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(b) "Blanket encumbrance" means a trust deed, mortgage, judgment, or any other lien or encumbrance, including an option or contract to sell or a trust agreement, affecting a subdivision or affecting more than one lot offered within a subdivision, except that such term shall not include any lien or other encumbrance arising as the result of the imposition of any tax assessment by any public authority.

(c) "Developer" means any person who, directly or indirectly, sells or leases, or offers to sell or lease, or advertises for sale or lease any lots in a subdivision.

(d) "Interstate commerce" means trade or commerce among the several states.

(e) "Offer" means any inducement, solicitation, or attempt to encourage a person to acquire a lot in a subdivision.

(f) "Person" means an individual, or an unincorporated organization, partnership, association, corporation, trust, or estate.

(g) "Purchaser" means an actual or prospective purchaser or lessee of a lot in a subdivision.

(h) "Rules and regulations" refer to all rules and regulations adopted pursuant to the Act, including the general requirements and the report requirements published in this part.

(i) "Secretary" means the Secretary of Housing and Urban Development or his duly authorized representatives.

(j) "State" includes the several States, the District of Columbia, the Commonwealth of Puerto Rico, and the territories and possessions of the United States. (k) "Subdivision" means any land which is divided or proposed to be divided into 50 or more lots, whether contiguous or not, for the purpose of sale or lease as part of a common promotional plan and where subdivided land is offered for sale or lease by a single developer or a group of developers acting in concert, and such land is contiguous or is known, designated, or advertised as a common unit or by a common name, such land shall be presumed, without regard to the number of lots covered by each individual offering as being offered for sale or lease as part of a common promotional plan.

(1) "Unimproved land” means a lot or lots which are located in a subdivision and upon which there are no residential, commercial or industrial buildings.

§ 1710.5 General applicability.

Except in the case of an exempt transaction as provided in § 1710.10, a de

veloper may not sell or lease unimproved land in a subdivision, making use of any means or instruments of transportation or communication in interstate commerce or of the mails, unless a statement of record is in effect in accordance with the provisions of this part; and the developer furnishes each purchaser with a printed property report, meeting the requirements of the provisions of this part, in advance of the signing of any contract or agreement for sale or lease by the purchaser. As used in this part, "unimproved land" shall include lots located in a foreign country if the offer to sell or lease the lots is made from within a State, making use of any means or instruments of transportation or communication in interstate commerce or of the mails.

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Unless a method of sale, lease or other disposition of land or an interest in land is adopted for the purpose of evasion of the Act, the rules and regulations in this part shall not apply to the following transactions.

(a) The sale or lease of real estate not pursuant to a common promotional plan to offer to sell 50 or more lots in a subdivision.

(b) The sale or lease of lots in a subdivision all of which are 5 acres or more in size.

(c) The sale or lease of any lots on which there is a residential, commercial, or industrial building, or to the sale or lease of land under a contract obligating the seller to erect such a building thereon within a period of 2 years.

(d) The sale or lease of real estate under or pursuant to court order.

(e) The sale of evidences of indebtedness secured by a mortgage or deed of trust on real estate.

(f) The sale of securities issued by a real estate investment trust.

(g) The sale or lease of real estate by any government or government agency. (h) The sale or lease of cemetery lots.

(i) The sale or lease of lots to any person who acquires such lots for the purpose of engaging in the business of constructing residential, commercial, or industrial buildings or for the purpose of resale or lease of such lots to persons engaged in such business.

(j) The sale or lease of real estate which, at the time of sale or lease, is free and clear of all liens, encumbrances and adverse claims. For the purpose of

exemption under this paragraph the definitions of terms in subparagraphs (1) and (2) of this paragraph shall be applicable and the conditions of subparagraphs (3), (4), (5), and (6) of this paragraph shall be met.

(1) The meaning of "liens, encumbrances and adverse claims" shall not include:

(i) Property reservations which land developers commonly convey or dedicate to local bodies or public utilities for the purpose of bringing public services to the land being developed.

(ii) Taxes and assessments imposed by a State, by any other public body having authority to assess and tax property or by a property owners' association, which under applicable State or local law constitute liens before they are due and payable.

(iii) Beneficial property restrictions which would be enforceable by other lot owners or lessees in the subdivision.

(2) The time of sale or lease shall be deemed to be the date the sales contract or lease is signed by the purchaser except that the time of sale shall be deemed to be the effective date of the conveyance if both of the following conditions are met:

(i) The contract of sale requires delivery of a deed to the purchaser within 120 days following the signing of the sales contract.

(ii) Any earnest money deposit or other payment on account of the purchase price, made by the purchaser prior to the effective date of the conveyance, is placed in an escrow account, fully protecting the interests of the purchaser, in an institution or organization which has trust powers or in an established bank, title insurance or abstract company, or escrow company doing business in the jurisdiction in which the property is located.

(3) Each and every purchaser or his or her spouse has personally made an on-the-lot inspection of the real estate which he has purchased or leased prior to the signing of a contract to purchase or lease.

(4) The developer has filed with the Secretary a claim of exemption in the form of an affirmation set forth in § 1710.101.

(5) The developer has obtained the Secretary's approval of a statement, prepared in accordance with the instructions in § 1710.102, which shall be fur

nished to each purchaser prior to the time of sale or lease, and the receipt thereof acknowledged in writing prior to the time of sale or lease by the purchaser.

(6) The developer shall file a copy of each acknowledged statement, with the Secretary within 31 days after the expiration of the calendar year in which the sale or lease is made. Such copies shall be bound in alphabetical order and indexed by purchaser surname. Each bound volume shall contain only such copies as are applicable to a single subdivision and shall be identified on the outer cover by the name and location of the subdivision and the number assigned by OILSR to such subdivision. Upon demand by the Secretary made at any time during the calendar year, the developer shall, without delay, file such copies of such acknowledged statements as shall be requested by the Secretary.

(k) The sale or lease of lots each of which exceeds 10,000 square feet and each of which will be sold for less than $100, including closing costs.

(1) The sale or lease of lots where the offering is entirely or almost entirely intrastate.

(m) The lease of lots for a term not to exceed 5 years, provided the terms of the lease do not obligate the lessee to

renew.

[34 F.R. 5930, Mar. 29, 1969, as amended at 35 F.R. 6065, Apr. 14, 1970]

§ 1710.15 Exemption advisory opinions.

A developer may obtain an advisory opinion from the Secretary as to whether an offer is exempted from the Act and the regulations in this part. Such opinion may be obtained in either of the following ways:

(a) By filing a statement of record as provided in § 1710.20 and in the form prescribed in § 1710.105, accompanied by the filing fees required by § 1710.35 and a statement of facts and applicable law under which the developer believes the offer to be exempt. Unless the developer receives an opinion that the offer is exempted, the provisions of § 1710.20 shall apply with respect to the effective date of the statement of record.

(b) By filing a partial statement of record in the form prescribed in § 1710.125, accompanied by the filing fee required by § 1710.35 (g) and a statement of facts and applicable law under which the developer believes the offer to be exempt.

§ 1710.20 Statement of record and property report.

(a) Except as otherwise provided in this section, the statement of record shall be in the form set forth in § 1710.105 and shall meet each of the following requirements:

(1) Include a property report in the form set forth in § 1710.110.

(2) Be supported by complete information and supporting documentation as indicated in the prescribed form.

(3) Be filed in duplicate with the Secretary by personal delivery or by certified mail, return receipt requested, addressed to the Office of Interstate Land Sales Registration, Department of Housing and Urban Development, Washington, D.C. 20411.

(b) The form of the statement of record and property report may be as required by State authorities if filed in accordance with the provisions of

§ 1710.25 and if the property report or similar instrument approved by the State is accompanied by a statement in the form set forth in § 1710.115. This statement shall be delivered to the purchaser simultaneously with the State property report.

(c) If an offering relates to lots which will be offered pursuant to the same common promotional plan as lots previously offered and covered by an effective statement of record, a developer shall file a new statement of record covering the additional lots. The developer may consolidate the new statement of record with the prior statement by incorporating by reference the information in the prior statement. The developer shall include in the consolidated statement of record any material changes which have occurred since the original filing and the consolidated statement of record must conform to all pertinent rules and regulations applicable to an original statement of record. Such consolidated statement of record shall be treated as a new statement of record for the purpose of determining the date of filing and the effective date thereof.

(d) The date of filing of a statement of record is the date the statement, accompanied by the required fee, is received by the Secretary.

(e) Except as provided in §§ 1710.40 and 1710.25 and unless the effective date is suspended by the Secretary in accordance with the provisions of § 1710.45, the

effective date of the statement of record shall be the thirtieth day after the date of filing or such earlier date as the Secretary may determine.

§ 1710.25 State filings.

Except as provided in paragraph (c) of this section, if a developer complies with the requirements of § 1710.115 with respect to the property report and the requirements of § 1710.120 with respect to the statement of record, a copy of material filed with State authorities and allowed to become effective by such authorities shall be an effective statement of record, an amendment thereto, or an effective consolidation of a subsequent statement of record into an earlier statement of record, as of the date of filing such copy together with the required fee with the secretary, as follows:

(a) With respect to a subdivision located in California, Florida, New York, or Hawaii, where the material is filed in full compliance with the laws and requirements of the authorities of such State, with the exception that material filed with the State of Hawaii will not be acceptable if it was filed with that State prior to the enactment of Act 223, Session Laws of Hawaii 1967, and material filed with the State of Florida will not be acceptable if it was filed with that State prior to the enactment of section 478, Florida statutes, effective August 1, 1967.

(b) With respect to a subdivision located outside of California, Florida, New York, or Hawaii and covered by material filed with any such State, if all lots and tracts in such subdivision have been made the subject of the State filing and if there has been full compliance with the laws and requirements of the authorities in such State, with the exception that material filed with the State of Hawaii will not be acceptable if it was filed with that State prior to the enactment of Act 223, Session Laws of Hawaii 1967 and material filed with the State of Florida will not be acceptable if it was filed with that State prior to the enactment of section 478, Florida statutes, effective August 1, 1967.

(c) A statement of record or similar instrument filed in a State which is not named in paragraph (a) or (b) of this section and which has been allowed to become effective as a filing by the authorities in a State named in paragraph

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(a) An amendment to a statement of record shall be filed if any change occurs affecting any material fact required to be contained in a statement of record filed with the Secretary except that additional lands offered for disposition pursuant to the same common promotional plan shall not be incorporated into an effective statement of record by amendment. A statement of record for such an offering may be consolidated with an effective statement of record as provided in § 1710.20.

(b) If an amendment to a statement of record is filed prior to the effective date of the statement, the statement shall be deemed to have been filed when such amendment was filed unless such amendment is filed with the consent of or pursuant to an order of the Secretary. (c) If an amendment to the statement of record is filed prior to the effective date of the statement and with the consent of or pursuant to an order of the Secretary, such amendment shall be treated as being filed as of the date of filing of the statement of record. Any such amendment shall be deemed to have been filed pursuant to the Secretary's consent or order only when the Secretary so advises.

(d) Any amendment to a statement of record shall be accompanied by a letter fully explaining its purpose. The letter shall identify the statement of record by OILSR filing number and shall include any and all changes to the original statement. Each change set forth in the letter shall be prefaced by an identification of the part or subpart of the statement of record to which the change relates. If the amendment requires a change in the property report, the developer shall also include a revised property report.

(e) The date of filing an amendment shall be the date the amendment is received by the Secretary.

(f) Except as provided in paragraph (c) of this section, and §§ 1710.25 and 1710.40, and unless the effective date is suspended by the Secretary in accordance with the provisions of § 1710.45, the effective date of the amendment shall be the 30th day after the date of filing or such earlier date as the Secretary may determine.

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(a) Except as provided in paragraphs (b) and (c) of this section, a filing fee, not to exceed $1,000, shall be paid with the filing of a statement of record and shall be computed as follows:

(1) A basic fee in the amount of $250, plus

(2) An additional fee of $50 for each 50 lots or fraction thereof included in the offering.

(b) A filing fee, not to exceed $1,000, shall be paid with the filing of a statement of record consolidating additional lots with a prior statement of record filed on lots in a subdivision and shall be computed as follows:

(1) A basic fee in the amount of $200, plus

(2) An additional fee of $50 for each 50 lots or fraction thereof included in the offering.

(c) If a developer files pursuant to § 1710.25, a filing fee, not to exceed $1,000, shall be paid with the filing and shall be computed as follows:

(1) In the case of an initial filing:

(i) A basic fee in the amount of $200, plus

(ii) An additional fee of $25 for each 50 lots or fraction thereof included in the offering.

(2) In the case of a State filing pursuant to § 1710.25 which involves a statement of record consolidating additional lots with a prior statement of record filed in a State:

(i) A basic fee in the amount of $100, plus

(ii) An additional fee of $25 for each 50 lots or fraction thereof included in the offering.

(3) If a State will not permit a developer to consolidate a filing on additional lots into a previous statement of record filed in the State, the filing shall be treated as an initial filing and the filing fee shall be paid and computed in accordance with subparagraph (1) of this paragraph.

(d) No fee shall be required in connection with the filing of an amendment to a statement of record.

(e) Fees shall be paid by certified or cashier's check or postal money order made payable to the Treasury of the United States.

(f) If the developer files pursuant to § 1710.105 and includes a request for an exemption advisory opinion pursuant to § 1710.15(a) and the Secretary advises

that the offering is exempt, the filing fee submitted by the developer except for an amount of $100 shall be refunded.

(g) If a developer files a partial statement of record-request for exemption pursuant to §§ 1710.15(b) and 1710.125, a filing fee, in the amount of $100, shall be paid with the filing. If the Secretary advises that the filing is not exempt, this fee shall apply as a credit toward the payment of the fee required for filing a complete statement of record.

§ 1710.40 Early effective date for sales in progress.

(a) A developer, who is or will be selling lots in a subdivision which has been subdivided or which has been platted of record and who is or will be engaged in an active sales program prior to May 28, 1969, may file a statement of record prior to that date. Such statement of record shall become effective on April 28, 1969, or on the date of its filing with the Secretary, whichever is the later, if the developer has complied with the requirements of paragraph (b) of this section. In no event may a developer subsequent to April 28, 1969, and prior to May 28, 1969, continue or begin a sales program until a statement of record has been filed with the Secretary.

(b) To qualify for an early effective date in accordance with the provisions of this section, the developer shall submit with the statement of record a letter stating that he is or will be selling lots in a subdivision which has been subdivided or which has been platted of record and that he is or will be engaged in an active sales program prior to May 28, 1969.

(c) Qualification for an early effective date hereunder shall not preclude the Secretary from making a review of the statement of record subsequent to the effective date thereof to determine its completeness and accuracy nor does the acceptance of such statement of record constitute a waiver of the right of the Secretary to make such review and to require such additional information as may be necessary to bring the statement or record into conformity with the Act and these rules and regulations.

§ 1710.45 Suspensions.

(a) Suspension notice-prior to effective date. (1) A suspension notice with respect to a statement of record or an amendment may be issued to a developer

within 30 days after receipt by the Secretary if any of the following occurs:

(i) Prior to its effective date, the Secretary has reasonable grounds to be lieve that a statement of record is on its face incomplete or inaccurate in any material respect.

(ii) Prior to its effective date, the Secretary has reasonable grounds to believe that an amendment is on its face incomplete or inaccurate in any material respect.

(2) Suspension notices issued pursuant to this section shall suspend the effective date of the statement or the amendment until 30 days, or such earlier date as the Secretary may determine, after the developer files such additional information as the Secretary shall require.

(3) A developer, upon receipt of a suspension notice may request a hearing, and such hearing shall be held within 20 days of receipt of such request by the Secretary.

(b) Notice of proceeding; suspension orders-subsequent to effective date. (1) A notice of proceedings to suspend an effective statement of record may be issued to a developer if any of the following occurs:

(i) The Secretary has reasonable grounds to believe that an effective statement of record includes an untrue statement of a material fact, or omits a material fact required by the Act or the rules and regulations, or omits a material fact which is necessary to make the statements therein not misleading.

(ii) The Secretary undertakes an examination of a developer or his records to determine whether a suspension order should be issued and the developer fails to cooperate with the Secretary, or obstructs, or refuses to permit the Secretary to make such examination.

(iii) Upon receipt of an amendment to an effective statement of record, the Secretary has reasonable grounds to believe that in the public interest or for the protection of purchasers, the statement of record should be suspended.

(2) The Secretary may, after notice, and after opportunity for a hearing, issue an order suspending the statement of record.

(3) In the event that a suspension order is issued, such order shall remain in effect until the developer has amended the statement of record or otherwise complied with the requirements of the order. When the developer has complied

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