Encumbrances on campground; requirements if developer holds leasehold interest.
1. A contract of membership may not be executed unless the developer has provided satisfactory evidence to the Administrator that:
(a) The campground is free and clear of any blanket encumbrances;
(b) Each person who holds an interest in a blanket encumbrance affecting the campground has executed an agreement, approved by the Administrator, to subordinate his right to the rights of the member;
(c) The developer has obtained and recorded a binding agreement acceptable to the Administrator, executed by himself and all holders of a blanket encumbrance which provides that the holder’s rights are subordinate to the rights of subsequent purchasers and that the holder, his successors and assigns, and any person who acquires the property through foreclosure or by deed in lieu of foreclosure of the blanket encumbrance, take the property subject to the rights of purchasers provided in the contract of membership; or
(d) Title to the campground has been conveyed to a trustee pursuant to the provisions of this chapter.
2. If the interest of the developer is a leasehold interest, the lease, unless otherwise required by the Administrator, must provide that:
(a) If an association has been formed, the lessor shall give notice of termination of the lease for any default by the lessee to the association and the individual members; and
(b) The lessor, upon the bankruptcy of the lessee, shall enter into a new lease with the association upon the same terms and conditions as the lease with the developer.
ĘThe Administrator may require the developer to execute a bond or other type of security to ensure the payment of the rental obligation.
3. In lieu of the requirements set forth in subsections 1 and 2, alternative arrangements may be made if they are adequate to protect the rights of the members and are approved by the Administrator.
4. As used in this section, “blanket encumbrance” means a mortgage, deed of trust, option to purchase, mechanic’s lien, vendor’s lien or interest under a contract or agreement of sale, judgment lien, federal or state tax lien, or other lien or encumbrance which secures or evidences the obligation to pay money or to sell or convey any property made available to purchasers by the developer, or any portion thereof, and which authorizes, permits or requires the foreclosure or other disposition of the property affected, except a lien for taxes or assessments levied by a public authority which are not yet due.
Last modified: February 27, 2006