Simmering frustration among Virginia officials over frequent consumer complaints about marketing of time-share condominiums has fueled an effort among state legislators to amend the state's time-share law during the current legislative session.

A bill that would include sweeping revisions to the four-year-old Virginia Real Estate Time-Share Act was passed by the Virginia Senate late last week by a vote of 39-to-0, and is now working its way through the House of Delegates. Supporters of the bill say they expect the measure will pass, probably sometime next week.

Legislators are trying to include changes that would extend the scope of the act, increase bonding and disclosure requirements, toughen the penalties for violating the time-share law and give the Virginia Real Estate Commission additional enforcement power to see that consumers are protected as the law requires.

Under the current law, time-share developers must disclose financial information and a detailed prospectus on the development's size and organization to prospective buyers.

Consumers also have the right to cancel any sales contract they sign within five working days, a right that can not be waived even if the buyer signs a document waiving the right.

Legislators complain, however, that these consumer protections are not enough to shield consumers from "the hard-sell tactics" they have heard constituents complain about. Legislators are also concerned that most of the time-share resorts in Virginia or marketed in the state are exempt from having to comply with the law.

"The problem with the existing time-share act is that there are more ways to get out of it than to get in it," said Del. Kenneth R. Plum, a Democratic representative from the Reston area who is shepherding the Senate bill through the House of Delegates. "It is leaky like a sieve. This bill would fill the holes and extend protections to consumers so that they wouldn't get caught up in transactions they don't understand."

Plum said that of the 22 time-share developers registered with the state's Real Estate Commission last year, two filed for registration and 20 filed for exemption from the time-share law.

The current law only applies to in-state projects started after the law was first enacted in 1981. Out-of-state projects marketed in Virginia and new segments of older projects in Virginia are not covered by act.

There are only a handful of time-share resorts in Virginia, all in the mountains and ocean resort areas, but the industry is growing along with the boom in resort building; in-state marketing of out-of-state time-share resorts is also on the increase.

At the same time that Virginia officials say they have seen an increase in complaints about deceptive marketing practices, officials investigating the bankruptcy of the time-share development at Massanutten Village this past year have been frustrated by the lack of strong penalties in the time-share law.

Construction of time-share units at Massanutten, a large time-share development in the Virginia Blue Ridge, slowed to a halt in early 1983 after construction companies filed $120,000 in liens in Rockingham County Circuit Court against the developer, First Federal Corp. of Virginia. Several hundred people who had bought time-share units at the resort found out that summer -- when they arrived for their time-share weeks -- that the town houses had not been built.

After more than a year in bankruptcy court, Massanutten Village was sold to a Charlottesville development company late last year. The new owners have promised to complete the unbuilt time-shares and continue time-share development. John R. Swaim, the president of First Federal Corp. and whose time-share empire has been crumbling steadily since 1982, was sentenced to three years in prison last summer by a Mississippi federal district judge for concealing the purchase price of a building in Florida when obtaining a loan.

The Virginia Real Estate Commission started an investigation into the Massanutten case more than a year ago, and a spokesman for the commission said this week that it is ongoing. She said that much of the work, however, has been delayed by the bankruptcy proceedings.

A trustee for the bankruptcy court is still working to track down funds allegedly moved out of First Federal Corp. into other Swaim-owned subsidiaries. There are more than $40 million in claims still pending against First Federal and the

"The problem with the existing time-share act is that there are more ways to get out of it than to get in it. It is leaky like a sieve." -- Delegate Kenneth R. Plum three subsidiary companies that also filed for bankruptcy in early 1983.

The most sweeping measure in the proposed bill to amend the time-share act is a clause extending the act to all time-share projects in Virginia and all projects marketed in the state.

The bill would also expand the requirements of what information developers would have to disclose to prospective purchasers, and would require that developers carry performance bonds insuring 100 percent completion of the units and amenities of the development.

Purchase deposits on time-share units would have to be put in escrow accounts, which would also have to be fully bonded.

Disclosure of information about time-share exchange programs would also be required under the bill. Time-share exchange companies are companies that trade time-share weeks between participating developments.

As a member, an owner of a time-share unit in Virginia can spend his week at some other participating time-share resort.

In an analysis of the inadequacies of the current time-share law, legislative staff noted that enrollment in an exchange program is usually handled through a contract separate and distinct from the time-share purchase contract.

Staff also said that time-share purchasers often do not understand how the exchange program works and that time-share salesmen often exacerbate the problem with inadequate explanations or misrepresentations.

The bill would also increase the fines and penalties the Virginia Real Estate Commission -- which oversees compliance of the time-share act -- could levy against developers or salespeople who disregard the provisions of the law.

Under the current law the classifications of certain crimes are seen by some legislators as "unsuitable" for the degree of crime. Certain violations currently listed as only misdemeanors would be increased under the bill to felonies.

Virginia Sen. Stanley C. Walker, a Democrat from the Norfolk area, said he became the sponsor of the bill after comparing Virginia's time-share law to those in Florida and South Carolina.

"Everyone, even the industry, agrees we have a very weak time-share law," said Walker. "Massanutten hurt the industry badly, and most of the industry representatives are sincere in wanting a bill that would help improve its image."

The bill has been sent to the House Committee of General Laws and is expected to go to the floor of the House for a vote next week.

Walker said that industry representatives have argued against the performance bond requirement, saying that it would hurt their ability to get financing, but he said they agreed to accept those provisions.

"In the final analysis, all the industry representatives agreed that for the most part it is a good bill," said Walker. "They believe that a time-share project in Virginia, conducted property by responsible people, can be done successfully."