The developer whose project is subject to an underlying blanket lien or encumbrance shall protect nondefaulting purchasers from foreclosure by the lienholder by obtaining from the lienholder a nondisturbance clause, subordination agreement, or partial release of the lien as the time-share intervals are sold. In the alternative, the developer may obtain the agreement of the lienholder to take the project, in the event of default by the developer, subject to the rights of the nondefaulting purchasers by (1) posting a bond, equal to fifty percent of the amount owed to the lienholder, (2) making an assignment of receivables equal to one hundred twenty-five percent of the principal amounts due from purchasers, (3) pledging collateral security equal to one hundred percent of the amount owed to the lienholder, or (4) entering into any other financing plan or escrow agreement acceptable to the lienholder.

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Terms Used In Nebraska Statutes 76-1740

  • Escrow: Money given to a third party to be held for payment until certain conditions are met.
  • Foreclosure: A legal process in which property that is collateral or security for a loan may be sold to help repay the loan when the loan is in default. Source: OCC
  • Lien: A claim against real or personal property in satisfaction of a debt.