The Florida Senate

498.039  Certain assurances or trust and escrow accounts required; reports required.--

(1)  The division shall require each registrant offering property subject to an encumbrance to establish and maintain an escrow account with an escrow agent in a financial institution unless the encumbrance contains a subordination provision that states as follows: "The lien of this document is subordinate to the purchaser's rights and the purchaser shall obtain the legal interest or other interest provided for in the purchase contract or lease, free and clear of the encumbrance, upon the purchaser's compliance with the terms, provisions, and conditions of the purchase contract or lease."

(2)  The division shall require each person offering debt instruments secured by a balloon mortgage or deed of trust involving any interest in subdivided lands to establish and maintain a sinking fund in a financial institution in a manner acceptable to retire the debt instruments.

(3)  The division may require each registrant responsible for interim maintenance of roads, recreational facilities, or other types of improvements to establish and maintain trust or escrow accounts in a financial institution in an acceptable manner if perpetual maintenance is not being performed in a manner otherwise acceptable to the division.

(4)  The division may require each registrant that offers subdivided lands pursuant to a plan of disposition involving a refund-of-moneys provision to establish and maintain trust or escrow accounts in a financial institution in a manner acceptable to assure refunds to purchasers.

(5)  The division shall require each registrant offering property in which all promised improvements have not been completed to establish reasonable assurances to ensure that all obligations imposed by the offering will be fulfilled.

(6)  Each registrant with registered subdivided lands subject to any lien, mortgage, or other encumbrance shall submit quarterly encumbrance reports certifying that all terms of any encumbering instrument have been met and that timely payments have been made to satisfy any lien, mortgage, real property tax, or other encumbrance upon subdivided lands in whole or in part. The quarterly report shall include satisfactory evidence of the registrant's compliance.

(7)  If registered subdivided lands are not subject to any lien, mortgage, delinquent real property taxes, or other encumbrance, encumbrance reports shall be submitted as directed by the division. The report shall include an affidavit establishing that no lien, mortgage, or other encumbrance has been placed upon the subdivided lands in whole or in part and that the payment of any real property tax assessed against the subdivided lands in whole or in part is not delinquent.

(8)  The division may require a registrant to establish and maintain a trust or escrow account in a financial institution or provide some other acceptable assurance that all applicable real property taxes will be timely paid if the division determines that:

(a)  The registrant is offering or will offer registered property for disposition under a contract for purchase, and the registrant is or will be responsible for the payment of the real property tax assessed against the property; and

(b)  The payment of any real property tax assessed against the registered property is delinquent.

(9)  The registrant shall submit a statement from the appropriate financial institution to the division indicating the status of any trust or escrow account established pursuant to this section on a monthly, quarterly, or semiannual basis as directed by the division.

(10)  The division may issue an order to show cause for any violation of the provisions of this section, which shall provide for a hearing, upon request, in accordance with chapter 120.

History.--s. 6, ch. 76-262; ss. 19, 30, 32, ch. 79-347; ss. 12, 21, ch. 81-177; ss. 2, 3, ch. 81-318; s. 3, ch. 83-265; ss. 20, 33, 34, ch. 88-90; s. 4, ch. 91-429; s. 15, ch. 97-192.

Note.--Former s. 478.052.