(A) A vacation time sharing plan for sale or offered for sale in this State must be registered with the South Carolina Real Estate Commission as follows:
(1) Upon receipt of an application for registration in proper form, the commission must initiate an examination to determine that the:
(a) seller may sell, convey, otherwise transfer, or cause to be sold, conveyed, or otherwise transferred the vacation time sharing plan offered for sale if the purchaser complies with the terms of the offer;
(b) advertising material and general promotional plan are not false or misleading;
(c) requirements of this chapter have been fulfilled;
(d) seller or its officers, directors, and principals have not been convicted of a crime involving land dispositions, crimes of moral turpitude, securities law violations, fraudulent business activities, or any aspect of the vacation time sharing business in this State, the United States, or another state or foreign country within the past ten years, and have not been subject to an injunction or administrative order within the past ten years restraining a false or misleading promotional plan involving any of the activities above; and
(e) interests in accommodations and facilities conveyed to a purchaser are free and clear of all liens, mortgages, and encumbrances of every kind, the existence or foreclosure of which may result in loss or diminution of the purchaser's ownership or use rights, as represented in the vacation time sharing plan. The seller shall provide adequate assurances to the commission that all interests conveyed to purchasers in accommodations and facilities, and the accommodations and facilities themselves, shall remain unencumbered excepting only tax liens, owners' association assessments, encumbrances including mortgage liens which are subordinate to the vacation time sharing plan or other encumbrances arising from the purchaser's actions, and purchase money mortgages, contracts for deed, or similar purchase money security interests arising from transactions in which the purchasers acquired their interests. Those assurances may consist of bonds, nondisturbance instruments, and recorded instruments advising third parties of the existence of purchaser use rights and providing for subordination of future liens. For those plans in which an interest in accommodations and facilities is not conveyed, the commission may require either a cash or surety bond, or both, in an amount up to but not to exceed a combined total of two hundred fifty thousand dollars.
(2) Within thirty days from the date the commission receives an application for registration, the commission must enter an order registering the vacation time sharing plan or rejecting the registration. If an order of rejection is not entered within thirty days from the date of application, the vacation time sharing plan is considered registered unless the applicant has consented in writing to a delay. A reasonable request for an extension of time by the commission must not be withheld.
(a) If the commission affirmatively determines, upon inquiry and examination, that the requirements of this chapter have been met, it must enter an order registering the plan.
(b) If the commission determines, upon inquiry and examination, that any of the requirements of this chapter have not been met, the commission must notify the applicant that the application for registration must be corrected in the particulars specified within fifteen days. The commission has the discretion to grant a longer period of time for the applicant to make the required corrections. If the requirements are not met within the time allowed, the commission must enter an order rejecting the registration and including the findings of fact upon which the order is based. The order rejecting the registration is not effective for twenty days during which the applicant may petition for reconsideration and must be granted a hearing.
(c) If it appears that a person, company, or a business organization has engaged or is about to engage in an act or practice constituting a violation of a provision of this chapter or any rule or order under it, the commission, through the Department of Labor, Licensing and Regulation, with or without prior administrative proceedings, may bring an action in the circuit court to enjoin the acts or practices and to enforce compliance with this chapter or any rule or order under it. The commission must notify, whenever practicable, a person or business violating this chapter before recourse in the circuit court. Upon proper showing, injunctive relief or temporary restraining orders may be granted, and a receiver or conservator may be appointed. Neither the commission nor the Department of Labor, Licensing and Regulation is required to post bond in a court proceeding.
(B) The commission may:
(1) make a public or private investigation it considers necessary, either within or outside of this State, to determine if a person has violated or is about to violate this chapter or any rule or order under it, or to aid in the enforcement of this chapter or in the prescribing of rules and forms under it;
(2) require or permit a person to file a statement in writing, under oath or otherwise as the commission determines, as to all facts and circumstances concerning the matter to be investigated;
(3) for the purpose of any investigation or proceeding pursuant to this chapter, the commission or an officer designated by rule may administer oaths or affirmation and, upon its own motion or upon request of a party, must subpoena witnesses, compel their attendance, take evidence, and require the production of a matter relevant to the investigation, including the existence, description, nature, custody, condition, and location of books, documents, or other tangible things and the identity and location of persons having knowledge of relevant facts or another matter reasonably calculated to lead to the discovery of material evidence;
(4) apply to the circuit court for an order compelling compliance upon a person's failure to obey a subpoena or to answer questions propounded by the investigating officer and upon reasonable notice to all persons affected by it, through the Department of Labor, Licensing and Regulation;
(5) issue an order requiring the seller to cease and desist from an unlawful practice and to take affirmative action to carry out the purposes of this chapter if, after notice and hearing, the commission determines that a seller has:
(a) violated a provision of this chapter;
(b) directly or through an agent or employee knowingly engaged in false, deceptive, or misleading advertising, promotional, or sales methods to offer or dispose of an interest in a vacation time sharing plan;
(c) made a substantial change in the plan of development and sale of the vacation time sharing plan after the order of the registration without obtaining the prior written approval of the commission; or
(d) violated a lawful order or rule of the commission;
(6) make findings of fact in writing that the public interest is irreparably harmed by delay in issuing an order and issue a temporary cease and desist order. Before issuing the temporary cease and desist order, the commission, whenever possible by telephone or otherwise, must give notice to the seller of the proposal to issue a cease and desist order. Each temporary cease and desist order must include in its terms a provision that, upon request, a hearing must be held promptly to determine whether or not the order becomes permanent;
(7) revoke a registration of a vacation time sharing plan if, after notice and hearing upon a written finding of fact, the commission determines that the seller has:
(a) failed to comply with the terms of a cease and desist order;
(b) been convicted in a court of competent jurisdiction, after the filing of the application for registration, of a crime involving fraud, deception, false pretenses, misrepresentation, false advertising, or dishonest dealing;
(c) disposed of, concealed, or diverted funds or assets of a person so as to defeat the rights of vacation time sharing plan purchasers;
(d) failed to faithfully perform any stipulation or agreement made with the commission as an inducement to grant a registration, to reinstate a registration, or to approve any promotional plan or advertisement; or
(e) made intentional misrepresentations or concealed material facts in an application for registration; and
(8) issue a cease and desist order instead of revoking a registration if it finds, after notice and hearing, that the seller has been guilty of a violation for which revocation could be ordered.
HISTORY: 1981 Act No. 106, Section 4; 1994 Act No. 385, Section 49; 2003 Act No. 84, Section 1.