§ 2811. Time-Share Advertising Criteria.

Standards which will be applied by the Real Estate Commissioner in determining whether advertising for sale or lease of time-share interests is false, untrue or misleading within the meaning of those terms in Section 11245 of the Code shall include, but shall not be limited to the following:

(1) Advertising shall not represent the availability for use of a time-share interest that is not set forth in the public report.

(2) A time-share plan shall not be advertised under a name that is not set forth in the application.

(3) A time-share plan shall not be advertised by a name or trade style which implies, contrary to fact, that the developer or his agent is a bona fide research organization, public agency, nonprofit organization or similar entity.

(4) No accommodation, improvement or facility, over which the developer does not have control with respect to completion, may be advertised unless (1) it has been completed (2) completion is assured through bonding or other arrangements approved by the commissioner, or (3) a clear and conspicuous disclosure is included in close proximity to the mention or depiction of the advertised accommodation, improvement or facility stating that the accommodation, improvement or facility is proposed and may not be built.

(5) Reference shall not be made to a proposed public facility or project which purports to affect the value and utility of time-share interests without a disclosure of the existing status of the proposed facility based upon information supplied or verified by the authority responsible for the public facility or project.

(6) Pictorial or illustrative depictions of the time-share property and surrounding lands must accurately portray the land as it exists and proposed improvements as they will be constructed.

(7) Pictorial or illustrative depictions other than unmodified photographs shall bear a prominent disclosure identifying the nature of the depiction, e.g., ARTISTS CONCEPTION and a legend identifying those improvements which are not then in existence.

(8) If a map or diagram is used to show the location of the time-share property in relation to other places, actual miles from each other place to the time-share property shall be shown or the map or diagram shall be prepared to scale and shall include a scale of miles or the map or diagram shall be prominently marked “Not to Scale.”

(9) If the existence of a lake, river, canal or other body of water, which is subject to a fluctuating water level other than through natural causes, is advertised as a feature of the time-share property, any significant effect of the fluctuation upon the use of the water facility and upon the time-share interests shall be described.

(10) No advertisement shall imply that a facility is available for the exclusive use of purchasers of time-share interests if a public right of access or of use of the facility exists.

(11) Full disclosure shall be made of the conditions or restrictions upon the availability for use by owners of time-share interests of private clubs or facilities in which an owner will not acquire a proprietary or contractual interest through purchase of a time-share interest, including, if applicable, that the use is at the pleasure of the owner of the facility.

(12) No representation may be made that time-share interests being offered for sale can be further divided unless a full disclosure is included as to the legal requirements for further division of the interests.

(13) Time-share interests may not be advertised as available at a particular minimum price if the number of time-share interests available at that price comprise less than 10% of the unsold inventory of the developer, unless the number of interests then for sale at the minimum price is set forth in the advertisement.

(14) Advertising of a discounted purchase price shall not be made unless the developer has established base prices for application of the discount through a substantial number of sales at base prices.

(15) A prospective increase in the price of a time-share interest may not be implied nor shall a price increase of such a time-share interest be announced without announcing the approximate date on which the increase will be placed into effect, and without a good faith belief that the price increase will be placed into effect on that date.

(16) If the phrase “closing costs only” or similar terminology is used to describe the price of a time-share interest, the estimated dollar amount of the costs must be set forth in the advertisement.

(17) No representation shall be made as to the availability of a resale program offered by or on behalf of the developer, unless the resale program is then in existence and the extent and intended duration of the resale program and any restrictions on the program are fully disclosed to the prospective purchaser.

(18) An asterisk or other reference symbol may be used to explain, but not to contradict or to change the ordinary meaning of the material in the body of the advertisement.

(19) Unless an offer made in connection with a sales promotion is unequivocally without conditions, the terms “free”, “no obligation” or similar terms may not be used to describe that which is offered.

(20) Offers of travel, accommodations, meals or entertainment at no cost or reduced cost, the purpose of which is to promote sales, shall not be described as “awards”, “prizes” or similar terms.

(21) Offers or solicitations of trip reservations to visit time-share property or any other place where a sales presentation for subdivided property is to be made shall set forth all conditions, limitations or qualifications that will be applied before the recipient will be allowed to make the trip.

(22) The approximate retail value of any gift, prize or premium offered through an advertisement to prospective purchasers shall be set forth in the advertisement. This requirement is limited to gifts, prizes or premiums with a retail value in excess of $25.

(23) Complete rules and procedures for any contest or drawing advertised in connection with the marketing of time-share interests shall be included in the advertisement, or the advertisement shall state the means by which a person can secure full information concerning said rules and procedures prior to his participation in the contest or drawing.

(24) Advertising shall not include testimonials or endorsements which contain matters which the developer would be precluded by law or regulation from making in his own behalf.

(25) An offer or inducement to purchase which purports to be limited as to quantity or restricted as to time shall set forth the numerical quantity and/or time applicable to the offer or inducement.

(26) No direct mail advertisement purporting to have resulted through a referral shall be used unless the developer can, upon request of the commissioner, provide evidence of the referral. Names purchased from marketing lists and similar commercial sources are not considered “referrals” for purposes of this section.

(27) Statements appearing in the public report for a time-share plan shall not be quoted, paraphrased or cited out of context nor shall any part of the public report be underscored, italicized, bold faced or otherwise highlighted except in strict conformance with highlighting in the public report itself.

HISTORY

1. New subsection (a)(24) filed 6-20-2002; operative 7-20-2002 (Register 2002, No. 25).

2. Repealer and new section filed 5-5-2005; operative 7-1-2005 (Register 2005, No. 18).

Note

Note: Authority cited: Section 11281, Business and Professions Code. Reference: Section 11245, Business and Professions Code.