(a) A developer of a time-share program shall:
(1) Deposit with an escrow agent 100 percent of all funds which are received during the seven-day cancellation period provided for in this article. The deposit of such funds shall be evidenced by an executed escrow agreement between the escrow agent and the developer, the provisions of which shall include:
(A) That its purpose is to protect the purchaser's right to a refund if he or she cancels the sales agreement for a time-share interval within a seven-day cancellation period;
(B) That funds may be disbursed to the developer by the escrow agent from the escrow account only after expiration of the purchaser's seven-day cancellation period and in accordance with the sales agreement; and
(C) That the escrow agent may release funds to the developer from the escrow account only after receipt of a sworn statement from the developer that no cancellation notice was received before expiration of the seven-day period;
(2) Deposit with an escrow agent after the seven-day cancellation period 100 percent of all funds which are received from purchasers of time-share uses. The deposit of such funds shall be evidenced by an executed escrow agreement between the escrow agent and the developer, the provisions of which shall include:
(A) That its purpose is to protect the purchaser's right to a refund, at any time the accommodations or facilities are no longer available as provided in the sales agreement entered into by the developer and the purchaser in an amount provided for in subparagraph (B) of this paragraph;
(B) That funds may be disbursed to the developer by the escrow agent from the escrow account periodically in the ratio of the amount of time the purchaser has already used or had the right to use the accommodations or facilities of the time-share use at the time of the disbursement in relation to the total time sold to the purchaser; and
(C) That the escrow agent may release funds to the developer from the escrow account only after receipt of a statement signed by the purchaser indicating that such purchaser has used or has had the right to use a specific number of days out of the total time period purchased. If a purchaser refuses to sign such a statement when tendered, the developer may submit a sworn statement to the escrow agent that the purchaser used or had the right to use a specific number of days, but that the purchaser refused to sign a statement to that effect;
(3) Place 100 percent of all funds received from purchasers of such time-share intervals, after the seven-day cancellation periods have ended, in an escrow account when interests in real property are being sold, according to a sales agreement which will transfer title to the purchasers. The establishment of such an escrow account shall be evidenced by an executed escrow agreement between the escrow agent and the developer, the provisions of which shall include:
(A) That its purpose is to protect all deposits and payments made by a purchaser toward the purchase price until the deed is delivered to the purchaser, whether physically or by recording the same, or until the purchaser and developer enter into a sales agreement which will transfer title to the purchaser; and
(B) That funds may be disbursed to the developer by the escrow agent from the escrow account only after title has been delivered to the purchaser physically or delivered for recording to the clerk of the superior court in the county where the real property underlying the time-share project is located or at such other time as may be agreed upon in writing by the purchaser and developer. However, in the case of a time-share estate sold by agreement for deed, funds may only be disbursed to the developer after recording of the agreement for deed and, if necessary, a notice to creditors with secured interests in the property underlying the time-share project and, if the property is encumbered by a deed to secure debt or mortgage instrument, a nondisturbance instrument has been recorded in the public records of the county or counties in which the time-share is located; or alternatively, after the developer records a notice to the aforesaid creditors and obtains a release of lien for a time-share interval, funds may be disbursed pertaining to that time-share interval; and
(4) Place any funds escrowed pursuant to this Code section with an escrow agent who shall be one of the following: an attorney in this state, a bank or savings and loan company having trust powers in this state, a title company in this state, or a real estate broker in this state. In lieu of the foregoing, the funds may be escrowed in an account required by the jurisdiction in which the sale of the time-share took place. The developer must notify the purchaser of the name and address of the escrow agent or the name, address, and account number of the bank or savings and loan company where the developer maintains the funds. Maintenance of trust funds and disbursements by an escrow agent in another state must be in accordance with the provisions of this article. The escrow agreement shall authorize the purchaser or the purchaser's representative to examine said trust account.
(b) An escrow agent holding funds escrowed pursuant to this Code section may invest such escrowed funds in securities of the United States government, or any agency thereof, or in savings or time deposits in institutions insured by an agency of the United States government. The right to receive the interest generated by any such investments shall be as specified by a written agreement between the developer and the purchaser.
(c) Each escrow agent shall maintain separate books and records for each time-share project and shall maintain such books and records according to generally accepted accounting principles.
Section: Previous 44-3-172 44-3-173 44-3-174 44-3-175 44-3-176 44-3-177 44-3-178 44-3-179 44-3-180 44-3-181 44-3-182 44-3-183 44-3-184 NextLast modified: October 14, 2016