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Mr Speaker it is my pleasure to start the debate on the Timeshare Vacations Bill.
As you know Jamaica is keen on developing a more sophisticated tourism product, one that also embraces the timeshare/vacation ownership market.
Research has shown that Vacation Ownership is one of the fastest growing sectors of the global hospitality industry, and that there is a huge and significant potential for further growth and development of the Timeshare product in the Caribbean and especially in Jamaica.
At the 16th Annual Shared Ownership Investment Conference held in Miami on Wednesday, October 15, 2014, Mr Howard Nusbaum, President of the American Resort Development Association (ARDA) said that there is a high demand for timeshare ownership in the Caribbean and that the Caribbean is the most highly sought-after timeshare destination in the world, partly because of the relative scarcity of timeshare units in the region.
Presently investment in our tourism sector is high. Prospective investors have shown an interest in developing timeshare in Jamaica and this can be of particular benefit as it includes a mix of accommodation such as integrated leisure resort facilities with luxury condo resorts. So Mr. Speaker, we will be further diversifying our accommodations offering as well as adding another tool in our investment portfolio.
Benefits of timeshare to Jamaica a country
So Mr. Speaker, during the last decade timeshare has been viewed as a significant driver of business in the hospitality sector. It has the potential to be part of the dynamic growth which Jamaica’s Tourism sector is currently enjoying. Timeshare schemes are providers of employment and can readily inject funds into multi-purpose projects.
Jamaica’s tourism industry stands to benefit from timeshare in several ways. Some of these are:
Development of Timeshare Legislation
Mr. Speaker, the Ministry of Tourism and Entertainment has been working on the development of Timeshare Legislation for some time now and we are pleased that it is finally a reality.
Mr. Speaker the process involved inputs from many individuals and entities. In this regard, I would like to acknowledge and thank The Honourable Minister of Justice, Senator Mark Golding who has been personally involved in the development of this Bill. In addition, I would like thank the Registrar of Titles, the Chairman and Chief Executive Officer of the Real Estate Board, American Resort Developers Association, the Jamaica Bankers Association, representatives from the Attorney General’s Chambers, the Chief Parliamentary Counsel and my staff at the Ministry for their support, advice and input towards the finalization of the Timeshare Vacations Bill.
Timeshare or Vacation Ownership Definition
Mr. Speaker, Timeshare as defined by American Resort Developers Association is “a method of use and or shared ownership of vacation real estate where purchasers acquire a period of time (often one (1) week) in a condominium, apartment or other type of vacation accommodation”.
From the purchasers’ point of view, timeshare or Vacation Ownership equals the acquisition of future holiday accommodation at today’s prices.
TIMESHARE VACATIONS BILL
Mr. Speaker the Bill is designed to achieve two main objectives. It will give legal recognition to timeshare vacation schemes in the form of right-to-use agreements which are timeshare contracts and deeds issued in respect thereof. It also regulates the marketing, promotion and provision of timeshare accommodation.
Mr. Speaker the Bill provides for:
Mr. Speaker, the Bill contains twenty seven (27) clauses and I will outline and provide a brief explanation of each.
CLAUSE 1, states the short title of the Bill and that it shall only come into effect by an appointed day notice made by the Minister and published in the Gazette.
CLAUSE 2, provides definitions for pertinent terms within the Bill.
Mr. Speaker, We at the Ministry has recognized that the Bill did not make specific reference to vacation clubs which is an important marketing tool used by the sector and growing in popularity.
To this end, at the appropriate time Mr. Speaker, I intend to make an amendment to the Bill to include a definition for vacations club.
CLAUSE 3, LICENSING REQUIREMENTS FOR TIMESHARE AGENTS, speaks to the licencing agents and empowers the Timeshare Registrar to grant annual licences and to impose terms and conditions for the licences. This licence is renewable. The Clause also sets out the conditions under which the licence may be granted.
CLAUSE 4, Mr. Speaker, speaks to the REGISTRATION OF TIMESHARE PLANS and sets up the regime for registration of such plans.
CLAUSE 5, deals with the PERMISSION REGARDING RESERVATIONS PRIOR TO REGISTRATION. Mr. Speaker the proprietor upon application to the Timeshare Registrar but prior to such registration may apply for permission to market, promote and accept non-binding reservations for rights to occupy the timeshare accommodation.
This will aid the proprietors in stimulating early investment in the development of the timeshare properties.
CLAUSE 6, deals with PUBLIC OFFERING STATEMENTS AND TIMESHARE CONTRACTS. It stipulates the information that has to be provided to a purchaser by the proprietor before the timeshare contract is executed. This information Mr. Speaker shall be in writing and shall be free of charge to the purchaser and easily accessible.
CLAUSE 7, speaks to the OBLIGATIONS REGARDING PROMOTION OF TIMESHARE ACCOMMODATION. Under a timeshare plan Mr. Speaker, even though a proprietor may have agents who market their timeshare, it is the responsibility of the proprietor to supervise all aspects of the promotion of the timeshare plan.
CLAUSE 8, is entitled WITHDRAWAL FROM TIMESHARE CONTRACTS. Mr. Speaker, this Clause seeks to protect an impulse buyer who has changed his mind after purchasing timeshare accommodation. The Purchaser may withdraw from the timeshare contract by giving written notice of the withdrawal within the withdrawal period as stated in the Act.
No reason needs to be given for the withdrawal. A standard notice form may be used as well as any other written document which clearly communicates the withdrawal. The withdrawal notice terminates the obligations under the contract and the proprietor shall return the moneys paid.
CLAUSE 9, Mr. Speaker, requires that the proprietor establishes and maintains an escrow account before promoting or offering any timeshare accommodation with an approved escrow agent.
All moneys deposited in this account shall be held, paid to, or applied for the benefit of persons entitled to it.
The escrow agent shall administer the account with due care and diligence and release money from the account only in accordance with the provisions of this Act.
Mr. Speaker, this clause is designed to protect the moneys of timeshare purchaser.
CLAUSE 10, Mr. Speaker ensures that all moneys which are received in relation to a timeshare contract shall be paid into the escrow account as mentioned previously within two (2) working days of receipt.
Upon withdrawal of a timeshare contract or cancellation of reservations, moneys paid into the escrow account shall be returned to a purchaser within twenty (21) days after a written demand is made by that purchaser.
CLAUSE 11 establishes the PURCHASERS ASSOCIATION AND CAPITAL RESERVE FUND. The purchasers of accommodation in a timeshare plan shall become the Purchasers Association for that plan.
The Purchasers Association shall establish and contribute to the capital reserve fund which is designed for the maintenance of the capital goods such as the buildings, furniture and equipment. This shall be done in keeping with prescribed regulations.
Mr. Speaker, the Purchasers Association shall be a body corporate.
CLAUSE 12 mandates the appointment of a management agent for each registered timeshare plan. The management agent shall be licensed as a real estate dealer under the Real Estate (Dealers and Developers) Act or it can be the purchasers association for that Timeshare Plan.
CLAUSE 13, speaks to the RIGHT TO OCCUPY NOT BEING EXTINGUISHED BY FORECLOSURE. Mr. Speaker, the Ministry of Tourism and Entertainment is conscious of the rights of the consumer who has bought a timeshare that has gone into receivership. This Clause seeks to ensure that the rights of a purchaser to occupy a timeshare plan shall not be extinguished by foreclosure, or the exercise of a power of sale.
CLAUSE 14 prohibits a proprietor or management agent from denying a purchaser access to a timeshare accommodation which he has the right to occupy within any period specified in the contract if he has complied with all contractual stipulations.
At an appropriate time I intend to make an amendment to this clause to allow for proprietors and management agents to offer to purchasers alternate accommodations if their timeshare is not available.
CLAUSE 15 defines the certificate of title and the Registrar of Titles which is in keeping with the Registration of Titles Act.
CLAUSE 16, outlines the basic procedure for the registration of a deed-based timeshare plan.
CLAUSE 17 Mr. Speaker speaks to the FORM AND EFFECT OF DEED and addresses the rights and obligations under the deed which may be assigned or transferred and the purchaser may create a mortgage, charge or other security interest in any rights or interest in the timeshare.
Mr. Speaker, this is important as it allows purchasers of timeshare to use the deed as security to borrow funds from financial institutions to finance their purchase.
CLAUSE 18 CESSATION OF TIMESHARE PLAN, this provides for the de-registration of deed-based timeshare accommodation where the property ceases to operate as a timeshare.
CLAUSE 19 provides for the inspection of the timeshare accommodation to be carried out by authorised officers. These include the Timeshare Registrar, the entity with responsibility for the development of standards for tourist accommodation, KSAC or the Parish Council, the Ministry with responsibility for health and the Jamaica Fire Brigade.
CLAUSE 20 outlines the enforcement powers given to the Timeshare Registrar.
CLAUSE 21 seeks to detail the offences that may be committed under this Act.
CLAUSE 22 establishes the Timeshare Vacations Registry. The Real Estate Board shall be responsible for the administration of the Registry and perform the functions of the Timeshare Registrar.
Mr. Speaker, the Timeshare Registrar like other statutory bodies will be required to submit annual reports to this Honourable House.
CLAUSE 23 mandates the Timeshare Registrar to maintain a register for timeshare plans registered under this Act.
CLAUSE 24 outlines the regulation making powers of the Timeshare Registrar. The Timeshare Registrar is empowered to make regulations with the approval of the Minister. Please note that Regulations which provide for penalties are subject to negative resolution.
Mr. Speaker, at an appropriate time I intend to make an amendment to this clause to allow for the Minister to make regulations governing the marketing of, sale of membership in and the operation of any scheme or other arrangement excluded from the definition of “timeshare contract” such as vacation clubs.
CLAUSE 25 speaks to proprietors who develop properties solely for use as timeshare accommodation in a registered timeshare plan. These proprietors will be exempt from any requirements under the Real Estate Dealers and Developers Act.
Mr. Speaker, this Clause is intended to encourage investment in the development of timeshare accommodations in Jamaica.
Mr. Speaker, it is recognized that there are timeshare contracts already established in the industry. Under Clause 26 these proprietors will be given two (2) years in which to register their timeshare. Consequently, proprietors who have these arrangements will not be in breach when the Act comes into force.
CLAUSE 27 speaks to the Amendments of the Electronic Transactions Act, the General Consumption Tax Act, the Real Estate Dealers and Developers Act and the Tourist Board Act to facilitate the functioning of the Timeshare Vacation Legislation.
Those were the twenty seven (27) clauses contained in the Bill.
Mr. Speaker, the Bill also contains four (4) schedules which I will now outline. The FIRST SCHEDULE details the particulars required in respect of a timeshare plan. These include the description of the accommodation and the total number of new units of accommodation.
THE SECOND SCHEDULE outlines the information to be provided to a purchaser before execution of the timeshare contract. This includes the price to be paid and a summary of the facilities and services available to the purchaser.
THE THIRD SCHEDULE, Mr Speaker contains the standard notice of withdrawal form and explains the effect of withdrawal from a timeshare contract.
THE FOURTH AND FINAL SCHEDULE contains the notice of acknowledgment of receipt of an executed timeshare contract.
In closing, Mr. Speaker, the passage of this piece of legislation is timely in light of the government’s growth agenda and the fact that global trends show tourism to be one of the fastest growing sectors in the global economy. The Timeshare Vacations Bill has the ability to help to propel the industry into an even more competitive position.
I am confident that current and prospective investors will now be more inclined to incorporate this product into their portfolio of services. And that we will benefit from the introduction of this new framework to govern the timeshare industry in Jamaica.