[Code of Federal Regulations] [Title 24, Volume 5] [Revised as of January 1, 2007] From the U.S. Government Printing Office via GPO Access [CITE: 24CFR1710.15] [Page 15-18] TITLE 24--HOUSING AND URBAN DEVELOPMENT CHAPTER X--OFFICE OF ASSISTANT SECRETARY FOR HOUSING--FEDERAL HOUSING COMMISSIONER, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (INTERSTATE LAND SALES REGISTRATION PROGRAM) PART 1710_LAND REGISTRATION--Table of Contents Subpart A_General Requirements Sec. 1710.15 Regulatory exemption--multiple site subdivision-- determination required. (a) General. (1) The sale of lots contained in multiple sites of fewer than 100 lots each, offered pursuant to a single common promotional plan, is exempt from the registration requirements. (2) For purposes of this exemption, the sale of lots in an individual site that exceeds 99 lots is not exempt from registration. Likewise, the sale of lots in a site containing fewer than 100 lots, where the developer either owns contiguous land or holds an option or other evidence of intent to acquire contiguous land which, when taken cumulatively, would or could result in one site of 100 or more lots, is not exempt from registration. Furthermore, the sale of lots that are within a subdivision established by a separate developer is not exempt from registration by this provision. (b) Eligibility requirements. The sale of each lot must meet the following requirements to be eligible for this exemption. (1) The lot is sold ``as is'' with all advertised improvements and amenities completed and in the condition advertised. (2) The lot is in conformance with all local codes and standards. (3) The lot is accessible, both legally and physically. For lots which are advertised or otherwise represented as ``residential'', either primary or secondary, with any inference that a permanent or temporary dwelling unit of any description (excluding collapsible tents) can be built or installed, physical access must be available by automobile, pick-up truck or equivalent ``on-road'' vehicle. (4) At the time of closing, a title insurance binder or title opinion reflecting the condition of title must be issued to the purchaser showing that, subject only to exceptions approved in writing by the purchaser at the time of closing, marketable title is vested in the seller. (5) Each contract or agreement and any promissory notes-- (i) Contain the following non-waivable provision in bold face type (which must be distinguished from the type used for the rest of the document) on the face or signature page above all signatures: You have the option to cancel your contract or agreement of sale by notice to the seller until midnight of the seventh day following the date of signing of the contract or agreement. If you did not receive a Lot Information Statement prepared pursuant to the rules and regulations of the Interstate Land Sales Registration Division, U.S. Department of [[Page 16]] Housing and Urban Development, in advance of your signing the contract or agreement, the contract or agreement of sale may be cancelled at your option for two years from the date of signing. If the purchaser is entitled to a longer revocation period by operation of state or local law, that period becomes the Federal revocation period and the contract must reflect the requirement of the longer period rather than the seven days. The revocation provisions may not be limited or qualified in the contract or other document by requiring a specific type of notice or by requiring that notice be given at a specified place. (ii) Obligate the developer to deliver, within 180 days, a warranty deed (or its equivalent under local law) for the lot which at the time of delivery is free from any monetary liens or encumbrances. (6) The purchaser or purchaser's spouse makes a personal on-the-lot inspection of the lot to be purchased before signing a contract. (7) The purchaser's payments are deposited in an escrow account independent of the developer until a deed is delivered. (8) Prior to the purchaser signing a contract or agreement of sale, the developer discloses in a written Lot Information Statement all liens, reservations, taxes, assessments, easements and restrictions applicable to the lot purchased (see paragraph (b)(11) of this section). (9) Prior to the purchaser signing a contract or agreement of sale, the developer discloses in a written Lot Information Statement the name, address and telephone number of the local governmental agency or agencies from which information on permits or other requirements for water, sewer and electrical installations can be obtained. This Statement will also contain the name, address and telephone number of the suppliers which would or could provide the foregoing services. (10) The lot sale must comply with the anti-fraud provisions of 24 CFR 1710.4 (b) and (c) and the sales practices and standards in 24 CFR 1715.10 through 1715.28. (11) A written Lot Information Statement must be delivered to, and acknowledged by, each purchaser prior to his or her signing a contract or agreement of sale, and must contain the information shown in the format below. The Statement must be typed or printed in at least 10 point font. A copy of the acknowledgement will be maintained by the developer for three years and will be made available to OILSR upon request. If the Statement is not delivered as required, the contract or agreement of sale may be revoked and a full refund paid, at the option of the purchaser, within two years of the signing date and the contract or agreement of sale will clearly provide this right. Sample Format (Use of the following headings and first paragraph are mandatory.) Lot Information Statement Important: Read Carefully Before Signing Anything The developer has obtained a regulatory exemption from registration under the Interstate Land Sales Full Disclosure Act. One requirement of that exemption is that you must receive this Statement prior to the time you sign an agreement (contract) to purchase a lot. Right To Cancel (Under this heading the developer is to state the specific rescission rights provided for in the contract pursuant to 1710.15(b)(5)(i)). Risk of Buying Land (Under this heading the developer is to list the following information:) There are certain risks in purchasing real estate that you should be aware of. The following are some of those risks: The future value of land is uncertain and dependent upon many factors. Do not expect all land to automatically increase in value. Any value which your lot may have will be affected if roads, utilities and/or amenities cannot be completed or maintained. Any development will likely have some impact on the surrounding environment. Development which adversely affects the environment may cause governmental agencies to impose restriction on the use of the land. In the purchase of real estate, many technical requirements must be met to assure that you receive proper title and that you will be able to use the land for its intended purpose. Since this purchase involves a [[Page 17]] major expenditure of money, it is recommended that you seek professional advice before you obligate yourself. If adequate provisions have not been made for maintenance of the roads or if the land is not served by publicly maintained roads, you may have to maintain the roads at your expense. If the land is not served by a central sewage system and/or water system, you should contact the local authorities to determine whether a permit will be given for an on-site sewage disposal system and/or well and whether there is an adequate supply of water. You should also become familiar with the requirements for, and the cost of, obtaining electrical service to the lot. Developer Information (Under this heading the developer is to list the following information:) Developer's Name:_______________________________________________________ Address:________________________________________________________________ Telephone Number:_______________________________________________________ Lot Information (Under this heading the developer is to list the following information:) Lot Location:___________________________________________________________ (Enter a statement disclosing all liens, reservations, taxes, assessments, easements and restrictions applicable to the lot. A copy of the restrictions may be attached in lieu of recitation.) Suppliers of Utilities and Issuers of Permits (Under this heading the developer is to list the name, address and phone number of the appropriate governmental agency or agencies, if any, that will provide information on permits or other requirements for water, sewer and electrical installations. The information will also contain the name, address and telephone number of the suppliers of such utilities which can provide information to the purchaser on costs and availability of such services. A chart similar to the one below may be used to supply this information. Listed below are contact points for determining permit requirements, if any, and to obtain information on approximate costs and availability for the listed services: ------------------------------------------------------------------------ Name, Address and Telephone Number of ------------------------------- Governmental agency Supplier ------------------------------------------------------------------------ Water................................... Sewer................................... Electricity............................. ------------------------------------------------------------------------ If misrepresentations are made in the sale of this lot to you, you may have rights under the Interstate Land Sales Full Disclosure Act. If you have evidence of any scheme, artifice or device used to defraud you, you may wish to contact: Interstate Land Sales Registration Division, HUD Building, Room 6278, 451 Seventh Street, SW., Washington, DC 20410. (The Receipt is to be in the following form:) Sample Receipt For Lot Information Statement Purchaser (print or type):______________________________________________ Date:___________________________________________________________________ Signature of purchaser:_________________________________________________ Street Address:_________________________________________________________ City:___________________________________________________________________ State:__________________________________________________________________ Zip:____________________________________________________________________ Name of salesperson (print or type):____________________________________ Signature of salesperson:_______________________________________________ (c) Request for Multiple Site Subdivision Exemption. (1) The developer must file a request for the Multiple Site Subdivision Exemption in the following format. The request must be accompanied by a filing fee of $500 (prepared in accordance with Sec. 1710.35 (a)) and a sample Lot Information Statement. Request for Multiple Site Subdivision Exemption Developer: Name:___________________________________________________________________ Address:________________________________________________________________ Telephone No.:__________________________________________________________ Agent: Name:___________________________________________________________________ Address:________________________________________________________________ Telephone No.:__________________________________________________________ (Insert a general description of the developer's method of operation.) I affirm that I am, or will be the developer of the property and/or method of operation described above. I affirm that the lots in said property will be sold in compliance with all of the requirements of 24 CFR 1710.15. I further affirm that the statements contained in all documents submitted with this request for an Exemption Order are true and complete. Date:___________________________________________________________________ Signature:______________________________________________________________ Title:__________________________________________________________________ Warning: 18 U.S.C. 1001 provides, among other things, that whoever knowingly and willingly makes or uses a document or writing containing any false, fictitious, or fraudulent statement or entry, in any matter within the jurisdiction of any department or agency of the United States, shall be fined not more than $10,000 or imprisoned for not more than 5 years or both. [[Page 18]] (2) This exemption will become effective upon issuance of an Exemption Order by the Secretary. (d) Annual Report. (1) By January 31 of each year the developer will send a report to the Secretary listing each site and its location available for a sale pursuant to the exemption during the preceding year and indicate the number of lot sales made in each site. The report will describe any changes in the information provided in the Request for the Multiple Site Subdivision Exemption or contain a statement that there are no changes. (2) The Annual Report must be accompanied by a filing fee of $100. (3) The Annual Report must be signed and dated by the developer, attesting to its completeness and accuracy. (4) Failure to submit the Annual Report within ten days after the receipt of notice from the Secretary will automatically terminate eligibility for the exemption as of the Report due date. (e) Termination. If, subsequent to the issuance of an Exemption Order, the Secretary has reasonable grounds to believe that exemption from the registration requirements in the particular case is not in the public interest, the Secretary may, after issuing a notice and giving the respondent an opportunity to request a hearing within fifteen days of receipt of the notice, terminate the exemption order. The basis for issuing a notice may be apparent omissions or misrepresentations in the documents submitted to the Secretary, the conduct of the developer or agent, such as unlawful conduct or insolvency, or adverse information about the real estate that should be disclosed to purchasers. Proceedings will be governed by 24 CFR 1720.238. [54 FR 40866, Oct. 4, 1989]