S.D. Admin. R. 20:69:12:32

Current through Register Vol. 51, page 57, November 12, 2024

Section 20:69:12:32 - Developer's escrow agreement when financial plan submitted

If a developer elects to submit a financial plan for protection of the purchasers to the commission for approval, the developer shall furnish the commission a certified statement of a summary of all underlying financial obligations of the time-share plan, including agreements of sale, leases, mortgages, liens, and a projected payment plan which provides for payment in full of all underlying financial obligations before the final receipts from the purchasers of their payments; a description of the source of means by which such payments will be made; and a description of arrangements with banks, licensed escrow companies, trust companies or lending institutions relating to the receipt of purchaser's moneys and disbursements on account of the payment plan.

The developer shall submit an escrow agreement which provides for the following:

(1) The purchaser's right to refund at any time the time-share units or facilities are no longer available as provided in the contract in an amount which represents the purchaser's pro rata share of the moneys in the escrow account;

(2) Deposit of all funds, except those excluded by § 20:69:12:33 paid by the purchasers of the time-share ownership or use plan in the special escrow account;

(3) Payment in full of all underlying financial obligations of the time-share plan before the final receipts from the purchasers of their payments;

(4) Modification of the payment plan with the approval of the commission upon change of circumstances. However, any payment plan must provide for payment in full of all underlying obligations before the final receipts from the purchasers of their payments, and no additional encumbrances may be placed on any property subject to the time-share plan without the approval of the commission;

(5) Collection of funds and making of disbursements by the bank, escrow company, or trust company according to the payment plan submitted to the commission by the developer;

(6) After payment of the underlying financial obligations, any interests in the time-share property must be conveyed to the purchaser in an ownership plan and in a use plan. The developer shall convey to a disinterested third party, such as a nonprofit corporation or club or trust company, an interest in the property necessary to ensure the use of the property for the period of time conveyed by the developer in the time-share plan; and

(7) Approval by the commission of an amendment to the escrow agreement.

A developer must have the holders of the underlying financial obligations submit to the commission annually statements of balances owing on the underlying financial obligations.

S.D. Admin. R. 20:69:12:32

10 SDR 68, effective 1/1/1984; 12 SDR 102, effective 12/22/1985; 12 SDR 151, 12 SDR 155, effective 7/1/1986; transferred from

General Authority: SDCL 36-21A-89, 43-15B-6.

Law Implemented: SDCL 43-15B-3, 43-15B-6.