§ 2807. Purchase Money Impounds.

(a) The amount of the money paid or advanced by a prospective buyer toward the purchase of a time-share interest (Purchase Money) that must be deposited and retained in an escrow depository or trust account pursuant to Section 11243 of the Code shall ordinarily be the entire amount of the Purchase Money less disbursements made to third parties for services enumerated in subdivision (b) of Regulation 2791.

(b) For purposes of compliance with Section 11243 of the Code:

(l) A proper release has not been obtained from a deed of trust encumbering time-share interests or accommodations in a time-share plan unless an instrument has been duly recorded unconditionally reconveying and releasing the interests being sold or leased from the lien or charge of such deed of trust.

(2) As an alternative to obtaining a proper release from the lien or charge of such deed of trust, it shall be deemed acceptable by the commissioner pursuant to Section 11243 of the Code if:

(A) the holder of the deed of trust has duly executed an agreement or demand (“release agreement”) wherein the holder has agreed, notwithstanding any provision to the contrary in the deed of trust, to promptly perform any act reasonably necessary to record an instrument unconditionally reconveying and releasing the time-share interests or accommodations in a time-share plan being sold from the lien or charge of the deed of trust upon payment to the holder of an amount or amounts specified in the release agreement as the release price for the affected time-share interests or accommodations in a time-share plan, and the holder has further agreed that specific performance of the terms and provisions of the release agreement shall be compelled in favor of the purchaser of the time-share interests or accommodations in a time-share plan;

(B) the release agreement has been deposited with the escrow holder for the transaction(s);

(C) the developer has notified each purchaser that the release agreement is available upon request from the escrow holder; and

(D) each purchaser has been provided a policy of title insurance insuring the purchaser or lessee against loss by reason of the deed of trust.

HISTORY

1. Amendment moving section 2807 from article 12.1 to article 12.2. and new section filed 5-5-2005; operative 7-1-2005 (Register 2005, No. 18). For prior history, see Register 96, No. 48.

Note

Note: Authority cited: Section 11281, Business and Professions Code. Reference: Section 11243, Business and Professions Code.