(a) For a timeshare plan located exclusively in this Territory, the developer of a timeshare plan shall:(1) Deposit with an escrow agent 100 percent of all funds and other property that are received during the seven-day cancellation period provided for in section 1106(b) of this chapter. The deposit of such funds and property must be evidenced by and pursuant to an executed escrow agreement between the escrow agenda and the developer, the provisions of which must include:(A) That its purpose is to protect the purchaser’s right to a refund if the purchaser cancels the purchase contract for a timeshare interest within a seven-day cancellation period;(B) That funds may be disbursed to the developer by the escrow agent from the escrow account only in compliance with this section and after expiration of the purchaser’s seven-day cancellation period and in accordance with the purchase contract;(C) That the escrow agent may release funds to the developer from the escrow account only after receipt of a sworn statement from the developer that no cancellation notice was received before expiration of the seven-day period; and(D) A provision governing the location of the escrow account.(2) Deposit 100 percent of all funds and other property received from a purchaser of a timeshare interest after the seven-day cancellation period has ended in an escrow account when interests in real property are being sold, according to a purchase contract which will transfer title to the purchaser. The establishment of such an escrow account must be evidence by and pursuant to an executed escrow agreement between the escrow agent and the developer, which may be the same escrow agreement contemplated by subsection (a)(1), the provision of which must include:(A) That its purposes is to protect all deposits and payments made by a purchaser toward the purchase price until the deed is delivered to the purchaser, whether physically or by recording the deed, or until the purchaser and developer enter into a purchase contract or agreement for deed, which will transfer title to the purchaser and a memorandum of contract or agreement for deed is recorded.(B) That funds may be disbursed to the developer by the escrow agent from the escrow account only after title has been delivered to the purchaser physically or delivered for recording the Recorder of Deeds in the judicial division were the real property underlying the timeshare plan is located or at such other time as may be agreed upon in writing by the purchaser and developer. However, in the case of a timeshare estate sold by purchase contract which will transfer title to the purchaser or agreement for deed, funds may be disbursed to the developer only after the recording of the memorandum of contact or agreement for deed and, if necessary, a notice to creditors with secured interests in the property underlying the timeshare plan and, if the property is encumbered by a deed to secure debt mortgage instrument, a non-disturbance instrument has been recorded in the public records of the district or districts in which the timeshare property is located; or alternatively, after the developer records a notice to the creditors and obtains a release of lien for a timeshare interest, funds may be disbursed pertaining to that timeshare interest; and(C) A provision governing the location of the escrow account.(3) Except as provided in section 1105 of this chapter, if a developer contracts to sell a timeshare interest and the construction of the building in which the timeshare interest is located has not been completed when the cancellation period expires, the developer shall maintain all funds received from the purchaser under the purchase contract in the escrow or trust account until construction of the building is completed. The documentation required for evidence of completion of construction includes: a certificate of occupancy, a certificate of substantial completion, evidence of a public safety inspection from a government agency in the applicable jurisdiction, or any other evidence acceptable to the escrow agent. If the promised improvements in any future additional phase in which the timeshare interest being purchased is located are not completed within six months after the date promised to the purchaser in the timeshare instruments or timeshare disclosure statement, the purchaser shall have a new seven-day cancellation period to cancel the purchase contract unless such delay was the result of any circumstance that is outside the reasonable control of the developer such as war, national or local emergency, labor disputes of any kind, hurricane, fire or other force majeure event.(4) Notify the purchaser of the name and address of the escrow agent or the name, address, and account number of the bank or savings and loan company where the developer maintains the funds. The escrow agreement must authorize the purchaser or the purchaser’s representative to examine said trust account.
(1) Deposit with an escrow agent 100 percent of all funds and other property that are received during the seven-day cancellation period provided for in section 1106(b) of this chapter. The deposit of such funds and property must be evidenced by and pursuant to an executed escrow agreement between the escrow agenda and the developer, the provisions of which must include:(A) That its purpose is to protect the purchaser’s right to a refund if the purchaser cancels the purchase contract for a timeshare interest within a seven-day cancellation period;(B) That funds may be disbursed to the developer by the escrow agent from the escrow account only in compliance with this section and after expiration of the purchaser’s seven-day cancellation period and in accordance with the purchase contract;(C) That the escrow agent may release funds to the developer from the escrow account only after receipt of a sworn statement from the developer that no cancellation notice was received before expiration of the seven-day period; and(D) A provision governing the location of the escrow account.
(A) That its purpose is to protect the purchaser’s right to a refund if the purchaser cancels the purchase contract for a timeshare interest within a seven-day cancellation period;
(B) That funds may be disbursed to the developer by the escrow agent from the escrow account only in compliance with this section and after expiration of the purchaser’s seven-day cancellation period and in accordance with the purchase contract;
(C) That the escrow agent may release funds to the developer from the escrow account only after receipt of a sworn statement from the developer that no cancellation notice was received before expiration of the seven-day period; and
(D) A provision governing the location of the escrow account.
(2) Deposit 100 percent of all funds and other property received from a purchaser of a timeshare interest after the seven-day cancellation period has ended in an escrow account when interests in real property are being sold, according to a purchase contract which will transfer title to the purchaser. The establishment of such an escrow account must be evidence by and pursuant to an executed escrow agreement between the escrow agent and the developer, which may be the same escrow agreement contemplated by subsection (a)(1), the provision of which must include:(A) That its purposes is to protect all deposits and payments made by a purchaser toward the purchase price until the deed is delivered to the purchaser, whether physically or by recording the deed, or until the purchaser and developer enter into a purchase contract or agreement for deed, which will transfer title to the purchaser and a memorandum of contract or agreement for deed is recorded.(B) That funds may be disbursed to the developer by the escrow agent from the escrow account only after title has been delivered to the purchaser physically or delivered for recording the Recorder of Deeds in the judicial division were the real property underlying the timeshare plan is located or at such other time as may be agreed upon in writing by the purchaser and developer. However, in the case of a timeshare estate sold by purchase contract which will transfer title to the purchaser or agreement for deed, funds may be disbursed to the developer only after the recording of the memorandum of contact or agreement for deed and, if necessary, a notice to creditors with secured interests in the property underlying the timeshare plan and, if the property is encumbered by a deed to secure debt mortgage instrument, a non-disturbance instrument has been recorded in the public records of the district or districts in which the timeshare property is located; or alternatively, after the developer records a notice to the creditors and obtains a release of lien for a timeshare interest, funds may be disbursed pertaining to that timeshare interest; and(C) A provision governing the location of the escrow account.
(A) That its purposes is to protect all deposits and payments made by a purchaser toward the purchase price until the deed is delivered to the purchaser, whether physically or by recording the deed, or until the purchaser and developer enter into a purchase contract or agreement for deed, which will transfer title to the purchaser and a memorandum of contract or agreement for deed is recorded.
(B) That funds may be disbursed to the developer by the escrow agent from the escrow account only after title has been delivered to the purchaser physically or delivered for recording the Recorder of Deeds in the judicial division were the real property underlying the timeshare plan is located or at such other time as may be agreed upon in writing by the purchaser and developer. However, in the case of a timeshare estate sold by purchase contract which will transfer title to the purchaser or agreement for deed, funds may be disbursed to the developer only after the recording of the memorandum of contact or agreement for deed and, if necessary, a notice to creditors with secured interests in the property underlying the timeshare plan and, if the property is encumbered by a deed to secure debt mortgage instrument, a non-disturbance instrument has been recorded in the public records of the district or districts in which the timeshare property is located; or alternatively, after the developer records a notice to the creditors and obtains a release of lien for a timeshare interest, funds may be disbursed pertaining to that timeshare interest; and
(C) A provision governing the location of the escrow account.
(3) Except as provided in section 1105 of this chapter, if a developer contracts to sell a timeshare interest and the construction of the building in which the timeshare interest is located has not been completed when the cancellation period expires, the developer shall maintain all funds received from the purchaser under the purchase contract in the escrow or trust account until construction of the building is completed. The documentation required for evidence of completion of construction includes: a certificate of occupancy, a certificate of substantial completion, evidence of a public safety inspection from a government agency in the applicable jurisdiction, or any other evidence acceptable to the escrow agent. If the promised improvements in any future additional phase in which the timeshare interest being purchased is located are not completed within six months after the date promised to the purchaser in the timeshare instruments or timeshare disclosure statement, the purchaser shall have a new seven-day cancellation period to cancel the purchase contract unless such delay was the result of any circumstance that is outside the reasonable control of the developer such as war, national or local emergency, labor disputes of any kind, hurricane, fire or other force majeure event.
(4) Notify the purchaser of the name and address of the escrow agent or the name, address, and account number of the bank or savings and loan company where the developer maintains the funds. The escrow agreement must authorize the purchaser or the purchaser’s representative to examine said trust account.
(b) Excluding any encumbrance placed against a purchaser’s timeshare interest securing the purchaser’s payment of purchase money financing for the purchase, a developer is not entitled to the release of any escrowed funds until the developer has provided evidence satisfactory to the escrow agent of one of the following:(1) That the timeshare interest, together with any other property or rights to property appurtenant to the timeshare interest, including any amenities represented to the purchaser as being part of the timeshare plan, are free and clear of any of the claims of the developer, any purchaser of the underlying fee, a mortgage, judgement creditor, or other lienor or person having an interest in or lien or encumbrance against the timeshare interest or appurtenant property or property rights to be sold or conveyed;(2) That the developer, any purchaser of the underlying fee, a mortgage, judgement creditor, or other lienor or person having an interest in or lien or encumbrance against the timeshare interest, timeshare property, or appurtenant property or property rights, including any amenities represented to the purchaser as being part of the timeshare plan, has recorded a subordination and notice to creditors document in the jurisdiction in which the timeshare interest is located. The subordination document must expressly provide that the interest holder’s right, lien or encumbrance does not adversely affect, and is subordinate to, the rights of the purchasers of the timeshare interests in the timeshare plan regardless of the date of purchase, from and after the effective date of the subordination document;(3) That the developer, any purchaser of the underlying fee, a mortgagee, judgement creditor, or other lienor or person having an interest in a lien or encumbrance against the timeshare interest, timeshare property, or appurtenant property or property rights, including any amenities represented to the purchaser as being part of the timeshare plan, has transferred the subject accommodations or amenities or all use rights therein to a nonprofit organization or an owners’ association, whose purpose is to hold the subject accommodations or amenities for the use and benefit of the purchasers of the timeshare plan and who shall act as a fiduciary to the purchasers, if the developer has transferred control of such organization or association to the purchasers or does not exercise such developer’s voting rights in such organization or association with respect to the subject accommodations or amenities. Prior to the transfer, any lien or encumbrance against the accommodation or amenity must be made subject to a subordination and notice to the creditors document pursuant to paragraph (2) of this subsection; or(4) Alternative arrangements have been made that are adequate to protect the rights of the purchasers of the timeshare interests and are approved by the escrow agent.
(1) That the timeshare interest, together with any other property or rights to property appurtenant to the timeshare interest, including any amenities represented to the purchaser as being part of the timeshare plan, are free and clear of any of the claims of the developer, any purchaser of the underlying fee, a mortgage, judgement creditor, or other lienor or person having an interest in or lien or encumbrance against the timeshare interest or appurtenant property or property rights to be sold or conveyed;
(2) That the developer, any purchaser of the underlying fee, a mortgage, judgement creditor, or other lienor or person having an interest in or lien or encumbrance against the timeshare interest, timeshare property, or appurtenant property or property rights, including any amenities represented to the purchaser as being part of the timeshare plan, has recorded a subordination and notice to creditors document in the jurisdiction in which the timeshare interest is located. The subordination document must expressly provide that the interest holder’s right, lien or encumbrance does not adversely affect, and is subordinate to, the rights of the purchasers of the timeshare interests in the timeshare plan regardless of the date of purchase, from and after the effective date of the subordination document;
(3) That the developer, any purchaser of the underlying fee, a mortgagee, judgement creditor, or other lienor or person having an interest in a lien or encumbrance against the timeshare interest, timeshare property, or appurtenant property or property rights, including any amenities represented to the purchaser as being part of the timeshare plan, has transferred the subject accommodations or amenities or all use rights therein to a nonprofit organization or an owners’ association, whose purpose is to hold the subject accommodations or amenities for the use and benefit of the purchasers of the timeshare plan and who shall act as a fiduciary to the purchasers, if the developer has transferred control of such organization or association to the purchasers or does not exercise such developer’s voting rights in such organization or association with respect to the subject accommodations or amenities. Prior to the transfer, any lien or encumbrance against the accommodation or amenity must be made subject to a subordination and notice to the creditors document pursuant to paragraph (2) of this subsection; or
(4) Alternative arrangements have been made that are adequate to protect the rights of the purchasers of the timeshare interests and are approved by the escrow agent.
(c) An escrow agent for a timeshare plan located exclusively in this Territory shall deposit funds escrowed pursuant to this section in an account in a branch of a financial institution located in this jurisdiction.
(d) An escrow agent holding funds escrowed pursuant to this section may invest such escrowed funds if the funds are held by a financial institution whose accounts are insured by a governmental agency or instrumentality. The right to receive the interest generated by any such investments must be as specified by a written agreement the developer and the purchaser.
(e) Each escrow agent shall maintain separate books and records for each timeshare plan and shall maintain such books and records according to generally accepted accounting principles.
(f) An action brought by a purchaser for a violation of this section may be brought in the jurisdiction where the timeshare plan is located.
(g) The escrow agent has a duty to each purchaser to maintain the escrow account in accordance with good accounting principles and to release funds from escrow only in accordance with this section.