California Business and Professions Code 11242.1 – (a) The assurance specified in Section 11241 and, if applicable, …
(a) The assurance specified in Section 11241 and, if applicable, the assurance specified in Section 11242, shall be delivered to the trustee or an escrow depository acceptable to the department along with an executed copy of the subsidization contract and instructions to the escrow depository signed by the developer and on behalf of the association. The instructions shall provide for both of the following:
(1) The escrow agent shall not release or exonerate the security device until it has received written notice from the association that the developer has faithfully performed all of the developer’s obligations under the subsidization contract, if applicable, and the escrow agent has received the written notices specified in paragraph (1) of subdivision (c) of Section 11241.
Terms Used In California Business and Professions Code 11242.1
- Association: means the organized body consisting of the purchasers of time-share interests in a time-share plan. See California Business and Professions Code 11212
- Contract: A legal written agreement that becomes binding when signed.
- Department: means the "Department of Real Estate. See California Business and Professions Code 11212
- Developer: means and includes any person who creates a time-share plan or is in the business of selling time-share interests, other than those employees or agents of the developer who sell time-share interests on the developer's behalf, or retains agents to do the same, or any person who succeeds to the interest of a developer by sale, lease, assignment, mortgage, or other transfer, but the term includes only those persons who offer time-share interests for disposition in the ordinary course of business. See California Business and Professions Code 11212
- Escrow: Money given to a third party to be held for payment until certain conditions are met.
- Subdivision: means a subdivision of the section in which that term occurs, unless some other section is expressly mentioned. See California Business and Professions Code 15
- Trustee: A person or institution holding and administering property in trust.
(2) If there is a dispute between the developer and the association with respect to the questions of satisfaction of the conditions for exoneration or release of the security, the issue or issues shall, at the request of either party, be submitted to arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association or another third-party arbitration organization selected by the parties and in accordance with Title 9 (commencing with Section 1280) of Part 3 of the Code of Civil Procedure.
(b) Any fee to initiate arbitration shall be submitted by the developer. The costs of arbitration shall be borne by the party as determined by the arbitrator.
(c) The agreement for the deficit subsidy, described in subdivision (a) of Section 11241, and the agreement for the buy down subsidy, described in subdivision (a) of Section 11242 may, at the option of the developer, be contained in one instrument.
(Amended by Stats. 2019, Ch. 153, Sec. 3. (SB 578) Effective January 1, 2020.)