514E-19 Protection of purchasers from blanket liens. (a) An escrow for the sale of a time share interest in a time share ownership plan may close only if the requirements of any one of the following alternatives for protecting the purchaser have been satisfied:

(1) The time share interest is conveyed to the purchaser free and clear of any blanket liens;

(2) The time share unit is conveyed to a trustee:

(A) Free and clear of any blanket liens under a trust meeting the requirements of sections 514E-22 and 514E-23; or

(B) Under a lien payment trust meeting the requirements of sections 514E-22, 514E-23, 514E-24, and 514E-25;

(3) (A) The time share interest is conveyed to the purchaser subject only to blanket liens:

(i) Where every person holding an interest in the blanket lien has executed and recorded a nondisturbance agreement; or

(ii) For which the director's acceptance of a surety bond or an irrevocable letter of credit meeting the requirements of section 514E-28 has been recorded with respect to that time share unit; and

(B) If legal or equitable title will be held by anyone other than the purchaser, a notice of time share plan is recorded; or

(4) The requirements of any alternative arrangements accepted by the director have been met.

(b) An escrow for the sale of a time share interest in a time share use plan may close only if the requirements of any one of the following alternatives for protecting purchasers have been satisfied:

(1) The time share unit is conveyed to a trustee:

(A) Free and clear of any blanket liens under a trust meeting the requirements of sections 514E-22 and 514E-23; or

(B) Under a lien payment trust meeting the requirements of sections 514E-22, 514E-23, 514E-24, and 514E-25;

(2) A notice of time share plan is recorded and either:

(A) Every person holding an interest in a recorded blanket lien against any time share interests in that time share unit executes and records a nondisturbance agreement; or

(B) The director's acceptance of a surety bond or an irrevocable letter of credit meeting the requirements of section 514E-28 is recorded; or

(3) The requirements of any alternative arrangements accepted by the director have been met.

(c) A time share interest in any time share plan which satisfies the escrow and blanket lien protection requirements of this chapter shall not be deemed a risk capital security under chapter 485A, and the offer or sale of a time share interest therein shall not be deemed the offer or sale of a security. [L 1982, c 186, 7; am L 2006, c 229, 15; am L 2018, c 18, 34]

 

 

Previous Vol12_Ch0501-0588 Next