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General Laws

Section 22. (a) For the purposes of this section, “special developer right” shall mean a right reserved for the benefit of a developer to add more units to a time-share property to maintain sales offices, management offices, models, and signs or to appoint, control, or serve as the managing entity. No special developer right created or reserved under this chapter may be transferred except by an instrument evidencing the transfer recorded in the registry of deeds or land registration office for every district in which any portion of the time-share property is located. The instrument shall not be effective unless it is also executed by the transferee.

(b) Upon transfer of a special developer right, the liability of a transferor developer shall be as follows:

(1) A transferor shall not be relieved of any obligation or liability arising before the transfer and shall remain liable for warranty obligations imposed upon him by this chapter. Lack of privity shall not deprive any time-share owner of standing to maintain an action to enforce any obligation of the transferor.

(2) If a successor to any special developer right is an affiliate of a developer, the transferor shall be jointly and severally liable with the successor for any obligations or liabilities of the successor relating to the time-share property.

(3) If a transferor retains any special developer right, but transfers other special developer rights to a successor who is not an affiliate of the developer, the transferor shall be liable for any obligations or liabilities imposed on a developer either by this chapter or by the time-share instrument relating to the retained special developer rights and arising after the transfer.

(4) A transferor shall not be liable for any act or omission or any breach of the contractual or warranty obligation arising from the exercise of a special developer right by a successor developer who is not an affiliate of the transferor.

(c) Unless otherwise provided in a mortgage instrument, in case of foreclosure of a mortgage, tax sale, judicial sale, or sale under bankruptcy code or receivership proceedings, of any time-shares owned by a developer in the time-share property, a person acquiring title to all the time-shares being foreclosed or sold succeeds to all special developer rights, or only to any rights reserved in the time-share instrument pursuant to section sixteen and held by said developer but only upon his request. The judgment or instrument conveying title shall provide for transfer of only the special developer rights requested.

(d) Upon foreclosure, tax sale, judicial sale, or sale under bankruptcy code or receivership proceedings, of all time-shares in a property owned by a developer

(1) the right to appoint, control, or serve as the managing entity shall terminate unless the judgment or instrument conveying title provides for transfer of all special developer rights to a successor developer; and

(2) the developer shall cease to have any other special developer rights.

(e) The liabilities and obligations of a person who succeeds to a special developer right shall be as follows:

(1) a successor to any special developer right who is an affiliate of a developer shall be subject to all obligations and liabilities imposed on the transferor by this chapter or by the time-share instrument;

(2) a successor to any special developer right, other than a successor described in clauses (3) or (4), who is not an affiliate of a developer, shall be subject to all obligations and liabilities imposed by this chapter or the time-share instrument:

(i) on a developer, which relate to his exercise or non-exercise of special developer rights; or

(ii) on his transferor other than:

(A) misrepresentation by any previous developer;

(B) warranty obligations on improvements made by any previous developer or made before the property became a time-share property;

(C) breach of any fiduciary obligation by any previous developer or his appointees; or

(D) any liability or obligation imposed on the transferor as a result of the transferor’s acts or omissions after the transfer.

(3) a successor to only a right to maintain sales offices, management offices, models, and signs, if he is not an affiliate of a developer, may not exercise any other special developer right and shall not be subject to any liability or obligation as a developer, except the obligation to provide a public offering statement and any liability arising as a result thereof; and

(4) a successor to all special developer rights held by his transferor who is not an affiliate of said developer and who has succeeded to said rights pursuant to a deed in lieu of foreclosure or a judgment or instrument conveying title to the time-shares pursuant to subsection (c) may declare his intention to hold said rights solely for transfer to another person in an instrument recorded in the appropriate registry of deeds or land registration office. Thereafter, until transferring all special developer rights to any person acquiring title to any time-share owned by the successor, or until recording an instrument permitting exercise of all said rights, said successor may not exercise any of said rights other than any right held by his transferor to appoint, control, or serve as the managing entity, and any attempted exercise of said rights shall be void. So long as a successor may not exercise special developer rights under this subsection, he shall not be subject to any liability or obligation as a developer other than liability for his acts and omissions in appointing, controlling, or serving as the managing entity.

(f) Nothing in this section shall subject any successor to a special developer right to any claims against or other obligations of a transferor developer, other than claims and obligations arising under this chapter or the time-share instrument.

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