[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: 24CFR1710.209]

[Page 49-52]
 
                 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 B_Reporting Requirements
 
Sec.  1710.209  Title and land use.

    (a) General information. (1) State whether the developer has 
reserved the right to exchange or withdraw lots after a purchaser has 
signed a sales contract (e.g., for prior sales, failure to pass credit 
check). If yes, indicate this authority and make reference to the 
applicable paragraph in the sales contract or other document.
    (2) State whether there is a provision giving purchasers an option 
to exchange lots. If yes, indicate this and make reference to the 
applicable paragraph in the sales contract or other document.
    (3) State whether the developer knows of any instruments not of 
record which, if recorded, would affect title to the subdivision. If 
yes, copies of these instruments shall be submitted, except that copies 
of unrecorded contracts for sales of lots in the subdivision need not be 
submitted.
    (4)(i) Identify the Federal, State and local agencies or similar 
organizations which have the authority to regulate or issue permits, 
approvals or licenses which may have a material effect on the 
developer's plans with respect to the proposed division of the land, and 
any existing or proposed facilities, common areas or improvements to the 
subdivision.
    (ii) Describe or identify the land or facilities affected; the 
permit, approval or license required; and indicate whether the permit, 
approval or license has been obtained by the developer.
    (iii) If no agency regulates the division of the land or issues any 
permits, approvals or licenses with respect to improvements, so state.
    (iv) Answers must specifically cover the areas of environmental 
protection; environmental impact statements; and construction, dredging, 
bulkheading, etc. that affect bodies of water within or around the 
subdivision. Also include licenses or permits required by water 
resources boards, pollution control boards, river basin commissions, 
conservation agencies or similar organizations.
    (5) State whether it is unlawful to sell lots prior to the final 
approval and recording of a plat map in the jurisdiction where the 
subdivision is located.
    (b) Title evidence. (1) Submit title evidence that specifically 
states the status of the legal and equitable title to the land 
comprising the lots covered by the Statement of Record and any common 
areas or facilities disclosed in the Property Report. Title evidence 
need not be submitted for those common areas and facilities which are 
not owned by the developer.
    (2) Acceptable title evidence shall be dated no earlier than 20 
business days preceding the date of the filing of the Statement of 
Record with the Secretary. Previously issued title evidence may be 
updated to the date referred to in the preceding sentence by 
endorsements or attorneys' opinions of title.
    (3) The developer shall amend the title evidence to reflect the 
change in status of title of any previously registered, reacquired lots 
unless their status is at least as marketable as they were when first 
offered for sale by the developer as registered lots.
    (c) Forms of acceptable title evidence. (1) An original or a copy of 
a signed owner's or mortgagee's policy of title insurance, title 
commitment, certificate of title or similar instrument

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issued by a title company authorized by law to issue such instruments in 
the state in which the subdivision is located. Title evidence that 
limits insurance or negligence liability to amounts less than the market 
value of the subject land at the time of its acquisition by the 
subdivision owner is not acceptable;
    (2) A legal opinion stating the condition of title, prepared and 
signed by an attorney at law experienced in the examination of titles 
and a member of the Bar in the state in which the property is located. 
The title opinion may be based on a Torrens land registration system 
certificate of title, or similar instrument, provided it meets all 
general title evidence requirements of this section and a copy of the 
registration certificate of title is submitted. Title opinions that 
limit negligence liability to amounts less than the market value of the 
subject land at the time of its acquisition by the subdivision owner are 
not acceptable.
    (d) Title searches. The required evidence of the status of title 
shall be based on a search of all public records which may contain 
documents affecting title to the land or the developer's ability to 
deliver marketable title. The search must cover a period which is 
required or generally considered adequate for insuring marketability of 
title in the jurisdiction in which the subdivision is located. Such 
search shall include an examination of at least the following documents:
    (1) The records of the recorder of deeds or similar authority;
    (2) U.S. Internal Revenue Liens;
    (3) The records of the circuit, probate, or other courts including 
Federal courts and bankruptcy or reorganization proceedings which have 
jurisdiction to affect the title to the land;
    (4) The tax records;
    (5) Financing statements filed pursuant to the Uniform Commercial 
Code or similar law. If it is held that the financing statements do not 
affect the title of the land, include a statement of the legal authority 
for that opinion.

This search may be accomplished through the use of a title insurance 
company title plant, the information in which is based on current 
searches of the appropriate and necessary documents, including as a 
minimum those listed immediately above. For any attorney's title opinion 
based on Torrens certificates of title, the title search need only go 
beyond the original time of registration of the certificate of title for 
those types of encumbrances which were not conclusively settled by the 
proceedings at the time of such registration. In such cases, the 
required statement shall clearly reflect the documents and periods 
searched.
    (e) Items to be included in the title evidence. The acceptable title 
evidence must include the following information, instruments and 
statements and need not be repeated or duplicated elsewhere in the 
Statement of Record.
    (1) A legal description of the land on which the lots, common areas, 
and facilities covered by the title evidence are located. This legal 
description shall be adequate for conveying land in the jurisdiction in 
which the subdivision is located. If this legal description is based on 
a recorded plat, the lot numbers, recording place, book name, book 
number, and page number shall be stated in the description. If this 
legal description is given by metes and bounds, the title evidence shall 
include or be accompanied by a certified statement of the preparer of 
the title evidence, a licensed attorney, or an engineer or surveyor, 
indicating that all subject lots, common areas, and common facilities 
are encompassed within the metes and bounds description in the evidence. 
If at any time after the submission of the legal description required 
above, the description of the subject land is changed or found to be in 
error, a correcting amendment shall be made to the Statement of Record.
    (2) The name of the person(s) or other legal entity(ies) holding fee 
title to the property described.
    (3) The name of any person(s) or other legal entity(ies) holding a 
leasehold estate or other interest of record in the property described.
    (4) A listing of any and all exceptions or objections to the title, 
estate or interest of the person(s) or legal entity(ies) referred to in 
paragraph (e)(2) or (e)(3) of this section, including any encumbrances, 
easements, covenants, conditions, reservations, limitations or 
restrictions of record. (Any reference

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to exceptions or objections to title shall include specific references 
to the instruments in the public records upon which they are based). 
When an objection or exception to title affects less than all of the 
property covered by this Statement of Record, the title evidence shall 
specifically note what portion of the property is so affected.
    (5) Copies of all instruments in the public records specifically 
referred to in paragraph (e)(4) of this section. (Abstracts of such 
instruments are acceptable if prepared by an attorney or professional or 
official abstractor qualified and authorized by law to prepare and 
certify such abstracts and if the abstracts contain a material portion 
of the recorded instruments sufficient to determine the nature and 
effect of such instruments.) Also include copies of any release 
provisions, relating to encumbrances on the property described, which 
are not included in the documents otherwise required by this section.
    (6) If an attorney's title opinion has been submitted pursuant to 
this section which has been based on a Torrens land registration 
certificate of title, submit a copy of such certificate.
    (f) Supplemental title information. (1) If there is a holder of an 
ownership interest in the land other than the developer, submit a copy 
of any documentation which evidences the developers' authorization to 
develop and/or sell the land.
    (2) Submit copies of any trust deeds, deeds in trust, escrow 
agreements or other instruments which purport to protect the purchaser 
in the event of default or bankruptcy by the developer on any instrument 
or instruments which create a blanket encumbrance upon the property 
unless they have been previously provided as part of ``title evidence'' 
submitted pursuant to paragraph (e) of this section.
    (3)(i) Submit copies of all forms of contracts or agreements and 
notes to be used in selling or leasing lots. The contracts or 
agreements, including promissory notes, must contain the following 
language in boldface type (which must be distinguished from the type 
used for the rest of the contract) 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 
signing of the contract or agreement.
    If you did not receive a Property Report prepared pursuant to the 
rules and regulations of the Office of Interstate Land Sales 
Registration, U.S. Department of 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.

    (ii) If the purchaser is entitled to a longer revocation period by 
operation of State law or the Act, that period becomes the Federal 
revocation period and the contract or agreement must reflect the 
requirements of the longer period, rather than the seven days. This 
language shall be consistent with that shown on the Cover Page (see 
Sec.  1710.105).
    (iii) 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.
    (iv) If it is represented that the developer will provide or 
complete roads or facilities for waters, sewer, gas, electric service or 
recreational amenities, the contract must contain a provision that the 
developer is obligated to provide or complete such roads, facilities and 
amenities (see Sec.  1715.15(f)).
    (4) Submit copies of deeds and leases by which the developer will 
lease or convey title to the lots to purchasers or lessees.
    (g) Plat maps, environmental studies and restrictions--(1) Plat 
maps. (i) In those jurisdictions where it is unlawful to sell lots prior 
to final approval and recording of the plat, and in those cases where a 
plat has been recorded, submit a copy of the recorded plat. This plat 
should be an exact copy of the recorded document. It should reflect the 
signatures of the approving authorities and bear a stamp or notation by 
the recorder of deeds, or similarly constituted officer, as to the 
recording data.
    (ii) If the plat has not been approved by the local authorities nor 
recorded, and if it is not unlawful to sell lots prior to final approval 
and recording,

[[Page 52]]

submit a map which has been prepared to scale and which shows the 
proposed division of the land, the lot dimensions and their relation to 
proposed or existing streets and roads. The map shall contain sufficient 
engineering data to enable a surveyor to locate the lots.
    (iii) Whether recorded or unrecorded, the plat or map should show:
    (A) The dimensions of each lot, stated in the standard unit of 
measure acceptable for such purposes in the political subdivision where 
the land is located.
    (B) A clear delineation of each of the lots and any common areas or 
facilities.
    (C) Any encroachments or rights-of-way on, over, or under the land, 
or a notation of these items together with the identity of the lots 
affected.
    (D) The courses, distances and monuments, natural or otherwise, of 
the land's boundaries; contiguous boundaries and identification or 
ownership of adjoining land and names of abutting streets, ways, etc.
    (E) The location of the section or unit encompassing the lots in 
relationship to the larger tract, or tracts, in the subdivision.
    (F) The delineation of any flood plains or flood control easements 
affecting any of the lots.
    (iv) The plat, or map shall be prepared by a licensed surveyor or 
engineer.
    (v) If all lots on each page of the plat are not included in the 
Statement of Record with which the plat or map is submitted, then the 
lots which are to be included in the Statement of Record shall be 
identified on the plat or map; a legend describing the method of 
identification shall be entered on the face of the plat or map and the 
number of lots so identified entered in the lower right hand corner of 
the plat map. The Secretary must be able to reconcile the totals of 
these numbers with the information given in Sec. Sec.  1710.108 and 
1710.208 of the Statement of Record and the title evidence.
    (2) Environmental impact study. If the developer is aware of any 
environmental impact study which considers the effect of the subdivision 
on the environment, submit a summary of that study.
    (3) Restrictions or covenants. Submit a copy of any recorded or 
proposed restrictions or covenants for the subdivision if not submitted 
elsewhere in this Statement of Record.

A copy of these restrictions or covenants shall be delivered to a 
prospective purchaser upon request. A supply shall be maintained at 
whatever place or places as will be necessary to allow immediate 
delivery upon request.

[44 FR 21453, Apr. 10, 1979, as amended at 45 FR 40489, June 13, 1980; 
49 FR 31371, Aug. 6, 1984]