With respect to any campground in this state acquired and put into operation by a membership camping operator after July 1, 1985, the membership camping operator shall not sell membership camping contracts in this state granting the right to use such campground until one (1) of the following requirements has been satisfied:

(1) Each person holding an interest in a blanket encumbrance shall have executed and delivered a nondisturbance agreement and such agreement shall have been recorded in the real estate records of the county in which the campground is located;
contract signature

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Terms Used In Tennessee Code 66-32-307

  • Blanket encumbrance: means any mortgage, deed of trust, option to purchase, vendor's lien or interest under a contract or agreement of sale, or other material financing lien or encumbrance granted by the membership camping operator, which secures or evidences the obligation to pay money or to sell or convey any campgrounds located in this state made available to purchasers by the membership camping operator or any portion thereof and which authorizes, permits, or requires the foreclosure or other disposition of the campground affected. See Tennessee Code 66-32-302
  • Campground: means real property owned or operated by a membership camping operator which is available for camping by purchasers of membership camping contracts. See Tennessee Code 66-32-302
  • Developer: means , in the case of any given property, any person or entity which is in the business of creating or which is in the business of selling its own time-share intervals in any time-share program. See Tennessee Code 66-32-102
  • 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
  • Holder: includes the seller who acquires a membership camping contract or, if the contract is purchased, a financing agency or other assignee that purchases the contract. See Tennessee Code 66-32-302
  • Lien: A claim against real or personal property in satisfaction of a debt.
  • Membership camping operator: means any enterprise, other than one that is tax exempt under §. See Tennessee Code 66-32-302
  • Nondisturbance agreement: means an instrument by which the holder of a blanket encumbrance agrees that:
    (A) Its rights in any campground made available to purchasers by the membership camping operator shall be subordinate to the rights of purchasers from and after the recordation of the instrument. See Tennessee Code 66-32-302
  • Person: means any individual, corporation, partnership, company, and any other form of multiple organization for carrying on foreign or domestic business, other than a government or a subdivision of a government. See Tennessee Code 66-32-302
  • sell: means entering into, or other disposition, of a membership camping contract for value, but the term "value" does not include a fee to offset the reasonable costs of transfer of a membership camping contract. See Tennessee Code 66-32-302
  • State: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
(2) The financial institution providing the major hypothecation loan to the membership camping operator, the “hypothecation lender”, shall have a lien on, or security interest in, the membership camping operator’s interest in the campground, and the hypothecation lender shall have executed and delivered a nondisturbance agreement and recorded such agreement in the real estate records of the county in which the campground is located. In addition, each person holding an interest in a blanket encumbrance superior to the interest held by the hypothecation lender shall have executed, delivered, and recorded an instrument stating that such person shall give the hypothecation lender notice of, and at least thirty (30) days to cure, any default under the blanket encumbrance before such person commences any foreclosure action affecting the campground. For the purposes of this provision, a major hypothecation loan to a membership camping operator is a loan or line of credit secured by substantially all of the contracts receivable arising from the membership camping operator’s sale of membership camping contracts;
(3) In the event the membership camping operator is selling real estate to purchasers, each person holding an interest in a blanket encumbrance shall have executed and delivered an agreement providing for periodic releases from the blanket encumbrance as real estate sales fees are paid on the debt. However, in such case, the membership camping operator shall have obtained an irrevocable letter of credit or surety bonds in favor of the holder of the blanket encumbrance insuring the completion of the roads and structural amenities which are promised for the project now being developed; or
(4) The membership campground operator whose project is subject to an underlying blanket lien or encumbrance 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 posting a bond equal to fifty percent (50%) of the amount owed to the lienholder, making an assignment of receivables equal to one hundred twenty-five percent (125%) of the principal amounts due to the lienholder, pledging collateral security equal to one hundred percent (100%) of the amount owed to the lienholder or entering into any other financing plan or escrow agreement acceptable to the lienholder.
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