707.42 Exchange or reciprocal program; additional requirements.

(1) Definitions. In this section:

(a) “Exchange company" means a person operating an exchange program.

(b) “Exchange program" means an arrangement where time-share owners exchange occupancy rights among themselves or with time-share owners of other time-share units or both.

(c) “Reciprocal program" means an arrangement allowing a campground member to use one or more campgrounds, the owners of which are persons other than the campground operator who entered into the campground contract with the campground member.

(2) Exchange program; disclosures. If time-share owners are permitted or required to become members of or to participate in an exchange program, the time-share disclosure statement or a supplement delivered with the statement shall contain or fully and accurately disclose, in addition to the information required by s. 707.41 (4) and, if applicable, ss. 707.43 to 707.45, all of the following information:

(a) Whether membership or participation in the exchange program by a time-share owner is voluntary or mandatory.

(b) The name and address of the exchange company, whether the exchange company is an affiliate of the developer, and whether the exchange company or any of its officers or directors has any legal or beneficial interest in any developer or manager of any time-share property participating in the exchange program.

(c) The names of all officers, directors and shareholders owning 5 percent or more of the outstanding stock of the exchange company.

(d) The terms and conditions of the contractual relationship between the time-share owner and the exchange company.

(e) The procedures whereby the contractual relationship between the time-share owner and the exchange company may be changed or terminated, and whether it may be terminated or otherwise affected by action or inaction of the developer or the managing entity or by other factors beyond the control of the time-share owner.

(f) A complete and accurate description of all limitations, restrictions or priorities used in the operation of the exchange program, including limitations on exchanges based on the season, unit size or levels of occupancy, expressed in boldface type, and if the limitations, restrictions or priorities are not uniformly applied by the exchange program, a clear description of the manner in which they are applied.

(g) The procedures to qualify for and effectuate exchanges and the manner in which exchanges are arranged by the exchange company.

(h) Whether exchanges are arranged on a space-available basis and whether the exchange program guarantees fulfilling specific requests for exchanges.

(i) Whether and under what circumstances a time-share owner, in dealing with the exchange company, may lose the use and occupancy of the time share in an exchange which the time-share owner properly applied for without being provided with substitute accommodations by the exchange company.

(j) The fees or range of fees for participation by time-share owners in the exchange program, a statement of whether the fees may be altered by the exchange company and the circumstances under which changes in the fees may be made.

(k) The name and address of the site of each time-share property, accommodation or facility that is participating in the exchange program.

(L) The number of units in each time-share property participating in the exchange program that are available for occupancy and that qualify for participation in the program, expressed with the following numerical groupings: 1-5, 6-10, 11-20, 21-50, and 51 and over.

(m) The number of time-share owners with respect to each time-share property who are eligible to participate in the exchange program expressed within the following numerical groups: 1-100, 101-249, 250-499, 500-999, and 1,000 and over.

(n) The disposition made by the exchange company of time shares deposited with the exchange program by time-share owners eligible to participate in the exchange program and not used by the exchange company in effecting exchanges.

(o) All of the following information, which shall be independently audited by an independent, certified public accountant or accounting firm in accordance with generally accepted accounting principles:

1. The number of time-share owners eligible to participate in the exchange program and a description of the relationship between the exchange company and time-share owners as either fee-paying or gratuitous.

2. The number of time-share properties, accommodations or facilities eligible to participate in the exchange program, categorized by those having a contractual relationship between the developer or the managing entity and the exchange company and those having solely a contractual relationship between the exchange company and time-share owners directly.

3. The percentage of confirmed exchanges, which shall be the number of exchanges confirmed by the exchange company divided by the number of exchanges properly applied for, together with a complete and accurate statement of the criteria used to determine whether an exchange request was properly applied for and the statement specified in sub. (4).

4. The number of time shares for which the exchange company has an outstanding obligation to provide an exchange to a time-share owner who relinquished a time share during the year in exchange for a time share in any future year.

5. The number of exchanges confirmed by the exchange company during the year.

(3) Delivery. If an exchange company offers an exchange program directly to the purchaser or time-share owner, the exchange company shall deliver to each purchaser or time-share owner the information set forth in sub. (2). This subsection does not apply to any renewal of the contract between a time-share owner and an exchange company, unless there are material changes in the information required by sub. (2) adversely affecting the interests of the time-share owner.

(4) Boldface statement. Each exchange company offering an exchange program to purchasers in this state shall include the following statement in boldface type on all promotional brochures, pamphlets, advertisements or other materials disseminated by the exchange company which also contain the percentage of confirmed exchanges described in sub. (2) (o) 3.: THE PERCENTAGE OF CONFIRMED EXCHANGES IS A SUMMARY OF THE EXCHANGE REQUESTS ENTERED WITH THE EXCHANGE COMPANY IN THE PERIOD REPORTED. THE PERCENTAGE OF CONFIRMED EXCHANGES DOES NOT INDICATE A PURCHASER'S PROBABILITIES OF BEING CONFIRMED TO ANY SPECIFIC CHOICE OR RANGE OF CHOICES, SINCE AVAILABILITY AT INDIVIDUAL LOCATIONS MAY VARY.

(5) Misrepresentation in exchange company information; representations by developer.

(a) If the developer relies in good faith on information provided by others in making disclosures required by this section, the developer shall be responsible for a misrepresentation based upon that information only if the developer has knowledge of its falsity.

(b) Except for written information provided to the developer by the exchange company, an exchange company is not liable for any of the following:

1. Representations made by the developer relating to the exchange program or the exchange company.

2. The use, delivery or publication by the developer of any information relating to the exchange program or the exchange company.

(6) Campgrounds; reciprocal program. A campground operator shall maintain any reciprocal program that is represented in a campground contract as available to a campground member when the campground contract is signed, except that the campground operator may cancel a reciprocal program if any of the following occurs:

(a) The campground operator acquires for the use of campground members the number of campgrounds specified in the campground contract as constituting a replacement for the reciprocal program.

(b) The term of the reciprocal program, as specified in the campground contract, expires.

(c) The campground operator substitutes a comparable reciprocal program, as provided in the campground contract.

History: 1987 a. 399.