79486 Federal Register / Vol. 76, No. 245 / Wednesday, December 21, 2011 / Rules and Regulations 

1Public Law 111–203, 124 Stat. 1376 (2010). 

BUREAU OF CONSUMER FINANCIAL 

PROTECTION 

12 CFR Parts 1010, 1011, and 1012 

[Docket No. CFPB–2011–0025] 

RIN 3170–AA06 

Interstate Land Sales Registration 

Program (Regulations J, K, and L) 

AGENCY: Bureau of Consumer Financial 

Protection. 

ACTION: Interim final rule with request 

for public comment. 

SUMMARY: Title X of the Dodd-Frank 

Wall Street Reform and Consumer 

Protection Act (Dodd-Frank Act) 

transferred rulemaking authority for a 

number of consumer financial 

protection laws from seven Federal 

agencies to the Bureau of Consumer 

Financial Protection (Bureau) as of July 

21, 2011. The Bureau is in the process 

of republishing the regulations 

implementing those laws with technical 

and conforming changes to reflect the 

transfer of authority and certain other 

changes made by the Dodd-Frank Act. 

In light of the transfer of the Department 

of Housing and Urban Development’s 

(HUD’s) rulemaking authority for the 

Interstate Land Sales Full Disclosure 

Act (ILSA) to the Bureau, the Bureau is 

publishing for public comment an 

interim final rule establishing a new 

Regulation J (Land Registration); a new 

Regulation K (Purchasers’ Revocation 

Rights, Sales Practices and Standards); 

and a new Regulation L (Special Rules 

of Practice). This interim final rule does 

not impose any new substantive 

obligations on persons subject to HUD’s 

existing ILSA regulations. 

DATES: This interim final rule is 

effective December 30, 2011. Comments 

must be received on or before February 

21, 2012. 

ADDRESSES: You may submit comments, 

identified by Docket No. CFPB–2011– 

0025 or RIN 3170–AA06, by any of the 

following methods: 

• Electronic: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Mail: Monica Jackson, Office of the 

Executive Secretary, Bureau of 

Consumer Financial Protection, 1500 

Pennsylvania Avenue NW. (Attn: 1801 L 

Street), Washington, DC 20220. 

• Hand Delivery/Courier in Lieu of 

Mail: Monica Jackson, Office of the 

Executive Secretary, Bureau of 

Consumer Financial Protection, 1700 G 

Street NW., Washington, DC 20006. 

All submissions must include the 

agency name and docket number or 

Regulatory Information Number (RIN) 

for this rulemaking. In general, all 

comments received will be posted 

without change to http:// 

www.regulations.gov. In addition, 

comments will be available for public 

inspection and copying at 1700 G Street 

NW., Washington, DC 20006, on official 

business days between the hours of 

10 a.m. and 5 p.m. Eastern Time. You 

can make an appointment to inspect the 

documents by telephoning (202) 435– 

7275. 

All comments, including attachments 

and other supporting materials, will 

become part of the public record and 

subject to public disclosure. Sensitive 

personal information, such as account 

numbers or social security numbers, 

should not be included. Comments will 

not be edited to remove any identifying 

or contact information. 

FOR FURTHER INFORMATION CONTACT: Bill 

Matchneer or Whitney Patross, Office of 

Regulations, at (202) 435–7700. 

SUPPLEMENTARY INFORMATION: 

I. Background 

The Interstate Land Sales Full 

Disclosure Act (ILSA) protects 

consumers by requiring certain land 

developers to register their plans and to 

provide prescribed disclosures to 

prospective purchasers. Developers of 

subdivisions with one hundred or more 

nonexempt lots, and developers of 

condominiums with one hundred or 

more nonexempt units, must register 

development plans with the Federal 

regulator designated by ILSA. These 

developers must also provide 

purchasers with a comprehensive 

disclosure statement known as a 

property report before a contract of sale 

is signed. Historically, ILSA has been 

implemented by the Department of 

Housing and Urban Development’s 

(HUD’s) Interstate Land Sales 

Registration Program, 24 CFR Parts 

1710, 1715 and 1720. The Dodd-Frank 

Wall Street Reform and Consumer 

Protection Act (Dodd-Frank Act) 1

amended a number of consumer 

financial protection laws, including 

ILSA. In addition to various substantive 

amendments, the Dodd-Frank Act 

transferred rulemaking authority for 

ILSA to the Bureau of Consumer 

Financial Protection (Bureau), effective 

July 21, 2011. See sections 1061 and 

1098A of the Dodd-Frank Act. Pursuant 

to the Dodd-Frank Act and ILSA, as 

amended, the Bureau is publishing for 

public comment an interim final rule to 

implement ILSA by establishing a new 

Regulation J (Land Registration), 12 CFR 

part 1010; a new Regulation K 

(Purchasers’ Revocation Rights, Sales 

Practices and Standards), 12 CFR part 

1011; and a new Regulation L (Special 

Rules of Practice), 12 CFR part 1012. 

II. Summary of the Interim Final Rule 

A. General 

The interim final rule substantially 

duplicates HUD’s Interstate Land Sales 

Registration Program regulations, 24 

CFR parts 1710, 1715, and 1720, as the 

Bureau’s new Regulation J (Land 

Registration), 12 CFR part 1010; new 

Regulation K (Purchasers’ Revocation 

Rights, Sales Practices and Standards), 

12 CFR part 1011; and new Regulation 

L (Special Rules of Practice), 12 CFR 

part 1012, making only certain nonsubstantive, technical, formatting, and 

stylistic changes. To minimize any 

potential confusion, the Bureau is 

preserving the numbering of HUD’s 

ILSA regulations other than the new 

part numbers. While this interim final 

rule generally incorporates HUD’s 

existing regulatory text, including 

model forms and clauses, the rule has 

been edited as necessary to reflect 

nomenclature and other technical 

amendments required by the DoddFrank Act. Notably this interim final 

rule does not impose any new 

substantive obligations on regulated 

entities. 

B. Specific Changes 

This interim final rule makes 

numerous amendments throughout 

HUD’s existing regulatory text to reflect 

ILSA’s transfer to the Bureau. 

‘‘Secretary’’ is replaced with ‘‘Director,’’ 

‘‘Department of Housing and Urban 

Development’’ with ‘‘Bureau of 

Consumer Financial Protection,’’ and 

‘‘Department’’ with ‘‘Bureau.’’ 

Model language for disclosure and 

other purposes that appeared in the text 

of HUD’s ILSA regulations has been 

moved to a new appendix. The model 

clauses and the sections of HUD’s 

regulations that address these model 

clauses include: 

I. Developers Affirmation for Land Sale 

§ 1710.13(a)(9) 

II. Language Notifying Buyer of Option to 

Cancel Contract § 1710.15(b)(5)(i) 

III. Sample Lot Information Statement and 

Sample Receipt § 1710.15(b)(11) 

IV. Request for Multiple Site Subdivision 

Exemption § 1710.15(c)(1) 

V. Request for Regulatory Exemption Order 

§ 1710.16(c) 

VI. Developer’s Affirmation for Advisory 

Opinion § 1710.17(b)(3) 

VII. Initial and Consolidated Registration Fee 

Schedule § 1710.35(b) 

VIII. Property Report § 1710.100(b) 

IX. Sample Page for Statement of Record 

§ 1710.102(e) 


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Federal Register / Vol. 76, No. 245 / Wednesday, December 21, 2011 / Rules and Regulations 79487 

2Public Law 111–203, section 1061(b)(7)(A). 

Effective on the designated transfer date, July 21, 

2011, the Bureau was also granted ‘‘all powers and 

duties’’ that were vested in the HUD Secretary 

relating to ILSA on the day before the designated 

transfer date. Id. at section 1061(b)(7)(B). Until this 

and other interim final rules take effect, existing 

regulations for which rulemaking authority 

transferred to the Bureau continue to govern 

persons covered by this rule. See 76 FR 43569 (July 

21, 2011). 

3Section 1066 of the Dodd-Frank Act grants the 

Secretary of the Treasury interim authority to 

perform certain functions of the Bureau. Pursuant 

to that authority, Treasury is publishing this interim 

final rule on behalf of the Bureau. 

4 Id. section 1098A(2); 15 U.S.C. 1718. 

5 Id. 

6See 24 CFR parts 1710, 1715 and 1720. 

7 5 U.S.C. 551 et seq. 

8 5 U.S.C. 553(b), (c). 

9 5 U.S.C. 553(b)(3)(A), (B). 

10This interim final rule is one of 14 companion 

rulemakings that together restate and recodify the 

implementing regulations under 14 existing 

consumer financial laws (part III.C, below, lists the 

14 laws involved). In the interest of proper 

coordination of this overall regulatory framework, 

which includes numerous cross-references among 

some of the regulations, the Bureau is establishing 

the same effective date of December 30, 2011 for 

those rules published on or before that date and 

making those published thereafter (if any) effective 

immediately. 

X. Language for Warning on Cover Page of 

Property Report § 1710.105(c) 

XI. Sample Entry in Table of Contents for 

Statement of Record § 1710.106(a) 

XII. Required Paragraphs for Risks of Buying 

Land § 1710.107(a) 

XIII. Format for General Information 

§ 1710.108 

XIV. Paragraphs To Be Included in the 

General Report—Title to the Property 

and Land Use § 1710.109(a)(1) 

XV. Statement on Release Provisions 

§ 1710.109(c)(2)(i)(A) 

XVI. Warning for Release Provisions 

§ 1710.109(c)(2)(i)(C)(1) 

XVII. Method and Purpose of Recording 

Warning § 1710.109(d)(1)(iv) 

XVIII. Escrow Statement Disclosure 

§ 1710.109(e)(1) 

XIX. Road Chart § 1710.110(b)(3) 

XX. Nearby Communities Chart 

§ 1710.110(b)(6) 

XXI. Water Chart Form § 1710.111(a)(1)(ii)(B) 

XXII. Comfort Station Chart 

§ 1710.111(b)(1)(ii) 

XXIII. Sewer Chart § 1710.111(b)(1)(iii)(B) 

XXIV. Electric Service Chart § 1710.111(c)(2) 

XXV. Recreational Facility Chart 

§ 1710.114(b) 

XXVI. Cost Sheet Format § 1710.117(a) 

XXVII. Sample Receipt, Agent Certification 

and Cancellation Page § 1710.118(a) 

XXVIII. Affirmation of Senior Executive 

Officer § 1710.219 

XXIX. Form for Certification for Disclosure 

Documents § 1710.504(a)(2) 

XXX. Language To Be Included on Property 

Report Cover Page § 1710.558(a)(1) 

XXXI. Notice of Revocation Rights 

§ 1710.559(a)(1) 

Many procedural rules previously 

contained in 12 CFR part 1720 have 

been eliminated as duplicative of the 

procedural rules that the Bureau 

promulgated in 12 CFR part 1081 earlier 

this year. Parties proceeding under ILSA 

should therefore be generally guided by 

12 CFR part 1081 to the extent ILSA and 

the procedural rules contained in 12 

CFR part 1012 do not address specific 

procedures. 

Conforming edits have also been 

made to internal cross-references and 

addresses for filing applications and 

notices. Historical references that are no 

longer applicable, such as Department 

of Housing and Urban Development Act, 

42 U.S.C. 3535(d), and references to 

effective dates that have passed, have 

been removed as appropriate. 

III. Legal Authority 

A. Rulemaking Authority 

The Bureau is issuing this interim 

final rule pursuant to its authority under 

ILSA and the Dodd-Frank Act. Effective 

July 21, 2011, section 1061 of the DoddFrank Act transferred to the Bureau all 

of the HUD Secretary’s consumer 

protection functions relating to ILSA.2

Accordingly, effective July 21, 2011, the 

authority of HUD to issue regulations 

pursuant to ILSA transferred to the 

Bureau.3

ILSA, as amended, directs the Bureau 

to prescribe regulations to carry out the 

purposes of ILSA.4 These regulations 

may contain such classifications, 

differentiations, or other provisions, and 

may provide for such adjustments and 

exceptions for any class of transactions, 

that in the Bureau’s judgment are 

necessary or proper to effectuate the 

purpose of ILSA, facilitate compliance 

with ILSA, or prevent circumvention or 

evasion of ILSA.5 In its existing 

regulations, HUD has used this ILSA 

authority to establish extensive rules 

that promote the informed purchase of 

unimproved property and 

unconstructed condominiums by 

mandating disclosures and regulating 

certain development practices.6

B. Authority To Issue an Interim Final 

Rule Without Prior Notice and Comment 

The Administrative Procedure Act 

(APA) 7 generally requires public notice 

and an opportunity to comment before 

promulgation of regulations.8 The APA 

provides exceptions to notice-andcomment procedures, however, where 

an agency for good cause finds that such 

procedures are impracticable, 

unnecessary, or contrary to the public 

interest or when a rulemaking relates to 

agency organization, procedure, and 

practice.9 The Bureau finds that there is 

good cause to conclude that providing 

notice and opportunity for comment 

would be unnecessary and contrary to 

the public interest under these 

circumstances. In addition, substantially 

all the changes made by this interim 

final rule, which were necessitated by 

the Dodd-Frank Act’s transfer of ILSA 

authority from HUD to the Bureau, 

relate to agency organization, procedure, 

and practice and are thus exempt from 

the APA’s notice-and-comment 

requirements. For example, part 1012 

contains rules of practice. Additional 

rules of practice contained in HUD’s 

rule were not restated as unnecessary 

because the Bureau’s rules at 12 CFR 

part 1081 will apply. 

The Bureau’s good cause findings are 

based on the following considerations. 

As an initial matter, HUD’s existing 

regulation was a result of notice-andcomment rulemaking to the extent 

required. Moreover, the interim final 

rule published today does not impose 

any new, substantive obligations on 

regulated entities. Rather, the interim 

final rule makes only non-substantive, 

technical changes to the existing text of 

the regulation, such as renumbering, 

changing internal cross-references, and 

replacing appropriate nomenclature to 

reflect the transfer of authority to the 

Bureau. Given the technical nature of 

these changes, and the fact that the 

interim final rule does not impose any 

additional substantive requirements on 

covered entities, an opportunity for 

prior public comment is unnecessary. In 

addition, recodifying HUD’s regulations 

to reflect the transfer of authority to the 

Bureau will help facilitate compliance 

with ILSA and its implementing 

regulations, and the new regulations 

will help reduce uncertainty regarding 

the applicable regulatory framework. 

Using notice-and comment procedures 

would delay this process and thus be 

contrary to the public interest. 

The APA generally requires that rules 

be published not less than 30 days 

before their effective dates. See 5 U.S.C. 

553(d). As with the notice and comment 

requirement, however, the APA allows 

an exception when ‘‘otherwise provided 

by the agency for good cause found and 

published with the rule.’’ 5 U.S.C. 

553(d)(3). The Bureau finds that there is 

good cause for providing less than 30 

days notice here. A delayed effective 

date would harm consumers and 

regulated entities by needlessly 

perpetuating discrepancies between the 

amended statutory text and the 

implementing regulation, thereby 

hindering compliance and prolonging 

uncertainty regarding the applicable 

regulatory framework.10

In addition, delaying the effective 

date of the interim final rule for 30 days 

would provide no practical benefit to 


srobinson on DSK4SPTVN1PROD with RULES5
79488 Federal Register / Vol. 76, No. 245 / Wednesday, December 21, 2011 / Rules and Regulations 

11Section 1022(b)(2)(A) of the Dodd-Frank Act 

addresses the consideration of the potential benefits 

and costs of regulation to consumers and covered 

persons, including the potential reduction of access 

by consumers to consumer financial products or 

services; the impact on depository institutions and 

credit unions with $10 billion or less in total assets 

as described in section 1026 of the Dodd-Frank Act; 

and the impact on consumers in rural areas. Section 

1022(b)(2)(B) requires that the Bureau ‘‘consult with 

the appropriate prudential regulators or other 

Federal agencies prior to proposing a rule and 

during the comment process regarding consistency 

with prudential, market, or systemic objectives 

administered by such agencies.’’ The manner and 

extent to which these provisions apply to interim 

final rules and to benefits, costs, and impacts that 

are compelled by statutory changes rather than 

discretionary Bureau action is unclear. 

Nevertheless, to inform this rulemaking more fully, 

the Bureau performed the described analyses and 

consultations. 

12The fourteen laws implemented by this and its 

companion rulemakings are: the Consumer Leasing 

Act, the Electronic Fund Transfer Act (except with 

respect to section 920 of that Act), the Equal Credit 

Opportunity Act, the Fair Credit Reporting Act 

(except with respect to sections 615(e) and 628 of 

that act), the Fair Debt Collection Practices Act, 

Subsections (b) through (f) of section 43 of the 

Federal Deposit Insurance Act, sections 502 through 

509 of the Gramm-Leach-Bliley Act (except for 

section 505 as it applies to section 501(b)), the 

Home Mortgage Disclosure Act, the Real Estate 

Settlement Procedures Act, the S.A.F.E. Mortgage 

Licensing Act, the Truth in Lending Act, the Truth 

in Savings Act, section 626 of the Omnibus 

Appropriations Act, 2009, and the Interstate Land 

Sales Full Disclosure Act. 

13 In light of the technical but voluminous nature 

of this recodification project, the Bureau focused 

the consultation process on a representative sample 

of the recodified regulations, while making 

information on the other regulations available. The 

Bureau expects to conduct differently its future 

consultations regarding substantive rulemakings. 

14 5 U.S.C. 601 et seq. 

15 5 U.S.C. 603, 604. 

16 5 U.S.C. 609. 

17 5 U.S.C. 603(a), 604(a); 5 U.S.C. 553(b)(B). 

18 5 U.S.C. 609(b). 

regulated entities in this context and in 

fact could operate to their detriment. As 

discussed above, the interim final rule 

published today does not impose any 

new, substantive obligations on 

regulated entities. Instead, the rule 

makes only non-substantive, technical 

changes to the existing text of the 

regulation. Thus, regulated entities that 

are already in compliance with the 

existing rules will not need to modify 

business practices as a result of this 

rule. To the extent that one-time 

modifications to forms are required, the 

Bureau has provided an ample 

implementation period to allow 

appropriate advance notice and 

facilitate compliance without 

suspending the benefits of the interim 

final rule during the intervening period. 

C. Section 1022(b)(2) of the Dodd-Frank 

Act 

In developing the interim final rule, 

the Bureau has conducted an analysis of 

potential benefits, costs, and impacts.11

The Bureau believes that the interim 

final rule will benefit consumers and 

covered persons by updating and 

recodifying Regulations J, K, and L to 

reflect the transfer of authority to the 

Bureau and certain other changes 

mandated by the Dodd-Frank Act. This 

will help facilitate compliance with 

ILSA and its implementing regulations 

and help reduce any uncertainty 

regarding the applicable regulatory 

framework. Although the interim final 

rule will require covered entities to 

modify certain disclosures to reflect the 

transfer of authority to the Bureau, as 

discussed below, the interim final rule 

will not impose any new substantive 

obligations on consumers or covered 

persons and is not expected to have any 

impact on consumers’ access to 

consumer financial products and 

services. 

As discussed above in part II of this 

SUPPLEMENTARY INFORMATION, the 

interim final rule republishes 31 model 

forms and clauses with references to 

HUD replaced with the Bureau and 

HUD addresses replaced with Bureau 

addresses. To implement these changes, 

covered entities may need to make onetime revisions to document templates 

they use for ILSA compliance. The 

Bureau believes that costs for these 

changes will be minimal. It is the 

Bureau’s understanding that a small set 

of entities maintain these forms and do 

so in accessible templates which can 

easily be modified on in-house 

computers. 

The interim final rule will have no 

unique impact on depository 

institutions or credit unions with $10 

billion or less in assets as described in 

section 1026(a) of the Dodd-Frank Act. 

Also, the interim final rule will have no 

unique impact on rural consumers. 

In undertaking the process of 

recodifying Regulations J, K, and L, as 

well as regulations implementing 

thirteen other existing consumer 

financial laws,12 the Bureau consulted 

the Federal Deposit Insurance 

Corporation, the Office of the 

Comptroller of the Currency, the 

National Credit Union Administration, 

the Board of Governors of the Federal 

Reserve System, the Federal Trade 

Commission, and the Department of 

Housing and Urban Development, 

including with respect to consistency 

with any prudential, market, or systemic 

objectives that may be administered by 

such agencies.13 The Bureau also has 

consulted with the Office of 

Management and Budget for technical 

assistance. The Bureau expects to have 

further consultations with the 

appropriate Federal agencies during the 

comment period. 

IV. Request for Comment 

Although notice and comment 

rulemaking procedures are not required, 

the Bureau invites comments on this 

notice. Commenters are specifically 

encouraged to identify any technical 

issues raised by the rule. The Bureau is 

also seeking comment in response to a 

notice published at 76 FR 75825 (Dec. 

5, 2011) concerning its efforts to identify 

priorities for streamlining regulations 

that it has inherited from other Federal 

agencies to address provisions that are 

outdated, unduly burdensome, or 

unnecessary. 

V. Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA), 

as amended by the Small Business 

Regulatory Enforcement Fairness Act of 

1996, requires each agency to consider 

the potential impact of its regulations on 

small entities, including small 

businesses, small governmental units, 

and small not-for-profit organizations.14

The RFA generally requires an agency to 

conduct an initial regulatory flexibility 

analysis (IRFA) and a final regulatory 

flexibility analysis (FRFA) of any rule 

subject to notice-and-comment 

rulemaking requirements, unless the 

agency certifies that the rule will not 

have a significant economic impact on 

a substantial number of small entities.15

The Bureau also is subject to certain 

additional procedures under the RFA 

involving the convening of a panel to 

consult with small business 

representatives prior to proposing a rule 

for which an IRFA is required.16

The IRFA and FRFA requirements 

described above apply only where a 

notice of proposed rulemaking is 

required,17 and the panel requirement 

applies only when a rulemaking 

requires an IRFA.18 As discussed above 

in part III, a notice of proposed 

rulemaking is not required for this 

rulemaking. 

In addition, as discussed above, this 

interim final rule has only a minor 

impact on entities subject to Regulations 

J, K, and L. The rule imposes no new, 

substantive obligations on covered 

entities and will require only minor, 

one-time adjustments to certain model 

forms, as discussed in part III above. 

Accordingly, the undersigned certifies 

that this interim final rule will not have 

a significant economic impact on a 

substantial number of small entities. 

VI. Paperwork Reduction Act 

The Bureau may not conduct or 

sponsor, and a respondent is not 

required to respond to, an information 


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Federal Register / Vol. 76, No. 245 / Wednesday, December 21, 2011 / Rules and Regulations 79489 

collection unless it displays a currently 

valid Office of Management and Budget 

(OMB) control number. This rule 

contains information collection 

requirements under the Paperwork 

Reduction Act (PRA), which have been 

previously approved by OMB, and the 

ongoing PRA burden for which is 

unchanged by this rule. There are no 

new information collection 

requirements in this interim final rule. 

The Bureau’s OMB control number for 

this information collection is: 3170– 

0012. 

List of Subjects in 12 CFR Parts 1010, 

1011 and 1012 

Land registration; Reporting 

requirements; Certification of 

substantially equivalent state law; 

Purchasers’ revocation rights; Unlawful 

sales practices; Advertising disclaimers; 

Filing assistance; and Adjudicatory 

proceedings. 

Authority and Issuance 

For the reasons set forth in the 

preamble, the Bureau of Consumer 

Financial Protection adds parts 1010, 

1011, and 1012 to Chapter X in Title 12 

of the Code of Federal Regulations to 

read as follows: 

■ 1. Add Part 1010 to read as follows: 

PART 1010—LAND REGISTRATION 

(REGULATION J) 

Subpart A—General Requirements 

Sec. 

1010.1 Definitions. 

1010.2 [Reserved] 

1010.3 General applicability. 

1010.4 Exemptions—general. 

1010.5 Statutory exemptions. 

1010.6 One hundred lot exemption. 

1010.7 Twelve lot exemption. 

1010.8 Scattered site subdivisions. 

1010.9 Twenty acre lots. 

1010.10 Single-family residence exemption. 

1010.11 Manufactured home exemption. 

1010.12 Intrastate exemption. 

1010.13 Metropolitan Statistical Area 

(MSA) exemption. 

1010.14 Regulatory exemptions. 

1010.15 Regulatory exemption—multiple 

site subdivision—determination 

required. 

1010.16 Regulatory exemption— 

determination required. 

1010.17 Advisory opinion. 

1010.18 No action letter. 

1010.19 [Reserved] 

1010.20 Requirements for registering a 

subdivision—Statement of Record— 

filing and form. 

1010.21 Effective dates. 

1010.22 Statement of record—initial or 

consolidated. 

1010.23 Amendment—filing and form. 

1010.24–1010.28 [Reserved] 

1010.29 Use of property report— 

misstatements, omissions or 

representation of Bureau approval 

prohibited. 

1010.35 Payment of fees. 

1010.45 Suspensions. 

Subpart B—Reporting Requirements 

1010.100 Statement of Record—format. 

1010.101 [Reserved] 

1010.102 General instructions for 

completing the Statement of Record. 

1010.103 Developer obligated 

improvements. 

1010.104 [Reserved] 

1010.105 Cover page. 

1010.106 Table of contents. 

1010.107 Risks of buying land. 

1010.108 General information. 

1010.109 Title to the property and land use. 

1010.110 Roads. 

1010.111 Utilities. 

1010.112 Financial information. 

1010.113 Local services. 

1010.114 Recreational facilities. 

1010.115 Subdivision characteristics and 

climate. 

1010.116 Additional information. 

1010.117 Cost sheet, signature of Senior 

Executive Officer 

1010.118 Receipt, agent certification and 

cancellation page. 

1010.200 Instructions for Statement of 

Record, Additional Information and 

Documentation. 

1010.201–1010.207 [Reserved] 

1010.208 General information. 

1010.209 Title and land use. 

1010.210 Roads. 

1010.211 Utilities. 

1010.212 Financial information. 

1010.214 Recreational facilities. 

1010.215 Subdivision characteristics and 

climate. 

1010.216 Additional information. 

1010.219 Affirmation. 

1010.310 Annual report of activity. 

Subpart C—Certification of Substantially 

Equivalent State Law 

1010.500 General. 

1010.503 Notice of certification. 

1010.504 Cooperation among certified 

states and between certified states and 

the Director. 

1010.505 Withdrawal of state certification. 

1010.506 State/Federal filing requirements. 

1010.507 Effect of suspension or 

withdrawal of certification granted under 

§ 1010.501(a): Full disclosure 

requirement. 

1010.508 Effect of suspension of 

certification granted under § 1010.501(b): 

Sufficient protection requirement. 

1010.552 Previously accepted state filings. 

1010.556 Previously accepted state filings— 

amendments and consolidations. 

1010.558 Previously accepted state filings— 

notice of revocation rights on property 

report cover page. 

1010.559 Previously accepted state filings— 

notice of revocation rights in contracts 

and agreements. 

Appendix to Part 1010: Standard and Model 

Forms and Clauses 

Authority: 12 U.S.C. 5512, 5581; 15 U.S.C. 

1718. 

Subpart A—General Requirements 

§ 1010.1 Definitions. 

(a) Statutory terms. All terms are used 

in accordance with their statutory 

meaning in 15 U.S.C. 1702, unless 

otherwise defined in paragraph (b) of 

this section or elsewhere in this part. 

(b) Other terms. As used in this part: 

Act means the Interstate Land Sales 

Full Disclosure Act, 15 U.S.C. 1701. 

Advisory opinion means the formal 

written opinion of the Director as to 

jurisdiction in a particular case or the 

applicability of an exemption under 

§§ 1010.5 through 1010.15, based on 

facts submitted to the Director. 

Available for use means that in 

addition to being constructed, the 

subject facility is fully operative and 

supplied with any materials and staff 

necessary for its intended purpose. 

Beneficial property restrictions means 

restrictions that are enforceable by the 

lot owners and are designed to control 

the use of the lot and to preserve or 

enhance the environment and the 

aesthetic and economic value of the 

subdivision. 

Date of filing means the date a 

Statement of Record, amendment, or 

consolidation, accompanied by the 

applicable fee, is received by the 

Director. 

Good faith estimate means an 

estimate based on documentary 

evidence. In the case of cost estimates, 

the documentation may be obtained 

from the suppliers of the services. In the 

case of estimates of completion dates, 

the documentation may be actual 

contracts let, engineering schedules, or 

other evidence of commitments to 

complete the amenities. 

ILSRP means the Interstate Land Sales 

Registration Program. 

Lot means any portion, piece, 

division, unit, or undivided interest in 

land located in any state or foreign 

country, if the interest includes the right 

to the exclusive use of a specific portion 

of the land. 

Owner means the person or entity 

who holds the fee title to the land and 

has the power to convey that title to 

others. 

Parent corporation means that entity 

which ultimately controls the 

subsidiary, even though the control may 

arise through any series or chain of 

other subsidiaries or entities. 

Principal means any person or entity 

holding at least a 10 percent financial or 

ownership interest in the developer or 

owner, directly or through any series or 

chain of subsidiaries or other entities. 

Rules means all rules adopted 

pursuant to the Act, including the 


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general requirements published in this 

part. 

Sale means any obligation or 

arrangement for consideration to 

purchase or lease a lot directly or 

indirectly. The terms ‘‘sale’’ or ‘‘seller’’ 

include in their meanings the terms 

‘‘lease’’ and ‘‘lessor’’. 

Senior Executive Officer means the 

individual of highest rank responsible 

for the day-to-day operations of the 

developer and who has the authority to 

bind or commit the developing entity to 

contractual obligations. 

Site means a group of contiguous lots, 

whether such lots are actually divided 

or proposed to be divided. Lots are 

considered to be contiguous even 

though contiguity may be interrupted by 

a road, park, small body of water, 

recreational facility, or any similar 

object. 

Start of construction means breaking 

ground for building a facility, followed 

by diligent action to complete the 

facility. 

§ 1010.2 [Reserved] 

§ 1010.3 General applicability. 

Except in the case of an exempt 

transaction, a developer may not sell or 

lease lots in a subdivision, making use 

of any means or instruments of 

transportation or communication in 

interstate commerce, or of the mails, 

unless a Statement of Record is in effect 

in accordance with the provisions of 

this part. In non-exempt transactions, 

the developer must give each purchaser 

a printed Property Report, meeting the 

requirements of this part, in advance of 

the purchaser’s signing of any contract 

or agreement for sale or lease. 

Information collection requirements 

contained in this part have been 

approved by the Office of Management 

and Budget under the provisions of 44 

U.S.C. 3501 et seq. and have been 

assigned OMB Control No. 3170–0012. 

§ 1010.4 Exemptions—general. 

(a) The exemptions available under 

§§ 1010.5 through 1010.16 are not 

applicable when the method of sale, 

lease or other disposition of land or an 

interest in land is adopted for the 

purpose of evasion of the Act. 

(b) With the exception of the sales or 

leases which are exempt under § 1010.5, 

the anti-fraud provisions of the Act (15 

U.S.C. 1703(a)(2)) apply to exempt 

transactions. The anti-fraud provisions 

make it unlawful for a developer or 

agent to employ any device, scheme, or 

artifice to: 

(1) Defraud; 

(2) To obtain money or property by 

means of any untrue statement of a 

material fact, or 

(3) To omit to state a material fact 

necessary in order to make the 

statements made not misleading, with 

respect to any information pertinent to 

the lot or subdivision; or 

(4) To engage in any transaction, 

practice, or course of business which 

operates or would operate as a fraud or 

deceit upon a purchaser. 

(c) The anti-fraud provisions of the 

Act require that certain representations 

be included in the contract in 

transactions which are not exempt 

under § 1010.5. Specifically, the Act 

requires that if a developer or agent 

represents that roads, sewers, water, gas 

or electric service or recreational 

amenities will be provided or completed 

by the developer, the contract must 

stipulate that the services or amenities 

will be provided or completed. See 

§ 1011.15(f). 

(d) Eligibility for exemptions available 

under §§ 1010.5 through 1010.14 is selfdetermining. With the exception of the 

exemptions available under §§ 1010.15 

and 1010.16, a developer is not required 

to file notice with or obtain the approval 

of the Director in order to take 

advantage of an exemption. If a 

developer elects to take advantage of an 

exemption, the developer is responsible 

for maintaining records to demonstrate 

that the requirements of the exemption 

have been met. 

(e) A developer may present evidence, 

or otherwise discuss, in an informal 

hearing before the Office of Nonbank 

Supervision, the Bureau’s position on 

the jurisdiction or non-exempt status of 

a particular subdivision. 

§ 1010.5 Statutory exemptions. 

A listing of the statutory exemptions 

is contained in 15 U.S.C. 1703. In 

accordance with 15 U.S.C. 1703(a)(2), if 

the sale involves a condominium or 

multi-unit construction, a presale clause 

conditioning the sale of a unit on a 

certain percentage of sales of other units 

is permissible if it is legally binding on 

the parties and is for a period not to 

exceed 180 days. However, the 180-day 

provision cannot extend the 2-year 

period for performance. The permissible 

180 days is calculated from the date the 

first purchaser signs a sales contract in 

the project or, if a phased project, from 

the date the first purchaser signs the 

first sales contract in each phase. 

§ 1010.6 One hundred lot exemption. 

The sale of lots in a subdivision is 

exempt from the registration 

requirements of the Act if, since April 

28, 1969, the subdivision has contained 

fewer than 100 lots, exclusive of lots 

which are exempt from jurisdiction 

under § 1010.5. In the sale of lots in the 

subdivision that are not exempt under 

§ 1010.5, the developer must comply 

with the Act’s anti-fraud provisions, set 

forth in § 1010.4(b) and (c). 

§ 1010.7 Twelve lot exemption. 

(a) The sale of lots is exempt from the 

registration requirements of the Act if, 

beginning with the first sale after June 

20, 1980, no more than twelve lots in 

the subdivision are sold in the 

subsequent twelve-month period. 

Thereafter, the sale of the first twelve 

lots is exempt from the registration 

requirements if no more than twelve lots 

were sold in each previous twelve 

month period which began with the 

anniversary date of the first sale after 

June 20, 1980. 

(b) A developer may apply to the 

Director to establish a different twelve 

month period for use in determining 

eligibility for the exemption and the 

Director may allow the change if it is for 

good cause and consistent with the 

purpose of this section. 

(c) In determining eligibility for this 

exemption, all lots sold or leased in the 

subdivision after June 20, 1980, are 

counted, whether or not the transactions 

are otherwise exempt. Sales or leases 

made prior to June 21, 1980, are not 

considered in determining eligibility for 

the exemption. 

(d) The sale must also comply with 

the anti-fraud provisions of § 1010.4(b) 

and (c) of this part. 

§ 1010.8 Scattered site subdivisions. 

(a) The sale of lots in a subdivision 

consisting of noncontiguous parts is 

exempt from the registration 

requirements of the Act if: 

(1) Each noncontiguous part of the 

subdivision contains twenty or fewer 

lots; and 

(2) Each purchaser or purchaser’s 

spouse makes a personal, on-the-lot 

inspection of the lot purchased prior to 

signing a contract. 

(b) For purposes of this exemption, 

interruptions such as roads, parks, small 

bodies of water or recreational facilities 

do not serve to break the contiguity of 

parts of a subdivision. 

(c) The sale must also comply with 

the anti-fraud provisions of § 1010.4(b) 

and (c) of this part. 

§ 1010.9 Twenty acre lots. 

(a) The sale of lots in a subdivision is 

exempt from the registration 

requirements of the Act if, since April 

28, 1969, each lot in the subdivision has 

contained at least twenty acres. In 

determining eligibility for the 

exemption, easements for ingress and 

egress or public utilities are considered 

part of the total acreage of the lot if the 


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purchaser retains ownership of the 

property affected by the easement. 

(b) The sale must also comply with 

the anti-fraud provisions of § 1010.4(b) 

and (c) of this part. 

§ 1010.10 Single-family residence 

exemption. 

(a) General. The sale of a lot which 

meets the requirements specified under 

paragraphs (b) and (c) of this section is 

exempt from the registration 

requirements of the Act. 

(b) Subdivision requirements. (1) The 

subdivision must meet all local codes 

and standards. 

(2) In the promotion of the 

subdivision there must be no offers, by 

direct mail or telephone solicitation, of 

gifts, trips, dinners or use of similar 

promotional techniques to induce 

prospective purchasers to visit the 

subdivision or to purchase a lot. 

(c) Lot requirements. (1) The lot must 

be located within a municipality or 

county where a unit of local government 

or the state specifies minimum 

standards in the following areas for the 

development of subdivision lots taking 

place within its boundaries: 

(i) Lot dimensions. 

(ii) Plat approval and recordation. 

(iii) Roads and access. 

(iv) Drainage. 

(v) Flooding. 

(vi) Water supply. 

(vii) Sewage disposal. 

(2) Each lot sold under the exemption 

must be either zoned for single-family 

residences or, in the absence of a zoning 

ordinance, limited exclusively by 

enforceable covenants or restrictions to 

single-family residences. Manufactured 

homes, townhouses, and residences for 

one-to-four family use are considered 

single-family residences for purposes of 

this exemption provision. 

(3) The lot must be situated on a 

paved street or highway which has been 

built to standards established by the 

state or the unit of local government in 

which the subdivision is located. If the 

roads are to be public roads they must 

be acceptable to the unit of local 

government that will be responsible for 

maintenance. If the street or highway is 

not complete, the developer must post 

a bond or other surety acceptable to the 

municipality or county in the full 

amount of the cost of completing the 

street or highway to assure completion 

to local standards. For purposes of this 

exemption, paved means concrete or 

pavement with a bituminous surface 

that is impervious to water, protects the 

base and is durable under the traffic 

load and maintenance contemplated. 

(4) The unit of local government or a 

homeowners association must have 

accepted or be obligated to accept the 

responsibility for maintaining the street 

or highway upon which the lot is 

situated. In any case in which a 

homeowners association has accepted or 

is obligated to accept maintenance 

responsibility, the developer must, prior 

to signing of a contract or agreement to 

purchase, provide the purchaser with a 

good faith written estimate of the cost of 

carrying out the responsibility over the 

first ten years of ownership. 

(5) At the time of closing, potable 

water, sanitary sewage disposal, and 

electricity must be extended to the lot 

or the unit of local government must be 

obligated to install the facilities within 

180 days following closing. For 

subdivisions which will not have a 

central water or sewage disposal system, 

there must be assurances that an 

adequate potable water supply is 

available year-round and that the lot is 

approved for the installation of a septic 

tank. 

(6) The contract of sale must require 

delivery within 180 days after the 

signing of the sales contract of a 

warranty deed, which at the time of 

delivery is free from monetary liens and 

encumbrances. If a warranty deed is not 

commonly used in the jurisdiction 

where the lot is located, a deed or grant 

which warrants that the seller has not 

conveyed the lot to another person may 

be delivered in lieu of a warranty deed. 

The deed or grant used must warrant 

that the lot is free from encumbrances 

made by the seller or any other person 

claiming by, through, or under the 

seller. 

(7) At the time of closing, a title 

insurance binder or title opinion 

reflecting the condition of title must be 

in existence and issued or presented to 

the purchaser showing that, subject only 

to exceptions which are approved in 

writing by the purchaser at the time of 

closing, marketable title to the lot is 

vested in the seller. 

(8) The purchaser or purchaser’s 

spouse must make a personal, on-the-lot 

inspection of the lot purchased prior to 

signing a contract or agreement to 

purchase. 

(d) The sale must also comply with 

the anti-fraud provisions of § 1010.4(b) 

and (c) of this part. 

§ 1010.11 Manufactured home exemption. 

(a) The sale of a lot is exempt from the 

registration requirements of the Act 

when the following eligibility 

requirements are met: 

(1) The lot is sold as a homesite by 

one party and a manufactured home is 

sold by another party and the contracts 

of sale: 

(i) Obligate the sellers to perform, 

contingent upon the other seller 

carrying out its obligations so that a 

completed manufactured home will be 

erected on a completed homesite within 

two years after the date the purchaser 

signed the contract to purchase the lot; 

(ii) Provide that all funds received by 

the sellers are to be deposited in escrow 

accounts independent of the sellers 

until the transactions are completed; 

(iii) Provide that funds received by 

the sellers will be released to the buyer 

upon demand if the lot on which the 

manufactured home has been erected is 

not conveyed within two years; and 

(iv) Contain no provisions which 

restrict the purchaser’s remedy of 

bringing suit for specific performance. 

(2) The homesite is developed in 

conformance with all local codes and 

standards, if any, for manufactured 

home subdivisions. 

(3) At the time of closing: 

(i) Potable water and sanitary sewage 

disposal are available to the homesite 

and electricity has been extended to the 

lot line; 

(ii) The homesite is accessible by 

roads; 

(iii) The purchaser receives 

marketable title to the lot; and 

(iv) Other common facilities 

represented in any manner by the 

developer or agent to be provided are 

completed or there are letters of credit, 

cash escrows or surety bonds in the 

form acceptable to the local government 

in an amount equal to 100 percent of the 

estimated cost of completion. Corporate 

bonds are not acceptable for purposes of 

the exemption. 

(4) For purposes of this section, a 

manufactured home is a unit receiving 

a label in conformance with U.S. 

Department of Housing and Urban 

Development (HUD) regulations 

implementing the National 

Manufactured Housing Construction 

and Safety Standards Act of 1974 (42 

U.S.C. 5401). 

(b) The sale must also comply with 

the anti-fraud provisions of § 1010.4(b) 

and (c) of this part. 

§ 1010.12 Intrastate exemption. 

(a) Eligibility requirements. The sale 

of a lot is exempt from the registration 

requirements of the Act if the following 

requirements are met: 

(1) The sale of lots in the subdivision 

after December 20, 1979, is restricted 

solely to residents of the state in which 

the subdivision is located unless the 

sale is exempt under § 1010.5, 

§ 1010.11, or § 1010.13. 

(2) The purchaser or purchaser’s 

spouse makes a personal on-the-lot 

inspection of the lot to be purchased 

before signing a contract. 


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(3) Each contract: 

(i) Specifies the developer’s and 

purchaser’s responsibilities for 

providing and maintaining roads, water 

and sewer facilities and any existing or 

promised amenities; 

(ii) Contains a good faith estimate of 

the year in which the roads, water and 

sewer facilities and promised amenities 

will be completed; and 

(iii) Contains a non-waivable 

provision giving the purchaser the 

opportunity to revoke the contract until 

at least midnight of the seventh calendar 

day following the date the purchaser 

signed the contract. If the purchaser is 

entitled to a longer revocation period by 

operation of state law, that period 

becomes the Federal revocation period 

and the contract must reflect the 

requirements of the longer period. 

(4) The lot being sold is free and clear 

of all liens, encumbrances and adverse 

claims except the following: 

(i) Mortgages or deeds of trust which 

contain release provisions for the 

individual lot purchased if: 

(A) The contract of sale obligates the 

developer to deliver, within 180 days, a 

warranty deed (or its equivalent under 

local law), which at the time of delivery 

is free from any monetary liens or 

encumbrances; and 

(B) The purchaser’s payments are 

deposited in an escrow account 

independent of the developer until a 

deed is delivered. 

(ii) Liens which are subordinate to the 

leasehold interest and do not affect the 

lessee’s right to use or enjoy the lot. 

(iii) Property reservations which are 

for the purpose of bringing public 

services to the land being developed, 

such as easements for water and sewer 

lines. 

(iv) Taxes or assessments which 

constitute liens before they are due and 

payable if imposed by a state or other 

public body having authority to assess 

and tax property or by a property 

owners’ association. 

(v) Beneficial property restrictions 

that are mutually enforceable by the lot 

owners in the subdivision. Restrictions, 

whether separately recorded or 

incorporated into individual deeds, 

must be applied uniformly to every lot 

or group of lots. To be considered 

beneficial and enforceable, any 

restriction or covenant that imposes an 

assessment on lot owners must apply to 

the developer on the same basis as other 

lot owners. Developers who maintain 

control of a subdivision through a 

Property Owners’ Association, 

Architectural Control Committee, 

restrictive covenant or otherwise, shall 

transfer such control to the lot owners 

no later than when the developer ceases 

to own a majority of total lots in, or 

planned for, the subdivision. 

Relinquishment of developer control 

shall require affirmative action, usually 

in the form of an election based upon 

one vote per lot. 

(vi) Reservations contained in United 

States land patents and similar Federal 

grants or reservations. 

(5) Prior to the sale the developer 

discloses in a written statement to the 

purchaser all qualifying liens, 

reservations, taxes, assessments and 

restrictions applicable to the lot 

purchased. The developer must obtain a 

written receipt from the purchaser 

acknowledging that the statement 

required by this subparagraph was 

delivered to the purchaser. 

(6) Prior to the sale the developer 

provides in a written statement good 

faith estimates of the cost to the 

purchaser of providing electric, water, 

sewer, gas and telephone service to the 

lot. The estimates for unsold lots must 

be updated every two years or more 

frequently if the developer has reason to 

believe that significant cost increases 

have occurred. The dates on which the 

estimates were made must be included 

in the statement. The developer must 

obtain a written receipt from the 

purchaser acknowledging that the 

statement required by this subparagraph 

was delivered to the purchaser. 

(b) Intrastate Exemption Statement. 

To satisfy the requirements of 

paragraphs (a)(5) and (6) of this section, 

an Intrastate Exemption Statement 

containing the information prescribed in 

each such paragraph shall be given to 

each purchaser. A State-approved 

disclosure document may be used to 

satisfy this requirement if all the 

information required by paragraphs 

(a)(5) and (6) of this section is included 

in this disclosure. In such a case, the 

developer must obtain a written receipt 

from the purchaser and comply with all 

other requirements of the exemption. To 

be acceptable for purposes of the 

exemption, the statement(s) given to 

purchasers must contain neither 

advertising nor promotion on behalf of 

the developer or subdivision nor 

references to the Bureau of Consumer 

Financial Protection or the Consumer 

Financial Protection Bureau. A sample 

Intrastate Exemption Statement is 

included in the exemption guidelines. 

(c) The sale must also comply with 

the anti-fraud provisions of § 1010.4(b) 

and (c) of this part. 

§ 1010.13 Metropolitan Statistical Area 

(MSA) exemption. 

(a) Eligibility requirements. The sale 

of a lot which meets the following 

requirements is exempt from 

registration requirements of the Act: 

(1) The lot is in a subdivision which 

contains fewer than 300 lots and has 

contained fewer than 300 lots since 

April 28, 1969. 

(2) The lot is located within a 

Metropolitan Statistical Area (MSA) as 

defined by the Office of Management 

and Budget and characterized in 

paragraph (b) of this section. 

(3) The principal residence of the 

purchaser is within the same MSA as 

the subdivision. 

(4) The purchaser or purchaser’s 

spouse makes a personal on-the-lot 

inspection of the lot to be purchased 

prior to signing a contract or agreement. 

(5) Each contract: 

(i) Specifies the developer’s and 

purchaser’s responsibilities for 

providing and maintaining roads, water 

and sewer facilities and any existing or 

promised amenities; 

(ii) Contains a good faith estimate of 

the year in which the roads, water and 

sewer facilities and promised amenities 

will be completed; 

(iii) Contains a nonwaivable provision 

giving the purchaser the opportunity to 

revoke the contract until at least 

midnight of the seventh calendar day 

following the date the purchaser signed 

the contract, or, if the purchaser is 

entitled to a longer revocation period by 

operation of state law, that period 

becomes the Federal revocation period 

and the contract must reflect the 

requirements of the longer period. 

(6) The lot being sold must be free and 

clear of liens such as mortgages, deeds 

of trust, tax liens, mechanics’ liens, or 

judgments. For purposes of this 

exemption, the term liens does not 

include the following: 

(i) Mortgages or deeds of trust which 

contain release provisions for the 

individual lot purchased if: 

(A) The contract of sale obligates the 

developer to deliver, within 180 days, a 

warranty deed (or its equivalent under 

local law), which at the time of delivery 

is free from any monetary liens or 

encumbrances; and 

(B) The purchaser’s payments are 

deposited in an escrow account 

independent of the developer until a 

deed is delivered. 

(ii) Liens which are subordinate to the 

leasehold interest and do not affect the 

lessee’s right to use or enjoy the lot. 

(iii) Property reservations which are 

for the purpose of bringing public 

services to the land being developed, 

such as easements for water and sewer 

lines. 

(iv) Taxes or assessments which 

constitute liens before they are due and 

payable if imposed by a state or other 


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public body having authority to assess 

and tax property or by a property 

owners’ association. 

(v) Beneficial property restrictions 

that are mutually enforceable by the lot 

owners in the subdivision. Restrictions, 

whether separately recorded or 

incorporated into individual deeds, 

must be applied uniformly to every lot 

or group of lots. To be considered 

beneficial and enforceable, any 

restriction or covenant that imposes an 

assessment on lot owners must apply to 

the developer on the same basis as other 

lot owners. Developers who maintain 

control of a subdivision through a 

Property Owners’ Association, 

Architectural Control Committee, 

restrictive covenants, or otherwise, shall 

transfer such control to the lot owners 

no later than when the developer ceases 

to own a majority of total lots in, or 

planned for, the subdivision. 

Relinquishment of developer control 

shall require affirmative action, usually 

in the form of an election based upon 

one vote per lot. 

(vi) Reservations contained in United 

States land patents and similar Federal 

grants or reservations. 

(7) Before the sale the developer gives 

a written MSA Exemption Statement to 

the purchaser and obtains a written 

receipt acknowledging that the 

statement was received. A sample MSA 

Exemption Statement is included in the 

exemption guidelines. A State-approved 

disclosure document may be used to 

satisfy this requirement if all of the 

information required by this section is 

included. The statement(s) given to 

purchasers must contain neither 

advertising nor promotion on behalf of 

the developer or the subdivision nor 

references to the Bureau of Consumer 

Financial Protection or the Consumer 

Financial Protection Bureau. In 

descriptive and concise terms, the 

statement that the developer must give 

the purchaser shall disclose the 

following: 

(i) All liens, reservations, taxes, 

assessments, beneficial property 

restrictions which are enforceable by 

other lot owners in the subdivision, and 

adverse claims which are applicable to 

the lot to be purchased. 

(ii) Good faith estimates of the cost to 

the purchaser of providing electric, 

water, sewer, gas and telephone service 

to the lot. The estimates for unsold lots 

must be updated every two years, or 

more frequently if the developer has 

reason to believe that significant cost 

increases have occurred. The dates on 

which the estimates were made must be 

included in the statement. 

(8) The developer executes and gives 

to the purchaser a written instrument 

designating a person within the state of 

residence of the purchaser as the 

developer’s agent for service of process. 

The developer must also acknowledge 

in writing that it submits to the legal 

jurisdiction of the state in which the 

purchaser or lessee resides. 

(9) The developer executes a written 

affirmation for each sale made under 

this exemption. By January 31 of each 

year, the developer submits to the 

Director a copy of the executed 

affirmation for each sale made during 

the preceding calendar year or a master 

affirmation in which are listed all 

purchasers’ names and addresses and 

the identity of the lots purchased. 

Individual affirmations must be 

available for the Director’s review at all 

times during the year. The affirmation 

must be in the form provided in section 

I of the appendix to this part: Form for 

Developer’s Affirmation for Land Sale. 

(b) Metropolitan Statistical Area. 

Metropolitan Statistical Areas are 

defined by the Office of Management 

and Budget generally on the basis of 

population statistics reported in a 

census. To determine whether a 

subdivision is located within an MSA 

and the boundaries of an MSA, contact 

the Office of Information and Regulatory 

Affairs, Office of Management and 

Budget, 726 Jackson Place NW., 

Washington, DC 20503. 

(c) The sale must also comply with 

the anti-fraud provisions of § 1010.4(b) 

and (c). 

§ 1010.14 Regulatory exemptions. 

(a) Eligibility requirements. The 

following transactions are exempt from 

the registration requirements of the Act 

unless the Director has terminated the 

exemption in accordance with 

paragraph (b) of this section. 

(1) The sale of lots, each of which will 

be sold for less than $100, including 

closing costs, if the purchaser will not 

be required to purchase more than one 

lot. 

(2) The lease of lots for a term not to 

exceed five years if the terms of the 

lease do not obligate the lessee to renew. 

(3) The sale of lots to a person who 

is engaged in a bona fide land sales 

business. 

(4) The sale of a lot to a person who 

owns the contiguous lot which has a 

residential, commercial or industrial 

building on it. 

(5) The sale of real estate to a 

government or government agency. 

(6) The sale of a lot to a person who 

has leased and resided primarily on the 

lot for at least the year preceding the 

sale. 

(b) Termination. If the Director has 

reasonable grounds to believe that 

exemption from the registration 

requirements in a particular case is not 

in the public interest, the Director may, 

after issuing a notice and giving the 

respondent an opportunity to request a 

hearing within fifteen days of receipt of 

the notice, terminate eligibility for 

exemption. The basis for issuing a 

notice may be the conduct of the 

developer or agent, such as unlawful 

conduct or insolvency, or adverse 

information about the lots or real estate 

that should be disclosed to the 

purchasers. Proceedings will be 

governed by § 1012.238. 

(c) The sale must also comply with 

the anti-fraud provisions of § 1010.4(b) 

and (c) of this part. 

§ 1010.15 Regulatory exemption—multiple 

site subdivision—determination required. 

(a) General. (1) The sale of lots 

contained in multiple sites of fewer than 

100 lots each, offered pursuant to a 

single common promotional plan, is 

exempt from the registration 

requirements. 

(2) For purposes of this exemption, 

the sale of lots in an individual site that 

exceeds 99 lots is not exempt from 

registration. Likewise, the sale of lots in 

a site containing fewer than 100 lots, 

where the developer either owns 

contiguous land or holds an option or 

other evidence of intent to acquire 

contiguous land which, when taken 

cumulatively, would or could result in 

one site of 100 or more lots, is not 

exempt from registration. Furthermore, 

the sale of lots that are within a 

subdivision established by a separate 

developer is not exempt from 

registration by this provision. 

(b) Eligibility requirements. The sale 

of each lot must meet the following 

requirements to be eligible for this 

exemption. 

(1) The lot is sold ‘‘as is’’ with all 

advertised improvements and amenities 

completed and in the condition 

advertised. 

(2) The lot is in conformance with all 

local codes and standards. 

(3) The lot is accessible, both legally 

and physically. For lots which are 

advertised or otherwise represented as 

‘‘residential,’’ either primary or 

secondary, with any inference that a 

permanent or temporary dwelling unit 

of any description (excluding 

collapsible tents) can be built or 

installed, physical access must be 

available by automobile, pick-up truck 

or equivalent ‘‘on-road’’ vehicle. 

(4) At the time of closing, a title 

insurance binder or title opinion 

reflecting the condition of title must be 

issued to the purchaser showing that, 

subject only to exceptions approved in 


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writing by the purchaser at the time of 

closing, marketable title is vested in the 

seller. 

(5) Each contract or agreement and 

any promissory notes: 

(i) Contain the non-waivable 

provision found in section II of the 

appendix to this part: Language 

Notifying Buyer of Option to Cancel 

Contract in bold face type (which must 

be distinguished from the type used for 

the rest of the document) on the face or 

signature page above all signatures. If 

the purchaser is entitled to a longer 

revocation period by operation of state 

or local law, that period becomes the 

Federal revocation period and the 

contract must reflect the requirement of 

the longer period rather than the seven 

days. The revocation provisions may not 

be limited or qualified in the contract or 

other document by requiring a specific 

type of notice or by requiring that notice 

be given at a specified place. 

(ii) Obligate the developer to deliver, 

within 180 days, a warranty deed (or its 

equivalent under local law) for the lot 

which at the time of delivery is free 

from any monetary liens or 

encumbrances. 

(6) The purchaser or purchaser’s 

spouse makes a personal on-the-lot 

inspection of the lot to be purchased 

before signing a contract. 

(7) The purchaser’s payments are 

deposited in an escrow account 

independent of the developer until a 

deed is delivered. 

(8) Prior to the purchaser signing a 

contract or agreement of sale, the 

developer discloses in a written Lot 

Information Statement all liens, 

reservations, taxes, assessments, 

easements and restrictions applicable to 

the lot purchased (see paragraph (b)(11) 

of this section). 

(9) Prior to the purchaser signing a 

contract or agreement of sale, the 

developer discloses in a written Lot 

Information Statement the name, 

address and telephone number of the 

local governmental agency or agencies 

from which information on permits or 

other requirements for water, sewer and 

electrical installations can be obtained. 

This Statement will also contain the 

name, address and telephone number of 

the suppliers which would or could 

provide the foregoing services. 

(10) The lot sale must comply with 

the anti-fraud provisions of 12 CFR 

1010.4(b) and (c) and the sales practices 

and standards in §§ 1011.10 through 

1011.28. 

(11) A written Lot Information 

Statement must be delivered to, and 

acknowledged by, each purchaser prior 

to his or her signing a contract or 

agreement of sale, and must contain the 

information shown in the format below. 

The Statement must be typed or printed 

in at least 10 point font. A copy of the 

acknowledgement will be maintained by 

the developer for three years and will be 

made available to ILSRP upon request. 

If the Statement is not delivered as 

required, the contract or agreement of 

sale may be revoked and a full refund 

paid, at the option of the purchaser, 

within two years of the signing date and 

the contract or agreement of sale will 

clearly provide this right. A sample 

format for the Statement is provided in 

section III of the appendix to this part: 

Sample Lot Information Statement and 

Sample Receipt. 

(c) Request for Multiple Site 

Subdivision Exemption. (1) The 

developer must file a request for the 

Multiple Site Subdivision Exemption. 

The request must be accompanied by a 

filing fee of $500 (prepared in 

accordance with § 1010.35(a)) and a 

sample Lot Information Statement, 

substantially in the form set forth in 

section IV of the appendix to this part: 

Request for Multiple Site Subdivision 

Exemption. 

(2) This exemption will become 

effective upon issuance of an Exemption 

Order by the Director. 

(d) Annual Report. (1) By January 31 

of each year the developer will send a 

report to the Director listing each site 

and its location available for a sale 

pursuant to the exemption during the 

preceding year and indicate the number 

of lot sales made in each site. The report 

will describe any changes in the 

information provided in the Request for 

the Multiple Site Subdivision 

Exemption or contain a statement that 

there are no changes. 

(2) The Annual Report must be 

accompanied by a filing fee of $100. 

(3) The Annual Report must be signed 

and dated by the developer, attesting to 

its completeness and accuracy. 

(4) Failure to submit the Annual 

Report within ten days after the receipt 

of notice from the Director will 

automatically terminate eligibility for 

the exemption as of the Report due date. 

(e) Termination. If, subsequent to the 

issuance of an Exemption Order, the 

Director has reasonable grounds to 

believe that exemption from the 

registration requirements in the 

particular case is not in the public 

interest, the Director may, after issuing 

a notice and giving the respondent an 

opportunity to request a hearing within 

fifteen days of receipt of the notice, 

terminate the exemption order. The 

basis for issuing a notice may be 

apparent omissions or 

misrepresentations in the documents 

submitted to the Director, the conduct of 

the developer or agent, such as unlawful 

conduct or insolvency, or adverse 

information about the real estate that 

should be disclosed to purchasers. 

Proceedings will be governed by 

§ 1012.238. 

§ 1010.16 Regulatory exemption— 

determination required. 

(a) General. The Director may exempt 

from the registration requirements of the 

Act any subdivision or lots in a 

subdivision by issuing an order in 

writing if it is determined that 

registration is not necessary in the 

public interest and for the protection of 

purchasers on the basis of the small 

amount or limited character of the 

offering and the requirements contained 

in paragraph (b) of this section. 

(b) Eligibility requirements. An 

exemption order may be issued at the 

discretion of the Director on the basis of 

the small amount or limited character of 

the offering if the following 

requirements are met: 

(1) The subdivision or sales 

substantially meet the requirements of 

one of the exemptions available under 

this chapter. 

(2) Each contract: 

(i) Specifies the developer’s and 

purchaser’s responsibilities for 

providing and maintaining roads, water 

and sewer facilities and any existing or 

promised amenities; 

(ii) Contains a good faith estimate of 

the year in which the roads, water and 

sewer facilities and promised amenities 

will be completed; 

(iii) Contains a non-waivable 

provision giving the purchaser the 

opportunity to revoke the contract until 

at least midnight of the seventh calendar 

day following the date the purchaser 

signed the contract. If the purchaser is 

entitled to a longer revocation period by 

operation of state law, that period 

becomes the Federal revocation period 

and the contract must reflect the 

requirements of the longer period. 

(iv) Contains a provision that 

obligates the developer to deliver to the 

purchaser within 180 days of the date 

the purchaser signed the sales contract, 

a warranty deed, or its equivalent under 

local law, which at the time of delivery 

is free from any monetary liens or 

encumbrances. 

(3) The purchaser or purchaser’s 

spouse makes a personal on-the-lot 

inspection of the lot to be purchased 

before signing a contract. 

(4) The developer files a request for an 

exemption order and supporting 

documentation in accordance with 

paragraphs (c) and (d) of this section 

and submits a filing fee of $500.00 in 


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accordance with § 1010.35(a) of this 

part. This fee is not refundable. 

(c) Request. The request for an 

Exemption Order must be substantially 

in the format set forth in section V of the 

appendix to this part: Request for 

Regulatory Exemption Order. 

(d) Supporting documentation. A 

request for an exemption order must be 

accompanied by the following 

documentation: 

(1) A plat of the entire subdivision 

with the lots subject to the exemption 

request delineated thereon. 

(2) A copy of the contract to be used. 

(3) A clear and specific statement 

detailing how the proposed sales of lots 

subject to the exemption request 

substantially complies with one of the 

available exemption provisions. 

(4) A description of the method by 

which the lots have been and will be 

promoted and to which population 

centers the promotion has been and will 

be directed. 

(e) The sale must also comply with 

the anti-fraud provisions of § 1010.4(b) 

and (c) of this part. 

(f) Termination. If, subsequent to the 

issuance of an exemption order, the 

Director has reasonable grounds to 

believe that exemption from the 

registration requirements in the 

particular case is not in the public 

interest, the Director may, after issuing 

a notice and giving the respondent an 

opportunity to request a hearing within 

fifteen days of receipt of the notice, 

terminate the exemption order. The 

basis for issuing a notice may be 

apparent omissions or 

misrepresentations in the documents 

submitted to the Director, the conduct of 

the developer or agent, such as unlawful 

conduct or insolvency, or adverse 

information about the real estate that 

should be disclosed to purchasers. 

Proceedings will be governed by 

§ 1012.238. 

§ 1010.17 Advisory opinion. 

(a) General. A developer may request 

an opinion from the Director as to 

whether an offering qualifies for an 

exemption or is subject to the 

jurisdiction of the Act. 

(b) Requirements. All requests for 

Advisory Opinions must be 

accompanied by the following: 

(1) A $500.00 filing fee submitted in 

accordance with § 1010.35(a). This fee is 

not refundable. 

(2) A comprehensive description of 

the conditions and operations of the 

offering. There is no prescribed format 

for submitting this information, but the 

developer should at least cite the 

applicable statutory or regulatory basis 

for the exemption or lack of jurisdiction 

and thoroughly explain how the offering 

either satisfies the requirements for 

exemption or falls outside the purview 

of the Act. 

(3) An affirmation as set forth in 

section VI of the appendix to this part: 

Developer’s Affirmation for Advisory 

Opinion. 

§ 1010.18 No Action Letter. 

(a) If the sale of lots is subject to the 

registration requirements of the Act but 

the circumstances of the sale are such 

that no affirmative action to enforce the 

registration requirements is needed to 

protect the public interest or 

prospective purchasers, the Director 

may issue a No Action Letter. 

(b) To obtain a No Action Letter a 

developer must submit a request which 

includes a thorough description of the 

proposed transaction, the property 

involved, and the circumstances 

surrounding the sale. 

(c) The issuance of a No Action Letter 

will not affect any right which a 

purchaser has under the Act, and it will 

not limit future action by the Director if 

there is evidence to show that 

affirmative action is necessary to protect 

the public interest or prospective 

purchasers. In no event will a No Action 

Letter be issued after the sale has 

occurred. 

§ 1010.19 [Reserved] 

§ 1010.20 Requirements for registering a 

subdivision—Statement of Record—filing 

and form. 

(a) Filing. In order to register a 

subdivision and receive an effective 

date, the developer or owner of the 

subdivision must file a Statement of 

Record with the Director. The official 

address to be used is: CFPB Interstate 

Land Sales, c/o: Armedia LLC, 8221 Old 

Courthouse Road, Suite 206, Vienna, VA 

22182. When the Statement of Record is 

filed, a fee in the amount set out in 

§ 1010.35(b) must be paid in accordance 

with § 1010.35(a). 

(b) Form. The Statement of Record 

shall be in the format specified in 

§ 1010.100 and shall be completed in 

accordance with the instructions in 

§§ 1010.102, 1010.105 through 

1010.118, 1010.200, 1010.208 through 

1010.216 and 1010.219. It shall be 

supported by the documents required by 

§§ 1010.208 through 1010.216 and 

1010.219. It shall include any other 

information or documents which the 

Director may require as being necessary 

or appropriate for the protection of 

purchasers. 

(c) State filings. A Statement of 

Record submitted under the provisions 

of 12 CFR part 1010, subpart C— 

Certification of Substantially Equivalent 

State Law, shall consist of the materials 

designated by the Certification 

Agreement between the Director and the 

certified state in which the subdivision 

is located. 

§ 1010.21 Effective dates. 

(a) General. The effective date of an 

initial, consolidated or amended 

Statement of Record is the 30th day after 

the filing of the latest amendatory 

material unless the Director notifies the 

developer in writing prior to such 30th 

day that: 

(1) The effective date has been 

suspended in accordance with 

§ 1010.45(a), or 

(2) An earlier effective date has been 

determined. 

(b) Suspension of effective date by 

developer. (1) A developer, or owner, 

may request that the effective date of its 

Statement of Record be suspended, 

provided there are no administrative 

proceedings pending against either of 

them at the time the request is 

submitted. The request must include 

any consolidations or amendments 

which have been made to the initial 

Statement of Record. Forms for this 

purpose will be furnished by the 

Director upon request. 

(2) Upon acceptance by the Director, 

the effectiveness of the Statement of 

Record shall be suspended as of the date 

the request was executed by the 

developer or owner. 

(3) The suspension shall continue 

until the developer, or owner, submits 

all amendments necessary to bring the 

registration into full compliance with 

the Regulations which are in effect on 

the date of the amendments and the 

Director allows those amendments to 

become effective. 

§ 1010.22 Statement of record—initial or 

consolidated. 

(a) Initial Statement of Record. (1) 

Except in the case of exempt 

transactions, an initial Statement of 

Record shall be filed, and an effective 

date issued, prior to selling or leasing 

any lot in a subdivision. 

(2) If a developer buys from another 

developer 100 or more lots from an 

existing registration, the new developer, 

or owner, may have to submit a new 

initial Statement of Record and receive 

an effective date covering the acquired 

lots prior to selling or leasing any of 

those lots. 

(3) Changes in principals due to a sale 

of stock in a corporation or changes in 

partners or joint venturers which are 

accomplished in accordance with the 

partnership or joint venture agreement 

but which do not cause a change in the 

title to the land in the subdivision may 

be submitted as an amendment. 


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(4) Any initial Statement of Record 

must be accompanied by a fee, as 

specified in § 1010.35(b), based upon 

the number of lots sought to be 

registered. 

(b) Consolidated Statement of Record. 

(1) If the developer intends to sell or 

lease additional lots as part of the same 

common promotional plan with lots 

already registered, a consolidated 

Statement of Record may be submitted 

for the additional lots. A fee, as 

specified in § 1010.35(b) and based on 

the number of additional lots, must 

accompany the submission. The 

additional lots may not be sold or leased 

until a new effective date is issued. 

(2) If the additional lots are simply the 

result of a replatting of lots previously 

registered and enumerated in the 

Property Report and do not include any 

additional land, the change may be 

made by an amendment. However, the 

amendment must be accompanied by a 

fee, as specified in § 1010.35(b), based 

on the number of additional lots. 

(c) Consolidated Statement of 

Record—Form. A consolidated 

Statement of Record shall contain the 

elements listed in paragraphs (c)(1) 

through (4) of this section. Pages having 

no changes and documents in previous 

submissions which apply equally to the 

additional lots may be included by 

reference. However, the developer may, 

at its option, submit the entire format 

for an initial filing, including copies of 

previously submitted documents, to 

expedite the examination process. 

(1) Those pages of the Property Report 

portion and Additional Information and 

Documentation portion which contain 

changes which have occurred since the 

last effective submission, and 

(2) A recapitulation or listing of each 

of the section headings, and 

subheadings if necessary, of the 

Additional Information and 

Documentation portion. Each item of 

the listing shall contain a statement as 

to whether or not any change is made 

in the section; whether any new or 

additional information is being 

submitted and, if documentation is 

added by cross reference, the previous 

submission in which that 

documentation may be found, and 

(3) Documentation to support the 

additional lots (e.g., plat maps, 

topographic maps and general plan to 

reflect new lots, title information, 

permits for additional facilities, 

financial assurances of completion of 

additional facilities, financial 

statements) or updated or expanded 

documents in support of previous 

submissions, and 

(4) The affirmation required by 

§ 1010.219. 

(d) Consolidated Statement of Record 

amends prior Statement of Record. A 

Consolidated Statement of Record shall 

contain all applicable information for all 

registered lots in the subdivision except 

those deleted pursuant to other 

provisions in these regulations. The 

resulting Property Report shall be used 

for all sales in the subdivision, except 

for those transactions which are exempt 

from the provisions of the Act or which 

have been granted an exempt status by 

the Director, unless the Director has 

specifically authorized the use of 

multiple Property Reports. 

(e) Initial Statement of Record—when 

prior approval to submit is required. In 

those subdivisions where there is a 

disparity between the lots already 

registered and those sought to be 

registered because of location, terrain, 

proposed use of the lots or the amenities 

to be furnished or available, the 

developer may present a resume of the 

differences and request the Director’s 

permission to file a separate initial 

Statement of Record for the additional 

lots. Upon consideration of the facts 

submitted, the Director may allow such 

a procedure. 

(f) Lots which have been deleted from 

registration. Should the developer, for 

any reason, delete by amendment any 

registered lots from an effective 

Statement of Record, those lots must be 

reregistered by a consolidation and a 

new effective date issued, before they 

can be sold or leased. An appropriate 

fee must accompany the submission. 

(g) Lots sold to individual purchasers. 

It is not necessary to delete from the 

registration those lots which have been 

sold to individual purchasers for their 

own use. 

§ 1010.23 Amendment—filing and form. 

(a) Filing. If any change occurs in any 

representation of material fact required 

to be stated in an effective Statement of 

Record, an amendment shall be filed. 

The amendment shall be filed within 15 

days of the date on which the developer 

knows, or should have known, that 

there has been a change in material fact. 

(b) Form. An amendment shall 

include by reference the prior Statement 

of Record except for any changes in 

material fact. A change in material fact 

shall be specifically described and 

supported by the same documentation 

which would be required for an initial 

submission. Any amendment shall be 

accompanied by: 

(1) A letter from the developer giving 

a clear and concise description of the 

purpose and significance of the 

amendment and referring to the section 

and page of the Statement of Record 

which is being amended, and 

(2) All pages of the Statement of 

Record, which have been amended, 

retyped in the required format to reflect 

the changes. The ILSRP number of the 

Statement of Record shall appear at the 

top of each page of the material 

submitted. 

(c) Amendments to suspended filings. 

Developers wishing to reactivate a 

suspended filing shall file the following: 

(1) Any amendments necessary to 

bring the filing into compliance, 

submitted in accordance with 

paragraphs (a) and (b) of this section; 

(2) An activity report in the form 

prescribed by § 1010.310; and 

(3) An amendment fee, if required 

under § 1010.35(d)(2). 

§§ 1010.24–1010.28 [Reserved] 

§ 1010.29 Use of property report— 

misstatements, omissions, or 

representation of Bureau approval 

prohibited. 

Nothing in these regulations shall be 

construed to authorize or approve the 

use of a property report containing any 

untrue statement of a material fact or 

omitting to state a material fact required 

to be stated therein. Nor shall anything 

in these regulations be construed to 

authorize or permit any representation 

that the Property Report is prepared or 

approved by the Director, ILSRP or the 

Bureau of Consumer Financial 

Protection. 

§ 1010.35 Payment of fees. 

(a) Method of payment. (1) Each fee 

must be paid by: 

(i) Certified check, cashier’s check, or 

postal money order made payable to the 

Treasurer of the United States, with the 

registration number, when known, and 

the name, of the subdivision on the face 

of the check, and mailed to an address 

specified by the Director; or 

(ii) Electronic payment in a manner 

specified by the Director. 

(2) Information regarding the current 

mailing address or electronic payment 

procedures is available from: Office of 

Nonbank Supervision, Bureau of 

Consumer Financial Protection,1700 G 

Street NW., Washington, DC 20006. 

(b) Fees for registration. The fee for 

each initial and consolidated 

registration is set forth in section VII of 

the appendix to this part: Initial and 

Consolidated Registration Fee Schedule. 

(c) Fee for Exemption Order or 

Advisory Opinion. The filing fee for an 

Exemption Order or an Advisory 

Opinion (§ 1010.16 or § 1010.17) is 

$500. This fee is not refundable. 

(d) Amendment fee. (1) A fee of $800 

is charged when an Annual Activity 

Report reflects an annual ending 


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inventory of 101 or more unsold 

registered lots. 

(2) A fee of $800 is charged for an 

amendment to reactivate a Statement of 

Record subsequent to its suspension, 

unless the developer has 100 or fewer 

unsold lots included in the Statement of 

Record. 

§ 1010.45 Suspensions. 

(a) Suspension notice—prior to 

effective date. (1) If it appears to the 

Director that a Statement of Record or 

an amendment is on its face incomplete 

or inaccurate in any material respect, 

the Director shall so advise the 

developer, by issuing a suspension 

notice, within a reasonable time after 

the filing of such materials but prior to 

the time the materials would otherwise 

be effective. 

(2) A suspension notice issued 

pursuant to this subsection shall 

suspend the effective date of the 

Statement of Record or the amendment. 

It shall continue in effect until 30 days, 

or such earlier date as the Director may 

determine, after the necessary 

amendments are submitted which 

correct all deficiencies cited in the 

notice. 

(3) Upon receipt of a suspension 

notice, the developer has 15 days in 

which to request a hearing. If a hearing 

is requested, it shall be held within 20 

days of the receipt of the request by the 

Director. 

(b) Suspension orders—subsequent to 

effective date. (1) A notice of 

proceedings to suspend an effective 

Statement of Record may be issued to a 

developer if the Director has reasonable 

grounds to believe that an effective 

Statement of Record includes an untrue 

statement of a material fact, or omits a 

material fact required by the Act or rules 

and regulations, or omits a material fact 

which is necessary to make the 

statements therein not misleading. The 

Director may, after notice, and after 

opportunity for a hearing requested 

pursuant to § 1012.220 within 15 days 

of receipt of such notice, issue an order 

suspending the Statement of Record. In 

the event that a suspension order is 

issued, such order shall remain in effect 

until the developer has amended the 

Statement of Record or otherwise 

complied with the requirements of the 

order. When the developer has 

complied with the requirements of the 

order, the Director shall so declare and 

thereupon the suspension order shall 

cease to be effective. 

(2) If the Director undertakes an 

examination of a developer or its 

records to determine whether a 

suspension order should be issued, and 

the developer fails to cooperate with the 

Director or obstructs, or refuses to 

permit the Director to make such 

examination, the Director may issue an 

order suspending the Statement of 

Record. Such order shall remain in 

effect until the developer has complied 

with the requirements of the order. 

When the developer has complied with 

the requirements of the order, the 

Director shall so declare and thereupon 

the suspension order shall cease to be 

effective. In accordance with the 

procedure described in § 1012.235, a 

hearing may be requested. 

(3) Upon receipt of an amendment to 

an effective Statement of Record, the 

Director may issue an order suspending 

the Statement of Record until the 

amendment becomes effective if the 

Director has reasonable grounds to 

believe that such action is necessary or 

appropriate in the public interest or for 

the protection of purchasers. In 

accordance with the procedure 

described in § 1012.235, a hearing may 

be requested. 

(4) Suspension orders issued pursuant 

to this subsection shall operate to 

suspend the Statement of Record as of 

the date the order is either served on the 

developer or its registered agent or is 

delivered by certified or registered mail 

to the address of the developer or its 

authorized agent. 

Subpart B—Reporting Requirements 

§ 1010.100 Statement of Record—format. 

(a) The Statement of Record consists 

of two portions; the Property Report 

portion and the Additional Information 

and Documentation portion. 

(b) General format. The Statement of 

Record shall be prepared in accordance 

with the format set forth in section VIII 

of the appendix to this part: Property 

Report: 

§ 1010.101 [Reserved] 

§ 1010.102 General instructions for 

completing the Statement of Record. 

(a) Paper and type. The Statement of 

Record shall be on good quality, 

unglazed white or pastel paper. Letter 

size paper, approximately 81⁄2 x 11 

inches in size, will be used for the 

Property Report portion and legal size 

paper, approximately 81⁄2 x 14 inches in 

size, will be used for the Additional 

Information and Documentation 

portion. Side margins shall be no less 

than 1 inch and no greater than 11⁄2

inches. Top and bottom margins shall be 

no less than 1 inch. In the preparation 

of the charts to be included in the 

Property Report, the developer may vary 

from the above margin requirements or 

print the charts lengthwise on the 

required size paper if such measures are 

necessary to make the charts readable. 

The Statement of Record shall be 

prepared in an easily readable, uniform 

font. 

(b) Numbering and dating. Each page 

of the Statement of Record as submitted 

to ILSRP shall be numbered and shall 

include the date of typing or preparation 

in the lower right hand corner, except 

in the final printed version of the 

Property Report portion. 

(c) Signing. The Statement of Record 

shall be signed by the senior executive 

officer of the developer or a designated 

agent. 

(d) Printing. The Statement of Record 

and, insofar as practical, all papers and 

documents filed as a part thereof, shall 

be printed, lithographed, photocopied, 

typewritten or prepared by any similar 

process which, in the opinion of the 

Director, produces copies suitable for a 

permanent record. Irrespective of the 

process used, all copies of any such 

materials shall be clear and easily 

readable. 

(e) Headings, subheadings, captions, 

introductory paragraphs, warnings. 

Property Report subject ‘‘headings’’ are 

those descriptive introductory words 

which appear immediately after section 

numbers 1010.106 through 1010.116 

(e.g. § 1010.108 has ‘‘General 

Information’’ and § 1010.111 has 

‘‘Utilities’’). Each such heading shall be 

printed in the Property Report in 

underlined capital letters and centered 

at the top of a new page. Section 

numbers shall not be printed in the 

Property Report. Property Report 

subheadings are those descriptive 

introductory words which appear in 

italics in the regulations at the 

beginning of paragraphs designated by 

paragraph letters (a), (b), (c) etc. An 

example of a subheading is ‘‘water’’ 

found immediately after the paragraph 

letter (a) in § 1010.111. These 

subheadings will be printed in the 

Property Report only if they are relevant 

to the subject subdivision. If printed 

these subheadings shall be capitalized 

and shall begin at the left hand margin 

of the page. Property Report ‘‘captions’’ 

are those descriptive introductory words 

which appear in italics in the 

Regulations at the beginning of 

subparagraphs designated by numbers 

(1), (2), (3), etc. An example of such 

captions is ‘‘Sales Contract and Delivery 

of Deed’’ found immediately after the 

subparagraph number ‘‘(1)’’ in 

§ 1010.109(b). These captions are to be 

printed in the Property Report only if 

they are applicable to the subject 

subdivision. If printed, these captions 

shall be centered on the page from the 

side margins, and shall have only the 

first letter of each word capitalized. 


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Headings and subheadings will be used 

in the Property Report in accordance 

with the sample page appearing in 

§ 1010.102. Introductory paragraphs will 

follow headings if they are applicable 

and necessary for a readable entry into 

the subject matters, but note, the 

introductory paragraphs for ‘‘Title to the 

Property and Land Use’’ are to be used 

in every case as provided in 

§ 1010.109(a)(1). Subheadings and 

captions which do not apply to the 

subdivision should be omitted from the 

Property Report portion and answered 

‘‘not applicable’’ in the Additional 

Information and Documentation 

portion, unless specifically required to 

be included elsewhere in these 

instructions. Warnings shall be printed 

substantially as they appear in the 

instructions in §§ 1010.105 through 

1010.118. They shall be printed in 

capital letters and enclosed in a box as 

shown on the sample page in 

§ 1010.102. The paragraphs in the 

Property Report portion need not be 

numbered. A sample page is set forth in 

section IX of the appendix to this part: 

Sample Page for Statement of Record. 

(f) Language style. All information 

given in the Property Report portion 

shall be stated in narrative form using 

plain, concise, everyday language which 

can be readily understood by purchasers 

who are unfamiliar with real estate 

transactions. Excessively long 

paragraphs should be avoided. Keep 

them as brief as possible. Use separate 

paragraphs for different points 

discussed. Disclose all pertinent facts. 

Potential consequences to a purchaser 

must be made clear even though not 

specifically asked for in the format and 

the instructions. In the Property Report 

the pronouns ‘‘you’’ and ‘‘your’’ shall 

generally be used in referring to the 

prospective purchaser and the pronouns 

‘‘we,’’ ‘‘us,’’ and ‘‘our’’ shall generally 

be used in referring to the developer. 

The Director specifically reserves the 

right to require modification of the text 

when the narrative does not meet the 

standards of this section. 

(g) Format of the Additional 

Information and Documentation portion 

of the Statement of Record. The 

supporting information and 

documentation required by these 

regulations shall be identified by 

affixing a tab on the right side of the 

cover sheet of the required information 

or documentation and by identifying on 

the tab the section number of the 

Statement of Record instructions to 

which the information or 

documentation corresponds. This 

information or documentation shall 

then be placed immediately after the 

page(s) on which the section number 

and answers for that section appear. If 

the data in a document is applicable to 

more than one section of instructions, 

the developer may substitute as a 

document in the second case a 

statement incorporating the earlier 

document. Deeds, title policies, 

subdivision plats or maps and other 

documentary information required to be 

contained in the Additional Information 

and Documentation portion of the 

Statement of Record need not be on the 

same size paper as the Statement of 

Record but, if larger, shall be folded to 

a size no larger than 81⁄2 x 14 inches. 

Supporting documents shall be inserted 

into the binding in such a manner as to 

permit them to be examined without the 

necessity of removing them from the 

binding. This may be accomplished by 

proper folding or through the use of 

envelopes. 

(h) Binding. The Statement of Record 

shall be bound with the Property Report 

portion on top, including any 

documents which may be required to be 

attached when delivered to the 

purchaser, followed by the Additional 

Information and Documentation 

portion. 

(i) Advertising and promotional 

material. No advertising, or promotional 

material or statements which are selfserving on behalf of the developer or 

owner may be included in the Statement 

of Record or resulting Property Report. 

(j) Additional information. (1) In 

addition to the information expressly 

required to be stated in the Statement of 

Record, there shall be added, and the 

Director may require, such further 

material information, documentation 

and certification as may be necessary in 

the public interest and for the protection 

of purchasers or necessary in order to 

make the statements not misleading in 

the light of circumstances under which 

they are made. 

(2) The instructions are not all 

inclusive. The developer shall include 

any other facts which would have a 

bearing upon the use by the purchaser 

of any of the facilities, services or 

amenities; which would cause or result 

in additional expenses to the purchaser; 

which would have an effect upon the 

use and enjoyment of the lot by the 

purchaser for the purpose for which it 

is sold or which would adversely affect 

the value of the lot. 

(k) Modification of format or content. 

The Director may require or permit 

modification to the content and format 

of the Property Report to include 

additional information, to modify or 

omit required information, or to change 

the sequence or position of information 

when such changes are deemed to be in 

the public interest or for the protection 

of purchasers. 

(l) Required documentation. Where 

the documentation required by the 

Statement of Record cannot be obtained, 

the Director may permit the best 

available alternative documentation to 

be substituted. 

(m) Final version of property report. 

On the date that a Statement of Record 

becomes effective, the Property Report 

portion shall become the Property 

Report for the subject subdivision. The 

version of the Property Report delivered 

to prospective lot purchasers shall be 

verbatim to that found effective by the 

Director and shall have no covers, 

pictures, emblems, logograms or 

identifying insignia other than as 

required by these regulations. It shall 

meet the same standards as to grade of 

paper, type size, margins, style and 

color of print as those set herein for the 

Statement of Record, except where 

required otherwise by these regulations. 

However, the date of typing or 

preparation of the pages and the ILSRP 

number shall not appear in the final 

version. If the final version of the 

Property Report is commercially 

printed, or photocopied by a process 

which results in a commercial printing 

quality, and is bound on the left side, 

both sides of the pages may be used for 

printed material. If it is typed or 

photocopied by a process which does 

not result in a clear and legible product 

on both sides of the page or is bound at 

the top, printing shall be done on only 

one side of the page. Three copies of the 

final version of the Property Report, in 

the exact form in which it is delivered 

to prospective lot purchasers, shall be 

sent to ILSRP Office within 20 days of 

the date on which the Statement of 

Record, amendment, or consolidation is 

allowed to become effective by the 

Director. If a Property Report in a 

foreign language is used as required by 

§ 1011.25(g), three copies of that 

Property Report together with copies of 

the translated documents shall be 

furnished the Director within 20 days of 

the date on which the advertising is first 

used. A Property Report prepared 

pursuant to these regulations shall not 

be distributed to potential lot 

purchasers until after the Statement of 

Record of which it is a part or any 

amendment to that Statement of Record 

has been made effective by the Director. 

§ 1010.103 Developer obligated 

improvements. 

(a) If the developer represents either 

orally or in writing that it will provide 

or complete roads or facilities for water, 

sewer, gas, electricity or recreational 

amenities, it must be contractually 


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obligated to do so (see § 1011.15(f)), and 

the obligation shall be clearly stated in 

the Property Report. While the 

developer may disclose relevant facts 

about completion, the obligation to 

complete cannot be conditioned, other 

than as provided for in § 1011.15(f), and 

an estimated completion date (month 

and year) must be stated in the Property 

Report. However, a developer that has 

only tentative plans to complete may so 

state in the Property Report, provided 

that the statement clearly identifies 

conditions to which the completion of 

the facilities are subject and states that 

there are no guarantees the facilities will 

be completed. 

(b) If a party other than the developer 

is responsible for providing or 

completing roads or facilities for water, 

sewer, gas, electricity or recreational 

amenities, that entity shall be clearly 

identified in the Property Report under 

the categories described in § 1010.110, 

§ 1010.111 or § 1010.114, as applicable. 

A statement shall be included in the 

proper section of the Property Report 

that the developer is not responsible for 

providing or completing the facility or 

amenity and can give no assurance that 

it will be completed or available for use. 

§ 1010.104 [Reserved] 

§ 1010.105 Cover page. 

The cover page of the Property Report 

shall be prepared in accordance with 

the following directions: 

(a) The margins shall be at least 1 

inch. 

(b) The next 3 inches shall contain a 

warning, centered, in 1⁄2 inch capital 

letters in red type with 1⁄4 inch space 

between the lines which reads as 

follows: ‘‘READ THIS PROPERTY 

REPORT BEFORE SIGNING 

ANYTHING’’. 

(c) The remainder of the page shall 

contain the language set forth in section 

X of the appendix to this part: Language 

for Warning on Cover Page of Property 

Report beginning 1⁄4-inch below the last 

line of the warning. 

(d)(1) If the purchaser is entitled to a 

longer revocation period by operation of 

state law, that period becomes the 

Federal revocation period and the Cover 

Page must reflect the requirements of 

the longer period, rather than the seven 

days. 

(2)(i) If a deed is not delivered within 

180 days of the signing of the contract 

or agreement of sale or unless certain 

provisions are included in the contract 

or agreement, the purchaser is entitled 

to cancel the contract within two years 

from the date of signing the contract or 

agreement. 

(ii) The deed must be a warranty 

deed, or where such a deed is not 

commonly used, a similar deed legally 

acceptable in the jurisdiction where the 

lot is located. The deed must be free and 

clear of liens and encumbrances. 

(iii) The contract provisions are: 

(A) A legally sufficient and recordable 

lot description; and 

(B) A provision that the seller will 

give the purchaser written notification 

of purchaser’s default or breach of 

contract and the opportunity to have at 

least 20 days from the receipt of notice 

to correct the default or breach; and 

(C) A provision that, if the purchaser 

loses rights and interest in the lot 

because of the purchaser’s default or 

breach of contract after 15% of the 

purchase price, exclusive of interest, has 

been paid, the seller shall refund to the 

purchaser any amount which remains 

from the payments made after 

subtracting 15% of the purchase price, 

exclusive of interest, or the amount of 

the seller’s actual damages, whichever is 

the greater. 

(iv) If a deed is not delivered within 

180 days of the signing of the contract 

or if the necessary provisions are not 

included in the contract, the following 

statement shall be used in place of any 

other rescission language: ‘‘Under 

Federal law you may cancel your 

contract or agreement of sale any time 

within two years from the date of 

signing.’’ 

(e) At the time of submission, the 

developer may indicate its intention to 

comply with the red printing by an 

illustration or by a statement to that 

effect. 

(f) The ‘‘Date of This Report’’ shall be 

the date on which the Director allows 

the Statement of Record to become 

effective and shall not be entered until 

the submission has become effective. 

§ 1010.106 Table of contents. 

(a) The second page(s) shall consist of 

a Table of Contents which lists the 

headings in the Property Report, the 

major subheadings, if any, and the page 

on which they appear. An example is 

set forth in section XI of the appendix 

to this part: Sample Entry in Table of 

Contents for Statement of Record. 

(b) Use of ‘‘You’’ and ‘‘We.’’ At the 

end of the Table of Contents insert the 

following remark: ‘‘In this Property 

Report, the words ‘‘you’’ and ‘‘your’’ 

refer to the buyer. The words ‘‘we,’’ 

‘‘us’’ and ‘‘our’’ refer to the developer.’’ 

§ 1010.107 Risks of buying land. 

(a) The next page shall be headed 

‘‘Risks of Buying Land’’ and shall 

contain the paragraphs listed in section 

XII of the appendix to this part: 

Required Paragraphs for Risks of Buying 

Land. 

(b) Warnings. If the instructions of the 

Director require any warnings to be 

included in the Property Report portion, 

the following statement shall be added 

beneath the ‘‘Risks of Buying Land’’ 

under a heading ‘‘Warnings’’: 

‘‘Throughout this Property Report there 

are specific warnings concerning the 

developer, the subdivision or individual 

lots. Be sure to read all warnings 

carefully before signing any contract or 

agreement.’’ Both the heading, 

‘‘Warnings,’’ and the statement shall be 

printed in capital letters and enclosed in 

a box. 

§ 1010.108 General information. 

Insert and complete the format set 

forth in section XIII of the appendix to 

this part: Format for General 

Information. 

§ 1010.109 Title to the property and land 

use. 

(a) General instructions.(1) Below the 

heading ‘‘Title to the Property and Land 

Use’’ insert the introductory paragraphs 

set forth in section XIV of the appendix 

to this part: Paragraphs to be included 

in the General Report—Title to the 

Property and Land Use. 

(2) Information to be provided. After 

the above introductory paragraphs 

provide the information required by the 

following instructions and questions. 

Follow a general form identical to the 

sample page set forth in section IX of 

the appendix to this part: Sample Page 

for Statement of Record. 

(b) Method of sale: (1) Sales contract 

and delivery of deed. (i) Will the buyer 

sign a purchase money or installment 

contract or similar instrument in 

connection with the purchase of the lot? 

When will a deed be delivered? 

(ii) If an installment contract is used, 

include the following, or substantially 

the same, language in the disclosure 

narrative under ‘‘Method of Sale’’: ‘‘If 

you fail to make your payments required 

by the contract, you may lose your lot 

and all monies paid.’’ 

(iii) If, at the time of a credit sale, the 

developer gives the buyer a deed to the 

lot, what type of security must the buyer 

give the seller? 

(iv) If the lots are to be sold on the 

basis of an installment contract, can the 

developer or the owner of the 

subdivision or their creditors encumber 

the lots under contract? If so, include 

the following warning in the disclosure 

narrative under the caption ‘‘Sales 

contract and delivery of deed’’: ‘‘The 

(indicate subdivision developer, owner, 

or their creditors) can place a mortgage 

on or encumber the lots in this 

subdivision after they are under 


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79500 Federal Register / Vol. 76, No. 245 / Wednesday, December 21, 2011 / Rules and Regulations 

contract. This may cause you to lose 

your lot and any monies paid on it.’’ 

(2) Type of deed. What type of deed 

will be used to convey title to lots in the 

subdivision? 

(3) Quitclaim deeds. If a quitclaim 

deed is to be given to lot purchasers 

insert the below warning, or a warning 

which is substantially the same, in the 

disclosure narrative below the caption 

‘‘Quitclaim Deeds.’’ This particular 

warning may be deleted at the direction 

of the Director if an acceptable 

attorney’s opinion is submitted with the 

Statement of Record which indicates 

that a quitclaim deed has a meaning in 

the jurisdiction where the subdivision is 

located which is substantially contrary 

to the effect of this warning. This 

warning shall be phrased substantially 

as follows: ‘‘The Quitclaim deed used to 

transfer title to lots in this subdivision 

gives you no assurance of ownership of 

your lot.’’ 

(4) Oil, gas, and mineral rights. If oil, 

gas or mineral rights have been 

reserved, insert the following statement 

or one substantially the same in the 

narrative answer under the caption ‘‘oil, 

gas, and mineral rights’’: ‘‘The (indicate 

oil, gas, or mineral rights) to (state 

which lots) in this subdivision will not 

belong to the purchaser of those lots. 

The exercise of these rights could affect 

the use, enjoyment and value of your 

lot.’’ 

(c) Encumbrances, mortgages and 

liens. (1) In general. State whether any 

of the lots or common facilities which 

serve the subdivision, other than 

recreation facilities, are subject to a 

blanket encumbrance, mortgage or lien. 

If yes, identify the type of encumbrance 

(e.g., deed of trust, mortgage, mechanics 

liens), the holder of the lien, and the 

lots covered by the lien. If any blanket 

encumbrance, mortgage, or lien is not 

current in accordance with its terms, so 

indicate. 

(2) Release provisions. (i) Explain the 

effect of any release provisions of any 

blanket encumbrance, mortgage or lien 

and include the one of the following 

statements that pertains. 

(A) If the release clauses are not 

included in a recorded instrument, 

insert the statement set forth in section 

XV of the appendix to this part: 

Statement on Release Provisions, or one 

substantially the same in the disclosure 

narrative below under the caption 

‘‘Release Provisions.’’ 

(B) If the developer or subdivision 

owner states that the release provisions 

are recorded and that the lot purchaser 

may pay the release price of the 

mortgage, the statement shall be 

supported by documentation supplied 

in § 1010.209. If the purchaser may pay 

the release fee, state the amount of the 

release fee and inform the purchaser 

that the amount may be in addition to 

the contract payments unless there is a 

bona fide trust or escrow arrangement in 

which the purchaser’s payments are set 

aside to pay the release price before any 

payments are made to the developer. 

(C)(1) If there are no provisions in the 

blanket encumbrance for release of an 

individual purchaser’s lot from a 

blanket encumbrance, include the 

warning set forth in section XVI of the 

appendix to this part: Warning for 

Release Provisions or a warning 

substantially the same, in the disclosure 

narrative under the ‘‘Release 

Provisions’’ caption. 

(2) If the provisions for release of 

individual lots from the blanket 

encumbrance may be exercised only by 

the developer insert the following 

statement, or one substantially the same, 

in the disclosure narrative under the 

‘‘Release Provisions’’ caption: ‘‘The 

release provisions in the (state the type 

of encumbrance) on (indicate all or 

particular lots) in this subdivision may 

be exercised only by us. Therefore, if we 

default on the (state type of 

encumbrance) before obtaining a release 

of your lot, you may lose your lot and 

any money you have paid for it.’’ 

(d) Recording the contract and deed. 

(1) Method or purpose of recording. (i) 

State what protection, if any, recording 

of deeds and contracts gives a lot 

purchaser in your jurisdiction. 

(ii) If the sales contract or deed may 

be recorded, so state. Also state whose 

responsibility it is to record the contract 

or deed. 

(iii) If the developer or subdivision 

owner will not have the sales contract 

officially acknowledged or if the 

applicable jurisdiction will not record 

sales contracts, state that sales contracts 

will not be recorded and why they will 

not be recorded. 

(iv) If at, or immediately after, the 

signing of a contract, the contract or a 

deed transfer to the buyer is not 

recorded by the developer or owner or 

if title to the lot is not otherwise 

transferred of record to a trust, or if 

other sufficient notice of transfer or sale 

is not placed of record, then the 

developer shall include the warning set 

forth in section XVII of the appendix to 

this part: Method and Purpose of 

Recording Warning, or substantially the 

same warning in the disclosure 

narrative under the caption ‘‘Method 

and Purpose of Recording.’’ The 

reference to contracts shall be deleted 

from the above warning if the answer to 

paragraph (d)(1)(i) of this section 

indicates that recording of a contract in 

the subject jurisdiction does not protect 

the purchaser from claims of later 

purchasers or creditors of anyone 

having an interest in the land. 

(2) Title insurance. If the developer 

does not deliver a title insurance policy 

to the buyer, state that the purchaser 

should obtain an attorney’s opinion of 

title or a title insurance policy which 

will describe the rights of ownership 

which are being acquired in the lot. 

Recommend that an appropriate 

professional should interpret the 

opinion or policy. 

(e) Payments. (1) Escrow. If 

purchasers’ deposits, down payments, 

or installment payments are to be placed 

in a third party controlled escrow or 

similar account, describe the 

arrangement including the name and 

address of the escrow holder or similar 

person. If there is no such arrangement, 

insert the statement set forth in section 

XVIII of the appendix to this part: 

Escrow Statement. The questions 

regarding an escrow agreement or 

similar protection may be answered 

affirmatively only if the money is under 

the control of an independent third 

party, allowing a purchaser to receive a 

return of all money paid in the event of 

the developer’s failure to convey title or 

the developer’s default on any 

obligation which would otherwise result 

in the purchaser’s loss of that money. 

(2) Prepayments. Explain any 

prepayment penalties or privileges in 

everyday language. 

(3) Default. What are the developer’s 

or subdivision owners’ remedies against 

a defaulted purchaser? 

(f) Restrictions on the use of your lot. 

(1) Restrictive covenants (i) Have any 

restrictive covenants been recorded 

against the land in the subdivision? If 

so, do they contain items which require 

the purchaser to secure permissions, 

approvals or take any other action prior 

to using or disposing of his lot (e.g., 

architectural control, developer’s right 

of first refusal, building deadlines, etc.)? 

If any of these or similar items are 

included, explain their meaning and 

effect upon the purchaser. 

(ii) If any restrictive covenants are to 

be used and if they have not been 

recorded, how will they be imposed? 

Include a statement to the effect that the 

restrictive covenants have not been 

recorded; that there is no assurance they 

will be applied uniformly; that they may 

be changed and that they may be 

difficult to enforce. If no restrictive 

covenants will be imposed, include a 

statement to the effect that, since there 

are no restrictive covenants on the use 

of the lots, they may be used for 

purposes which could adversely affect 

the use and enjoyment of surrounding 

lots. 


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(iii) If there are restrictive covenants, 

whether recorded or unrecorded, the 

following statement shall be made: ‘‘A 

complete copy of these restrictions is 

available upon request.’’ 

(2) Easements. (i) Are there easements 

which may have an effect on the 

purchaser’s building or lot use plans 

(e.g., large drainage easements along lot 

lines, high voltage electric transmission 

lines, pipe lines or drainage easements 

which encroach upon the building area 

of the lot or inhibit its use)? 

(ii) Is the subdivision subject to any 

type of flood control or flowage 

easements? 

(iii) If the answer to either (2)(i) or 

(2)(ii) is in the affirmative, identify the 

affected lots and state the effect upon 

the use of the lots. 

(g) Plats, zoning, surveying, permits 

and environment. (1) Plats (i) Have the 

subdivision plans and plats of specific 

units been approved by the regulatory 

authorities? If the approvals have not 

been obtained, include a warning to the 

effect that regulatory authorities have 

not approved the proposed plats; that 

they may require significant alterations 

before they will approve them and they 

may not allow the land to be used for 

the purpose for which it is being sold. 

(ii) Have plats covering the lots in this 

Report been recorded? If so, where are 

they recorded? If they have not been 

recorded, is the description of the lots 

given in this Report legally adequate for 

the conveyance of land in the 

jurisdiction where the subdivision is 

located? If it is not, include a statement 

to the effect that the description of the 

lots is not legally adequate for the 

conveyance of the lots and that it will 

not be until the plat is recorded. 

(2) Zoning. For what purpose may the 

lots be used (e.g., single family homes, 

camping, commercial)? Does this use 

conform to local zoning requirements 

and the restrictive covenants? 

(3) Surveying. Has each lot been 

surveyed and is each lot marked for 

identification? If not, and the purchaser 

is responsible for the expense, state the 

estimated cost. 

(4) Permits. Must the purchaser obtain 

a building permit before beginning 

construction on his lot? Where is the 

permit obtained? Are any other permits 

necessary to use the lot for the purpose 

for which it is sold or for construction 

in connection with its use? 

(5) Environment. Has there been any 

environmental impact study prepared 

which considers the effect of the 

subdivision on the environment? If a 

study has been prepared, summarize 

any adverse conclusions and refer the 

lot buyer to the proper State 

Clearinghouse for complete information. 

If a study has not been prepared, 

include a statement that ‘‘No 

determination has been made as to the 

possible adverse effects the subdivision 

may have upon the environment and 

surrounding area.’’ If the developer does 

not know whether an environmental 

impact study has been prepared, or the 

name and location of the Office where 

any study made can be found, inquiry 

should be made to the State or Area 

Clearinghouse established under the 

authority of title IV of the 

Intergovernmental Cooperation Act of 

1968. 

§ 1010.110 Roads. 

(a) Access to the subdivision. (1) Is 

access to the subdivision provided by 

public or private roads? What type of 

surface do they have? How many lanes? 

What is the width of the wearing 

surface? 

(2) Who is responsible for their 

maintenance? What is the cost to the 

purchaser, if any? Are any 

improvements contemplated? If so, 

when will they begin and when will 

they be completed? At whose expense? 

(b) Access within the subdivision. (1) 

How have legal and physical access by 

conventional automobile been or will 

they be, provided to the lots (e.g., road 

on recorded easement; right of way 

dedicated to the public; right of way 

dedicated to use of lot owners)? 

(2) Who is responsible for the road 

construction? Is there any construction 

cost to the purchaser? Is there any 

financial assurance of completion? If 

there is no financial assurance of 

completion, enter a warning to the effect 

that no funds have been set aside in an 

escrow or trust account and there are no 

other financial arrangements to assure 

completion of the roads. 

(3) How many lanes do the interior 

roads have? What is the estimated 

starting date of construction (month and 

year); the present percentage of 

construction now complete; the present 

surface; the estimated completion date 

(month and year) and what is the final 

surface to be? If there are separate units 

or sections in the subdivision which 

will have different completion dates or 

different surfaces, the chart in section 

XIX of the appendix to this part: Road 

Chart shall be used rather than a 

narrative paragraph. 

(4) Who is responsible for road 

maintenance? If the roads are to be 

maintained by a public authority, a 

property owners’ association or some 

other entity at some time in the future, 

who is responsible for their 

maintenance during the interim period? 

What is the cost to the purchaser during 

the interim period and after acceptance 

for permanent maintenance? Will they 

be maintained so as to provide access to 

the lots on a year round basis? If not, 

include a warning which informs the 

purchaser that access may not be 

available year round. Identify the 

months when access may not be 

available to lots. If there are no 

arrangements for maintenance, include 

a warning to the effect that purchasers 

are responsible for maintaining the 

roads and that, if maintenance is not 

performed, the roads may soon 

deteriorate and access may become 

difficult or impossible. 

(5) If estimated completion dates 

given in prior Statements of Record 

have not been met, state that previous 

dates have not been met and give the 

previous dates. Underline the answer. If 

the roads are 100 percent completed, no 

dates are needed. 

(6) Complete the chart in section XX 

of the appendix to this part: Nearby 

Communities Chart by listing the county 

seat (identify) and at least two nearby 

communities. Include at least one 

community of significant size which 

offers general services. 

(7) If the purchasers will be 

individually responsible for providing 

access to their lots and for maintaining 

that access, what is the estimated cost 

of construction and maintenance? 

§ 1010.111 Utilities. 

(a) Water. (1) How is water to be 

supplied to the individual lots (e.g., 

central system or individual wells)? Of 

the following items only those which 

apply to the subdivision need be 

included. 

(i) Individual system. (A) If water is to 

be supplied by an individual private 

well, cistern or other individual system, 

what are the total estimated costs of the 

system, including but not limited to, the 

costs of installation, storage, any 

treatment facilities and other necessary 

equipment? 

(B) If individual cisterns or similar 

storage tanks are to be used, state where 

water to fill them can be secured; the 

cost of the water, and its delivery costs 

for a supply sufficient to serve the 

monthly needs of a family of four living 

in a house on a year-round basis. 

Include a statement to the effect that 

water stored for extended periods tends 

to become stale and may acquire an 

unpleasant taste or odor. 

(C) If individual wells are to be used 

and if the sales contract contains no 

provisions for refund or exchange in the 

event a productive well cannot be 

installed, include a statement to the 

effect that there is no assurance a 

productive well can be installed and, if 


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79502 Federal Register / Vol. 76, No. 245 / Wednesday, December 21, 2011 / Rules and Regulations 

it cannot, no refund of the purchase 

price of the lot will be made. 

(D) If individual wells or individual 

cisterns are to be used, include a brief 

statement to the effect that the purity 

and chemical content of the water 

cannot be determined until each 

individual well or source of water is 

completed and tested. 

(E) If there have been no hydrological 

surveys in connection with the use of 

individual wells or sources of hauled 

water for cisterns, include a warning to 

the effect that there is no assurance of 

a sufficient supply of water for the 

anticipated population. 

(F) Is a permit required to install the 

individual system to be used? If so, from 

whom and where is the permit secured? 

State the cost of a permit. 

(ii) Central system. (A) If water is to 

be provided by a central system, who is 

the supplier? What is the supplier’s 

address? 

(B) Will the water mains be extended 

in front of, or adjacent to, each lot? 

When will construction begin? What is 

the present percentage of completion of 

the water mains and central supply 

plant? When will service be available to 

the individual lots? If the central system 

is not complete and there are separate 

units or sections of the subdivision 

included in the Statement of Record 

which have different completion dates, 

then the starting date for construction 

(month and year), the percentage of 

construction now complete and the 

estimated service availability date 

(month and year) shall be set forth in 

the chart in section XXI of the appendix 

to this part: Water Chart Form rather 

than in a narrative paragraph. 

(C) What is the present capacity of the 

central plant (i.e., how many 

connections can be supplied)? If the 

capacity is not sufficient to serve all lots 

in the Statement of Record and is to be 

expanded in phases, what is the timetable for each phase to be in service and 

what will trigger the beginning of the 

expansion for each phase? If an entity 

other than the developer or an affiliate 

or subsidiary of the developer will 

supply the water for the central system; 

if the operation of that entity is 

supervised by a governmental agency 

and if that entity states it can supply the 

anticipated population of the 

development, then information as to the 

capacity of the plant and a hydrological 

survey is not necessary. If the entity 

does not indicate it can supply enough 

water for the anticipated population or 

if the capacity of any central system is 

not sufficient to serve all lots in the 

Statement of Record, include a warning 

which describes the limitations and sets 

forth the number of lots which can now 

be served. 

(D) Have there been any hydrological 

surveys to determine that a sufficient 

source of water is available to serve the 

anticipated population of the 

subdivision? Has the water in the 

central system been tested for purity 

and chemical content? If so, did the 

results show that the water meets all 

standards for a public water supply? If 

there have been no hydrological surveys 

showing a sufficient supply of water or 

no tests for purity and chemical content 

for the central system, include a 

warning to the effect that there is no 

assurance of a sufficient supply or that 

the water is drinkable. 

(E) Is there any financial assurance of 

completion of the central system and 

any future expansion? If not, include a 

warning to the effect that no funds have 

been set aside in an escrow or trust 

account nor have any other financial 

arrangements been made to assure 

completion of the water system. 

(F) If the developer or an affiliate or 

subsidiary of the developer operates the 

central system, have all permits been 

obtained from the proper agencies for 

the construction, use and operation of 

the central system? If not, include a 

warning to the effect that the required 

permits, approvals or licenses for 

construction, operation or use of the 

water system have not been obtained, 

therefore there is no assurance the 

system can be constructed or used. 

(G) If previous completion dates given 

in prior Statements of Record have not 

been met, state that previous completion 

dates have not been met and give the 

previous dates. Underline the answer. If 

the central water system is 100 percent 

completed, no dates are needed. 

(H) Is the purchaser to pay any 

construction costs, one-time connection 

fees, availability fees, special 

assessments or deposits for the central 

system? If so, what are the amounts? If 

not, state that there are no charges other 

than use fees. If the purchaser will be 

responsible for construction costs of the 

water mains, state the cost to install the 

mains to the most remote lot covered by 

this report. 

(I) If a purchaser wishes to use a lot 

prior to the date central water is 

available to it, may the purchaser install 

an individual system? If so, include the 

information required for individual 

systems in § 1010.111(a)(1)(i). Will the 

purchaser be required to discontinue 

use of any individual system and 

connect to the central system when 

service is available to the lot? If the 

purchaser is not required to connect to 

the central system, must any 

construction costs, connection fees, 

availability fees, special assessments or 

deposits in connection with the central 

system still be paid? If an individual 

system may not be installed, so state 

and indicate water will not be available 

until the central system is extended to 

the lot. 

(J) If connection to the system is 

voluntary and not all purchasers elect to 

use the system, will the cost to those 

who do use the system be increased? If 

so, include a statement to the effect that 

connection to the central system is 

voluntary and those who use the system 

may have to pay a disproportionate 

share of the cost of the system and its 

operation. 

(K) If the developer is to construct the 

system and will later turn it over to a 

property owners’ association for 

operation and maintenance, state the 

estimated date and conditions of the 

conveyance and if it will be conveyed 

free and clear of any encumbrance. If 

there is a charge or if the association 

must assume an encumbrance, state the 

estimated amount of either and the 

terms for retirement of either obligation. 

(L) If the supplier of water is other 

than a governmental agency or an entity 

which is regulated and supervised by a 

governmental agency, state that neither 

the operation of the water system nor 

the rates are regulated by a public 

authority. 

(M) The warning ‘‘We do not own or 

operate the central water system so we 

cannot assure its continued availability 

for your use’’ shall be included unless: 

(1) The central water system is owned 

and operated by the developer, or an 

affiliate or subsidiary of the developer, 

or 

(2) The central water system is owned 

and operated by a governmental agency 

or by an entity which is regulated and 

supervised by a governmental agency. 

(b) Sewer. (1) What methods of sewage 

disposal are to be used (e.g., central 

system, comfort stations or individual 

on-site systems such as septic tanks, 

holding tanks, etc.) in the subdivision? 

Of the following items, only those 

which apply to the subdivision need be 

included. 

(i) Individual systems. (A) If 

individual systems are to be used, have 

the local authorities given general 

approval to the use of these systems in 

the subdivision or have they given 

specific approval for each lot? Are 

permits necessary? From whom and 

where are they obtained? Must testing of 

the lot be done prior to the issuance of 

a permit? State the cost of a permit and 

the estimated costs of the system and 

any necessary tests. 

(B) If holding tanks are to be used, 

state whether pumping and hauling 


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service is available and the estimated 

monthly costs of that service for a 

family of four living in a house on a 

year-round basis. 

(C) If each and every lot has not been 

approved for the use of an individual 

on-site system, include a warning to the 

effect that there is no assurance permits 

can be obtained for the installation and 

use of individual on-site systems. If the 

sales contract contains no provisions for 

refund or exchange in the event a permit 

cannot be obtained, include a statement 

to the effect that there is no assurance 

an individual on-site system can be 

installed and, if it cannot, no refund of 

the purchase price of the lot will be 

made. 

(D) If no permit is required for the 

installation and use of individual onsite systems, explain whether this may 

have an effect upon the purchaser or the 

availability of construction or 

permanent financing. 

(E) If the developer has knowledge 

that permits for the installation of 

individual on-site systems have been 

denied; that there have been 

unsatisfactory percolation tests or that 

systems have not operated satisfactory 

in the subdivision, state the number of 

these rejections, unsatisfactory tests or 

operations. 

(ii) Comfort stations. (A) If comfort 

stations are to be used, how many lots 

will be served by each station? When 

will construction be started? When will 

the station or stations be completed and 

ready for use? Have the necessary 

permits been obtained for the 

construction and use of comfort 

stations? If the necessary permits have 

not been obtained, include a warning 

that the necessary permits, approvals or 

licenses have not been obtained for the 

construction and use of the comfort 

stations; therefore there is no assurance 

they can be constructed or used. If there 

are comfort stations located in different 

units and having different completion 

dates, the chart found in section XXII of 

the appendix to this part: Comfort 

Station Chart shall be used to show the 

estimated construction starting date 

(month and year), the present 

percentage of completion and the date 

on which they will be used rather than 

a narrative paragraph. 

(B) Who is to construct the comfort 

stations? Is there any financial 

assurance of their completion? If not, 

include a warning to the effect that no 

funds have been set aside in an escrow 

or trust account nor have any other 

financial arrangements been made to 

assure completion of the comfort 

stations and there is no assurance the 

facilities will be completed. 

(C) Who will be responsible for 

maintenance of the comfort stations? Is 

there any cost to the purchaser for 

construction, use or maintenance? 

(iii) Central system. (A) If a central 

sewage treatment and collection system 

is being installed, who is responsible for 

construction of the system? Will the 

sewer mains be installed in front of, or 

adjacent to, each lot? When will 

construction be started (month and 

year)? When will service be available 

(month and year)? Who will own and 

operate the system? Give the name and 

address of the entity. 

(B) What is the present percentage of 

completion and the present capacity of 

the system (i.e., number of connections 

which can be served)? If the present 

capacity is not sufficient to serve all lots 

in the Statement of Record and it is to 

be expanded in phases, what is the 

time-table for expansion and what will 

trigger that expansion? If the central 

system is not complete and there are 

separate units or sections of the 

subdivision which have different 

service availability dates, the chart 

found in section XXIII of the appendix 

to this part: Sewer Chart shall be used 

to show the construction starting date 

(month and year); the percentage of 

completion and service availability date 

(month and year) in each unit or section 

rather than a narrative paragraph. If 

sewage treatment facilities are to be 

supplied by an entity which is regulated 

by a governmental agency and which is 

not the developer or an affiliate or 

subsidiary of the developer and the 

entity has stated it can serve the 

anticipated population of the 

development, then information on 

capacity need not appear. 

(C) If the developer or an affiliate or 

subsidiary of the developer operates the 

central system, have all necessary 

permits been obtained for the 

construction, operation and use of the 

central system? Do these permits limit 

the number of connections or homes 

which the system may serve? If the 

permits have not been obtained, enter a 

warning to the effect that the necessary 

permits, approvals or licenses have not 

been obtained for the central sewage 

system; therefore there is no assurance 

that the system can be completed, 

operated or used. 

(D) If the system cannot now serve all 

lots included in the Statement of 

Record, either because the supplier of 

the service has not stated it can and will 

serve all lots or if construction has not 

reached a stage where all lots can be 

served or permits to serve all lots have 

not been obtained, include a warning 

which states that all lots cannot now be 

served; the number which can be served 

and the reason for the lack of capacity. 

(E) Will the purchaser pay any 

construction costs, special assessments, 

one time connection fees or availability 

fees? What are the amounts of these 

charges? If the purchaser is to pay 

construction costs of the sewer mains, 

state the cost of installation of the mains 

to the most remote lot in this Report. 

(F) If the purchaser wishes to use the 

lot prior to the date central sewer 

service is available, may the purchaser 

install an individual system? If so, 

include the information on individual 

systems required by § 1010.111(b)(1)(i). 

Will the purchaser be required to 

discontinue use of the individual 

system and connect to the central 

system when service is available? If the 

purchaser is not required to connect to 

the central system, must the purchaser 

still pay any construction costs, 

connection fees, availability fees, or 

special assessments? If the purchaser 

may not install an individual system, so 

state and indicate service will not be 

available until the central system 

reaches the lot. 

(G) If connection to the system is 

voluntary and not all purchasers elect to 

use the system, will the cost to those 

who do use the system be increased? If 

so, include a statement to the effect that 

connection to the central system is 

voluntary and those who use the system 

may have to pay a disproportionate 

share of the cost of the system and its 

operation. 

(H) Is there any financial assurance of 

completion of the central system and 

any future expansion? If not, include a 

warning that no funds have been set 

aside in an escrow or trust account nor 

have any other financial arrangements 

been made to assure the completion of 

the central system; therefore there is no 

assurance that it will be completed. 

(I) If previous completion dates given 

in prior Statements of Record have not 

been met, state that previous dates have 

not been met and give the previous 

dates. Underline the answer. If the 

central sewage treatment and collection 

system are 100 percent completed, no 

dates are needed. 

(J) If the developer is to construct the 

system and will later turn it over to a 

property owners’ association for 

operation and maintenance, state the 

date of the transfer and whether there 

will be any charge for the conveyance 

and if it will be conveyed free and clear 

of any encumbrance. If there is a charge 

or if the association must assume an 

encumbrance, state the estimated 

amount of either and the terms for 

retirement of either obligation. 


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(K) If the owner or operator of the 

central sewer system is other than a 

governmental agency or an entity which 

is regulated and supervised by a 

governmental agency, state that neither 

the operation of the sewer system nor 

the rates are regulated by a public 

authority. 

(L) The warning ‘‘We do not own or 

operate the central sewer system so we 

cannot assure its continued availability 

for your use.’’ shall be included unless: 

(1) The central sewer system is owned 

and operated by the developer, or an 

affiliate or subsidiary of the developer, 

or 

(2) The central sewer system is owned 

and operated by a governmental agency 

or by an entity which is regulated and 

supervised by a governmental agency. 

(c) Electricity. (1) Who will provide 

electrical services to the subdivision? 

(2) Have primary electrical service 

lines been extended in front of, or 

adjacent to, all of the lots? If not, when 

(month and year) or under what 

conditions will construction begin and 

when will service be available? If they 

have not been installed, who is 

responsible for their construction? If 

electrical service lines have not been 

extended in front of, or adjacent to, all 

lots and there are separate units or 

sections having different service 

availability dates, the chart found in 

section XXIV of the appendix to this 

part: Electric Service Chart shall be used 

rather than a narrative paragraph. 

(3) If construction of the lines or 

service to the ultimate consumer is 

provided by an entity other than a 

publicly regulated utility, who provides, 

or will provide, the service? Who will 

be responsible for maintenance? What is 

the assurance of completion? If service 

is not provided by a publicly regulated 

utility, what charges or assessments will 

the purchaser pay? 

(4) If the primary service lines have 

not been extended in front of, or 

adjacent to each lot, will the purchaser 

be responsible for any construction 

costs? If so, what is the utility 

company’s policy and charges for 

extension of primary lines? Based on 

that policy, what would be the cost to 

the purchaser for extending primary 

service to the most remote lot in this 

Report? 

(5) If electrical service will not be 

provided, what is an alternate source 

(e.g., generators, etc.) and what are the 

estimated costs? 

(6) If the lines are to be installed by 

some entity other than a publicly 

regulated utility and if there is no 

financial assurance of completion, 

include a warning to the effect that no 

funds have been set aside in an escrow 

or trust account nor have any other 

financial arrangements been made to 

assure construction of the electric lines. 

(d) Telephone. (1) Is telephone service 

now, or will it be, available? Who will 

furnish the service? 

(2) Have the service lines been 

extended in front of, or adjacent to, each 

of the lots? If not, when, and under what 

conditions, will construction be started 

and when will service be available 

(month and year)? 

(3) If the service lines have not been 

extended in front of, or adjacent to, each 

lot, will the purchaser be responsible for 

any construction costs? If so, what is the 

utility company’s policy and charges for 

extension of service lines? Based on that 

policy, what would be the cost to the 

purchaser of extending service lines to 

the most remote lot in this Report? 

(e) Fuel or other energy source. (1) 

What fuel, or other energy source, will 

be available for heating, cooking, etc. in 

the subdivision? If other than electricity 

is to be used, describe the availability of 

the fuel or other energy source. Give the 

name and address of the supplier. If the 

fuel is natural gas, when will the mains 

be installed to the lots? What is the cost 

to the purchaser for installation fees and 

connection fees? If oil or propane gas 

will be used, include the cost of a 

storage tank. 

(2) [Reserved] 

§ 1010.112 Financial information. 

(a) The information required by 

paragraphs (b) and (c) of this section 

need appear only if the answer to the 

question is an affirmative one. 

(b) Has the developer had a deficit in 

retained earnings or experienced an 

operating loss during the last fiscal year 

or, if less than a year old, since its 

formation? If so, include a statement to 

the effect that this may affect the 

developer’s ability to complete 

promised facilities and to discharge 

financial obligations. This statement 

may be omitted if: 

(1) All facilities, utilities and 

amenities proposed to be completed by 

the developer in the Property Report 

and sales contract have been completed 

so that the lots included in the 

Statement of Record are immediately 

usable for the purpose for which they 

are sold, or if: 

(2) The developer is contractually 

obligated to the purchaser to complete 

all facilities, utilities and amenities 

promised by it in the Statement of 

Record, and: 

(i) The developer has made financial 

arrangements, such as the posting of 

surety bonds (corporate or individual 

notes or bonds are not acceptable), 

irrevocable letters of credit, escrow or 

trust accounts, to assure that the 

facilities, utilities and amenities will be 

completed by the dates set out in the 

Property Report or contract; 

(ii) The sales contract provides for 

delivery of a deed within 180 days of 

the signing of the contract which 

conveys title free of any mortgage or 

lien, or the developer has filed an 

assurance of title agreement with ILSRP 

as outlined in § 1010.212(e); and 

(iii) Any down payments or deposits 

are held in an escrow or trust account. 

(c) If the developer’s financial 

statements have been audited, did the 

accountant qualify the opinion or 

decline to give an opinion? If so, why 

was the opinion qualified or declined? 

(d) The following statement shall 

appear: ‘‘A copy of our financial 

statements for the period ending _____ 

is available from us upon request.’’ 

(e) The information furnished in 

§ 1010.212(b) may necessitate a warning 

as to costs and/or feasibility of the 

completion of the subdivision. 

§ 1010.113 Local services. 

(a) Fire protection. Describe the 

availability of fire protection and 

indicate whether it is available year 

round. 

(b) Police protection. Describe the 

availability of police protection. 

(c) Schools. State whether elementary, 

junior high and senior high schools are 

available to residents of the subdivision. 

Is school bus transportation available 

from within the subdivision? 

(d) Hospital. Give the name and 

location of the nearest hospital and state 

whether ambulance service is available. 

(e) Physicians and dentists. State the 

location of the nearest physicians’ and 

dentists’ offices. 

(f) Shopping facilities. State the 

location of the nearest shopping 

facilities. 

(g) Mail service. If there is no mail 

service to the subdivision, describe the 

arrangements the purchasers must make 

to receive mail service. 

(h) Public transportation. Is there 

public transportation available in the 

subdivision or to nearby towns? If not, 

give the location of the nearest public 

transportation and the distance from the 

subdivision. 

§ 1010.114 Recreational facilities. 

(a) Recreational facilities to be 

covered. Unless otherwise indicated, all 

information required by paragraphs (b) 

and (c) of this section shall be provided 

for only those recreational facilities 

which 

(1) The developer is contractually 

responsible to provide or complete and 

which are: 


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Federal Register / Vol. 76, No. 245 / Wednesday, December 21, 2011 / Rules and Regulations 79505 

(i) Within, adjacent or contiguous to 

the subdivision, and 

(ii) Maintained substantially for the 

use of lot owners; or 

(2) For which a third party is 

responsible and which are: 

(i) Within, adjacent or contiguous to 

the subdivision, and 

(ii) Maintained substantially for the 

use of lot owners. 

(b) Recreational facility chart. 

Complete the chart found in section 

XXV of the appendix to this part: 

Recreational Facility Chart in 

accordance with the instructions which 

follow it. This chart shall immediately 

follow the § 1010.114 heading. Limit the 

chart to facilities provided essentially 

for use of lot buyers. 

(1) Facility. Identify each recreational 

facility. Identify closely related facilities 

(e.g., swimming pool and bathhouse) 

separately only if their availability dates 

differ. If any recreational facility is not 

owned by the developer, insert a 

warning below the chart phrased 

substantially as follows: ‘‘We do not 

own the (name of facility or facilities) so 

we can not assure its (their) continued 

availability.’’ 

(2) Percent complete. State the present 

percentage of completion of 

construction for each recreational 

facility. 

(3) Estimated date of start of 

construction. Insert the estimated date 

of the start of construction for the 

facility (month and year). 

(4) Estimated date available for use. If 

the construction of the facility is not 

complete or if it is not available to lot 

owners for its intended use, indicate the 

estimated date (month and year) that the 

facility will be available for use. If the 

‘‘estimated date available for use’’ for 

any facility has been amended to delay 

it to a later date, indicate such delay in 

a statement immediately below the 

chart. Underline the response. This 

statement shall include the name of the 

facility and the prior estimated 

availability date, and it shall be 

referenced to the appropriate facility 

listed on the chart by use of an asterisk 

or other appropriate symbol. If a facility 

is 100 percent completed and in use, no 

date is needed. 

(5) Financial assurance of completion. 

If the construction of the facility is not 

complete, state whether there is any 

financial assurance of completion. If 

none, state ‘‘none.’’ If such exists, state 

the type of assurance (i.e., bond, escrow, 

or trust). If no documentation for such 

assurance has been provided in 

§ 1010.214 of the Statement of Record, 

then do not indicate such assurance on 

the chart, but in place of such assurance 

on the chart state ‘‘none.’’ 

(6) Buyer’s annual cost or 

assessments. State the lot buyer’s 

annual cost or assessments for using the 

facility. These costs should include any 

applicable property owners’ association 

assessment, and the developer’s 

maintenance assessment. If the cost 

information is lengthy, you may use an 

asterisk or other appropriate symbol and 

include the cost information in a 

paragraph below the chart. 

(c) Information to be provided below 

the recreational facility chart and 

related warnings. 

(1) Constructing the facilities. If the 

facilities are not complete, indicate who 

is responsible for the construction of the 

facilities. Indicate whether the 

purchaser will be required to pay any of 

the cost of construction of these 

facilities (estimate and disclose such 

cost, if any). 

(2) Maintaining the facilities. Indicate 

who is responsible for the operation and 

maintenance of these facilities. 

(3) Facilities which will be leased to 

lot purchasers. If no facilities covered 

here will be leased to a Property 

Owners’ Association or other lot owners 

in the subject subdivision, omit this 

caption and any information requested 

under it from the Property Report. If 

such leases exist or are anticipated, state 

which facilities are or will be leased and 

indicate the term of the lease. Also, state 

whether the lot owners will have an 

opportunity to terminate or ratify the 

lease after control of the Property 

Owners’ Association is turned over to 

them. Indicate whether the owner of a 

recreational facility leased to the 

Property Owners’ Association or other 

lot owners may encumber it and 

whether the holders of such 

encumbrances may acquire the leased 

facilities and not honor the lease. 

Indicate whether the lease payments 

may be increased on an escalating or 

other basis and what costs or expenses, 

if any, will be borne by the owner. State 

whether the lease can be assigned or 

sublet. State how the lease can be 

terminated. 

(4) Transfer of the facilities. If there 

are presently any liens or mortgages on 

any of these recreational facilities, 

describe such liens or mortgages. If the 

developer, or owner of the subdivision, 

their principals, or subsidiaries, intend 

to transfer the title of a listed 

recreational facility in the future, 

explain at what time, by what type of 

conveyance, and to whom such transfer 

will be made. Disclose any adverse 

effects on, or cost to, lot purchasers 

which may be caused by such transfer. 

If any facility is to be transferred to lot 

owners as a Property Owners’ 

Association or otherwise, state whether 

the facility will be transferred free and 

clear of all liens and encumbrances. If 

not, state the amount of the 

encumbrance to be assumed and 

disclose any contractual conditions on 

such transfer which relate to lot 

purchasers. 

(5) Permits. If the necessary permits 

have not been obtained for the 

construction and/or use of the facilities, 

identify the facilities for which such 

permits have not been obtained and 

include the following statement, or one 

substantially the same, in the narrative 

under the caption ‘‘Permits’’: ‘‘The 

(identify the permit or license) has not 

been obtained and therefore there is no 

assurance that the lot owners will be 

able to use the (identify the facility).’’ 

(6) Who may use the facilities. 

Indicate who will be permitted to use 

the recreational facilities (e.g., lot 

owners, their guests, employees of 

developer, general public). If the general 

public will be permitted to use the 

facilities include the following 

statement in the narrative under the 

caption ‘‘Who may use the facilities’’: 

‘‘The (identify the facility) is open to 

use by the general public and their use 

of the facility may limit use of it by lot 

owners.’’ 

§ 1010.115 Subdivision characteristics and 

climate. 

(a) General topography. What is the 

general topography and the major 

physical characteristics of the land in 

the subdivision? State the percentage of 

the subdivision which is to remain as 

natural open space and as developed 

parkland. Are there any steep slopes, 

rock outcroppings, unstable or 

expansive soil conditions, etc., which 

will necessitate the use of special 

construction techniques to build on, or 

use, any lot in the subdivision? If so, 

identify the lots affected, and describe 

the techniques recommended. If any lots 

in the subdivision have a slope of 20%, 

or more, include a warning that ‘‘Some 

lots in this subdivision have a slope of 

20%, or more. This may affect the type 

and cost of construction.’’ 

(b) Water coverage. Are any lots, or 

portions of any lots, covered by water at 

any time? What lots are affected? When 

are they covered by water? How does 

this affect their use for the purpose for 

which they are sold? Can the condition 

be corrected? At what cost to the 

purchaser? 

(c) Drainage and fill. Identify the lots 

which require draining or fill prior to 

being used for the purpose for which 

they are being sold. Who will be 

responsible for any corrective action? If 

the purchaser is responsible, what are 

the estimated costs? 


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79506 Federal Register / Vol. 76, No. 245 / Wednesday, December 21, 2011 / Rules and Regulations 

(d) Flood plain. Is the subdivision 

located within a flood plain or an area 

designated by any Federal, state or local 

agency as being flood prone? What lots 

are affected? Is flood insurance 

available? Is it required in connection 

with the financing of any improvements 

to the lot? What is the estimated cost of 

the flood insurance? 

(e) Flooding and soil erosion. (1) Does 

the developer have a program which 

provides, or will provide, at least 

minimum controls for soil erosion, 

sedimentation or periodic flooding 

throughout the subdivision? 

(2) If there is a program, describe it. 

Include in the description information 

as to whether the program has been 

approved by the appropriate 

government officials; when it is to start; 

when it is to be completed (month and 

year); whether the developer is 

obligated to comply with the program 

and whether there is any financial 

assurance of completion. 

(3) If there is no program or if the 

program has not been approved by the 

appropriate officials or if the program 

does not provide minimum protection, 

include a statement to the effect that the 

measures being taken may not be 

sufficient to prevent property damage or 

health and safety hazards. A minimum 

program will usually provide for: 

(i) Temporary measures such as 

mulching and seeding of exposed areas 

and silt basins to trap sediments in 

runoff water, and 

(ii) Permanent measures such as 

sodding and seeding in areas of heavy 

grading or cut and fill along with the 

construction of diversion channels, 

ditches, outlet channels, waterway 

stabilizers and sediment control basins. 

(f) Nuisances. Are there any land uses 

which may adversely affect the 

subdivision (e.g., unusual or unpleasant 

noises or odors, pollutants or nuisances 

such as existing or proposed industrial 

activity, military installations, airports, 

railroads, truck terminals, race tracks, 

animal pens, noxious smoke, chemical 

fumes, stagnant ponds, marshes, 

slaughterhouses and sewage treatment 

facilities)? If any nuisances exist, 

describe them. If there are none, state 

there are no nuisances which affect the 

subdivision. 

(g) Hazards. (1) Are there any unusual 

safety factors which affect the 

subdivision (e.g., dilapidated buildings, 

abandoned mines or wells, air or 

vehicular traffic hazards, danger from 

fire or explosion or radiation hazards)? 

Is the developer aware of any proposed 

plans for construction which may create 

a nuisance or safety hazard or adversely 

affect the subdivision? If there are any 

existing hazards or if there is any 

proposed construction which will create 

a nuisance or hazard, describe the 

hazard or nuisance. If there are no 

existing or possible future hazards, state 

that there are none. 

(2) Is the area subject to natural 

hazards or has it been formally 

identified by any Federal, state or local 

agency as an area subject to the frequent 

occurrence of natural hazards (e.g., 

tornadoes, hurricanes, earthquakes, 

mudslides, forest fires, brush fires, 

avalanches, flash flooding)? If the 

jurisdiction in which the subdivision is 

located has a rating system for fire 

hazard, state the rating assigned to the 

land in the subdivision and explain its 

meaning. 

(h) Climate. What are the average 

temperature ranges, summer and winter, 

for the area in which the subdivision is 

located (i.e., high, low and mean)? What 

is the average annual rainfall and 

snowfall? 

(i) Occupancy. How many homes are 

occupied on a full- or part-time basis as 

of (date of submission)? 

§ 1010.116 Additional information. 

(a) Property Owners’ Association. (1) 

Will there be a property owners’ 

association for the subdivision? Has it 

been formed? What is its name? Is it 

operating? If not yet formed, when will 

it be formed? Who is responsible for its 

formation? 

(2) Does the developer exercise, or 

have the right to exercise, any control 

over the Association because of voting 

rights or placement of officers or 

directors? For how long will this control 

last? 

(3) Is membership in the association 

voluntary? Will non-member lot owners 

be subject to the payment of dues or 

assessments? What are the association 

dues? Can they be increased? Are 

members subject to special assessments? 

For what purpose? If membership in the 

association is voluntary and if the 

association is responsible for operating 

or maintaining facilities which serve all 

lot owners, include the following 

statement: ‘‘Since membership in the 

association is voluntary, you may be 

required to pay a disproportionate share 

of the association costs or it may not be 

able to carry out its responsibilities.’’ 

(4) What are the functions and 

responsibilities of the association? Will 

the association hold architectural 

control over the subdivision? 

(5) Are there any functions or services 

that the developer now provides at no 

charge for which the association may be 

required to assume responsibility in the 

future? If so, will an increase in 

assessments or fees be necessary to 

continue these functions or services? 

(6) Does the current level of 

assessments, fees, charges or other 

income provide the capability for the 

association to meet its present, or 

planned, financial obligations including 

operating costs, maintenance and repair 

costs and reserves for replacement? If 

not, how will any deficit be made up? 

(b) Taxes. (1) When will the 

purchaser’s obligation to pay taxes 

begin? To whom are the taxes paid? 

What are the annual taxes on an 

unimproved lot after the sale to a 

purchaser? If the taxes are to paid to the 

developer, include a statement that 

‘‘Should we not forward the tax funds 

to the proper authorities, a tax lien may 

be placed against your lot.’’ 

(2) If the subdivision is encompassed 

within a special improvement district or 

if a special district is proposed, describe 

the purpose of the district and state the 

amount of assessments. Describe the 

purchaser’s obligation to retire the debt. 

(c) Violations and litigations. This 

information need appear only if any of 

the questions are answered in the 

affirmative. Unless the Director gives 

prior approval for it to be omitted, a 

brief description of the action and its 

present status or disposition shall be 

given. 

(1) With respect to activities relating 

to or in violation of a Federal, state or 

local law concerned with the 

environment, land sales, securities 

sales, construction or sale of homes or 

home improvements, consumer fraud or 

similar activity, has the developer, the 

owner of the land or any of their 

principals, officers, directors, parent 

corporation, subsidiaries or an entity in 

which any of them hold a 10% or more 

financial interest, been: 

(i) Disciplined, debarred or suspended 

by any governmental agency, or is there 

now pending against them an action 

which could result in their being 

disciplined, debarred or suspended or, 

(ii) Convicted by any court, or is there 

now pending against them any criminal 

proceedings in any court? ILSRP 

suspension notices on pre-effective 

Statements of Record and amendments 

need not be listed. 

(2) Has the developer, the owner of 

the land, any principal, any person 

holding a 10% or more financial or 

ownership interest in either, or any 

officer or director of either, filed a 

petition in bankruptcy? Has an 

involuntary petition in bankruptcy been 

filed against it or them or have they 

been an officer or director of a company 

which became insolvent or was 

involved, as a debtor, in any 

proceedings under the Bankruptcy Act 

during the last 13 years? 


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(3) Is the developer or any of its 

principals, any parent corporation or 

subsidiary, any officer or director a 

party to any litigation which may have 

a material adverse impact upon its 

financial condition or its ability to 

transfer title to a purchaser or to 

complete promised facilities? If so, 

include a warning which describes the 

possible effects which the action may 

have upon the subdivision. 

(d) Resale or exchange program. (1) 

Are there restrictions which might 

hinder lot owners in the resale of their 

lots (e.g., a prohibition against posting 

signs, limitations on access to the 

subdivision by outside brokers or 

prospective buyers; the developer’s right 

of first refusal; membership 

requirements)? If so, briefly explain the 

restrictions. 

(2) Does the developer have an active 

resale program? If the answer is ‘‘no,’’ 

include the following statement: ‘‘We 

have no program to assist you in the sale 

of your lot.’’ 

(3) Does the developer have a lot 

exchange program? If the answer is 

‘‘yes,’’ describe the program; state any 

conditions and indicate if the program 

reserves a sufficient number of lots to 

accommodate all those wishing to 

participate. If there is no program or if 

sufficient lots are not reserved, include 

one of the following statements as 

applicable: ‘‘We do not have any 

provision to allow you to exchange one 

lot for another’’ or ‘‘We do not have a 

program which assures that you will be 

able to exchange your lot for another.’’ 

(e) Unusual situations. This topic 

need appear only if one or more of the 

following cases apply to the 

subdivision, then only the applicable 

subject, or subjects, will appear. 

(1) Leases. What is the term of the 

lease? Is it renewable? Is it recordable? 

Can creditors of the developer, or 

owner, acquire title to the property 

without any obligation to honor the 

terms of the lease? Are the lease 

payments a flat sum or are they 

graduated? Can the lessee mortgage or 

otherwise encumber the leasehold? Will 

the lessee be permitted to remove any 

improvements which have been 

installed when the lease expires or is 

terminated? 

(2) Foreign subdivision. (i) Is the 

owner or developer of the subdivision a 

foreign country corporation? If legal 

action is necessary to enforce the 

contract, must it be taken in the courts 

of the country where the subdivision is 

located? 

(ii) Does the country in which the 

subdivision is located have any laws 

which restrict, in any way, the 

ownership of land by aliens? If so, what 

are the restrictions? 

(iii) Must an alien obtain a permit or 

license to own land, build a home, live, 

work or do business in the country 

where the subdivision is located? If so, 

where is such permit or license secured; 

for how long is it valid and what is its 

cost? 

(3) Time sharing. (i) How is title to be 

conveyed? How many shares will be 

sold in each lot? How is use time 

allocated? How are taxes, maintenance 

and utility expenses divided and billed? 

How are voting rights in any 

Association apportioned? Are there 

management fees? If so, what are their 

amounts and how are they apportioned? 

(ii) Is conveyance of any portion of 

the lot contingent upon the sale of the 

remaining portions? Is the initial buyer 

responsible for any greater portion of 

the expense than his normal share until 

the remaining interests are sold? If the 

purchase of any of the portions is 

financed, will the default of one owner 

have any effect upon the remaining 

owners? 

(4) Memberships. (i) Does the 

purchaser receive any interest in title to 

the land? What is the term of the 

membership? Is it renewable? What 

disposition is made of the membership 

in the event of the death of the member? 

Are the lots individually surveyed and 

the corners marked? If not, how does the 

member identify the area which the 

member is entitled to use? What is the 

approximate square footage the member 

is entitled to use? Are there different 

classes of membership? How are the 

different classes identified and what are 

the differences between them? 

(ii) If the member does not receive any 

interest in the title to the land, include 

a warning to the effect that ‘‘you receive 

no interest in the title to the land but 

only the right to use it for a certain 

period of time.’’ 

(f) Equal opportunity in lot sales. 

State whether or not the developer is in 

compliance with title VIII of the Civil 

Rights Act of 1968 by not directly or 

indirectly discriminating on the basis of 

race, color, religion, sex, national origin, 

familial status, and handicap in any of 

the following general areas: Lot 

marketing and advertising, rendering of 

lot services, and in requiring terms and 

conditions on lot sales and leases. An 

affirmative answer cannot be given if 

the developer, directly or indirectly, 

because of race, color, religion, sex, 

national origin, familial status, or 

handicap is: 

(1) Refusing to sell or lease lots after 

the making of a bona fide offer or to 

negotiate for the sale or lease of lots or 

is otherwise making unavailable or 

denying a lot to any person, or 

(2) Discriminating against any person 

in the terms, conditions or privileges in 

the sale or leasing of lots or in providing 

services or facilities in connection 

therewith, or 

(3) Making, printing, publishing or 

causing to be made, printed or 

published any notice, statement or 

advertisement with respect to the sale or 

leasing of lots that indicates any 

preference, limitation or discrimination 

against any person, or 

(4) Representing to any person that 

any lot is not available for inspection, 

sale or lease when such lot is in fact 

available, or 

(5) For profit, inducing or attempting 

to induce any person to sell or lease any 

lot by representations regarding the 

entry or non-entry into the 

neighborhood of a person or persons of 

a particular race, color, religion, sex, 

national origin, familial status, or 

handicap. 

(g) Listing of lots. Provide a listing of 

lots which shall consist of a description 

of the lots included in the Statement of 

Record by the names or number of the 

section or unit, if any; the block 

number, if any; and the lot numbers. 

The lots shall be listed in the most 

efficient and concise manner. If the 

filing is a consolidation, the listing shall 

include all lots registered to date in the 

subdivision, except any which have 

been deleted by amendment. 

§ 1010.117 Cost sheet, signature of Senior 

Executive Officer. 

(a) Cost sheet—Format. (1) The cost 

sheet shall be prepared in accordance 

with the format found in section XXVI 

of the appendix to this part: Cost Sheet 

Format and paragraph (a)(2) of this 

section. 

(2) Cost sheet instructions. (i) All 

amounts for cost sheet items will be 

entered before the purchaser signs the 

receipt. However, any costs that are 

identical for all lots may be pre-printed. 

(ii) If a central water or sewer system 

will be used in all or part of the 

subdivision and a private system in all 

or other parts, then the portion that does 

not apply to the purchaser’s lot shall be 

crossed out. 

(iii) If individual private systems may 

be used prior to the availability of 

service from any central system and the 

purchaser is not required to connect to 

any central system, both figures may be 

entered or only the highest cost figures 

may be used with a parenthetical 

explanation or footnote. If the purchaser 

is required to connect to any central 

system and discontinue the use of his 

private system when central service is 


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available, both cost figures shall be 

given, together with an explanation or 

footnote. 

(iv) If there is a one time, lump sum 

‘‘availability fee’’ which is assessed to 

the purchaser in connection with a 

central utility, include under ‘‘other’’ 

and identify. 

(v) Dues and assessments need be 

included only if they are involuntary 

regardless of use. 

(vi) At the discretion of the Director, 

where there is extreme diversity in the 

figures for different areas of the 

subdivision, variations may be 

permitted as to whether the figures will 

be printed, entered manually, or a range 

of costs used or any combination of 

these features. 

(vii) The estimated annual taxes shall 

be based upon the projected valuation of 

the lot after sale to a purchaser. 

(b) Signature of the Senior Executive 

Officer. The Senior Executive Officer or 

a duly authorized agent shall sign the 

property report. Facsimile signatures 

may be used for purposes of 

reproduction of the property report. 

§ 1010.118 Receipt, agent certification, and 

cancellation page. 

(a) Format. The receipt, agent 

certification and cancellation page shall 

be prepared in accordance with the 

sample found in section XXVII of the 

appendix to this part: Sample Receipt, 

Agent Certification and Cancellation 

Page. 

(b) The original and one copy of this 

executed page shall be attached to the 

Property Report delivered to prospective 

purchasers. After the purchaser has 

signed the receipt and the salesman has 

signed the certification, the copies can 

be retained by the developer for a period 

of three years from the date of execution 

or the term of the contract, whichever is 

the longer. Upon demand by the 

Director, the developer shall, without 

delay, make the copies of these receipts 

and certifications available for 

inspection by the Director or the 

developer shall forward to the Director 

any of the receipts and certifications, or 

copies thereof, as the Director may 

specify. 

(c) If the transaction takes place 

through the mails, the cost figures shall 

be entered and the person most active 

in dealing with the prospective 

purchaser shall sign the certification 

prior to mailing the Property Report to 

the purchaser. Otherwise, the 

certification shall be executed in the 

presence of the purchaser. 

(d) The date of Report appearing on 

the receipt shall be the same as that 

appearing on the cover sheet of the 

Property Report. 

(e) Notification of cancellation by 

mail shall be considered given at the 

time post-marked. 

§ 1010.200 Instructions for Statement of 

Record, Additional Information and 

Documentation. 

The Additional Information and 

Documentation portion of the Statement 

of Record shall contain the statements 

and documents required in §§ 1010.208 

through 1010.219. Each section number 

and its associated heading and each 

paragraph letter or number and their 

associated subheadings or captions must 

appear in this portion. Following each 

heading, subheading, or caption printed 

in this portion, the registrant shall insert 

an appropriate response. If a heading, 

subheading, or caption does not apply 

to the subdivision, it shall be followed 

by the words ‘‘not applicable’’. 

Immediately after the page(s) on which 

the section number and answers for that 

section appear, insert the information or 

documents which support that section. 

In addition to the statements and 

documentation expressly required there 

shall be added any further material, 

information, documentation and 

certifications as may be necessary in the 

public interest and for the protection of 

purchasers or to cause the statements 

made to be not misleading in the light 

of the circumstances under which they 

are made. 

§§ 1010.201–1010.207 [Reserved] 

§ 1010.208 General information. 

(a) Administrative information. (1) 

State whether the material represents an 

initial Statement of Record or a 

consolidated Statement of Record. If it 

is a consolidated Statement of Record, 

identify the original ILSRP number 

assigned to the initial Statement of 

Record. State whether subsequent 

Statements of Record will be submitted 

for additional lots in the subdivision. 

(2) Has the developer submitted a 

request for an exemption for the 

subdivision? 

(3) List the states in which registration 

has been made by the developer for the 

sale of lots in the subdivision. 

(4) If any state listed in paragraph 

(a)(3) of this section has not permitted 

a registration to become effective or has 

suspended the registration or prohibited 

sales, name the state involved and give 

the reasons cited by the state for their 

action. 

(5) State whether the developer has 

made, or intends to make, a filing with 

the U.S. Securities and Exchange 

Commission (SEC) which is related in 

any way to the subdivision. If a filing 

has been made with the SEC, give the 

SEC identification number; identify the 

prospectus by name; date of filing and 

state the page number of the prospectus 

upon which specific reference to the 

subdivision is made. Any disciplinary 

action taken against the developer by 

the SEC should be disclosed in 

§§ 1010.116 and 1010.216. 

(b) Subdivision information. (1) If this 

is a consolidated Statement of Record, 

state the number of lots being added, the 

number of lots in prior Statements of 

Record and the new total number of 

lots. The Director must be able to 

reconcile the numbers stated here with 

the title evidence; the plat maps and the 

disclosure in § 1010.108. 

(2) State the number of acres 

represented by the lots in this Statement 

of Record. If this is a consolidated 

Statement of Record, state the number of 

acres being added, the number of acres 

in prior Statements of Record and the 

new total number of acres. State the 

total acreage owned in the subdivision, 

the number of acres under option or 

similar arrangement for acquisition of 

title to the land and the total acreage to 

be offered pursuant to the same 

common promotional plan. 

(3) State whether any lots have been 

sold in this subdivision since April 28, 

1969, and prior to registration with 

ILSRP. If they were sold pursuant to an 

exemption, identify the exemption 

provision and state whether an advisory 

opinion, exemption order or exemption 

determination was obtained with 

respect to those lots sales. Give the 

ILSRP number assigned to the 

exemption, if any. 

(c) Developer information. (1) State 

the name, address, Internal Revenue 

Service number and telephone number 

of the owner of the land. If the owner 

is other than an individual, name the 

type of legal entity and list the interest, 

and extent thereof, of each principal. 

Identify the officers and directors. 

(2) If the developer is not the owner 

of the land, state the developer’s name, 

address, Internal Revenue Service 

number and telephone number. If the 

developer is other than an individual, 

name the type of legal entity and list the 

interest, and the extent thereof, of each 

principal. Identify the officers and 

directors. 

(3) If you wish to appoint an 

authorized agent, state the agent’s name, 

address and telephone number and 

scope of responsibility. This shall be the 

party designated by the developer to 

receive correspondence, service of 

process and notice of any action taken 

by ILSRP. In all Statements of Record, 

including those for foreign subdivisions, 

the authorized agent shall be a resident 

of the United States. A change of the 


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authorized agent will require an 

appropriate amendment. 

(4) State whether the owner of the 

land, the developer, its parent, 

subsidiaries or any of the principals, 

officers or directors of any of them are 

directly or indirectly involved in any 

other subdivision containing 100 or 

more lots. If so, identify the subdivision 

by name, location, and ILSRP number, 

if any. 

(5) State whether the owner or 

developer is a subsidiary corporation. If 

either the owner or developer is a 

subsidiary corporation or if any of the 

principals of the owner or developer are 

corporate entities, name the parent and/ 

or corporate entity and state the 

principals of each to the ultimate parent 

entity. 

(d) Documentation . (1) Submit a copy 

of the property report, subdivision 

report, offering statement or similar 

document filed with the state or states 

with which the subdivision has been 

registered. 

(2) Submit a copy of a general plan of 

the subdivision. This general plan must 

consist of a map, prepared to scale, and 

it must identify the various proposed 

sections or blocks within the 

subdivision, the existing or proposed 

roads or streets, and the location of the 

existing or proposed recreational and/or 

common facilities. In an initial filing, 

this map must at least show the area 

included in the Statement of Record. In 

a consolidated Statement of Record, 

show areas being added, as well as the 

areas previously registered. If a map of 

the entire subdivision is submitted with 

the initial Statement of Record, and if 

no substantial changes are made when 

material for a consolidated Statement of 

Record is submitted, the original map 

may be included by reference. 

(3)(i) If the developer is a corporation, 

submit a copy of the articles of 

incorporation, with all amendments; a 

copy of the certificate of incorporation 

or a certificate of a corporation in good 

standing and, if the subdivision is 

located in a state other than the one in 

which the original certificate of 

corporation was issued, a certificate of 

registration as a foreign corporation 

with the state where the subdivision is 

located. 

(ii) If the developer is a partnership, 

unincorporated association, joint stock 

company, joint venture or other form of 

organization, submit a copy of the 

articles of partnership or association 

and all other documents relating to its 

organization. 

(iii) If the developer is not the owner 

of the land, submit copies of the above 

documents for the owner. 

§ 1010.209 Title and land use. 

(a) General information. (1) State 

whether the developer has reserved the 

right to exchange or withdraw lots after 

a purchaser has signed a sales contract 

(e.g., for prior sales, failure to pass 

credit check). If yes, indicate this 

authority and make reference to the 

applicable paragraph in the sales 

contract or other document. 

(2) State whether there is a provision 

giving purchasers an option to exchange 

lots. If yes, indicate this and make 

reference to the applicable paragraph in 

the sales contract or other document. 

(3) State whether the developer knows 

of any instruments not of record which, 

if recorded, would affect title to the 

subdivision. If yes, copies of these 

instruments shall be submitted, except 

that copies of unrecorded contracts for 

sales of lots in the subdivision need not 

be submitted. 

(4)(i) Identify the Federal, State, and 

local agencies or similar organizations 

which have the authority to regulate or 

issue permits, approvals or licenses 

which may have a material effect on the 

developer’s plans with respect to the 

proposed division of the land, and any 

existing or proposed facilities, common 

areas or improvements to the 

subdivision. 

(ii) Describe or identify the land or 

facilities affected; the permit, approval 

or license required; and indicate 

whether the permit, approval or license 

has been obtained by the developer. 

(iii) If no agency regulates the division 

of the land or issues any permits, 

approvals or licenses with respect to 

improvements, so state. 

(iv) Answers must specifically cover 

the areas of environmental protection; 

environmental impact statements; and 

construction, dredging, bulkheading, 

etc. that affect bodies of water within or 

around the subdivision. Also include 

licenses or permits required by water 

resources boards, pollution control 

boards, river basin commissions, 

conservation agencies or similar 

organizations. 

(5) State whether it is unlawful to sell 

lots prior to the final approval and 

recording of a plat map in the 

jurisdiction where the subdivision is 

located. 

(b) Title evidence. (1) Submit title 

evidence that specifically states the 

status of the legal and equitable title to 

the land comprising the lots covered by 

the Statement of Record and any 

common areas or facilities disclosed in 

the Property Report. Title evidence need 

not be submitted for those common 

areas and facilities which are not owned 

by the developer. 

(2) Acceptable title evidence shall be 

dated no earlier than 20 business days 

preceding the date of the filing of the 

Statement of Record with the Director. 

Previously issued title evidence may be 

updated to the date referred to in the 

preceding sentence by endorsements or 

attorneys’ opinions of title. 

(3) The developer shall amend the 

title evidence to reflect the change in 

status of title of any previously 

registered, reacquired lots unless their 

status is at least as marketable as they 

were when first offered for sale by the 

developer as registered lots. 

(c) Forms of acceptable title evidence. 

(1) An original or a copy of a signed 

owner’s or mortgagee’s policy of title 

insurance, title commitment, certificate 

of title or similar instrument issued by 

a title company authorized by law to 

issue such instruments in the state in 

which the subdivision is located. Title 

evidence that limits insurance or 

negligence liability to amounts less than 

the market value of the subject land at 

the time of its acquisition by the 

subdivision owner is not acceptable; 

(2) A legal opinion stating the 

condition of title, prepared and signed 

by an attorney at law experienced in the 

examination of titles and a member of 

the Bar in the state in which the 

property is located. The title opinion 

may be based on a Torrens land 

registration system certificate of title, or 

similar instrument, provided it meets all 

general title evidence requirements of 

this section and a copy of the 

registration certificate of title is 

submitted. Title opinions that limit 

negligence liability to amounts less than 

the market value of the subject land at 

the time of its acquisition by the 

subdivision owner are not acceptable. 

(d) Title searches. The required 

evidence of the status of title shall be 

based on a search of all public records 

which may contain documents affecting 

title to the land or the developer’s 

ability to deliver marketable title. The 

search must cover a period which is 

required or generally considered 

adequate for insuring marketability of 

title in the jurisdiction in which the 

subdivision is located. Such search shall 

include an examination of at least the 

documents listed in paragraphs (d)(1) 

through (5) of this section. This search 

may be accomplished through the use of 

a title insurance company title plant, the 

information in which is based on 

current searches of the appropriate and 

necessary documents, including as a 

minimum those listed immediately 

above. For any attorney’s title opinion 

based on Torrens certificates of title, the 

title search need only go beyond the 

original time of registration of the 


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certificate of title for those types of 

encumbrances which were not 

conclusively settled by the proceedings 

at the time of such registration. In such 

cases, the required statement shall 

clearly reflect the documents and 

periods searched. 

(1) The records of the recorder of 

deeds or similar authority; 

(2) U.S. Internal Revenue Liens; 

(3) The records of the circuit, probate, 

or other courts including Federal courts 

and bankruptcy or reorganization 

proceedings which have jurisdiction to 

affect the title to the land; 

(4) The tax records; 

(5) Financing statements filed 

pursuant to the Uniform Commercial 

Code or similar law. If it is held that the 

financing statements do not affect the 

title of the land, include a statement of 

the legal authority for that opinion. 

(e) Items to be included in the title 

evidence. The acceptable title evidence 

must include the following information, 

instruments and statements and need 

not be repeated or duplicated elsewhere 

in the Statement of Record. 

(1) A legal description of the land on 

which the lots, common areas, and 

facilities covered by the title evidence 

are located. This legal description shall 

be adequate for conveying land in the 

jurisdiction in which the subdivision is 

located. If this legal description is based 

on a recorded plat, the lot numbers, 

recording place, book name, book 

number, and page number shall be 

stated in the description. If this legal 

description is given by metes and 

bounds, the title evidence shall include 

or be accompanied by a certified 

statement of the preparer of the title 

evidence, a licensed attorney, or an 

engineer or surveyor, indicating that all 

subject lots, common areas, and 

common facilities are encompassed 

within the metes and bounds 

description in the evidence. If at any 

time after the submission of the legal 

description required above, the 

description of the subject land is 

changed or found to be in error, a 

correcting amendment shall be made to 

the Statement of Record. 

(2) The name of the person(s) or other 

legal entity(ies) holding fee title to the 

property described. 

(3) The name of any person(s) or other 

legal entity(ies) holding a leasehold 

estate or other interest of record in the 

property described. 

(4) A listing of any and all exceptions 

or objections to the title, estate or 

interest of the person(s) or legal 

entity(ies) referred to in paragraph (e)(2) 

or (3) of this section, including any 

encumbrances, easements, covenants, 

conditions, reservations, limitations or 

restrictions of record. Any reference to 

exceptions or objections to title shall 

include specific references to the 

instruments in the public records upon 

which they are based. When an 

objection or exception to title affects 

less than all of the property covered by 

this Statement of Record, the title 

evidence shall specifically note what 

portion of the property is so affected. 

(5) Copies of all instruments in the 

public records specifically referred to in 

paragraph (e)(4) of this section. 

Abstracts of such instruments are 

acceptable if prepared by an attorney or 

professional or official abstractor 

qualified and authorized by law to 

prepare and certify such abstracts and if 

the abstracts contain a material portion 

of the recorded instruments sufficient to 

determine the nature and effect of such 

instruments. Also include copies of any 

release provisions, relating to 

encumbrances on the property 

described, which are not included in the 

documents otherwise required by this 

section. 

(6) If an attorney’s title opinion has 

been submitted pursuant to this section 

which has been based on a Torrens land 

registration certificate of title, submit a 

copy of such certificate. 

(f) Supplemental title information. (1) 

If there is a holder of an ownership 

interest in the land other than the 

developer, submit a copy of any 

documentation which evidences the 

developers’ authorization to develop 

and/or sell the land. 

(2) Submit copies of any trust deeds, 

deeds in trust, escrow agreements or 

other instruments which purport to 

protect the purchaser in the event of 

default or bankruptcy by the developer 

on any instrument or instruments which 

create a blanket encumbrance upon the 

property unless they have been 

previously provided as part of ‘‘title 

evidence’’ submitted pursuant to 

paragraph (e) of this section. 

(3)(i) Submit copies of all forms of 

contracts or agreements and notes to be 

used in selling or leasing lots. The 

contracts or agreements, including 

promissory notes, must contain the 

following language in boldface type 

(which must be distinguished from the 

type used for the rest of the contract) on 

the face or signature page above all 

signatures: ‘‘You have the option to 

cancel your contract or agreement of 

sale by notice to the seller until 

midnight of the seventh day following 

the signing of the contract or agreement. 

If you did not receive a Property Report 

prepared pursuant to the rules and 

regulations of the Bureau of Consumer 

Financial Protection, in advance of your 

signing the contract or agreement, the 

contract or agreement of sale may be 

cancelled at your option for two years 

from the date of signing.’’ 

(ii) If the purchaser is entitled to a 

longer revocation period by operation of 

state law or the Act, that period 

becomes the Federal revocation period 

and the contract or agreement must 

reflect the requirements of the longer 

period, rather than the seven days. This 

language shall be consistent with that 

shown on the cover page (see 

§ 1010.105). 

(iii) The revocation provisions may 

not be limited or qualified in the 

contract or other document by requiring 

a specific type of notice or by requiring 

that notice be given at a specified place. 

(iv) If it is represented that the 

developer will provide or complete 

roads or facilities for waters, sewer, gas, 

electric service or recreational 

amenities, the contract must contain a 

provision that the developer is obligated 

to provide or complete such roads, 

facilities and amenities (see 

§ 1011.15(f)). 

(4) Submit copies of deeds and leases 

by which the developer will lease or 

convey title to the lots to purchasers or 

lessees. 

(g) Plat maps, environmental studies 

and restrictions. (1) Plat maps. (i) In 

those jurisdictions where it is unlawful 

to sell lots prior to final approval and 

recording of the plat, and in those cases 

where a plat has been recorded, submit 

a copy of the recorded plat. This plat 

should be an exact copy of the recorded 

document. It should reflect the 

signatures of the approving authorities 

and bear a stamp or notation by the 

recorder of deeds, or similarly 

constituted officer, as to the recording 

data. 

(ii) If the plat has not been approved 

by the local authorities nor recorded, 

and if it is not unlawful to sell lots prior 

to final approval and recording, submit 

a map which has been prepared to scale 

and which shows the proposed division 

of the land, the lot dimensions and their 

relation to proposed or existing streets 

and roads. The map shall contain 

sufficient engineering data to enable a 

surveyor to locate the lots. 

(iii) Whether recorded or unrecorded, 

the plat or map should show: 

(A) The dimensions of each lot, stated 

in the standard unit of measure 

acceptable for such purposes in the 

political subdivision where the land is 

located. 

(B) A clear delineation of each of the 

lots and any common areas or facilities. 

(C) Any encroachments or rights-ofway on, over, or under the land, or a 

notation of these items together with the 

identity of the lots affected. 


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(D) The courses, distances and 

monuments, natural or otherwise, of the 

land’s boundaries; contiguous 

boundaries and identification or 

ownership of adjoining land and names 

of abutting streets, ways, etc. 

(E) The location of the section or unit 

encompassing the lots in relationship to 

the larger tract, or tracts, in the 

subdivision. 

(F) The delineation of any flood 

plains or flood control easements 

affecting any of the lots. 

(iv) The plat, or map shall be prepared 

by a licensed surveyor or engineer. 

(v) If all lots on each page of the plat 

are not included in the Statement of 

Record with which the plat or map is 

submitted, then the lots which are to be 

included in the Statement of Record 

shall be identified on the plat or map; 

a legend describing the method of 

identification shall be entered on the 

face of the plat or map and the number 

of lots so identified entered in the lower 

right hand corner of the plat map. The 

Director must be able to reconcile the 

totals of these numbers with the 

information given in §§ 1010.108 and 

1010.208 of the Statement of Record and 

the title evidence. 

(2) Environmental impact study. If the 

developer is aware of any 

environmental impact study which 

considers the effect of the subdivision 

on the environment, submit a summary 

of that study. 

(3) Restrictions or covenants. Submit 

a copy of any recorded or proposed 

restrictions or covenants for the 

subdivision if not submitted elsewhere 

in this Statement of Record. A copy of 

these restrictions or covenants shall be 

delivered to a prospective purchaser 

upon request. A supply shall be 

maintained at whatever place or places 

as will be necessary to allow immediate 

delivery upon request. 

§ 1010.210 Roads. 

(a) State the estimated cost to the 

developer of the proposed road system. 

(b) If the developer is to complete any 

roads providing access to the 

subdivision, submit copies of any bonds 

or escrow agreements which have been 

posted to guarantee completion thereof. 

(c) Submit copies of any bonds or 

escrow agreements which have been 

posted to assure completion of the roads 

within the subdivision. 

(d) If the interior roads are to be 

maintained by a public authority, 

submit a copy of a letter from that 

authority which states that the roads 

have been, or the conditions upon 

which they will be, accepted for 

maintenance and when. 

§ 1010.211 Utilities. 

(a) Water. (1) State the estimated cost 

to the developer of the central water 

system. 

(2) If water is to be supplied by a 

central system, furnish a letter from the 

supplier that it will supply the water. If 

the system is operated by a 

governmental division or by an entity 

whose operations are regulated by a 

governmental agency but which is not 

affiliated with or under the control of 

the developer, the letter shall include a 

statement that the supply of water will 

be sufficient to serve the anticipated 

population of the subdivision or how 

many homes or connections it can and 

will serve and that the water is tested at 

regular intervals and has been found to 

meet all standards for a public water 

supply. 

(3) If the water is to be supplied by 

individual wells, by an entity which is 

not regulated by a governmental agency, 

by the developer or by an entity which 

is affiliated with or controlled by the 

developer, submit a copy of any 

engineers’ reports or hydrological 

surveys which indicate there is a 

sufficient supply of water to serve the 

anticipated population of the 

subdivision. 

(4) If the supplier of water is not in 

one of the categories in paragraph (a)(2) 

of this section, submit a copy of a letter 

or report from a cognizant health officer, 

or from a private laboratory licensed by 

the state to perform tests and issue 

reports on water, to the effect that the 

water was found to meet all drinking 

water standards required by the state for 

a public water system. 

(5) If any bond, escrow agreement or 

other financial assurance of the 

completion of the central system, 

including any phases which are to be 

constructed in the future, has been 

posted by the developer or an entity not 

regulated by a government agency, 

furnish a copy of the document. 

(6) Furnish a copy of any permits 

which have been obtained by the 

developer or any entity affiliated with or 

under the control of the developer in 

connection with the construction and 

operation of the central system. If a 

permit is required to install individual 

wells, submit a letter from the proper 

authority which states the requirements 

for obtaining the permit and that there 

is no objection to the use of individual 

wells in the subdivision. 

(7) Furnish a copy of any membership 

agreement or contract which allows or 

requires lot owners to use the central 

water system. If this document is 

furnished elsewhere in the Statement of 

Record, reference to it may be made 

here. 

(b) Sewer. (1) State the estimated cost 

to the developer of the central sewer 

system. 

(2) If sewage disposal is to be by 

individual on-site systems, furnish a 

letter from the local health authorities 

giving general approval to the use of 

these systems in the subdivision or 

giving specific approval for each and 

every lot. 

(3) If sewage disposal is to be through 

a central system which is owned and 

operated by a governmental division, or 

by an entity whose operations are 

regulated by a governmental agency but 

which is not affiliated with, or under 

the control of, the developer, furnish a 

letter from the entity that it will provide 

this service and that its treatment 

facilities have the capacity to serve the 

anticipated population of the 

subdivision or how many homes or 

connections it can and will serve. 

(4) Furnish a copy of any permits 

obtained by the developer or any entity 

affiliated with or under the control of 

the developer, for the construction and 

operation of the central sewer system or 

construction and use of any other 

method of sewage disposal 

contemplated for the subdivision except 

those to be obtained by individual lot 

owners at a later date. 

(5) If any bond, escrow agreement or 

other financial assurance of the 

completion of the central system or 

other system for which the developer is 

responsible, and any future expansion, 

has been posted, furnish a copy of the 

document. 

(6) Furnish a copy of any membership 

agreement of contract which allows, or 

requires, the lot owners to use the 

central system. If this document is 

furnished elsewhere in the Statement of 

Record, it may be included here by 

reference. 

(c) Electricity. Give an estimate of the 

total construction cost to be expended 

by the developer and submit any 

instrument providing financial 

assurance of completion of the facilities 

which has been posted by the 

developer. 

(d) Telephone. Give an estimate of the 

total construction cost to be expended 

by the developer and submit a copy of 

any instrument providing financial 

assurance of the completion of the 

facilities which has been posted by the 

developer. 

§ 1010.212 Financial information. 

(a) Financing of improvements. 

Describe the financing plan that is to be 

used in financing on-site or off-site 

improvements proposed in the 

Statement of Record. 


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79512 Federal Register / Vol. 76, No. 245 / Wednesday, December 21, 2011 / Rules and Regulations 

(b) Complete the following format (If 

the subdivision or common promotional 

plan contains, or will contain, 1000 or 

more lots, furnish this information in its 

entirety. If the subdivision or common 

promotional plan contains, or will 

contain, less than 1,000 lots, only 

paragraphs (b)(3)(iii) and (iv) of this 

section need be completed.) 

(1) Estimated date for full completion 

of amenities 

(2) Projected date for complete sell 

out of subdivision 

(3) Cost and expense recap for lots 

included in this Statement of Record: 

(i) Land acquisition cost or current 

fair market value of land. 

(ii) Development and improvement 

costs (include the estimated cost of such 

items as roads, utilities, and amenities 

which the developer will incur). 

(iii) Estimated marketing and 

advertising costs. 

(iv) Estimated sales commission. 

(v) Interest (include cost in financing 

the land purchase, improvements, or 

other borrowings). 

(vi) Estimated other expenses (include 

general costs, administrative costs, 

profit, etc.). 

(vii) Total. 

(4) Total land sales revenue: 

(i) Estimated total land sales income. 

(ii) Estimated other income. 

(iii) Total income. 

(c) Financial statements. (1) Submit a 

copy of the developer’s financial 

statements for the last full fiscal year. 

These statements shall be prepared in 

accordance with generally accepted 

accounting principles as prescribed by 

the Financial Accounting Standards 

Board and generally accepted auditing 

standards as prescribed by the American 

Institute of Certified Public 

Accountants, and shall be audited by an 

independent licensed public 

accountant. They shall include a 

balance sheet, a statement of profit and 

loss, a statement of changes in financial 

condition and a certified opinion by the 

accountant. The statements shall be no 

more than six months old on the date 

the Statement of Record is submitted. 

(2) If the audited statements are more 

than six months old at the date of 

submission of the Statement of Record, 

or if the last full fiscal year has ended 

within the last 90 days and audited 

Statements are not yet available, the 

developer may submit a copy of the 

audited statements for the previous full 

fiscal year and supplement them with 

unaudited, interim statements so that 

the financial information is no more 

than six months old on the date that the 

Statement of Record is submitted. The 

interim statements may be prepared by 

company personnel but must contain a 

balance sheet, a statement of profit and 

loss and a statement of changes in 

financial condition and be prepared in 

accordance with generally accepted 

accounting principles. 

(d) Annual report. (1) Each year after 

the initial effective date, the developer 

shall submit a copy of its latest financial 

statements. These statements must meet 

the standards set out in § 1010.212(c)(1), 

unless the developer has qualified for an 

exception under § 1010.212(e), and must 

be submitted within 120 days after the 

close of the developer’s fiscal year. 

(2) If a developer has submitted its 

latest statements with a consolidated 

filing since the close of its fiscal year 

and prior to the end of the 120 day 

period, a second submission of the 

statements to comply with this section 

is not necessary. 

(3) If the developer no longer has an 

active sales program on the date this 

report is due, the information set forth 

in § 1010.310(c)(7)(iii) may be furnished 

in lieu of this report. 

(e) Exceptions. (1) If the developer 

does not have audited financial 

statements and the criteria in one of the 

following exceptions are met, 

statements need not be audited and 

certified but must meet all of the other 

requirements set forth in paragraphs 

(c)(1) and (2) of this section. 

(2) The term ‘‘conveys title free of any 

mortgage or lien’’ in these exceptions is 

not intended to prohibit the taking of an 

instrument as security for the lot 

purchase price after title is conveyed. 

For the purposes of these exceptions, 

these definitions shall apply: 

(i) Deed shall mean a warranty deed, 

or its equivalent, which conveys title 

free and clear of liens and 

encumbrances. 

(ii) Assurance of Title Agreement 

shall mean a legal arrangement whereby 

the purchaser is guaranteed a deed upon 

payment of no more than the full 

purchase price of the lot (e.g. 

subdivision trust). In addition to a copy 

of any Assurance of Title Agreement, 

the Director may require additional 

documentation such as an attorney’s 

opinion letter to assure that the 

purchaser’s title is fully protected. 

(iii) Date of contract shall mean the 

date on which the contract or agreement 

is signed by the purchaser. 

(iv) Escrow or trust account as to 

down payments and deposits shall 

mean an account, established in 

accordance with local real estate laws or 

regulations, which assures the return to 

the purchaser of any monies paid in the 

event title is not delivered to the 

purchaser in accordance with the terms 

of the contract. 

(3) The exceptions are: 

(i) The aggregate sales price of all lots 

offered pursuant to a common 

promotional plan equals $500,000.00 or 

less; or 

(ii) Each of the following conditions 

of paragraphs (e)(3)(ii)(A) and (B) of this 

section are met, plus the conditions of 

one of paragraphs (e)(3)(ii)(C), (D), or (E) 

of this section: 

(A) Down payments and deposits are 

held in an escrow or trust account. 

(B) The contract provides for delivery 

of a deed which conveys title free of any 

mortgage or lien within 180 days of the 

signing of the contract. (In lieu of 

delivery of a deed, the developer may 

submit to ILSRP an Assurance of Title 

Agreement.) 

(C) The aggregate sales prices of all 

lots offered pursuant to a common 

promotional plan is at least $500,000 

but less than $1,500,000. 

(D) All facilities, utilities and 

amenities proposed by the developer in 

the Property Report or sales contract 

have been completed so that the lots in 

the Statement of Record are 

immediately usable for the purpose for 

which they are sold. 

(E) (1) The developer is contractually 

obligated to the purchaser to complete 

all facilities, utilities and amenities 

proposed by the developer in the 

Property Report and sales contract so 

that all lots included in the Statement 

of Record will be usable for the purpose 

for which they are sold by the dates set 

out in the Property Report, and; 

(2) The developer has made financial 

arrangements, such as the posting of 

surety bonds (corporate bonds or 

individual notes or bonds are not 

acceptable), irrevocable letters of credit 

or the establishment of escrow or trust 

accounts, which assure completion of 

all facilities, utilities and amenities 

proposed by the developer in the 

Property Report or contract. 

(f) Newly-formed entity. If the 

developer is newly formed or has not 

had any significant operating 

experience, an audited or unaudited 

balance sheet and statements of receipts 

and disbursements of funds may be 

submitted. 

(g) Use of parent company statements. 

(1) If the developer is a subsidiary 

company and does not have audited 

financial statements, the Director may 

permit the use of the audited and 

certified statements of the parent 

company: Provided, That those 

statements are accompanied by an 

unconditional guaranty that the parent 

shall perform and fulfill the obligations 

of the subsidiary. If this procedure is 

adopted, the developer shall submit the 

following: 


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(i) The audited and certified financial 

statements of the parent company, 

together with interim statements if 

necessary, which comply with 

§ 1010.212(c). 

(ii) A properly executed guaranty in a 

form acceptable to the Director. 

(2) In cases described in paragraph 

(g)(1) of this section, the disclosure 

information required in § 1010.112 shall 

be appropriately amended to reference 

the parent company and not the 

developer and must include a statement 

to the effect that the developer’s parent 

company (insert name) has entered into 

an unconditional guaranty to perform 

and fulfill the obligations of the 

developer. 

(h) Opinions. If the accountant 

qualifies or disclaims his opinion, the 

Director may accept the statements and 

require such additional disclosure as the 

Director deems necessary in the public 

interest or for the protection of 

purchasers. 

(i) Copies for prospective purchasers. 

Copies of the financial statements filed 

with the Statement of Record shall be 

made available to prospective 

purchasers upon request. A supply of 

the latest submitted statements shall be 

maintained at whatever place, or places, 

as is necessary to allow immediate 

delivery upon request by a prospective 

purchaser. These statements shall 

contain financial information only and 

shall not include any promotional 

material such as that usually set forth in 

annual reports. 

(j) Change from audited to unaudited 

statements. (1) Developers who file 

audited statements must continue with 

audited statements throughout the 

duration of the registration unless, at a 

later date, the developer submits 

amendments which demonstrate to the 

satisfaction of the Director that it then 

qualifies for an exception from audited 

statements under paragraph (e)(3)(ii) of 

this section. For purposes of paragraph 

(e)(3)(ii)(C) of this section, the Director 

will consider the aggregate sales prices 

of only the lots yet to be sold, and may 

consider whether any additions to the 

subdivisions or reacquisitions of lots 

already sold would be likely to cause 

the dollar limits to be exceeded. 

(i) The aggregate sales prices of the 

lots yet to be sold in the subdivision has 

been reduced to less than $1,500,000.00, 

and that it will not exceed this amount 

through further additions to the 

subdivision, or through the 

reacquisition of lots already sold, and; 

(ii) The sales contract provides for 

delivery of a deed within 120 days of 

the date of the contract which conveys 

title free and clear of any mortgage or 

lien or the developer files an Assurance 

of Title Agreement with ILSRP, and; 

(iii) Any down payments or deposits 

are held in an escrow or trust account, 

or; 

(iv) The developer then qualifies for 

exception (e)(3)(iii) or (iv) of this 

section. 

(2) The Director may allow a 

developer, who has made sales prior to 

registration, to submit unaudited 

statements under the provisions of 

paragraph (j)(1)(i) of this section. The 

developer must demonstrate to the 

satisfaction of the Director that the 

acceptance of unaudited statements 

would not be a detriment to the public 

interest or to the protection of 

purchasers. 

§ 1010.214 Recreational facilities. 

(a) Submit a synopsis of the proposed 

plans and estimated cost of any 

proposed or partially constructed 

recreational facility disclosed in 

§ 1010.114. This item should include 

the general dimensions and a brief 

description of the facility but it should 

not include blueprints or similar 

technical materials. 

(b) Submit a copy of any bond or 

escrow arrangements to assure 

completion of the recreational facilities 

disclosed in § 1010.114 which are not 

structurally complete. 

(c) Submit a copy of the lease for any 

leased recreational facility. 

§ 1010.215 Subdivision characteristics and 

climate. 

(a) Submit two copies of a current 

geological survey topographic map, or 

maps, of the largest scale available from 

the U.S. Geological Survey with an 

outline of the entire subdivision and the 

area included in this Statement of 

Record clearly indicated. Photo copies 

made by the developer are not 

acceptable. Do not shade the areas on 

the maps which have been outlined. 

(b) If drainage facilities are proposed 

but not yet completed, submit a 

synopsis of the developer’s proposed 

plans that includes a description of the 

system of collecting surface waters; a 

description of the steps to be taken to 

control erosion and sedimentation and 

the estimated cost of the drainage 

facilities. 

(c) Submit copies of any bonds, 

escrow or trust accounts or other 

financial assurance of completion of the 

drainage facilities. 

(d) State whether the jurisdiction in 

which the subdivision is located has a 

system for rating the land for fire 

hazards. 

§ 1010.216 Additional information. 

(a) Property Owners’ Association. (1) 

If the association has been formed as a 

legal entity, submit a copy of the articles 

of association, bylaws or similar 

documents, and a copy of the charter or 

certificate of incorporation. 

(2) If the developer exercises any 

control over the association, state 

whether any contracts have been 

executed between the association and 

the developer or any affiliate or 

principal of the developer. If there have 

been, briefly summarize the terms of the 

contracts, their purpose, their duration 

and the method and rate of payment 

required by the contract. State whether 

the association may modify or terminate 

the contracts after the owners assume 

control of the association. 

(3) State whether there is any 

agreement which would require the 

association to reimburse the developer, 

its affiliates or successors for any 

attorney’s fees or costs arising from an 

action brought against them by the 

association or individual property 

owners regardless of the outcome of the 

action. 

(4) If the answer to paragraph (a)(2) or 

(a)(3) of this section is in the affirmative, 

disclosure may be required in 

§ 1010.116(a) at the discretion of the 

Director. 

(5) Submit a copy of any membership 

agreement or similar document. 

(b) Price range, type of sales and 

marketing. (1) State the price range of 

lots in the subdivision. 

(2) State the type of sales to be made, 

i.e., contract for deed, cash, deed with 

security instrument, etc. 

(3) Describe the methods of 

advertising and marketing to be used for 

the subdivision. The description should 

include, but need not be limited to, 

information on such matters as to: 

(i) Whether the developer will employ 

his own sales force or will contract with 

an outside group; 

(ii) Whether wide area telephone 

solicitation will be employed; 

(iii) Whether presentations will be 

made away from the immediate vicinity 

of the subdivision and/or if prospective 

purchasers will be furnished 

transportation from distant cities to the 

subdivision; 

(iv) Whether mass mailing techniques 

will be used and gifts offered to those 

who respond. 

(4) For any subdivision that meets any 

of the criteria in paragraphs (b)(4)(i) 

through (iii) of this section, submit a 

copy of any advertising or promotional 

material that is, or has been, used for the 

subdivision. Amendments to reflect 

changes in advertising or promotional 

material need be filed only when there 


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79514 Federal Register / Vol. 76, No. 245 / Wednesday, December 21, 2011 / Rules and Regulations 

is a material change related to one of the 

above factors. Depending upon the 

content of the material submitted, the 

Director may require additional 

warnings in the Property Report portion. 

This requirement applies to any 

subdivision that: 

(i) Mentions or refers to recreational 

facilities which are not disclosed in 

§ 1010.114, or; 

(ii) Promotes the sale of lots based on 

the investment potential or expected 

profits, or; 

(iii) Contains information which is in 

conflict with that disclosed in this 

Statement of Record. 

(c) Violations and litigation. (1) 

Submit a copy of the complaint(s), the 

answer(s) and the decision(s) for any 

litigation listed in § 1010.116(c). 

(2) If it is indicated in § 1010.116(c) 

that the developer or any of the parties 

involved in the subdivision are, or have 

been, the subject of any bankruptcy 

proceedings, furnish a copy of the 

schedules of liabilities and assets (or a 

recap of those schedules); the petition 

number; the date of the filing of the 

petition; names and addresses of the 

petitioners, trustee and counsel; the 

name and location of the court where 

the proceedings took place and the 

status or disposition of the petition. 

Explain, briefly, the cause of the action. 

(3) Furnish a copy of any orders 

issued in connection with any 

violations listed in § 1010.116(c). 

(d) Resale or exchange program. (1) If 

it is stated in § 1010.116(d)(3) that there 

is an exchange program which provides 

sufficient lots to satisfy all requests for 

exchange, describe the method used to 

determine the number of lots required; 

state whether these lots have been 

reserved or set aside; whether additional 

lots will be provided if the lots available 

for exchange are exhausted and the 

source of any additional lots. 

(e) Unusual situations. (1) Foreign 

subdivisions. If the subdivision is 

located outside the several States, the 

District of Columbia, the 

Commonwealth of Puerto Rico or the 

territories or possession of the United 

States, the Statement of Record shall be 

submitted in the English language and 

all supporting documents, including 

copies of any laws which restrict the 

ownership of land by aliens, shall be 

submitted in their original language and 

shall be accompanied by a translation 

into English. 

§ 1010.219 Affirmation. 

The affirmation set forth in section 

XXVIII of the appendix to this part: 

Affirmation of Senior Executive Officer 

shall be executed by the senior 

executive officer or a duly authorized 

agent: 

§ 1010.310 Annual report of activity. 

(a) As an integral part of the 

Statement of Record, the developer shall 

file with the Director an Annual Report 

of Activity on any initial or 

consolidated registration not under 

suspension. For this purpose, only one 

Annual Report of Activity will be 

expected for subdivisions on which 

developers have filed consolidations. 

For registrations certified by a state as 

provided for in § 1010.500, a developer 

need file only one Annual Report of 

Activity for any registration for which 

the ILSRP number is the same 

(alphabetic designators indicate that the 

registration has been treated as a 

consolidation). 

(b) The report shall be submitted 

within 30 days of the annual 

anniversary of the effective date of the 

initial Statement of Record. 

(c) The report shall contain the 

following information: 

(1) Subdivision name and address. 

(2) Developer’s name, address and 

telephone number. 

(3) Agent’s name, address and 

telephone number. 

(4) Interstate Land Sales Registration 

number. 

(5) The date on which the initial filing 

first became effective. 

(6) The number of registered lots, 

parcels or units which are unsold as of 

the date on which the report is due. 

(7) One of the following: 

(i) A statement that the developer is 

still engaged in land sales activity at the 

subject subdivision and that there have 

been no changes in material fact since 

the last effective date was issued which 

would require an amendment to the 

Statement of Record; or 

(ii) A statement that the developer is 

still engaged in land sales activity at the 

subject subdivision, that material 

changes have occurred since the last 

effective date, and that corrected pages 

to the Property Report portion or 

Additional Information and 

Documentation portion of the Statement 

accompany the report; or 

(iii) A statement that the developer is 

no longer engaged in land sales activity 

at the subject subdivision, together with 

the reason the developer is no longer 

selling (e.g., all lots sold to the public 

or the remaining lots sold to another 

developer, along with the date of sale 

and the new developer’s name, address 

and telephone number). A request may 

be made that the Statement of Record be 

voluntarily suspended. The request 

should be submitted in duplicate and 

will become effective upon the countersignature of the Director (or an 

authorized Designee) with the duplicate 

being returned to the developer. 

(8) The report shall be dated and shall 

be signed by the senior executive officer 

of the developer on a signature line 

above his typed name and title. The 

senior executive officer’s 

acknowledgement shall be attested to or 

certified by a notary public or similar 

public official authorized to attest or 

certify acknowledgements in the 

jurisdiction in which the report is 

executed. 

(d) If the report indicates that there 

are 101 or more registered lots, parcels 

or units remaining for sale, the report 

shall be accompanied by an amendment 

fee in the amount and form prescribed 

in § 1010.35. 

(e) Failure to submit the report when 

due shall be grounds for an action to 

suspend the effective Statement of 

Record. 

Subpart C—Certification of 

Substantially Equivalent State Law 

§ 1010.500 General. 

(a) This subpart establishes 

procedures and criteria for certifying 

state land sale or lease disclosure 

programs and State state land 

development standards programs. The 

purpose of State Certification is to 

lessen the administrative burden on the 

individual developer, arising where 

there are duplicative state and federal 

Federal registration and disclosure 

requirements, without affecting the level 

of protection given to the individual 

purchaser or lessee. If the Director 

determines that a state has adopted and 

is effectively administering a program 

that gives purchasers and lessees the 

same level of protection given to them 

by the Interstate Land Sales Registration 

Program, then the Director shall certify 

that state. Developers who accomplish 

an effective registration with a state in 

which the land is located after the 

Director has certified the state may 

satisfy the registration requirements of 

the Director by filing with the Director 

materials designated by agreement with 

certified states in lieu of the federal 

Federal Statement of Record and 

Property Report. 

(b) A state that is certified by the 

Director shall be known as the situs 

certified state for all land located within 

its borders. 

(c) After a developer is effectively 

registered with the Director through a 

certified state, the Director has the same 

authority over that developer as the 

Director has over developers who file 

directly with the Director. This includes 

the authority to subpoena information 


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and to examine, evaluate and suspend a 

developer’s registration under sections 

1407(d) and (e) of the Act and 

§ 1010.45(b)(1) and (b)(2) of these 

regulations. 

(d) The prohibitions against the use of 

the Property Report contained in 

§ 1010.29 apply to state disclosure 

materials and substantive development 

standards. In addition, for purposes of 

this paragraph, references made to the 

Director, ILSRP and the Bureau in 

§ 1010.29 will include a reference to the 

equivalent state officer or agency. 

(e) The Purchaser’s Revocation Rights, 

Sales Practices and Standards rules 

contained in part 1011 of these 

regulations apply to developers who 

register with the Director through 

certified States. All of the rules in part 

1011 apply, excepting the disclaimer 

statement in § 1011.50(a) which is 

modified to read as follows: ‘‘Obtain the 

Property Report or its equivalent, 

required by Federal and State law and 

read it before signing anything. No 

Federal or State agency has judged the 

merits or value, if any, of this property.’’ 

(f) Developers are obliged to pay filing 

fees as set forth in § 1010.35 of this part. 

§ 1010.503 Notice of certification. 

(a) If the Director determines that a 

state qualifies for certification under 

§ 1010.501(a) or (b), the Director shall so 

notify the state in writing. The state will 

be effectively certified under the section 

and as of the date specified in the 

notice. 

(b) If the Director determines that a 

state does not meet the standards for 

certification, the Director shall so notify 

the state in writing. The notice will 

specify particular changes in state law, 

regulations or administration that are 

needed to obtain certification. The 

Director shall not be bound in advance 

to certify a state that makes the 

suggested changes if other deficiencies 

become apparent at a later time. 

(c) The Director’s final determination 

to accept or reject a State’s Application 

for Certification of Land Sales Program 

shall be published in the Federal 

Register. 

(d) A state’s certification will remain 

in effect until it is voluntarily 

suspended by the state or withdrawn by 

the Director. A state can voluntarily 

suspend its certification by notifying the 

Director in writing. The suspension will 

take effect as of the date and time 

specified in the notice to the Director, 

or upon receipt by the Director if no 

date is specified. The Director may 

withdraw certification as provided in 

§ 1010.505. 

§ 1010.504 Cooperation among certified 

states and between certified states and the 

Director. 

(a) By filing an Application for 

Certification of State Land Sales 

Program pursuant to § 1010.502, a state 

agrees that, if it is certified by the 

Director, it will: 

(1) Accept for filing and allow to be 

distributed as the sole disclosure 

document, a disclosure document 

currently in effect in the situs certified 

state. Only those documents filed with 

the situs state after certification by the 

Director must automatically be accepted 

by other certified states; 

(2) Certify copies of all disclosure 

documents, amendments and 

consolidations filed with it by 

developers of land located within its 

borders for and as needed by developers 

required to submit certified copies to 

the Director and all other certified 

states. The certification shall indicate 

whether the documents are currently in 

effect. The certification should be in the 

format set forth in section XXIX of the 

appendix to this part: Form for 

Certification for Disclosure Documents. 

(3) Assist and cooperate with the 

Director and other certified states by 

requiring that developers of land within 

its borders amend disclosure documents 

if any change occurs in any 

representation of material fact required 

to be stated in the disclosure 

documents, including a change resulting 

from the developer’s compliance with 

the requirements of the law in another 

certified state. The state shall require 

developers to send certified copies of 

the amended documents to the Director 

and requesting certified states. All 

amendments to such materials, which 

reflect changes in material facts 

regarding the subdivision, shall be 

submitted to the situs certified state 

authorities within 15 days of the date on 

which the developer knows, or should 

have known, of such change. Certified 

copies of the disclosure documents shall 

be submitted by the developer to the 

Director and the other certified states 

within 15 days after it becomes effective 

under the situs certified state laws. 

(4) Continue to effectively operate its 

Land Sales Program as that Program is 

described in the Application for 

Certification and as it was certified by 

the Director. 

(5) Assist and cooperate with the 

Director by monitoring the sales 

practices of developers registered with it 

directly or through another certified 

state, and by reporting to the Director 

any violations of the Act, including but 

not limited to the required contract 

provisions, revocation rights and antifraud provisions of 15 U.S.C. 1703, or 

the regulations. 

(b) A state required to accept the 

disclosure documents of another situs 

certified state pursuant to paragraph 

(a)(1) of this section, may, in its 

discretion, require the developer to 

furnish it with copies certified pursuant 

to paragraph (a)(2) of this section. 

(c) No state shall be prevented from 

establishing substantive or disclosure 

requirements which exceed the federal 

Federal standard provided that such 

requirements are not in conflict with the 

Act or these regulations. For example, a 

certified state may impose additional 

disclosure requirements on developers 

of land located within its borders but 

may not impose additional disclosure 

requirements on developers whose 

disclosure documents it is required to 

accept pursuant to paragraph (a)(1) of 

this section. However, a certified state 

may impose additional nondisclosure 

requirements on out of state developers 

even though the developer is registered 

in the certified state in which the land 

is located. 

(d) After a developer is effectively 

registered with a certified state through 

a situs certified state, either or both 

certified states may exercise full 

enforcement authorities and powers 

over that developer according to 

applicable law and regulations. 

(e) The Director shall cooperate with 

the certified states by offering a forum 

for nonbinding arbitration of disputes 

between two or more certified States 

arising out of the State Certification 

Program. 

§ 1010.505 Withdrawal of State state 

certification. 

(a) The Director shall periodically 

review the laws, regulations and 

administration thereof, of a certified 

state. If the Director finds that, taken as 

a whole, the laws, regulations or 

administration thereof, no longer meet 

the requirements of subpart C, then the 

Director may issue a notice to withdraw 

the certification of that state. 

(b) The notice of proceedings to 

withdraw a state’s certification will be 

issued to the state by the Director 

pursuant to § 1012.236. The Director 

may, after notice and after an 

opportunity for a hearing, pursuant to 

§ 1012.237, issue an order withdrawing 

certification. In the event that a 

withdrawal order is issued, the order 

shall remain in effect until the state has 

amended its laws, regulations or the 

administration thereof or has otherwise 

complied with the requirements of the 

order. When the state has complied with 

the requirements of the order, the 

Director shall so declare and the 


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withdrawal order shall cease to be 

effective. 

(c) Withdrawal orders issued pursuant 

to this subsection will be effective as of 

the date the order is received by the 

state. The withdrawal order shall be 

published in the Federal Register. 

(d) The rules of 12 CFR part 1080, 

unless otherwise specified in 12 CFR 

part 1012, subpart D, will generally 

apply to hearings on withdrawal of a 

state’s certification. 

§ 1010.506 State/Federal filing 

requirements. 

(a)(1) If the Director has certified a 

state under § 1010.501, the Director 

shall accept for filing disclosure 

materials or other acceptable documents 

which have been approved by the 

certified state within which the 

subdivision is located. Only those 

filings made by the developer with the 

state after the state was certified by the 

Director shall be automatically accepted 

by the Director. 

(2) Retroactive application of the 

effectiveness of state’s certification to a 

specified date may be granted on a stateby-state basis, where the Director 

determines that retroactive application 

will not result in automatic federal 

Federal registration of any state filing 

that has not met the requirements of the 

certified state laws. 

(b) For a developer to be registered 

with the Director, the developer shall 

file with the Director a state certified 

copy of the Property Report or its 

equivalent, and any other 

documentation as stipulated in the 

Director’s Notice of Certification to the 

state. 

(c) The documents and materials filed 

under paragraph (b) of this section will 

be automatically effective as the Federal 

Statement of Record and Property 

Report after these materials and the 

proper filing fee have been received by 

the Director. 

(d) The Director has authority 

pursuant to § 1010.45(b)(1) and (b)(2) to 

suspend individual filings which fail to 

meet the requirements of the certified 

state’s law or regulations or the 

standards in the certification agreement 

whether or not the state agency has 

initiated a similar action. 

(e)(1) State accepted materials filed 

with the Director pursuant to this 

section must be amended to reflect any 

amendment to such materials made 

effective by the state. All amendments 

to such materials must be submitted to 

the Director within 15 days after 

becoming effective under the applicable 

state laws. Amendments are 

automatically effective upon their 

receipt by the Director and the 

provisions of § 1010.45(b)(1) and (2) 

apply to amendments filed under this 

section. 

(2) Amendments shall include or be 

accompanied by: 

(i) A letter from the developer giving 

a narrative statement fully explaining 

the purpose and significance of the 

amendment and referring to that section 

and page of the material which is being 

amended, and; 

(ii) A signed state acceptance 

certification substantially the same as 

that required by § 1010.504(a)(2). 

(f) If a certified state suspends the 

registration of a particular subdivision 

for any reason, the subdivision’s federal 

Federal registration with the Director 

shall be automatically suspended as a 

result of the state action. No action need 

be taken by the Director to effect the 

suspension. 

(g) A state is certified only with regard 

to land located within the state borders. 

The Director is not required to accept 

filings which have been accepted by a 

certified state if the land which is the 

subject of the filing is not located within 

that certified state. For example, if State 

A is certified by the Director and State 

B is not, the Director is not required to 

accept filings from State B simply 

because State A accepts filings from 

State B. 

§ 1010.507 Effect of suspension or 

withdrawal of certification granted under 

§ 1010.501(a): Full disclosure requirement. 

(a) If a state certified under 

§ 1010.501(a) suspends its own 

certification or has its certification 

withdrawn under § 1010.505, the 

Federal disclosure materials accepted 

and made effective by the Director, 

pursuant to § 1010.506, prior to the 

suspension or withdrawal shall remain 

in effect unless otherwise suspended by 

the Director. 

(b) In the event that there is a change 

in a material fact with regard to a 

subdivision that remains registered 

under the provisions of paragraph (a) of 

this section, the developer shall file a 

new registration with the Director 

meeting the requirements of the then 

applicable Federal registration 

regulations. Modifications of the Federal 

format may be used as specified by the 

Director. 

§ 1010.508 Effect of suspension of 

certification granted under § 1010.501(b): 

Sufficient protection requirement. 

(a) If a state certified under 

§ 1010.501(b) suspends its own 

certification or has its certification 

withdrawn under § 1010.505, the 

effectiveness of the Federal disclosure 

materials accepted and made effective 

by the Director, pursuant to § 1010.506, 

prior to the suspension or withdrawal 

shall terminate ninety (90) days after the 

notice of withdrawal order is published 

in the Federal Register as provided in 

§ 1010.505(c). 

(b) At the end of the ninety day 

period, or during the ninety day period 

in the event that there is a change in 

material fact with regard to a 

subdivision that remains registered 

under the provisions of paragraph (a) of 

this section, the developer shall file a 

new registration with the Director 

meeting the requirements of the then 

applicable Federal registration 

regulations. Modifications of the Federal 

format may be used as specified by the 

Director. 

§ 1010.552 Previously accepted state 

filings. 

(a) Materials filed with a state and 

accepted by the HUD Secretary as a 

Statement of Record prior to January 1, 

1981, pursuant to 24 CFR 1010.52 

through 1010.59 (as published in the 

Federal Register on April 10, 1979) may 

continue in effect. However, developers 

must comply with the applicable 

amendments to the Federal Act and the 

regulations thereunder. In particular, 

see §§ 1010.558 and 1010.559, which 

require that the Property Report and 

contracts or agreements contain notice 

of purchaser’s revocation rights. In 

addition see § 1011.15(f), which 

provides that it is unlawful to make any 

representations with regard to the 

developer’s obligation to provide or 

complete roads, water, sewers, gas, 

electrical facilities or recreational 

amenities, unless the developer is 

obligated to do so in the contract. 

(b) If any such filing becomes inactive 

or suspended under the laws of the 

state, the registration with the Director 

shall be ineffective from that time. 

(c) Such Statement of Record may be 

suspended pursuant to § 1010.45. 

(d) The Director may refuse to accept 

any particular filing under this section 

when it is determined that acceptance is 

not in the public interest. 

(e) The Director may require such 

changes, additional information, 

documents or certification as the 

Director determines to be reasonably 

necessary or appropriate in the public 

interest. 

§ 1010.556 Previously accepted state 

filings—amendments and consolidations. 

(a) Amendments. (1) General 

requirements. State accepted materials, 

filed with the Director pursuant to 

§ 1010.552, shall be amended to reflect 

any amendment to such materials made 

effective by the state or any change of 


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a material fact regarding the 

subdivision. All amendments to such 

materials, which reflect changes in 

material facts regarding the subdivision, 

shall be submitted to the state 

authorities within 15 days of the date on 

which the developer knows, or should 

have known, of such change and to the 

Director within 15 days after it becomes 

effective under the applicable State 

laws. However, such amendment shall 

not be effective as a Federal registration 

until the Director has determined that 

the amendment meets all applicable 

requirements of these regulations. 

(2) Amendments shall include or be 

accompanied by: 

(i) A letter from the developer giving 

a narrative statement fully explaining 

the purpose and significance of the 

amendment and referring to that section 

and page of the Statement of Record 

which is being amended, and; 

(ii) All amended pages of the state 

accepted materials filed with the 

Director. These pages shall be copied 

together with their amendments. Each 

such page shall have its date of 

preparation in the lower right hand 

corner, and; 

(iii) A signed state acceptance 

certification, and; 

(iv) The appropriate fees as indicated 

in § 1010.35. 

(b) Consolidations. (1) When 

consolidations allowed. If lots are to be 

registered pursuant to § 1010.552 which 

are in the same common promotional 

plan with other lots already registered 

with the Director, then new 

consolidated state accepted materials 

including such lots may be filed with 

the Director as a Statement of Record 

following the format of the previously 

accepted filing. 

(2) Consolidated Statements of Record 

shall include or be accompanied by: 

(i) State accepted consolidation 

materials which are also acceptable to 

the Director as a Statement of Record 

(state property report inclusive). These 

state accepted consolidation materials 

shall cover all lots previously registered 

in the common promotional plan except 

those deleted pursuant to other 

provisions in these regulations. These 

materials shall also include information 

and items required for state accepted 

materials filed as an initial registration 

Statement of Record, except that, 

supporting documentation in materials 

previously made effective by the 

Director for other lots in the subject 

common promotional plan may be 

included incorporated by reference into 

the new consolidation materials 

submitted as a Statement of Record. 

However, such documentation may be 

incorporated by reference included only 

if it is applicable to the new 

consolidated lots as well as to the 

previously registered lots. 

(ii) A signed state acceptance 

certification. 

(iii) The appropriate fees as indicated 

in § 1010.35. 

(c) Effective date; state filing. The 

effective dates of state materials filed as 

amendments and consolidated 

Statements of Record shall be 

determined in accordance with the 

provisions of § 1010.21. 

§ 1010.558 Previously accepted state 

filings—notice of revocation rights on 

property report cover page. 

(a)(1) The cover page on Property 

Reports for filings made with the 

Director pursuant to § 1010.552 shall be 

prepared in accordance with § 1010.105 

and shall include the paragraphs set 

forth in section XXX of the appendix to 

this part: Language to be Included on 

Property Report Cover Page. 

(2) If the purchaser is entitled to a 

longer revocation period by operation of 

State law, that period becomes the 

Federal revocation period and the cover 

page must reflect the longer period, 

rather than the seven days. 

(b)(1) If a deed is not delivered within 

180 days of the signing of the contract 

or agreement of sale or unless certain 

provisions are included in the contract 

or agreement, the purchaser is entitled 

to cancel the contract within two years 

from the date of signing the contract or 

agreement. 

(2) The deed must be a warranty deed, 

or where such a deed is not commonly 

used, a similar deed legally acceptable 

in the jurisdiction where the lot is 

located. The deed must be free and clear 

of liens and encumbrances. 

(3) The contract provisions are: 

(i) A legally sufficient and recordable 

lot description, and; 

(ii) A provision that the seller will 

give the purchaser written notification 

of purchaser’s default or breach of 

contract and the opportunity to remedy 

the default or breach within 20 days of 

the notice; and 

(iii) A provision that, if the purchaser 

loses rights and interest in the lot 

because of the purchaser’s default or 

breach of contract after 15 percent of the 

purchase price, exclusive of interest, has 

been paid, the seller shall refund to the 

purchaser any amount which remains 

from the payments made after 

subtracting 15 percent of the purchase 

price, exclusive of interest, or the 

amount of the seller’s actual damages, 

whichever is the greater. 

(4) If a deed is not delivered within 

180 days of the signing of the contract 

or if the necessary provisions are not 

included in the contract, the following 

statement shall be used in place of any 

other rescission language: ‘‘Under 

Federal law you may cancel your 

contract or agreement of sale any time 

within two years from the date of 

signing.’’ 

§ 1010.559 Previously accepted state 

filings—notice of revocation rights in 

contracts and agreements. 

(a)(1) All contracts or agreements, 

including promissory notes used in sale 

of lots for filings made with the Director 

pursuant to § 1010.552, must contain 

the language set forth in section XXXI 

of the appendix to this part: Notice of 

Revocation Rights in boldface type 

(which must be distinguished from the 

type used for the rest of the contract) on 

the face or signature page above all 

signatures: 

(2) If the purchaser is entitled to a 

longer revocation period by operation of 

State law or the Act, that period 

becomes the Federal revocation period 

and the contract or agreement must 

reflect the longer period, rather than the 

seven days. The language shall be 

consistent with that shown on the Cover 

Page (see § 1010.558). 

(b) The above revocation provisions 

may not be limited or qualified in the 

contract or other document by requiring 

a specific type of notice or by requiring 

that notice be given at a specified place. 

Appendix A: to Part 1010: Standard and 

Model Forms and Clauses 

I. Forms for Developer’s Affirmation for 

Land Sale—§ 1010.13(a)(9) 

Developer’s Name llllllllllll

Developer’s Address lllllllllll

Purchaser’s Name(s) lllllllllll

Purchaser’s Address(es) (including county) 

Name of Subdivision lllllllllll

Legal Description of Lot(s) Purchased lll

I hereby affirm that all of the 

requirements of the MSA exemption as 

set forth in 15 U.S.C. 1702(b)(8) and 12 

CFR 1010.13 have been met in the sale 

or lease of the lot(s) described above. 

I also affirm that I submit to the 

jurisdiction of the Interstate Land Sales 

Full Disclosure Act with regard to the 

sale or lease cited above. 

(Date) llllllllllllllllll

(Signature of Developer or Authorized 

Agent) lllllllllllllllll

(Title) lllllllllllllllll

II. Language Notifying Buyer of Option 

to Cancel Contract—§ 1010.15(b)(5)(i) 

You have the option to cancel your 

contract or agreement of sale by notice 

to the seller until midnight of the 

seventh day following the date of 

signing of the contract or agreement. 

If you did not receive a Lot 

Information Statement prepared 


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pursuant to the rules and regulations of 

the Bureau of Consumer Financial 

Protection in advance of your signing 

the contract or agreement, the contract 

or agreement of sale may be cancelled 

at your option for two years from the 

date of signing. 

III. Sample Lot Information Statement 

and Sample Receipt—§ 1010.15(b)(11) 

Sample Format 

(Use of the following headings and 

first paragraph are mandatory.) 

Lot Information Statement 

Important: Read Carefully Before 

Signing Anything 

The developer has obtained a 

regulatory exemption from registration 

under the Interstate Land Sales Full 

Disclosure Act. One requirement of that 

exemption is that you must receive this 

Statement prior to the time you sign an 

agreement (contract) to purchase a lot. 

Right To Cancel 

(Under this heading the developer is 

to state the specific rescission rights 

provided for in the contract pursuant to 

1010.15(b)(5)(i)). 

Risk of Buying Land 

(Under this heading the developer is 

to list the following information:) 

There are certain risks in purchasing 

real estate that you should be aware of. 

The following are some of those risks: 

The future value of land is uncertain 

and dependent upon many factors. Do 

not expect all land to automatically 

increase in value. 

Any value which your lot may have 

will be affected if roads, utilities and/or 

amenities cannot be completed or 

maintained. 

Any development will likely have 

some impact on the surrounding 

environment. Development which 

adversely affects the environment may 

cause governmental agencies to impose 

restriction on the use of the land. 

In the purchase of real estate, many 

technical requirements must be met to 

assure that you receive proper title and 

that you will be able to use the land for 

its intended purpose. Since this 

purchase involves a major expenditure 

of money, it is recommended that you 

seek professional advice before you 

obligate yourself. 

If adequate provisions have not been 

made for maintenance of the roads or if 

the land is not served by publicly 

maintained roads, you may have to 

maintain the roads at your expense. 

If the land is not served by a central 

sewage system and/or water system, you 

should contact the local authorities to 

determine whether a permit will be 

given for an on-site sewage disposal 

system and/or well and whether there is 

an adequate supply of water. You 

should also become familiar with the 

requirements for, and the cost of, 

obtaining electrical service to the lot. 

Developer Information 

(Under this heading the developer is 

to list the following information:) 

Developer’s Name: llllllllllll

Address: llllllllllllllll

Telephone Number: lllllllllll

Lot Information 

(Under this heading the developer is 

to list the following information:) 

Lot Location: llllllllllllll

(Enter a statement disclosing all liens, 

reservations, taxes, assessments, 

easements and restrictions applicable to 

the lot. A copy of the restrictions may 

be attached in lieu of recitation.) 

Suppliers of Utilities and Issuers of 

Permits 

(Under this heading the developer is 

to list the name, address and phone 

number of the appropriate governmental 

agency or agencies, if any, that will 

provide information on permits or other 

requirements for water, sewer and 

electrical installations. The information 

will also contain the name, address and 

telephone number of the suppliers of 

such utilities which can provide 

information to the purchaser on costs 

and availability of such services. A chart 

similar to the one below may be used to 

supply this information). 

Listed below are contact points for 

determining permit requirements, if 

any, and to obtain information on 

approximate costs and availability for 

the listed services: 

Name, address and telephone 

number of 

Governmental 

agency Supplier 

Water 

Sewer 

Electricity 

If misrepresentations are made in the 

sale of this lot to you, you may have 

rights under the Interstate Land Sales 

Full Disclosure Act. If you have 

evidence of any scheme, artifice or 

device used to defraud you, you may 

wish to contact: Office of Nonbank 

Supervision, Interstate Land Sales 

Registration Program, Bureau of 

Consumer Financial Protection, 1700 G 

Street NW., Washington, DC 20006. 

(The Receipt is to be in the following 

form:) 

Sample Receipt for Lot Information 

Statement 

Purchaser (print or type): lllllllll

Date: llllllllllllllllll

Signature of purchaser: llllllllll

lllllllllllllllllllll

Street Address: lllllllllllll

City: llllllllllllllllll

State: llllllllllllllllll

Zip: llllllllllllllllll

Name of salesperson (print or type): llll

Signature of salesperson: lllllllll

IV. Request for Multiple Site 

Subdivision Exemption—§ 1010.15(c)(1) 

Request for Multiple Site Subdivision 

Exemption 

Developer: 

Name: lllllllllllllllll

Address: llllllllllllllll

Telephone No.: lllllllllllll

Agent: 

Name: lllllllllllllllll

Address: llllllllllllllll

Telephone No.: lllllllllllll

(Insert a general description of the 

developer’s method of operation.) 

I affirm that I am, or will be, the 

developer of the property and/or 

method of operation described above. 

I affirm that the lots in said property 

will be sold in compliance with all of 

the requirements of 12 CFR 1010.15. 

I further affirm that the statements 

contained in all documents submitted 

with this request for an Exemption 

Order are true and complete. 

Date: llllllllllllllllll

Signature: llllllllllllllll

Title: llllllllllllllllll

WARNING: 18 U.S.C. 1001 provides, 

among other things, that whoever 

knowingly and willingly makes or uses 

a document or writing containing any 

false, fictitious, or fraudulent statement 

or entry, in any matter within the 

jurisdiction of any department or agency 

of the United States, shall be fined not 

more than $10,000 or imprisoned for not 

more than 5 years or both. 

V. Request for Regulatory Exemption 

Order—§ 1010.16(c) 

REQUEST FOR EXEMPTION ORDER 

Subdivision lllllllllllllll

Location (including county) lllllll

Developer llllllllllllllll

Address llllllllllllllll

Authorized Agent or President of Developer 

lllllllllllllllllllll

Address llllllllllllllll

Number of Lots Subject to Exemption Request llllllllllllllllll

Description of Lots (list lot and block number 

or other identifying designation) lllll

lllllllllllllllllllll

I affirm that I am the developer or 

owner of the property described above 

or will be the developer or owner at the 


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Federal Register / Vol. 76, No. 245 / Wednesday, December 21, 2011 / Rules and Regulations 79519 

time the lots are offered for sale to the 

public, or that I am the agent authorized 

by the developer or owner to complete 

this statement. 

I further affirm that the statements 

contained in all documents submitted 

with the request for an exemption order 

are true and complete. 

lllllllllllllllllllll

(Date) 

lllllllllllllllllllll

(Signature of Developer, Owner or 

Authorized Agent) 

lllllllllllllllllllll

(Title) 

WARNING: Section 15 U.S.C. 1717 

provides: ‘‘Any person who willfully 

violates any of the provisions of this 

title or of the rules and regulations or 

any person who willfully, in a 

Statement of Record filed under, or in 

a Property Report issued pursuant to 

this title, makes any untrue statement of 

a material fact shall upon conviction be 

fined not more than $10,000.00 or 

imprisoned not more than 5 years, or 

both.’’ 

VI. Developer’s Affirmation for Advisory 

Opinion—§ 1010.17(b)(3) 

Developer’s Affirmation 

Name of Subdivision lllllllllll

Location (Including County and State) lll

Name of Developer lllllllllll

Address of Developer llllllllll

Name of Agent lllllllllllll

Address of Agent llllllllllll

Number of Lots in Subdivision llllll

Number of Acres in Subdivision lllll

I affirm that I am the developer or 

owner of the property described above 

or will be the developer or owner at the 

time the lots are offered for sale to the 

public, or that I am the agent authorized 

by the developer or owner to complete 

this statement. 

I further affirm that the statements 

contained in all documents submitted 

with the request for an Advisory 

Opinion are true and complete. 

lllllllllllllllllllll

(Date) 

lllllllllllllllllllll

(Signature) 

lllllllllllllllllllll

(Title); 

WARNING: 15 U.S.C. 1717 provides: 

‘‘Any person who willfully violates any 

of the provisions of this title or of the 

rules and regulations or any person who 

willfully, in a Statement of Record filed 

under, or in a Property Report issued 

pursuant to this title, makes any untrue 

statement of a material fact shall upon 

conviction be fined not more than 

$10,000.00 or imprisoned not more than 

5 years, or both.’’ 

VII. Initial and Consolidated 

Registration Fee Schedule—§ 1010.35(b) 

Number of lots Fees 

200 or fewer lots ........................... $800 

201 or more lots ........................... 1,000 

VIII. Property Report for Statement of 

Record—§ 1010.100(b) 

Property Report 

Heading and Section Number 

Cover Sheet .................................. 1010.105 

Table of Contents ......................... 1010.106 

Risks of Buying Land, Warnings 1010.107 

General Information .................... 1010.108 

Title and Land Use ...................... 1010.109 

(a) General Instructions 

(b) Method of Sale 

(c) Encumbrances, Mortgages 

and Liens 

(d) Recording the Contract and 

Deed 

(e) Payments 

(f) Restrictions 

(g) Plats, Zoning, Surveying, 

Permits, Environment 

Roads ............................................ 1010.110 

Utilities ........................................ 1010.111 

(a) Water 

(b) Sewer 

(c) Electricity 

(d) Telephone 

(e) Fuel or other Energy 

Source 

Financial Information .................. 1010.112 

Local Services .............................. 1010.113 

Recreational Facilities ................. 1010.114 

Subdivision Characteristics and 

Climate ..................................... 1010.115 

(a) General Topography 

(b) Water Coverage 

(c) Drainage and Fill 

(d) Flood Plain 

(e) Flooding and Soil Erosion 

(f) Nuisances 

(g) Hazards 

(h) Climate 

(i) Occupancy 

Additional Information ............... 1010.116 

(a) Property Owners’ Association 

(b) Taxes 

(c) Violations and Litigation 

(d) Resale or Exchange Program 

(e) Unusual Situations 

1. Leases 

2. Foreign Subdivision 

3. Time Sharing 

4. Membership 

(f) Equal Opportunity in Lot 

Sales 

(g) Listing of lots 

Cost Sheet .................................... 1010.117 

Receipt, Agent Certification and 

Cancellation Page ..................... 1010.118 

ADDITIONAL INFORMATION AND 

DOCUMENTATION 

General Information .................... 1010.208 

Title and Land Use ...................... 1010.209 

Roads ............................................ 1010.210 

Utilities ........................................ 1010.211 

Financial Information .................. 1010.212 

Recreational Facilities ................. 1010.214 

Subdivision Characteristics ........ 1010.215 

Additional Information ............... 1010.216 

Affirmation .................................. 1010.219 

The Bureau’s OMB control number for this 

information collection is: 3170–0012. 

IX. Sample Page for Statement of 

Record—1010.102(e) 

SAMPLE PAGE 

ROADS 

Here we discuss the roads that lead to 

the subdivision, those within the 

subdivision and the location of nearby 

communities. 

ACCESS TO THE SUBDIVISION. 

County road #43 leads to the 

subdivision. It has two lanes and the 

width of the wearing surface is 22 feet. 

It’s paved with a macadam surface. 

This road is maintained by Bottineau 

County with County funds. No 

improvements are planned at this time. 

ACCESS WITHIN THE SUBDIVISION. 

The roads within the subdivision will 

be located on rights of way dedicated to 

the public. 

We are responsible for constructing 

the interior roads. There will be no 

additional cost to you for this 

construction. 

WE HAVE NOT SET ASIDE ANY 

FUNDS IN AN ESCROW OR TRUST 

ACCOUNT OR MADE ANY OTHER 

FINANCIAL ARRANGEMENTS TO 

ASSURE COMPLETION OF THE 

ROADS, SO THERE IS NO 

ASSURANCE WE WILL BE ABLE TO 

COMPLETE THE ROADS. 

At present, the roads are under 

construction and do not provide access 

to the lots in Units 2 and 3 during wet 

weather. The succeeding chart describes 

their present condition and estimated 

completion dates. 

UUnit Estimated starting date 

(month and year) 

Percentage of 

construction 

now complete 

Estimated completion date 

(month and year) 

Present 

surface Final surface 

1 .................... February 2010 .................................... 50 December 2010 .................................. Gravel .......... Asphalt. 

2 .................... August 2010 ....................................... 0 June 2011 ........................................... Dirt ............... Do. 


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79520 Federal Register / Vol. 76, No. 245 / Wednesday, December 21, 2011 / Rules and Regulations 

UUnit Estimated starting date 

(month and year) 

Percentage of 

construction 

now complete 

Estimated completion date 

(month and year) 

Present 

surface Final surface 

3 .................... April 2011 ........................................... 0 October 2011 ...................................... None ............ Do. 

X. Language for Warning on Cover Page 

of Property Report—§ 1010.105(c) 

This Report is prepared and issued by 

the developer of this subdivision. It is 

not prepared or issued by the Federal 

Government. 

Federal law requires that you receive 

this Report prior to your signing a 

contract or agreement to buy or lease a 

lot in this subdivision. However, NO 

FEDERAL AGENCY HAS JUDGED THE 

MERITS OR VALUE, IF ANY, OF THIS 

PROPERTY. 

If you received this Report prior to 

signing a contract or agreement, you 

may cancel your contract or agreement 

by giving notice to the seller any time 

before midnight of the seventh day 

following the signing of the contract or 

agreement. 

If you did not receive this Report 

before you signed a contract or 

agreement, you may cancel the contract 

or agreement any time within two years 

from the date of signing. 

Name of Subdivision lllllllllll

Name of Developer lllllllllll

Date of This Report lllllllllll

XI. Sample Entry in Table of Contents 

for Statement of Record—§ 1010.106(a) 

Title and Land Use # Page # 

Method of Sale 

Encumbrances, Mortgages and Liens 

Recording the Contract and Deed 

Payments 

Restrictions on the Use of Your Lot 

Plat Maps, Zoning, Surveying, Permits 

and Environment 

XII. Required Language for Risks of 

Buying Land—§ 1010.107(a) 

(1) The future value of any land is 

uncertain and dependent upon many 

factors. DO NOT expect all land to 

increase in value. 

(2) Any value which your lot may 

have will be affected if the roads, 

utilities and all proposed improvements 

are not completed. This paragraph may 

be omitted if all improvements have 

been completed or if no improvements 

are proposed. 

(3) Resale of your lot may be difficult 

or impossible, since you may face the 

competition of our own sales program 

and local real estate brokers may not be 

interested in listing your lot. 

(4) Any subdivision will have an 

impact on the surrounding 

environment. Whether or not the impact 

is adverse and the degree of impact, will 

depend on the location, size, planning 

and extent of development. 

Subdivisions which adversely affect the 

environment may cause governmental 

agencies to impose restrictions on the 

use of the land. Changes in plant and 

animal life, air and water quality and 

noise levels may affect your use and 

enjoyment of your lot and your ability 

to sell it. 

(5) In the purchase of real estate, 

many technical requirements must be 

met to assure that you receive proper 

title. Since this purchase involves a 

major expenditure of money, it is 

recommended that you seek 

professional advice before you obligate 

yourself. 

XIII. Format for General Information— 

§ 1010.108 

‘‘This Report covers __ lots located in 

______ County, (State ). See Page __ for 

a listing of these lots. It is estimated that 

this subdivision will eventually contain 

__ lots.’’ 

‘‘The developer of this subdivision is: 

lllllllllllllllllllll

(Developer’s Name) 

lllllllllllllllllllll

(Developer’s Address) 

lllllllllllllllllllll

(Developer’s telephone number) 

‘‘Answers to questions and 

information about this subdivision may 

be obtained by telephoning the 

developer at the number listed above.’’ 

XIV. Paragraphs to be included in the 

General Report—Title to the Property 

and Land Use—§ 1010.109(a)(1) 

‘‘A person with legal title to property 

generally has the right to own, use and 

enjoy the property. A contract to buy a 

lot may give you possession but doesn’t 

give you legal title. You won’t have legal 

title until you receive a valid deed. A 

restriction or an encumbrance on your 

lot, or on the subdivision, could 

adversely affect your title.’’ 

‘‘Here we will discuss the sales 

contract you will sign and the deed you 

will receive. We will also provide you 

with information about any land use 

restrictions and encumbrances, 

mortgages, or liens affecting your lot 

and some important facts about 

payments, recording, and title 

insurance.’’ 

XV. Statement on Release Provisions— 

§ 1010.109(c)(2)(i)(A) 

‘‘The release provisions for the 

(indicate all or particular lots) have not 

been recorded. Therefore, they may not 

be honored by subsequent holders of the 

mortgage. If they are not honored, you 

may not be able to obtain clear title to 

a lot covered by this mortgage until we 

have paid the mortgage in full, even if 

you have paid the full purchase price of 

the lot. If we should default on the 

mortgage prior to obtaining a release of 

your lot, you may lose your lot and all 

monies paid.’’ 

XVI. Warning for Release Provisions— 

§ 1010.109(c)(2)(i)(C)(1) 

‘‘The (state type of encumbrance) on 

(indicate all or particular lots) in this 

subdivision does not contain any 

provisions for the release of an 

individual lot when the full purchase 

price of the lot has been paid. Therefore, 

if your lot is subject to this (state type 

of encumbrance), you may not be able 

to obtain clear title to your lot until we 

have paid the (state type of 

encumbrance) in full, even though you 

may have received a deed and paid the 

full purchase price of the lot. If we 

should default on the (state type of 

encumbrance) prior to obtaining a 

release, you may lose your lot and all 

monies paid.’’ 

XVII. Method and Purpose of Recording 

Warning—§ 1010.109(d)(1)(iv) 

‘‘Unless your contract or deed is 

recorded you may lose your lot through 

the claims of subsequent purchasers or 

subsequent creditors of anyone having 

an interest in the land’’. 

XVIII. Escrow Statement—Disclosure 

§ 1010.109(e)(1) 

‘‘You may lose your (indicate deposit, 

down payment and/or installment 

payments) on your lot if we fail to 

deliver legal title to you as called for in 

the contract, because (they are/it is) not 

held in an escrow account which fully 

protects you.’’ 

XIX. Road Chart—§ 1010.110(b)(3) 


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UUnit 

Estimated starting 

date 

(month/year) 

Percentage of construction now complete Estimated completion 

date 

(month/year) 

Present 

surface Final surface 

XX. Nearby Communities Chart— 

§ 1010.110(b)(6) 

Nearby Communities .................... ................

Population ..................................... ................

Distance Over Paved Roads ........ ................

Distance Over Unpaved Roads .... ................

Total.

XXI. Water Chart Form— 

§ 1010.111(a)(1)(ii)(B) 

WATER

UUnit Estimated starting date 

(month and year) 

Percentage of 

construction now 

complete 

Estimated service availability date 

(month and year) 

XXII. Comfort Station Chart— 

§ 1010.111(b)(1)(ii) 

Comfort Stations 

Unit llllllllllllllllll

Estimated Starting Date (month-year) lll

Percentage of Construction now complete l

Estimated Service Availability Date (month 

and year) llllllllllllllll

XXIII. Sewer Chart— 

§ 1010.111(b)(1)(iii)(B) 

Sewer 

Unit Estimated Starting Date (month/year) l

Percentage of Construction now complete l

Estimated Service Availability Date (month/ 

year) llllllllllllllllll

XXIV. Electric Service Chart— 

§ 1010.111(c)(2) 

ELECTRIC SERVICE

UUnit Estimated starting date 

(month and year) 

Percentage of 

construction complete 

Estimated service availability date 

(month and year) 

XXV. Recreational Facility Chart— 

§ 1010.114(b) 

Facility 

Percentage of 

construction now 

complete 

Estimated date of 

start of construction 

(month/year) 

Estimated date 

available for use 

(month/year) 

Financial assurance 

of completion 

Buyer’s annual cost 

or assessments 

XXVI. Cost Sheet Format—§ 1010.117(a) 

Cost Sheet 

In addition to the purchase price of 

your lot, there are other expenditures 

which must be made. 

Listed below are the major costs. 

There may be other fees for use of the 

recreational facilities. 

All costs are subject to change. 

Sales Price 

Cash Price of lot ........................... $ 

Finance Charge ............................. $ 

Total ........................................... $ 

Estimated one-time charges 

1. Water connection fee/installation or private well.$ 

2. Sewer connection fee/installation of private on-site sewer 

system.

$ 

3. Construction costs to extend 

electric and/or telephone services.

$ 

4. Other (Identify) ......................... $ 

........................................................ $ 

Total of estimated sales price 

and one-time charges.

$ 

Estimated monthly/annual charges, 

exclusive of utility use fees 

1. Taxes—Average unimproved 

lot after sale to purchaser.

$ 

2. Dues and assessments .............. $ 

The information contained in this 

Property Report is an accurate 

description of our subdivision and 

development plans. 

lllllllllllllllllllll

Signature of Senior Executive Officer 

XXVII. Sample Receipt, Agent 

Certification and Cancellation Page— 

§ 1010.118(a) 

Receipt, Agent Certification and 

Cancellation Page purchaser receipt 

Important: Read Carefully 

Name of subdivision lllllllllll

ILSRP number llllllllllllll

Date of report llllllllllllll

We must give you a copy of this 

Property Report and give you an 

opportunity to read it before you sign 

any contract or agreement. By signing 

this receipt, you acknowledge that you 

have received a copy of our Property 

Report. 

Received by lllllllllllllll

Date llllllllllllllllll

Street address llllllllllllll

City llllllllllllllllll

State llllllllllllllllll

Zip lllllllllllllllllll


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79522 Federal Register / Vol. 76, No. 245 / Wednesday, December 21, 2011 / Rules and Regulations 

If any representations are made to you 

which are contrary to those in this 

Report, please notify the: 

Bureau of Consumer Financial 

Protection 

1700 G Street NW 

Washington, DC 20006 

Agent Certification 

I certify that I have made no 

representations to the person(s) 

receiving this Property Report which are 

contrary to the information contained in 

this Property Report. 

Lot lllllllllllllllllll

Block llllllllllllllllll

Section lllllllllllllllll

Name of salesperson lllllllllll

Signature llllllllllllllll

Date llllllllllllllllll

Purchase Cancellation 

If you are entitled to cancel your 

purchase contract, and wish to do so, 

you may cancel by personal notice, or 

in writing. If you cancel in person or by 

telephone, it is recommended that you 

immediately confirm the cancellation by 

certified mail. You may use the form 

below. 

Name of subdivision lllllllllll

Date of contract lllllllllllll

This will confirm that I/we wish to 

cancel our purchase contract. 

Purchaser(s) signature llllllllll

Date llllllllllllllllll

XXVIII. Affirmation of Senior Executive 

Officer—§ 1010.219 

I hereby affirm that I am the Senior 

Executive Officer of the developer of the 

lots herein described or will be the 

Senior Executive Officer of the 

developer at the time lots are offered for 

sale or lease to the public, or that I am 

the agent authorized by the Senior 

Executive Officer of such developer to 

complete this statement (if agent, submit 

written authorization to act as agent); 

and, 

That the statements contained in this 

Statement of Record and any 

supplement hereto, together with any 

documents submitted herein, are full, 

true, complete, and correct; and, 

That the developer is bound to carry 

out the promises and obligations set 

forth in this Statement of Record and 

Property Report or I have clearly stated 

who is or will be responsible; and 

That the fees accompanying this 

submission are in the amount required 

by the rules and regulations of the 

Bureau of Consumer Financial 

Protection. 

lllllllllllllllllllll

(Date) 

lllllllllllllllllllll

(Signature) 

lllllllllllllllllllll

(Corporate seal if applicable) 

lllllllllllllllllllll

(Title) 

WARNING: 15 U.S.C. 1717 provides: 

‘‘Any person who willfully violates any 

of the provisions of this title or of the 

rules and regulations or any person who 

willfully, in a Statement of Record filed 

under, or in a Property Report issued 

pursuant to this title, makes any untrue 

statement of a material fact shall upon 

conviction be fined not more than 

$10,000.00 or imprisoned not more than 

5 years, or both.’’ 

XXIX. Form for Certification for 

Disclosure Documents—§ 1010.504(a)(2) 

The (indicate the State Department of 

Real Estate or other appropriate entity) 

has reviewed the attached materials and 

finds they are true copies of (1) the 

(indicate Property Report or other 

similar state accepted document or 

amendment to such document) for 

(indicate the name of the subdivision), 

made effective by the state of ______ on 

______ (give date) and still in effect; and 

(2) the supporting documentation upon 

which such (indicate the document or 

amendment) is based. 

lllllllllllllllllllll

Signature 

XXX. Language to be Included on 

Property Report Cover Page— 

§ 1010.558(a)(1) 

‘‘If you received this Report prior to 

signing a contract or agreement, you 

may cancel your contract or agreement 

by giving notice to the seller anytime 

before midnight of the seventh day 

following the signing of the contract or 

agreement. 

‘‘If you did not receive this Report 

before you signed a contract or 

agreement, you may cancel the contract 

or agreement anytime within two years 

from the date of signing.’’ 

XXXI. Notice of Revocation Rights— 

§ 1010.559(a)(1) 

You have the option to cancel your 

contract or agreement of sale by notice 

to the seller until midnight of the 

seventh day following the signing of the 

contract or agreement. If you did not 

receive a Property Report prepared 

pursuant to the rules and regulations of 

the Bureau of Consumer Financial 

Protection, in advance of your signing 

the contract or agreement, this contract 

or agreement may be revoked at your 

option for two years from the date of 

signing. 

■ 2. Add Part 1011 to read as follows: 

PART 1011—PURCHASERS’ 

REVOCATION RIGHTS, SALES 

PRACTICES AND STANDARDS 

(REGULATION K) 

Subpart A—Purchasers’ Revocation 

Rights 

Sec. 

1011.1 General. 

1011.2 Revocation regardless of 

registration. 

1011.4 Contract requirements and 

revocation. 

1011.5 Reimbursement. 

Subpart B—Sales Practices and Standards 

1011.10 General. 

1011.15 Unlawful sales practices— 

statutory provisions. 

1011.20 Unlawful sales practices— 

regulatory provisions. 

1011.25 Misleading sales practices. 

1011.27 Fair housing. 

1011.30 Persons to whom subpart B is 

inapplicable. 

Subpart C—Advertising Disclaimers 

1011.50 Advertising disclaimers; 

subdivisions registered and effective 

with the Bureau. 

Authority: 12 U.S.C. 5512, 5581; 15 U.S.C. 

1718. 

Subpart A—Purchasers’ Revocation 

Rights 

§ 1011.1 General. 

The purpose of this subpart A is to 

elaborate on the revocation rights in 15 

U.S.C. 1703, by enumerating certain 

conditions under which purchasers may 

exercise revocation rights. Generally, 

whenever revocation rights are 

available, they apply to promissory 

notes, as well as traditional agreements. 

§ 1011.2 Revocation regardless of 

registration. 

All purchasers have the option to 

revoke a contract or lease with regard to 

a lot not exempt under §§ 1010.5 

through 1010.11 and 1010.14 until 

midnight of the seventh day after the 

day that the purchaser signs a contract 

or lease. If a purchaser is entitled to a 

longer revocation period under state 

law, that period is deemed the Federal 

revocation period rather than the 7 days, 

and all contracts and agreements 

(including promissory notes) shall so 

state. 

§ 1011.4 Contract requirements and 

revocation. 

(a) In accordance with 15 U.S.C. 

1703(d)(3), the refund to the purchaser 

is calculated by subtracting from the 

amount described in 15 U.S.C. 

1703(d)(3)(B), the greater of: 

(1) Fifteen percent of the purchase or 

lease price of the lot (excluding interest 


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Federal Register / Vol. 76, No. 245 / Wednesday, December 21, 2011 / Rules and Regulations 79523 

owed) at the time of the default or 

breach of contract or agreement; or 

(2) The amount of damages incurred 

by the seller or lessor due to the default 

or breach of contract. 

(b) For the purposes of this section: 

Damages incurred by the seller or 

lessor means actual damages resulting 

from the default or breach, as 

determined by the law of the 

jurisdiction governing the contract. 

However, no damages may be specified 

in the contract or agreement, except a 

liquidated damages clause not 

exceeding 15 percent of the purchase 

price of the lot, excluding any interest 

owed. 

Purchase price means the cash sales 

price of the lot shown on the contract. 

(c) The contractual requirements of 15 

U.S.C. 1703(d) do not apply to the sale 

of a lot for which, within 180 days after 

the signing of the sales contract, the 

purchaser receives a warranty deed or, 

where warranty deeds are not 

commonly used, its equivalent under 

state law. 

§ 1011.5 Reimbursement. 

If a purchaser exercises rights under 

15 U.S.C. 1703(b), (c), or (d), but cannot 

reconvey the lot in substantially similar 

condition, the developer may subtract 

from the amount paid by the purchaser, 

and otherwise due to the purchaser 

under 15 U.S.C. 1703, any diminished 

value in the lot caused by the acts of the 

purchaser. 

Subpart B—Sales Practices and 

Standards 

§ 1011.10 General. 

Sales practices means any conduct or 

advertising by a developer or its agents 

to induce a person to buy or lease a lot. 

This subpart describes certain unlawful 

sales practices and provides standards 

to illustrate what other sales practices 

are considered misleading in light of 

certain circumstances in which they are 

made and within the context of the 

overall offer and sale or lease. 

§ 1011.15 Unlawful sales practices— 

statutory provisions. 

The statutory prohibitions against 

fraudulent or misleading sales practices 

are set forth at 15 U.S.C. 1703(a). With 

respect to the prohibitions against 

representing that certain facilities will 

be provided or completed unless there 

is a contractual obligation to do so by 

the developer: 

(a) The contractual covenant to 

provide or complete the services or 

amenities may be conditioned only 

upon grounds that are legally sufficient 

to establish impossibility of 

performance in the jurisdiction where 

the services or amenities are being 

provided or completed; 

(b) Contingencies such as acts of God, 

strikes, or material shortages are 

recognized as permissible to defer 

completion of services or amenities; and 

(c) In creating these contractual 

obligations developers have the option 

of incorporating by reference the 

Property Report in effect at the time of 

the sale or lease. If a developer chooses 

to incorporate the Property Report by 

reference, the effective date of the 

Property Report being included by 

reference must be specified in the 

contract of sale or lease. 

§ 1011.20 Unlawful sales practices— 

regulatory provisions. 

In selling, leasing or offering to sell or 

lease any lot in a subdivision it is an 

unlawful sales practice for any 

developer or agent, directly or 

indirectly, to: 

(a) Give the Property Report to a 

purchaser along with other materials 

when done in such a manner so as to 

conceal the Property Report from the 

purchaser. 

(b) Give a contract to a purchaser or 

encourage him to sign anything before 

delivery of the Property Report. 

(c) Refer to the Property Report or 

Offering Statement as anything other 

than a Property Report or Offering 

Statement. 

(d) Use any misleading practice, 

device or representation which would 

deny a purchaser any cancellation or 

refund rights or privileges granted the 

purchaser by the terms of a contract or 

any other document used by the 

developer as a sales inducement. 

(e) Refuse to deliver a Property Report 

to any person who exhibits an interest 

in buying or leasing a lot in the 

subdivision and requests a copy of the 

Property Report. 

(f) Use a Property Report, note, 

contract, deed or other document 

prepared in a language other than that 

in which the sales campaign is 

conducted, unless an accurate 

translation is attached to the document. 

(g) Deliberately fail to maintain a 

sufficient supply of restrictive 

covenants and financial statements or to 

deliver a copy to a purchaser upon 

request as required by §§ 1010.109(f), 

1010.112(d), 1010.209(g), and 

1010.212(i). 

(h) Use, as a sales inducement, any 

representation that any lot has good 

investment potential or will increase in 

value unless it can be established, in 

writing, that: 

(1) Comparable lots or parcels in the 

subdivision have, in fact, been resold by 

their owners on the open market at a 

profit, or; 

(2) There is a factual basis for the 

represented future increase in value and 

the factual basis is certain, and; 

(3) The sales price of the offered lot 

does not already reflect the anticipated 

increase in value due to any promised 

facilities or amenities. The burden of 

establishing the relevancy of any 

comparable sales and the certainty of 

the factual basis of the increase in value 

shall rest upon the developer. 

(i) Represent a lot as a homesite or 

building lot unless: 

(1) Potable water is available at a 

reasonable cost; 

(2) The lot is suitable for a septic tank 

operation or there is reasonable 

assurance that the lot can be served by 

a central sewage system; 

(3) The lot is legally accessible; and 

(4) The lot is free from periodic 

flooding. 

§ 1011.25 Misleading sales practices. 

Generally, promotional statements or 

material will be judged on the basis of 

the affirmative representations 

contained therein and the reasonable 

inferences to be drawn therefrom, 

unless the contrary is affirmatively 

stated or appears in promotional 

material, or unless adequate safeguards 

have been provided by the seller to 

reasonably guarantee the occurrence of 

the thing inferred. For example, when a 

lot is represented as being sold by a 

warranty deed, the inference is that the 

seller can and will convey fee simple 

title free and clear of all liens, 

encumbrances, and defects except those 

which are disclosed in writing to the 

prospective purchaser prior to 

conveyance. The following advertising 

and promotional practices, while not all 

inclusive, are considered misleading, 

and are used to evaluate a developer’s 

or agent’s representations in 

determining possible violations of the 

Act or regulations. In this section 

‘‘represent’’ carries its common 

meaning. 

(a) Proposed improvements. 

References to proposed improvements 

of any land unless it is clearly indicated 

that the improvements are only 

proposed or what the completion date is 

for the proposed improvement. 

(b) Off-premises representations. 

Representing scenes or proposed 

improvements other than those in the 

subdivision unless 

(1) It is clearly stated that the scenes 

or improvements are not related to the 

subdivision offered; or 

(2) In the case of drawings that the 

scenes or improvements are artists’ 

renderings; 

(3) If the areas or improvements 

shown are available to purchasers, what 


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79524 Federal Register / Vol. 76, No. 245 / Wednesday, December 21, 2011 / Rules and Regulations 

the distance in road miles is to the 

scenes or improvements represented. 

(c) Land use representations. 

Representing uses to which the offered 

land can be put unless the land can be 

put to such use without unreasonable 

cost to the purchaser and unless no fact 

or circumstance exists which would 

prohibit the immediate use of the land 

for its represented use. 

(d) Use of ‘‘road’’ and ‘‘street.’’ Using 

the words ‘‘road’’ or ‘‘street’’ unless the 

type of road surface is disclosed. All 

roads and streets shown on subdivision 

maps are presumed to be of an allweather graded gravel quality or higher 

and are presumed to be traversable by 

conventional automobile under all 

normal weather conditions unless 

otherwise shown on the map. 

(e) Road access and use. Representing 

the existence of a road easement or 

right-of-way unless the easement or 

right-of-way is dedicated to the public, 

to property owners or to the appropriate 

property owners association. 

(f) Waterfront property. References to 

waterfront property, unless the property 

being offered actually fronts on a body 

of water. Representations which refer to 

‘‘canal’’ or ‘‘canals’’ must state the 

specific use to which such canal or 

canals can be put. 

(g) Maps and distances. (1) The use of 

maps to show proximity to other 

communities, unless the maps are 

drawn to scale and scale included, or 

the specific road mileage appears in 

easily readable print. 

(2) The use of the terms such as 

‘‘minutes away,’’ ‘‘short distance,’’ 

‘‘only miles,’’ or ‘‘near’’ or similar terms 

to indicate distance unless the actual 

distance in road miles is used in 

conjunction with such terms. Road 

miles will be measured from the 

approximate geographical center of the 

subdivided lands to the approximate 

downtown or geographical center of the 

community. 

(h) Lot size. Representation of the size 

of a lot offered unless the lot size 

represented is exclusive of all easements 

to which the lot may be subject, except 

for those for providing utilities to the 

lot. 

(i) ‘‘Free’’ lots. Representing lots as 

‘‘free’’ if the prospective purchaser is 

required to give any consideration 

whatsoever, offering lots for ‘‘closing 

costs only’’ when the closing costs are 

substantially more than customary, or 

when an additional lot must be 

purchased at a higher price. 

(j) Pre-development prices. References 

to pre-development sales at a lower 

price because the land has not yet been 

developed unless there are plans for 

development, and reasonable assurance 

is available that the plans will be 

completed. 

(k) False reports of lot sales. 

Repeatedly announcing that lots are 

being sold or to make repetitive 

announcements of the same lot being 

sold when in fact this is not the case. 

(l) Guaranteed refund. Use of the 

word ‘‘guarantee’’ or phrase ‘‘guaranteed 

refund’’ or similar language implying a 

money-back guarantee unless the refund 

is unconditional. 

(m) Discount certificates. The use of 

discount certificates when in fact there 

is no actual price reduction or when a 

discount certificate is regularly used. 

(n) Lot exchanges. Representations 

regarding property exchange privileges 

unless any applicable conditions are 

clearly stated. 

(o) Resale program. Making any 

representation that implies that the 

developer or agent will resell or 

repurchase the property being offered at 

some future time unless the developer 

or agent has an ongoing program for 

doing so. 

(p) Symbols for conditions. The use of 

asterisks or any other reference symbol 

or oral parenthetical expression as a 

means of contradicting or substantially 

changing any previously made 

statement or as a means of obscuring 

material facts. 

(q) Proposed public facilities. 

References to a proposed public facility 

unless money has been budgeted for 

construction of the facility and is 

available to the public authority having 

the responsibility of construction, or 

unless disclosure of the existing facts 

concerning the public facility is made. 

(r) Non-profit or institutional name 

use. The use of names or trade styles 

which imply that the developer is a 

nonprofit research organization, public 

bureau, group, etc., when such is not the 

case. 

§ 1011.27 Fair housing. 

Title VIII of the Civil Rights Act of 

1968, 42 U.S.C. 3601, et seq., and its 

implementing regulations and 

guidelines apply to land sales 

transactions to the extent warranted by 

the facts of the transaction. 

§ 1011.30 Persons to whom subpart B is 

inapplicable. 

Newspaper or periodical publishers, 

job printers, broadcasters, or telecasters, 

or any of the employees thereof, are not 

subject to this subpart unless the 

publishers, printers, broadcasters, or 

telecasters: 

(a) Have actual knowledge of the 

falsity of the advertisement or 

(b) Have any interest in the 

subdivision advertised or 

(c) Also serve directly or indirectly as 

the advertising agent or agency for the 

developer. 

Subpart C—Advertising Disclaimers 

§ 1011.50 Advertising disclaimers; 

subdivisions registered and effective with 

the Bureau. 

(a) The following disclaimer 

statement shall be displayed below the 

text of all printed material and literature 

used in connection with the sale or 

lease of lots in a subdivision for which 

an effective Statement or Record is on 

file with the Director: ‘‘Obtain the 

Property Report required by Federal law 

and read it before signing anything. No 

Federal agency has judged the merits or 

value, if any, of this property.’’ If the 

material or literature consists of more 

than one page, it shall appear at the 

bottom of the front page. The disclaimer 

statement shall be set in type of at least 

ten point font. 

(b) If the advertising is of a classified 

type; is not more than five inches long 

and not more than one column in print 

wide, the disclaimer statement may be 

set in type of at least six point font. 

(c) This disclaimer statement need not 

appear on billboards, on normal size 

matchbook folders or business cards 

which are used in advertising nor in 

advertising of a classified type which is 

less than one column in print wide and 

is less than five inches long. 

(d) A developer who is required by 

any state, or states, to display an 

advertising disclaimer in the same 

location, or one of equal prominence, as 

that of the Federal disclaimer, may 

combine the wording of the disclaimers. 

All of the wording of the Federal 

disclaimer must be included in the 

resulting combined disclaimer. 

■ 3. Add Part 1012 to read as follows: 

PART 1012—SPECIAL RULES OF 

PRACTICE (REGULATION J) 

Subpart A—[Reserved] 

Subpart B—Filing Assistance 

Sec. 

1012.30 Scope of this subpart. 

1012.35 Prefiling assistance. 

1012.40 Processing of filings. 

Subpart C—[Reserved] 

Subpart D—Adjudicatory Proceedings 

1012.105–1012.200 [Reserved] 

1012.205 Suspension notice prior to 

effective date. 

1012.210 Hearings—suspension notice 

prior to effective date. 

1012.215 Notice of proceedings subsequent 

to effective date. 

1012.220 Hearings—notice of proceedings 

subsequent to effective date. 

1012.225 Suspension order for failure to 

cooperate. 


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Federal Register / Vol. 76, No. 245 / Wednesday, December 21, 2011 / Rules and Regulations 79525 

1012.230 Suspension order pending 

amendments. 

1012.235 Hearings—suspension orders for 

failure to cooperate and pending 

amendments. 

1012.236 Notice of proceedings to 

withdraw a State’s certification. 

1012.237 Hearings—notice of proceedings 

pursuant to withdrawal of state 

certification. 

1012.238 Notices of proceedings to 

terminate exemptions. 

1012.239 Hearings—notice of proceedings 

pursuant to exemptions. 

Authority: 12 U.S.C. 5512, 5581; 15 U.S.C. 

1718. 

Subpart A—[Reserved] 

Subpart B—Filing Assistance 

§ 1012.30 Scope of this subpart. 

This subpart applies to and governs 

procedures under which developers 

may obtain prefiling assistance and be 

notified of and permitted to correct 

deficiencies in the Statement of Record. 

§ 1012.35 Prefiling assistance. 

Persons intending to file with the 

Bureau of Consumer Financial 

Protection, Office of Nonbank 

Supervision may receive advice of a 

general nature as to the preparation of 

the filing including information as to 

proper format to be used and the scope 

of the items to be included in the 

format. Inquiries and requests for 

informal discussions with staff members 

should be directed to the Office of 

Nonbank Supervision, Interstate Land 

Sales Registration Program, Bureau of 

Consumer Financial Protection, 1700 G 

Street NW., Washington, DC 20006. 

§ 1012.40 Processing of filings. 

(a) Statements of Record and 

accompanying filing fees will be 

received on behalf of the Director by the 

Office of Nonbank Supervision, for 

determination of whether the criteria set 

forth in paragraphs (a)(1) through (3) of 

this section have been satisfied. Where 

it appears that all three criteria are 

satisfied and it is otherwise practicable, 

acceleration of the effectiveness of the 

Statement of Record will normally be 

granted. 

(1) Completeness of the statement 

(2) Adequacy of the filing fee, and 

(3) Adequacy of disclosure. 

(b) Filings intended as Statements of 

Record but which do not comply in 

form with §§ 1010.105 and 1010.120 of 

this chapter, whichever is applicable, 

and Statements of Record accompanied 

by inadequate filing fees will not be 

effective to accomplish any purpose 

under the Act. At the discretion of the 

Interstate Land Sales Registration 

Program, such filings and any moneys 

accompanying them may be 

immediately returned to the sender or 

after notification may be held pending 

the sender’s appropriate response. 

(c) Persons filing incomplete or 

inaccurate Statements of Record will be 

notified of the deficiencies therein by 

the Suspension Notice procedure 

described in § 1010.45(a) of this chapter. 

Subpart C—[Reserved] 

Subpart D—Adjudicatory Proceedings 

§§ 1012.105–1012.200 [Reserved] 

§ 1012.205 Suspension notice prior to 

effective date. 

A suspension pursuant to § 1010.45(a) 

of this chapter shall be effected by 

service of a suspension notice which 

shall contain: 

(a) An identification of the filing to 

which the notice applies. 

(b) A specification of the deficiencies 

of form, disclosure, accuracy, 

documentation or fee tender which 

constitute the grounds under 

§ 1010.45(a) of this chapter, of the 

suspension, and of the additional or 

corrective procedure, information, 

documentation, or tender which will 

satisfy the Director’s requirements. 

(c) A notice of the hearing rights of 

the developer under § 1012.210 and of 

the procedures for invoking those rights. 

(d) A notice that, unless otherwise 

ordered, the suspension shall remain in 

effect until 30 days after the developer 

cures the specified deficiencies as 

required by the notice. 

§ 1012.210 Hearings—suspension notice 

prior to effective date. 

(a) A developer, upon receipt of a 

suspension notice issued pursuant to 

§ 1010.45(a) of this chapter, may obtain 

a hearing by filing a written request in 

accordance with the instructions 

regarding such request contained in the 

suspension notice. Such a request must 

be filed within 15 days of receipt of the 

suspension notice and must be 

accompanied by an answer and 3 copies 

thereof signed by the respondent or the 

respondent’s attorney conforming to the 

requirements of 1081.201(b) and (c). 

(b) When a hearing is requested 

pursuant to paragraph (a) of this section, 

such hearing shall be held within 20 

days of receipt of the request. The time 

and place for hearing shall be fixed with 

due regard for the public interest and 

the convenience and necessity of the 

parties or their representatives. 

(c) A request for hearing filed 

pursuant to paragraph (a) of this section 

shall not interrupt or annul the 

effectiveness of the suspension notice, 

and suspension of the effective date of 

the Statement or amendment shall 

continue until vacated by order of the 

Director or administrative law judge. 

Except in cases in which the developer 

shall waive or withdraw the request for 

such hearing, or shall fail to pursue the 

same by appropriate appearance at a 

hearing duly scheduled, noticed and 

convened, the suspended filing shall be 

reinstated in the event of failure of the 

Director to schedule, give notice of or 

hold a duly-requested hearing within 

the time specified in paragraph (b) of 

this section, or in the event of a finding 

that the Director has failed to support at 

such hearing the propriety of the 

suspension with respect to the material 

issues of law and fact raised by the 

answer. Such reinstatement shall be 

effective on the date on which the filing 

would have become effective had no 

notice of suspension been issued with 

respect to it. 

(d) If there is an outstanding 

suspension notice under § 1010.45(a) 

with respect to the same matter for 

which a suspension order under 

§ 1010.45(b)(3) is issued, the notice and 

order shall be consolidated for the 

purposes of hearing. In the event that 

allegations upon which the suspension 

notice and suspension order are based 

are identical, only one answer need be 

filed. 

§ 1012.215 Notice of proceedings 

subsequent to effective date. 

A proceeding pursuant to 

§ 1010.45(b)(1) of this chapter is 

commenced by issuance and service of 

a notice which shall contain: 

(a) A clear and accurate identification 

of the filing or filings to which the 

notice relates. 

(b) A clear and concise statement of 

material facts, sufficient to inform the 

respondent with reasonable definiteness 

of the statements, omissions, conduct, 

circumstances or practices alleged to 

constitute the grounds for the proposed 

suspension order under § 1010.45(b)(1) 

of this chapter. 

(c) A notice of hearing rights of the 

developer under § 1012.220 and of the 

procedures for invoking those rights. 

(d) Designation of the administrative 

law judge appointed to preside over prehearing procedures and over the 

hearings. 

(e) A notice that failure to file an 

answer conforming to the requirements 

of § 1081.201(b) and (c) will result in an 

order suspending the Statement of 

Record. 

§ 1012.220 Hearings—notice of 

proceedings subsequent to effective date. 

(a) A developer, upon receipt of a 

notice of proceedings issued pursuant to 


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79526 Federal Register / Vol. 76, No. 245 / Wednesday, December 21, 2011 / Rules and Regulations 

§ 1010.45(b)(1) of this chapter, may 

obtain a hearing by filing a written 

request in accordance with the 

instructions regarding such request 

contained in the notice of proceedings. 

Such a request must be filed within 15 

days of receipt of the notice of 

proceedings and must be accompanied 

by an answer conforming to the 

requirements of § 1081.201(b) and (c). 

(b) When a hearing is requested 

pursuant to paragraph (a) of this section, 

such hearing shall be held within 45 

days of receipt of the request by the 

Director unless it is determined that it 

is not in the public interest. The time 

and place for hearing shall be fixed with 

due regard for the public interest and 

the convenience and necessity of the 

parties or their representatives. 

(c) Failure to answer within the time 

allowed by paragraph (a) of this section 

or failure of a developer to appear at a 

hearing duly scheduled shall result in 

an appropriate order under 

§ 1010.45(b)(1) of this chapter 

suspending the statement of record. 

Such order shall be effective as of the 

date of service or receipt. 

§ 1012.225 Suspension order for failure to 

cooperate. 

A suspension pursuant to 

§ 1010.45(b)(2) of this chapter shall be 

effected by service of a suspension order 

which shall contain: 

(a) An identification of the filing to 

which the order applies. 

(b) Bases for issuance of order. 

(c) A notice of the hearing rights of 

the developer under § 1012.235 the 

procedures for invoking those rights. 

(d) A statement that the order shall 

remain in effect until the developer has 

complied with the Director’s 

requirements. 

§ 1012.230 Suspension order pending 

amendments. 

A suspension pursuant to paragraph 

(b)(3) of § 1010.45 of this chapter shall 

be effected by service of a suspension 

order which shall contain: 

(a) An identification of the filing to 

which the order applies. 

(b) An identification of the 

amendment to the filing which 

generated the order. 

(c) A statement that the issuance of 

the order is necessary or appropriate in 

the public interest or for the protection 

of purchasers. 

(d) A statement that the order shall 

remain in effect until the amendment 

becomes effective. 

(e) A notice of the hearing rights of 

the developer under § 1012.235 and of 

the procedure for invoking those rights. 

§ 1012.235 Hearings—suspension orders 

for failure to cooperate and pending 

amendments. 

(a) A developer, upon receipt of a 

suspension order issued pursuant to 

§ 1010.45(b)(2) or § 1010.45(b)(3) of this 

chapter, may obtain a hearing by filing 

a written request in accordance with the 

instructions regarding such request 

contained in the suspension order. Such 

request must be filed within 15 days of 

receipt of the suspension order and 

must be accompanied by an answer and 

3 copies thereof signed by the 

respondent or respondent’s attorney 

conforming to the requirements of 

§ 1081.201(b) and (c). 

(b) When a hearing is requested 

pursuant to paragraph (a) of this section, 

such hearing shall be held within 20 

days of receipt of the request. The time 

and place for hearing shall be fixed with 

due regard for the public interest and 

the convenience and necessity of the 

parties or their representatives. 

(c) A request for hearing filed 

pursuant to paragraph (a) of this section 

shall not interrupt or annul the 

effectiveness of the suspension order. 

§ 1012.236 Notice of proceedings to 

withdraw a State’s certification. 

A proceeding pursuant to § 1010.505 

of this chapter is commenced by 

issuance and service of a notice which 

shall contain: 

(a) An identification of the state 

certification to which the notice applies. 

(b) A clear and concise statement of 

material facts, sufficient to inform the 

respondent with reasonable definiteness 

of the basis for the Director’s 

determination, pursuant to § 1010.505, 

that the State’s laws, regulations and the 

administration thereof, taken as a 

whole, no longer meet the requirements 

of § 1010.501. 

(c) A notice of hearing rights of the 

state under § 1012.237 and of the 

procedures for invoking those rights. 

(d) A notice that failure to file an 

answer conforming to the requirements 

of § 1081.201(b) and (c) will result in an 

order suspending the State’s 

certification. 

§ 1012.237 Hearings—notice of 

proceedings pursuant to withdrawal of state 

certification. 

(a) A State, upon receipt of a notice 

of proceedings issued pursuant to 

§ 1010.505 of this chapter, may obtain a 

hearing by filing a written request in 

accordance with the instructions 

regarding such request contained in the 

notice of proceedings. Such request 

must be filed within 15 days of receipt 

of the notice of proceedings and must be 

accompanied by an answer conforming 

to the requirements of § 1081.201(b) and 

(c). 

(b) When a hearing is requested 

pursuant to paragraph (a) of this section, 

such hearing shall be held within 45 

days of receipt of this request. The time 

and place for the hearing shall be fixed 

with due regard for the public interest 

and the convenience and necessity of 

the parties or their representatives. 

(c) Failure to answer within the time 

allowed by paragraph (a) of this section 

or failure to appear at a hearing duly 

scheduled shall result in an appropriate 

order under § 1010.505 of this chapter 

withdrawing the State’s certification. 

Such order shall be effective as of the 

date of service or receipt. 

§ 1012.238 Notices of proceedings to 

terminate exemptions. 

A proceeding to terminate a selfdetermining exemption under § 1010.14 

or an exemption order under § 1010.15 

or § 1010.16 is commenced by issuance 

and service of a notice which shall 

contain: 

(a) In the case of an exemption under 

§ 1010.14, an identification of the 

developer and subdivision to which this 

notice applies. In the case of an 

exemption under either § 1010.15 or 

§ 1010.16, an identification of the 

exemption order to which the notice 

applies. 

(b) A clear and concise statement of 

material facts, sufficient to inform the 

respondent with reasonable definiteness 

of the basis for the Director’s 

determination that further exemption 

from the registration and disclosure 

requirements is not in the public 

interest or that the sales or leases do not 

meet the requirements for exemption, or 

both. 

(c) A notice of hearing rights of the 

respondent under § 1012.239 and of the 

procedures for invoking those rights. 

(d) A notice that failure to file an 

answer conforming to the requirements 

of § 1081.201(b) and (c) will result, in 

the case of a notice issued under 

§ 1010.14, in an order terminating 

eligibility for the exemption, or, in the 

case of a notice issued under either 

§ 1010.15 or § 1010.16, in an order 

terminating the exemption order. 

§ 1012.239 Hearings—notice of 

proceedings pursuant to exemptions. 

(a) A developer, upon receipt of a 

notice of proceedings issued under 

§§ 1010.14, 1010.15, and 1010.16 of this 

chapter, may obtain a hearing by filing 

a written request contained in the notice 

of proceedings. The request must be 

filed within 15 days of receipt of the 

notice of proceedings and must be 

accompanied by an answer conforming 


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Federal Register / Vol. 76, No. 245 / Wednesday, December 21, 2011 / Rules and Regulations 79527 

to the requirements of § 1081.201(b) and 

(c). 

(b) When a hearing is requested 

pursuant to paragraph (a) of this section, 

such hearing shall be held within 45 

days of receipt of this request. The time 

and place for the hearing shall be fixed 

with due regard for the public interest 

and the convenience and necessity of 

the parties of their representatives. 

(c) Failure to answer within the time 

allowed by paragraph (a) of this section, 

or failure to appear at a duly scheduled 

hearing shall result in an appropriate 

order under § 1010.14, § 1010.15, or 

§ 1010.16 of this chapter terminating the 

developer’s exemption. The order shall 

be effective as of the date of service or 

receipt. 

Dated: November 29, 2011. 

Alastair M. Fitzpayne, 

Deputy Chief of Staff and Executive Secretary, 

Department of the Treasury. 

[FR Doc. 2011–31713 Filed 12–20–11; 8:45 am] 

BILLING CODE 4810–AM–P 


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