
Additional time share units shall not be created in a mixed-use project containing
an existing time share unit or time share plan and any residential unit, unless time
share units are allowed in the project pursuant to section 514E-5, HRS, and
section 514E-6, HRS, and all of the requirements of this chapter relating to the
use are met. [Eff 11/15/80; am and comp 3/28/85; comp 8/30/85; comp 11/29/85;
comp 6/5/87; comp 3/7/88; comp 9/15/90] (Auth: 	HRS §514E-13) (Imp: 	HRS
§§514E-5, 514E-6, 514E-14)
SUBCHAPTER 8
STATUTE AND RULES RELATING TO TIME SHARING
§16-106-31 Statute and rules available. A developer or sales agent shall:
(1) 	Have a copy of chapter 514E, HRS, and a copy of this chapter
available for inspection by any prospective purchaser;
(2) 	Advise each prospective purchaser at the time any interest in a time
share plan is offered for sale in this State or out-of-state that copies
of the statute and rules are available for inspection; and
(3) 	Provide copies of chapter 514E, HRS, and this chapter upon
request and payment of a reasonable amount to defray printing
costs. 	[Eff 11/15/80; am and comp 3/28/85; comp 8/30/85; comp
11/29/85; comp 6/5/87; comp 3/7/88; comp 9/15/90] (Auth: HRS
§514E-13) (Imp: 	HRS §514E-13)
SUBCHAPTER 9
PLAN MANAGER’S ACCOUNT AND ESCROW ACCOUNT
§16-106-32 	Repealed. 	[R 3/28/85]
§16-106-33 	Plan manager’s account. 	A plan manager shall establish and
maintain an account with a bank, savings and loan association, or trust company
authorized to do business in this State for the deposit of any moneys received by
the plan manager in connection with the management of the time share plan. An
account with a bank, savings and loan association, or trust company doing
business in another state may be established upon approval by the director. 	[Eff
106-37

11/15/80; am and comp 3/28/85; comp 8/30/85; comp 11/29/85; comp 6/5/87;
comp 3/7/88; comp 9/15/90] (Auth: HRS §514E-13) (Imp: 	HRS §514E-13)
§16-106-34 	Escrow account required for deposit of purchaser’s funds,
notes, and contracts. 	(a) A developer for a time share plan shall establish and
maintain an escrow account for the deposit of all funds, negotiable instruments,
and purchase money contracts received before closing from or on behalf of
purchasers or prospective purchasers of interests in the time share plan. 	The
developer or sales agent designated by the developer for the time share plan,
resale agent, however, may hold until the expiration of the seven-day cancellation
period provided by section 514E-8, HRS, and section 16-106-20, or any longer
purchaser 	cancellation 	period 	provided 	in 	the 	sales 	contract, 	a 	negotiable
instrument or purchase money contract made by a purchaser:
(1) 	For which subsequent holders cannot claim holder in due course
status within the meaning of article 3 of chapter 490, HRS; or
(2) 	Where the payee is:
(A) 	The escrow agent; or
(B) 	The trustee of a lien payment trust established pursuant to
section 514E-19, HRS.
(b) 	The escrow agent must be a bank, savings and loan association, or
trust company authorized to do business in the State, or a corporation licensed as
an escrow depository under chapter 449, HRS. In connection with sales made out
of the State for the use of time share units located in the State, however, the
escrow account may be established and maintained in the jurisdiction where the
sale is executed if the law of the jurisdiction requires it; provided that the
out-of-state escrow agent shall be subject to the approval of the director.
(c) 	The establishment of the escrow account shall be evidenced by a
written 	escrow 	agreement 	executed 	by 	the 	developer 	and 	the 	in-state 	or
out-of-state escrow agent; provided that each sales agent designated by the
developer for the time share plan shall be made a party to the escrow agreement
or shall otherwise agree to obey and be bound by the terms of the agreement. The
escrow agreement required under this subsection shall provide for the handling of
purchasers’ funds, negotiable instruments, and purchase money contracts as
required by chapter 514E, HRS, and must include the following provisions:
(1) 	All funds, negotiable instruments, and purchase money contracts
received by the developer or sales agent before closing from or on
behalf of purchasers or prospective purchasers in connection with
the purchase or reservation of any interest or interests in the time
share plan shall be placed in the escrow account, subject to the
106-38

exceptions set forth in section 514E-16(a), HRS, and subsection
(a);
(2) 	A complete statement, including a specific citation to the applicable
provision of section 514E-19, HRS, of the method to be used to
protect purchasers against underlying blanket liens on the time
share unit or units;
(3) 	The 	conditions 	under 	which 	a 	purchaser’s 	funds, 	notes, 	and
contracts may be released from escrow without a closing, as
specified in section 514E-17, HRS; and
(4) 	The 	conditions 	under 	which 	a 	purchaser’s 	funds, 	notes, 	and
contracts may be released from escrow upon closing, as specified
in section 514E-18, HRS; provided that the agreement shall refer
specifically to the purchaser protection alternative set forth in
section 514E-18(b), HRS, which applies to the time share plan.
(d) 	As required by section 16-106-3(c)(3), a summary of the escrow
agreement shall be included in the disclosure statement.
(e) 	A purchaser’s funds, negotiable instruments, and purchase money
contracts which are required to be placed in an escrow account shall not be
expended or released for any purpose prior to closing except for the purposes
specified in section 514E-17, HRS. 	[Eff 11/15/80; am and comp 3/28/85; comp
8/30/85; comp 11/29/85; comp 6/5/87; am and comp 3/7/88; comp 9/15/90] (Auth:
HRS §§514E-9, 514E-13, 514E-16) (Imp: 	HRS §§514E-16, 514E-17, 514E-18,
514E-19)
§16-106-35 	Repealed. 	[R 3/28/85]
§16-106-36 Account open for inspection. A developer and sales agent, or
plan manager, shall provide any information on the respective accounts maintained
by each party to the director upon written request. 	The account shall be subject
to inspection upon reasonable notice by the director or a representative of the
director. 	If the accounting records are not kept in this State, the provisions on
inspections and production of records in section 16-106-12(f) shall apply. 	[Eff
11/15/80; am and comp 3/28/85; comp 8/30/85; comp 11/29/85; comp 6/5/87;
comp 3/7/88; comp 9/15/90] (Auth: 	HRS §514E-13) (Imp: 	HRS §514E-10)
SUBCHAPTER 10
ADVERTISING AND PROMOTIONAL MATERIAL
106-39

§16-106-38 	Filing of advertising and promotional material. 	(a) No
advertisements, promotional brochures, circulars, pamphlets, handouts, or other
material shall be published or used by a developer, acquisition agent, sales agent,
or OPC in connection with the sale of any interest or interests in a time share plan
unless copies of these materials are filed with the director at least fifteen days
prior to use.
(b) 	No radio or television advertisements or any standard verbal sales
presentation shall be used by a developer, acquisition agent, or sales agent in
connection with the sale of any interest or interests in a time share plan unless
copies of verbatim scripts relating to these advertisements or a sales presentation
are filed with the director at least fifteen days prior to use.
(c) 	Any 	audio-visual 	material 	used 	in 	connection 	with 	a 	sales
presentation for a time share plan shall be produced for examination upon the
request of the director. 	[Eff 	11/15/80; am and comp 3/28/85; comp 8/30/85;
comp 11/29/85; comp 6/5/87; comp 3/7/88; comp 9/15/90] (Auth: HRS §514E-13)
(Imp: 	HRS §§514E-11, 514E-11.1)
§16-106-39 	Requirements for promotional literature and other printed or
written material. 	(a) The following caption shall be included on all promotional
literature and other printed or written material used in connection with the sale of
any interest or interests in a time share plan; provided that the caption shall be
printed in capital letters of twenty-four point bold type or type as large as the
largest printing or writing elsewhere in the material:
"THIS 	IS 	A 	TIME 	SHARING 	SALES 	PRESENTATION. 	ANY
PURCHASER HAS, UNDER THE LAW, A SEVEN-DAY RIGHT OF
RESCISSION OF ANY TIME SHARING SALES CONTRACT."
Failure to include this caption on any printed or written material shall constitute
an unfair or deceptive trade practice within the meaning of chapter 480, HRS, and
shall be a violation of chapter 514E, HRS, and this chapter.
(b) 	Any written invitation used in connection with any time share
advertising or sales promotion plan which offers a prospective purchaser a prize
or gift, conditioned upon the attendance of the prospective purchaser at a sales
presentation, shall contain the following written disclosure; provided that the
disclosure is furnished to the prospective purchaser at the time the prospective
purchaser is notified of the prize or gift; and provided further that the disclosure
shall be written or printed in a size equal to at least ten point bold type:
(1) 	A full description of the exact prize or gift won by the prospective
purchaser, including the cash value of the prize or gift;
106-40

(2) 	All terms and conditions attached to the prize or gift;
(3) 	A statement that the prospective purchaser must attend a sales
presentation; and
(4) 	An identification of the time share plan to be offered for sale,
including type of ownership, exchange privileges, limitations, and
price ranges of the time share interests in the plan.
Failure to provide the written disclosure required in this subsection shall constitute
an unfair or deceptive trade practice within the meaning of chapter 480, HRS, and
shall be a violation of chapter 514E, HRS, and this chapter. 	[Eff and comp
3/28/85; am and comp 8/30/85; comp 11/29/85; comp 6/5/87; comp 3/7/88; comp
9/15/90] (Auth: 	HRS §514E-13) (Imp: 	HRS §§514E-11, 514E-11.1)
SUBCHAPTER 11
BOND
§16-106-40 	Plan manager’s bond. 	(a) A plan manager shall at all times
maintain a bond, naming the time share owners association and all time share
owners as obligees, covering all of its directors, officers, employees, agents, and
volunteers having control of or access to moneys of the plan manager or moneys
which are collected, held, managed, or disbursed by the plan manager in the
performance of its duties as plan manager for a time share plan. 	The bond shall
cover any loss of money or other property the plan manager, time share owners
association and time share owners may sustain as a result of any fraud, dishonesty,
forgery 	or 	alteration, 	larceny, 	theft, 	embezzlement, 	unlawful 	obstruction,
misapplication, misplacement, destruction or misappropriation, or any other
dishonest or criminal act or omission, or infidelity to duty of or by any director,
officer, employee, agent, or volunteer of the plan manager, and may contain at
least the following provisions:
(1) 	That the surety shall provide, not less frequently than annually,
written assurances to the director and to the time share owners
association that the bond is in full force and effect;
(2) 	That the surety may not cancel the bond without giving at least
thirty days prior written notice to the director and to the time share
owners association of the cancellation of the bond;
106-41

(3) 	That the prosecution or conviction or both of a director, officer,
employee, agent, or volunteer of the plan manager shall not be a
condition precedent to recovery on the bond;
(4) 	That knowledge of defalcations shall not be imputed to the plan
manager where a director, officer, employee, agent, or volunteer
other than the offending party has knowledge of the defalcations;
(5) 	That the identification of a specific offending party shall not be a
condition precedent to recovery on the bond; provided that it is
conclusively shown that loss has occurred as a result of the actions
of a director, officer, employee, agent, or volunteer of the plan
manager;
(6) 	That the surety expressly acknowledges the plan manager’s status
(if such be the case) as an independent contractor or agent of the
time share owners association, and that coverage under the bond
shall not be affected thereby;
(7) 	That the bond may not be changed or amended without the prior
written consent of the director; and
(8) 	That the surety waives any defense based upon the exclusion of
volunteers or other persons who serve without pay from coverage
under the bond.
(b) 	The amount and form of the above-described bond and the identity
of the surety thereon shall be approved by the director; provided that the amount
of the bond shall be not less than the following:
(1) 	If payments are collected or received by the plan manager or due
from the time share owners at intervals of forty-five days or less,
an amount equal to three times the total amount due at each such
interval from the owners of all time share units in the time share
plan; or
(2) 	If payments are collected or received by the plan manager or due
from the time share owners at intervals longer than forty-five days,
an amount equal to two times the total amount due at each such
interval from the owners of all time share units in the time share
plan.
(3) 	Notwithstanding subsections (1) and (2), the amount of the bond
shall not be less than $10,000 nor more than $200,000, unless said
amount is increased or decreased by the director pursuant to
subsection (d).
(c) 	In lieu of the above-described bond, a plan manager may file a cash
bond or irrevocable letter of credit with the director in the applicable amount
specified in subsection (b)(1) or subsection (b)(2) above.
106-42

(d) 	The director shall have the discretion to accept a bond or other
equivalent, the form and amount of which are not in conformance with this section
if, in the judgment of the director, that bond or equivalent would give time share
owners the benefits and protections designed to be afforded by this section. In the
exercise of that discretion, the director may take into consideration the following
factors:
(1) 	The background and experience of the plan manager;
(2) 	The length of operation of the time share program;
(3) 	The financial history and strength of the plan manager;
(4) 	The history of complaints or non-complaints against the plan
manager;
(5) 	The plan manager is a real estate broker, licensed pursuant to
chapter 467, HRS;
(6) 	The existence of other types of insurance covering the plan
manager;
(7) 	The method of collection and procedures in place to protect time
share owners; and
(8) 	Such other factors upon which the benefits and protections to be
afforded the time share owners by this section can best be met
without undue burden to the plan manager.
(e) 	A plan manager shall annually provide evidence that a bond which
satisfies the requirements of this section has been secured for each time share plan
under the management of the plan on a form prescribed by the director. [Eff and
comp 9/1/85; am and comp 11/29/85; am and comp 6/5/87; am and comp 3/7/88;
comp 9/15/90] (Auth: 	HRS §§514E-10, 514E-13) (Imp: 	HRS §514E-10)
§16-106-40.1 	Acquisition agent’s bond. 	(a) 	An acquisition agent not
licensed pursuant to chapter 467, HRS, shall at all times be bonded in the amount
of $25,000 by a surety company authorized to do business in the State or file a
cash bond in an equivalent amount with the director to cover any violation by the
acquisition agent and any of its employees, agents, or independent contractors of
any solicitation ordinances or other regulations governing the use of the premise
or premises in which a time share plan is promoted.
(b) 	An acquisition agent shall provide evidence that a bond which
satisfies the requirements of subsection (a) has been secured for each time share
plan with which the acquisition agent is affiliated. [Eff and comp 9/1/85; am and
comp 	11/29/85; 	comp 	6/5/87; 	comp 	3/7/88; 	comp 	9/15/90] 	(Auth: 	HRS
§§514E-10, 514E-13, 106-32(c)) (Imp: 	HRS §514E-10)
106-43

§16-106-41 	Beneficiary of bond. 	Any bond required under this chapter
shall inure to the benefit of purchasers who suffer loss as a result of any
violations, defalcations, or default described in section 514E-10(b) and (d), HRS,
or any rule adopted pursuant thereto. 	[Eff 11/15/80; am and comp 3/28/85; am
and comp 8/30/85; comp 11/29/85; comp 6/5/87; comp 3/7/88; comp 9/15/90]
(Auth: 	HRS §514E-13) (Imp: 	HRS §514E-10)
§16-106-42 	Cancellation of bond. 	(a) A surety company may cancel the
bond by giving thirty days notice in writing to the director and to the time share
owners association; provided that cancellation of the bond shall not relieve a
surety company from liability for any cause of action arising out of acts which
may have occurred during the period of the bond.
(b) 	A registrant who has filed a cash bond may cancel the bond by
giving thirty days notice in writing to the director; provided that the security for
the bond shall not be returned for a period of six years after the effective date of
cancellation of the bond. 	[Eff 11/15/80; am and comp 3/28/85; am and comp
8/30/85; comp 11/29/85; am and comp 6/5/87; comp 3/7/88; comp 9/15/90] (Auth:
HRS §514E-13) (Imp: 	HRS §514E-10)
SUBCHAPTER 12
COUNTY ZONING REGULATIONS
§16-106-45 Evidence of compliance with county regulation required. The
developer of a time share plan, in conjunction with the submission of an
application for registration of a time share plan as required by chapter 514E, HRS,
and this chapter, shall provide confirmation that each time share unit or time share
plan is located in an area designated by the county for time share use; provided
that no confirmation is required for preexisting time share units. 	Confirmation
shall be provided on a form 	prescribed by the director and completed by the
proper county authority not more than thirty days before the date of submission
of the application. 	[Eff 11/15/80; am and comp 3/28/85; comp 8/30/85; comp
11/29/85; comp 6/5/87; comp 3/7/88; comp 9/15/90] (Auth: 	HRS §514E-13)
(Imp: 	HRS §§514E-4, 514E-5)
SUBCHAPTER 13
PROHIBITED AND DECEPTIVE TRADE PRACTICES
106-44

§16-106-46 	Practices prohibited. 	(a) It shall be a violation of chapter
514E, HRS, and this chapter for any sales agent or acquisition agent for any time
share plan or unit to:
(1) 	Fail to comply with the disclosure requirements set forth in section
514E-9, HRS, or any rule adopted pursuant thereto;
(2) 	Use any promotional device without fully disclosing that the device
is being used for the purpose of soliciting sales of any interest or
interests in time share units or a time share plan;
(3) 	Offer a prospective purchaser a prize or gift, in writing, as part of
any time share advertising or sales promotion plan if in order to
claim the prize or gift the prospective purchaser must attend a sales
presentation, unless the written disclosure set forth in section
514E-11(3), HRS, and section 16-106-39(b) is provided at the time
the prospective purchaser is notified of the prize or gift;
(4) 	Misrepresent or deceptively represent any material fact concerning
the time share unit offered or sold, including, but not limited to:
(A) 	The amount of time or period of time the unit will be
available to any purchaser;
(B) 	The location or locations of the time share unit;
(C) 	The size, nature, extent, qualities, or characteristics of the
time share unit;
(D) 	The nature or extent of any services incident to the time
share unit;
(E) 	The 	rights 	of 	a 	purchaser, 	if 	any, 	to 	exchange 	the
purchaser’s occupancy rights to a unit in one location for
occupancy rights to a unit in another location; or
(F) 	The contents of the contract or other document or the
purchaser’s rights, privileges, or benefits thereunder;
(5) 	Fail to honor or comply with all provisions of a contract or
reservation agreement with the purchaser;
(6) 	Include, in any contract or reservation agreement, provisions
purporting to waive any right or benefit provided for purchasers
pursuant to chapter 514E, HRS;
(7) 	Receive from any prospective purchaser any money, property
(including but not limited to a credit card), or other valuable
consideration prior to signing a contract or reservation agreement
for the purchase of a time share unit; and
(8) 	Make 	a 	sales 	presentation 	to 	a 	prospective 	purchaser 	before
delivering, furnishing, or tendering to that prospective purchaser
any promised promotional device or other instrument.
106-45

(b) 	An acquisition agent operating in the State is prohibited from
selling or offering to sell or discussing price or terms of sale of any interest or
interests in a time share plan with prospective purchasers. 	The function of an
acquisition agent shall be limited to soliciting or encouraging others to attend a
time share sales presentation or to contact a time share sales agent or developer.
(c) 	A sales agent operating in the State shall not sell or offer to sell
any interest or interests in a time share plan unless the sales agent has an active
real estate broker’s license issued by the State real estate commission, and all of
the sales agent’s employees and independent contractors engaged in sales activities
with 	respect 	to 	the 	time 	share 	plan 	have 	an 	active 	real 	estate 	broker 	or
salesperson’s license issued by the state real estate commission. 	[Eff 11/15/80;
am and comp 3/28/85; comp 8/30/85; comp 11/29/85; comp 6/5/87; comp 3/7/88;
comp 9/15/90] (Auth: 	HRS §514E-13) (Imp: 	HRS §§514E-2.5, 514E-11)
§16-106-47 	Deceptive trade practices. 	It shall constitute an unfair or
deceptive trade practice within the meaning of chapter 480, HRS, and shall be a
violation of chapter 514E, HRS, for any developer, acquisition agent, or sales
agent to:
(1) 	Engage in the prohibited practices set forth in section 16-106-46(a),
paragraphs 	(2), (3), and (4);
(2) 	Fail to inform each purchaser orally and in writing, at the time the
purchaser signs the contract to purchase an interest or interests in
a time share unit or plan, of the purchaser’s seven-day right to
cancel or void the contract;
(3) 	Misrepresent in any manner the purchaser’s right to cancel or void
any contract to purchase a time share interest in a time share unit
or plan;
(4) 	Fail or refuse to honor any valid notice of cancellation of the
contract by the purchaser and fail or refuse to refund all payments
made under the contract or sale within fifteen business days after
receipt of the cancellation notice; or fail or refuse to cancel and
return 	any 	negotiable 	instrument 	executed 	by 	the 	buyer 	in
connection with the contract or sale and take any appropriate action
to terminate promptly any mortgage, lien, or other security interest
created in connection with the transaction;
(5) 	Fail to include on promotional literature and other printed or
written material the caption required by section 514E-11.1(7), HRS,
and section 16-106-39(a); and
(6) 	Fail to orally disclose during the initial oral contact with a
prospective purchaser that any promised promotional device is
106-46

being offered for the purpose of soliciting sales of time share
interests in time share units or a time share plan. 	[Eff and comp
3/28/85; am and comp 8/30/85; am and comp 11/29/85; comp
6/5/87; 	am 	and 	comp 	3/7/88; 	comp 	9/15/90] 	(Auth: 	HRS
§514E-13) (Imp: 	HRS §514E-11.1)
SUBCHAPTER 14
SUSPENSION OR REVOCATION OF REGISTRATION
§16-106-49 Cause for suspension or revocation. The director may suspend
or revoke the registration of a developer, acquisition agent, sales agent, OPC, plan
manager, or exchange agent for violation by the registrant or any of its employees
of any of the provisions of chapter 514E, HRS, or any rules adopted pursuant
thereto, after a hearing conducted pursuant to chapters 91 and 92, HRS, and
chapter 16-201, the administrative practice and procedure rules of the department,
or if the director determines that any registrant has failed to comply with a
temporary cease and desist order issued by the director pursuant to section
514E-12(b), HRS. 	[Eff 11/15/80; am and comp 3/28/85; comp 8/30/85; comp
11/29/85; am and comp 6/5/87; comp 3/7/88; comp 9/15/90] (Auth: 	HRS
§514E-13) (Imp: 	HRS §514E-12)
SUBCHAPTER 15
OUTSIDE PUBLIC CONTACT
§16-106-50 	OPC to be employed by broker. 	The OPC at all times shall
be employed either directly or indirectly by a licensed real estate broker who shall
also be registered as a time share sales agent or acquisition agent. 	A real estate
broker who employs an OPC who is not licensed pursuant to chapter 467, HRS,
shall be responsible for the acts of the OPC. [Eff 3/19/82; am and comp 3/28/85;
comp 8/30/85; comp 11/29/85; comp 6/5/87; comp 3/7/88; comp 9/15/90] (Auth:
HRS §§514E-2.5, 514E-13) (Imp: 	HRS §§514E-2.5, 514E-10)
§16-106-51 	Limitation on activity of OPC. 	(a) The sole function of the
OPC shall be to contact invitees to attend a time share sales presentation which
shall be conducted by a licensed real estate broker or salesperson.
106-47

(b) 	The OPC shall not respond to questions regarding the time share
plan being promoted at the time share sales presentation or participate in or
conduct any portion of the sales presentation. Questions regarding the time share
plan shall be referred to a licensed real estate broker or salesperson.
(c) 	The OPC shall conduct business activities only from the licensed
real estate broker’s place of business or a booth operated by the broker. The OPC
may distribute handbills or similar materials which otherwise conform to the
requirements of this chapter from outside the booth but must perform all business
activities from the booth. 	For the purposes of this section, the term "business
activities" shall mean signing up individuals for sales presentations, exchanging
moneys, or accepting deposits of moneys. 	A licensed real estate broker or
salesperson need not be physically present at the place of business or in the booth
when the OPC contacts invitees; provided that the OPC remains in the booth at
all times when conducting business activities. 	[Eff 	3/19/82; am and comp
3/28/85; comp 8/30/85; comp 11/29/85; am and comp 6/5/87; comp 3/7/88; comp
9/15/90] (Auth: HRS §§514E-2.5, 514E-13) (Imp: 	HRS §§514E-2.5, 514E-10)
§16-106-52 	Disclosure to be made by OPC. 	The OPC shall verbally
inform the invitee of the following:
(1) 	Any promised entertainment, prizes, gifts, food and drinks, games,
or other inducement offered at the time share sales presentation are
being offered for the purpose of soliciting sales of time share
interests in time share units or plans;
(2) 	The name of the time share program; and
(3) 	The name of the time share company the OPC represents. 	[Eff
3/19/82; am and comp 3/28/85; comp 8/30/85; comp 11/29/85;
comp 	6/5/87; 	comp 	3/7/88; 	comp 	9/15/90] 	(Auth: 	HRS
§§514E-2.5, 514E-13) (Imp: 	HRS §§514E-2.5, 514E-9, 514E-10,
514E-11, 514E-11.1)
§16-106-53 Location of booth. The location of any booth operated by the
licensed real estate broker shall be in compliance with applicable state or county
laws, ordinances, or rules. 	Information on the location of the booth shall be
provided to the director on a form prescribed by the director. 	No booth shall be
operated until an application containing the information required herein has been
accepted by the director. The application shall be deemed accepted if the director
has not acted upon the application within sixty days following receipt of the same.
[Eff 3/19/82; am and comp 3/28/85; comp 8/30/85; comp 11/29/85; comp 6/5/87;
106-48

comp 3/7/88; comp 9/15/90] (Auth: 	HRS §§514E-2.5, 514E-13) (Imp: 	HRS
§§514E-2.5, 514E-9, 514E-10)
SUBCHAPTER 16
LIEN PAYMENT TRUST
§16-106-56 	Requirements for trustees. 	(a) The 	requirements of this
section shall be met if time share units are conveyed to a trustee under a lien
payment trust established pursuant to section 514E-19, HRS.
(b) 	The trustee shall be a bank, savings and loan association, or trust
company authorized to do business in the State; provided that if the trustee is an
out-of-state bank, savings and loan association, or trust company, the trustee shall
be subject to approval of the director.
(c) 	The trustee shall at all times maintain a fidelity bond or fidelity
bonds covering all of its directors, officers, employees, agents, and volunteers
having control of or access to moneys or securities of the trustee, or moneys or
securities which are collected, held, managed, or disbursed by the trustee. 	The
fidelity bond or fidelity bonds shall cover any loss of money or other property the
trustee, the time share owners association, time share owners, and time share
purchasers may sustain as a result of any fraud, dishonesty, forgery or alteration,
larceny, theft, embezzlement, unlawful obstruction, misapplication, misplacement,
destruction or misappropriation, or any other dishonest or criminal act or omission,
or infidelity to duty of or by any director, officer, employee, agent, or volunteer
of the trustee. 	The bond may be in the form of individual bonds, a schedule
fidelity bond, or a blanket bond covering all of the persons mentioned above, and
may contain at least the following provisions:
(1) 	That the surety shall provide, not less frequently than annually,
written assurances to the director and to the time share owners
association that the bond is in full force and effect;
(2) 	That the surety may not cancel the bond without giving at least
thirty days notice in writing to the director and to the time share
owners association of the cancellation of the bond;
(3) 	That the prosecution or conviction or both of a director, officer,
employee, agent, or volunteer of the trustee shall not be a condition
precedent to recovery on the bond;
(4) 	That knowledge of defalcations shall not be imputed to the trustee
where a director, officer, employee, agent, or volunteer other than
the offending party has knowledge of the defalcations;
106-49

(5) 	That the identification of a specific offending party shall not be a
condition precedent to recovery on the bond; provided that it is
conclusively shown that loss has occurred as a result of the actions
of a director, officer, employee, agent, or volunteer of the trustee;
(6) 	That the bond may not be changed or amended without the prior
written consent of the director; and
(7) 	That the surety waives any defense based upon the exclusion of
volunteers or other persons who serve without pay from coverage
under the bond.
The amount and form of the fidelity bond or fidelity bonds covering directors,
officers, employees, agents, and volunteers of the trustee, and the sufficiency of
the surety thereon, shall be approved by the director; provided that the amount of
any bond shall be at least $50,000 or equivalent to the sum of all blanket liens on
the time share units which are registered for sale in the time share plan.
(d) 	The trustee shall at all times maintain a policy of errors and
omissions insurance covering any loss which the trustee shall become legally
obligated to pay as a result of any claims made against the trustee by reason of
liability arising out of any "wrongful act" on the part of the trustee in its capacity
as trustee of a time share plan under section 514E-19, HRS. The term "wrongful
act" shall mean any actual or alleged error or misstatement or misleading
statement or act or omission or neglect or breach of duty by the trustee. 	The
policy of insurance may contain at least the following provisions:
(1) 	That the insurer shall provide, not less frequently than annually,
written assurances to the director and to the time share owners
association that the policy is in full force and effect;
(2) 	That the insurer may not cancel the policy without giving at least
thirty days notice in writing to the director and to the time share
owners association of the cancellation of the policy; and
(3) 	That the policy may not be changed or amended without the prior
written consent of the director.
The amount and form of the policy and the sufficiency of the insurer thereon shall
be approved by the director; provided that the amount of any policy shall be at
least $5,000,000. [Eff and comp 3/28/85; comp 8/30/85; am and comp 11/29/85;
comp 6/5/87; comp 3/7/88; comp 9/15/90] (Auth: HRS §§514E-13, 514E-23)
(Imp: 	HRS §514E-23)
SUBCHAPTER 17
VOTING RIGHTS FOR APARTMENT UNITS
DESIGNATED FOR TIME SHARE USE
106-50

§16-106-58 	Voting rights for apartment units designated or sold as time
share units. (a) The time share instruments creating or regulating any time share
plan in a condominium project or apartment building shall include provisions
governing:
(1) 	Voting rights of each time share owner in the time share owners
association;
(2) 	The manner in which each time share unit’s vote in the association
of apartment owners shall be cast by the owners of the time share
unit;
(3) 	The voting rights of a time share purchaser under an agreement of
sale;
(4) 	Whether meetings of the board of directors of the time share
owners association shall be open to all members of the time share
owners association;
(5) 	The use of proxies; and
(6) 	The maintenance of a membership list of the members of the time
share owners association;
Provided that if the time share plan is created in a condominium project, these
provisions shall be subject to the provisions of the condominium project’s
declaration of horizontal property regime and bylaws.
(b) 	Notwithstanding anything to the contrary contained in the time
share instruments, voting rights in the time share owners association may be
exercised only by owners of time share interests (or by the holders of their
proxies) and no voting rights shall attach or be allocated to lobby areas, swimming
pools, recreation areas, saunas, storage areas, hallways, trash chutes, laundry
chutes, and other similar areas located outside apartments. [Eff and comp 3/28/85;
am and comp 8/30/85; comp 11/29/85; comp 6/5/87; comp 3/7/88; comp 9/15/90]
(Auth: 	HRS §§514E-6.5, 514E-13) (Imp: 	HRS §514E-6.5)
106-51

Amendments to and compilation of chapter 16-106, Hawaii Administrative
Rules, on the Summary Page dated July 30, 1990, were adopted on July 30, 1990,
following a public hearing held on July 9, 1990, after public notices were given
in the Honolulu Advertiser, Hawaii Tribune-Herald, West Hawaii Today, Maui
News, and the Kauai Times on June 1, 1990.
They shall take effect ten days after filing with the Office of the Lieutenant
Governor.
/s/ Robert A. Alm
ROBERT A. ALM
Director of Commerce and Consumer Affairs
APPROVED AS TO FORM: 	Date 8-16-90
/s/ Glenn S. Grayson
Deputy Attorney General
APPROVED: 	Date 	9-4-90
/s/ John Waihee
JOHN WAIHEE
Governor
State of Hawaii
September 5, 1990
Filed
106-52

DEPARTMENT OF COMMERCE AND CONSUMER AFFAIRS
Amendment and Compilation of Chapter 16-106
Hawaii Administrative Rules
July 30, 1990
SUMMARY
1. 	§16-106-2 is amended.
2. 	§16-106-2.5 is added.
3. 	§§16-106-4.4 and 16-106-4.5 are amended.
4. 	§16-106-8.1 is amended.
5. 	§16-106-12 is amended.
6. 	Chapter 106 is compiled.