(1) Unless exempt under the provisions of section 12-10-501 (3), a developer, before selling, leasing, or transferring or agreeing or negotiating to sell, lease, or transfer, directly or indirectly, any subdivision or any part thereof, shall register pursuant to this part 5. (2) Upon approval by the commission, a developer who has applied for registration pursuant to section 12-10-503 may offer reservations in a subdivision during the pendency of the application and until the application is granted or denied if the fees for the reservations are held in trust by an independent third party and are fully refundable. (3) (a) Upon the commission's approval of a developer's subdivision registration pursuant to section 12-10-503, the developer may enter into binding purchase contracts with prospective buyers and accept earnest money deposits. Except as provided in subsection (3)(b) of this section, an earnest money deposit must be held in trust by an independent third party. (b) (I) Notwithstanding subsection (3)(a) of this section or any other provision in this part 5, upon subdivision registration approval, a developer may receive earnest money deposits from an accredited investor and use some or all of the funds toward development of a subdivision, but only if the purchase contract or other written disclosure contains a clear statement setting forth: (A) To whom the funds will be delivered; (B) When the delivery of the funds will occur; (C) How the funds will be used; and (D) Any restriction on the use of the funds. (II) A developer may receive earnest money deposits from an accredited investor pursuant to the requirements in subsection (3)(b)(I) of this section without first having to post a bond or other security. (c) This subsection (3) applies only if the subdivision is a time share estate, as defined in section 38-33-110 (5).
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