§ 2792.14. Undivided Interests Subdivisions -Blanket Encumbrances.

(a) Except as provided in subdivision (b) hereof, if the real property to be owned by the stock cooperative corporation will be subject to a mortgage or deed of trust affecting the interest of more than one member or shareholder of the stock cooperative (hereafter blanket encumbrance), a public report will not be issued unless legal or financial arrangements satisfactory to the Real Estate Commissioner have been made to:

(1) Provide assurance that the ownership and possessory rights of a member of the stock cooperative will not be adversely affected by foreclosure or acceleration of the blanket encumbrance by or on behalf of the beneficiary unless the affected member or shareholder is delinquent in payments allocated by the stock cooperative to debt service on the blanket encumbrance.

(2) Provide assurance for the payment of said blanket encumbrance.

(b) The provisions of subdivision (a) shall not apply in the case of a stock cooperative which is

(1) insured under section 213 or section 221 of the National Housing Act, as amended and involves a regulatory agreement between stock cooperative and the Secretary of Housing and Urban Development with the provision for the establishment and maintenance of a general operating reserve or

(2) assisted under section 8 of the U. S. Housing Act of 1937 as amended and involves a housing assistance payment contract between the stock cooperative and the Secretary of Housing and Urban Development with a special provision for the establishment and maintenance of a general operating reserve as the Secretary of Housing and Urban Development may approve.

HISTORY

1. New section filed 9-17-65; effective thirtieth day thereafter (Register 65, No. 17).

2. Repealer and new section filed 1-17-80; effective thirtieth day thereafter (Register 80, No. 3).

3. Amendment of section (a) filed 7-12-91; operative 8-11-91 (Register 91, No. 44).

Note

Note: Authority cited: Section 11001, Business and Professions Code. Reference: Sections 11013, 11013.1, 11013.2, 11013.4, Business and Professions Code.