South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:69 - REAL ESTATE BROKERS AND SALESPERSONS › Chapter 20:69:12 - Time-share estates › Section 20:69:12:32 - Developer's escrow agreement when financial plan submitted

Current through Register Vol. 51, page 10, July 15, 2024
If a developer elects to submit a financial plan for
				  protection of the purchasers to the commission for approval, the developer
				  shall furnish the commission a certified statement of a summary of all
				  underlying financial obligations of the time-share plan, including agreements
				  of sale, leases, mortgages, liens, and a projected payment plan which provides
				  for payment in full of all underlying financial obligations before the final
				  receipts from the purchasers of their payments; a description of the source of
				  means by which such payments will be made; and a description of arrangements
				  with banks, licensed escrow companies, trust companies or lending institutions
				  relating to the receipt of purchaser's moneys and disbursements on account of
				  the payment plan.
The developer shall submit an escrow agreement which provides
				  for the following:
(1) The purchaser's
				right to refund at any time the time-share units or facilities are no longer
				available as provided in the contract in an amount which represents the
				purchaser's pro rata share of the moneys in the escrow account;
(2) Deposit of all funds, except those
				excluded by §
									20:69:12:33 paid by the purchasers
				of the time-share ownership or use plan in the special escrow
				account;
(3) Payment in full of all
				underlying financial obligations of the time-share plan before the final
				receipts from the purchasers of their payments;
(4) Modification of the payment plan with the
				approval of the commission upon change of circumstances. However, any payment
				plan must provide for payment in full of all underlying obligations before the
				final receipts from the purchasers of their payments, and no additional
				encumbrances may be placed on any property subject to the time-share plan
				without the approval of the commission;
(5) Collection of funds and making of
				disbursements by the bank, escrow company, or trust company according to the
				payment plan submitted to the commission by the developer;
(6) After payment of the underlying financial
				obligations, any interests in the time-share property must be conveyed to the
				purchaser in an ownership plan and in a use plan. The developer shall convey to
				a disinterested third party, such as a nonprofit corporation or club or trust
				company, an interest in the property necessary to ensure the use of the
				property for the period of time conveyed by the developer in the time-share
				plan; and
(7) Approval by the
				commission of an amendment to the escrow agreement.
A developer must have the holders of the underlying financial
				  obligations submit to the commission annually statements of balances owing on
				  the underlying financial obligations.
General Authority:
SDCL
					 36-21A-89,
					 43-15B-6.
Law Implemented:
SDCL
					 43-15B-3,
					 43-15B-6.