§514E-19 Protection of purchasers from blanket liens. (a) An escrow for the sale of a time share interest in a time share ownership plan may close only if the requirements of any one of the following alternatives for protecting the purchaser have been satisfied: (1) The time share interest is conveyed to the purchaser free and clear of any blanket liens; (2) The time share unit is conveyed to a trustee: (A) Free and clear of any blanket liens under a trust meeting the requirements of sections 514E-22 and 514E-23; or (B) Under a lien payment trust meeting the requirements of sections 514E-22, 514E-23, 514E-24, and 514E-25; (3) (A) The time share interest is conveyed to the purchaser subject only to blanket liens: (i) Where every person holding an interest in the blanket lien has executed and recorded a nondisturbance agreement; or (ii) For which the director's acceptance of a surety bond or an irrevocable letter of credit meeting the requirements of section 514E-28 has been recorded with respect to that time share unit; and (B) If legal or equitable title will be held by anyone other than the purchaser, a notice of time share plan is recorded; or (4) The requirements of any alternative arrangements accepted by the director have been met. (b) An escrow for the sale of a time share interest in a time share use plan may close only if the requirements of any one of the following alternatives for protecting purchasers have been satisfied: (1) The time share unit is conveyed to a trustee: (A) Free and clear of any blanket liens under a trust meeting the requirements of sections 514E-22 and 514E-23; or (B) Under a lien payment trust meeting the requirements of sections 514E-22, 514E-23, 514E-24, and 514E-25; (2) A notice of time share plan is recorded and either: (A) Every person holding an interest in a recorded blanket lien against any time share interests in that time share unit executes and records a nondisturbance agreement; or (B) The director's acceptance of a surety bond or an irrevocable letter of credit meeting the requirements of section 514E-28 is recorded; or (3) The requirements of any alternative arrangements accepted by the director have been met. (c) A time share interest in any time share plan which satisfies the escrow and blanket lien protection requirements of this chapter shall not be deemed a risk capital security under chapter 485A, and the offer or sale of a time share interest therein shall not be deemed the offer or sale of a security. [L 1982, c 186, §7; am L 2006, c 229, §15; am L 2018, c 18, §34]
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