Nevada Timeshare License Practice Exam

Which statement is true regarding a developer's disclosure requirements for exchange programs?

1. Only verbal disclosures are needed

2. Written disclosure of potential benefits is required

3. All disclosures must be made post-sale

4. Disclosure of membership costs is optional

The correct answer is: Written disclosure of potential benefits is required

The statement regarding a developer's disclosure requirements for exchange programs emphasizes the importance of written communication to prospective buyers. Developers are obligated to provide written disclosures detailing potential benefits associated with exchange programs. This requirement ensures that consumers have clear, concise, and detailed information about what they can expect when participating in such programs. Written disclosures help to avoid misunderstandings and provide a tangible reference for buyers, reinforcing the notion of informed consent in the sales process. In contrast, the other statements inaccurately represent the legal requirements and best practices. Verbal disclosures alone do not suffice, as written disclosures provide a more reliable record. It is also essential for disclosures to be made prior to the sale rather than post-sale to foster transparency and allow potential buyers to make informed decisions. Lastly, disclosure of membership costs is a critical part of the overall information package and cannot be considered optional, as this could mislead consumers about the total financial commitment involved in participating in an exchange program.