contiguous or not, for the purpose of sale or lease as part of a common promotional plan; and where subdivided land is offered for sale or lease by a single developer or a group of developers acting in concert and where such land is contiguous or is known, designated, or advertised as a common unit or by a common name, such land shall be presumed, without regard to the number of lots covered by each individual offering, as being offered for sale or lease as part of a common promotional plan.

[38 FR 23875, Sept. 4, 1973, as amended at 39 FR 38098, Oct. 29, 1974]

§ 1710.2 Official address.

The official address of the Secretary for delivery of all mail, telegrams, information, filings, registration, and other material required by or relating to the Act or this chapter is:

Office of Interstate Land Sales Registration, HUD Building, 451 Seventh Street SW., Washington, DC 20410.

§ 1710.5 General applicability.

Except in the case of an exempt transaction, a developer may not sell or lease lots in a subdivision, making use of any means or instruments of transportation or communication in interstate commerce or of the mails, unless a Statement of Record is in effect in accordance with the provisions of this part; and the developer furnishes each purchaser with a printed Property Report, meeting the requirements of the provisions of this part, in advance of the signing of any contract or agreement for sale or lease by the purchaser. As used in this part, "lots" shall include lots located in any state or in a foreign country.

[38 FR 23875, Sept. 4, 1973, as amended at 39 FR 38098, Oct. 29, 1974]

§ 1710.10 Statutory exemptions.

The requirements of this chapter shall not apply to:

(a) The sale or lease of real estate not pursuant to a common promotional plan to offer or sell 50 or more lots in a subdivision.

(b) The sale or lease of lots in a subdivision, all of which are 5 acres or more in size.

(c) The sale or lease of any lots on which there is a residential, commercial, or industrial building, or to the sale or lease of land under a contract obligating the seller to erect such a building thereon within a period of 2 years.

(d) The sale or lease of real estate under or pursuant to court order.

(e) The sale of evidences of indebtedness secured by a mortgage or deed of trust on real estate.

(f) The sale of securities issued by & real estate investment trust.

(g) The sale or lease of real estate by any government or government agency. (h) The sale or lease of cemetery lots.

(1) The sale or lease of lots to any person who acquires such lots for the purpose of engaging in the business of constructing residential, commercial or industrial buildings or for the purpose of resale or lease of such lots to persons engaged in such business.

(j) The sale or lease of real estate which is zoned by the appropriate governmental authority for industrial or commercial development, when:

(1) Local authorities have approved access from such real estate to a public street or highway;

(2) The purchaser or lessee of such real estate is a duly organized corporation, partnership, trust, or business entity engaged in commercial or industrial business;

(3) The purchaser or lessee of such real estate is represented in the transaction of sale or lease by a representative of its own selection;

(4) The purchaser or lessee of such real estate affirms in writing to the seller that it either (i) is purchasing or leasing such real estate substantially for its own use or (ii) has a binding commitment to sell, lease, or sublease such real estate to an entity which meets the requirement of subparagraph (2), is engaged in commercial or industrial business, and is not affiliated with the seller or agent; and

(5) A policy of title insurance or title opinion is issued in connection with the transaction showing that title to the real estate purchased or leased is vested in the seller or lessor, subject only to such exceptions as may be approved in writing by such purchaser or the lessee prior to recordation of the instrument of conveyance or execution of the lease, but (i) nothing herein shall be construed as requiring the recordation of a lease, and (ii) any purchaser or lessee may waive, in writing in a separate document, the requirement of this subparagraph that a policy of title insurance or title opinion be issued in connection with the transaction.

The foregoing exemptions are available where the particular factual circumstances of the sale or lease meet the express requirements of the exemption provision. No formal written decision is required, but an exemption advisory opinion pursuant to § 1710.15 may be obtained if desired.

[38 FR 23875, Sept. 4, 1973; 38 FR 32444, Nov. 26, 1973, as amended at 39 FR 38098, Oct. 29, 1974]

§ 1710.11 Statutory exemptions-determination required.

(a) The sale or lease of real estate shall be exempt from the requirements of this chapter if all of the following criteria are met:

(1) At the time of sale or lease the real estate is free and clear of all liens, encumbrances, and adverse claims.

(2) Each and every purchaser or his or her spouse has made a personal onthe-lot inspection of the real estate which he purchased or leased, prior to the signing of a contract to purchase or lease, and the developer submits his written affirmation to that effect, in the format set forth in § 1710.103.

(3) The developer has filed with the Secretary a Claim of Exemption in the form set forth in § 1710.101.

(4) The developer has obtained the Secretary's approval of the form and content of a Statement of Reservations, Restrictions, Taxes, and Assessments, prepared in accordance with the instructions in § 1710.102.

(5) Prior to the time a purchaser signs a contract for sale or lease the developer shall have furnished to such purchaser the Statement of Reservations, Restrictions, Taxes, and Assessments and shall have obtained in writing the purchaser's acknowledgment of receipt of such statement.

(b) (1) Within 31 days after the expiration of the calendar year in which the sale or lease is made, the developer shall file with the Secretary a copy of each acknowledged statement, together with the developer's affirmation required by paragraph (a) (2) of this section.

(2) If the developer has relied upon the provisions of paragraph (c)(1) of this section to establish the time of sale, he shall file with each acknowledged statement and affirmation a copy of the applicable contract of sale.

(3) All documents required to be submitted by this section shall be bound in alphabetical order and indexed by pur

chaser's surname. Each bound volume shall contain only such documents as are applicable to a single subdivision and shall be identified on the outer cover by the name and location of the subdivision and the number assigned by OILSR to such subdivision. Upon demand by the Secretary, made at any time during the calendar year, the developer shall, without delay, file copies of such acknowledged statements, affirmations, and applicable contracts as the Secretary may specify.

(c) For the purposes of this Section: (1) "Time of sale or lease" means the date the sales contract or lease is signed by the purchaser except that the "time of sale" shall be deemed to be the effective date of the conveyance if both of the following conditions are met:

(i) The contract of sale requires delivery of a deed to the purchaser within 120 days following the signing of the sales contract.

(ii) Any earnest money deposit, or other payment on account of the purchase price, made by the purchaser prior to the effective date of the conveyance is placed in an escrow account fully protecting the interest of the purchaser. Such account shall be with an institution or organization which has trust powers or in an established bank, title insurance, or abstract company, or an escrow company which is doing business in the jurisdiction in which the property is located.

(2) "Liens, encumbrances, and adverse claims" do not include the following:

(i) Property reservations which land developers commonly convey or dedicate to local bodies or public utilities for the purpose of bringing public services to the land being developed.

(ii) Taxes and assessments imposed by a State, by any other public body having authority to assess and tax property or by a property owners' association which under applicable State or local law constitute liens before they are due and payable.

(iii) Benefical property restrictions which would be enforceable by other lot owners or lessees in the subdivision. [38 FR 23875, Sept. 4, 1973; 38 FR 32444, Nov. 26, 1973]

sale, lease, or other disposition of land or an interest in land is adopted for the purpose of evasion of the Act.

§ 1710.13 Regulatory exemptions.

The requirements of this chapter shall not apply to:

(a) The sale or lease of lots, each of which will be sold for less than $100, including closing costs, provided that the purchaser will not be required to purchase more than one lot.

(b) The lease of lots for a term not to exceed 5 years provided the terms of the lease do not obligate the lessee to renew.

The foregoing exemptions are available where the particular factual circumstances of the sale or lease meet the express requirements of the exemption provision. No formal written decision is required, but an exemption advisory opinion pursuant to § 1710.15 may be obtained if desired.

(c) The sale or lease of lots in a subdivision, provided that the number of such sales or leases is less than fifty lots and not more than five percent of the developer's total lots in the subdivision platted of record, and provided further: that the other lot sales are exempt because they are sales of lots upon which there are residential, commercial, or industrial buildings, or upon which the developer is obligated to construct such buildings within two years, or which are being sold or leased to any person who acquires such lots for the purpose of engaging in the business of constructing residential, commercial or industrial buildings thereon.

The foregoing exemptions are available where the particular factual circumstances of the sale or lease meet the express requirements of the exemption provision unless the method of disposition is adopted for the purpose of evasion of the Act. No formal written decision is required, but an exemption advisory opinion pursuant to § 1710.15 may be obtained if desired.

[38 FR 23875, Sept. 4, 1973; 38 FR 32444, Nov. 26, 1973, as amended at 39 FR 9432, Mar. 11, 1974]

NOTE: 1710.13 as amended at 39 FR 9432, Mar. 11, 1974 becomes effective May 1, 1974. § 1710.14 Regulatory exemptions-exemption order required-limited offering.

(a) The Secretary may exempt from the provisions of this chapter any subdivision or any lots in a subdivision which

otherwise would be covered by the provisions of this chapter, by issuing an exemption order in writing to the effect that the enforcement of this chapter with respect to such subdivision or lots is not necessary in the public interest and for the protection of purchasers by reason of the small amount involved or the limited character of the public offering, if he determines that:

(1) The request for the exemption order is limited to a single transaction;

or

(2) All of the following criteria are met:

(i) There are less than 300 lots in the subdivision.

(ii) The subdivision is located entirely within one State.

(iii) The offering of lots in the subdivision is entirely or almost entirely limited to the State in which the subdivision is located.

(iv) The use of all advertising and other promotional means, the distribution of which is within control of the developer or his agents, is confined to the State in which the subdivision is located. All use of billboards and similar signs, telephonic methods of communication and direct mail shall be presumed to be within the control of the developer or his agents.

(v) No more than 5 percent of the sales in the subdivision in any one year will be made to nonresidents of the State in which the subdivision is located.

(b) To obtain an order by the Secretary under paragraph (a) of this section, the developer shall:

(1) File a partial Statement of Record-request for exemption in accordance with § 1710.125. The partial Statement of Record shall not operate as registration under the Act.

(2) Pay the filing fee required by § 1710.35(g).

(3) Submit a comprehensive statement.

(i) Identifying the lots which are the subject of the exemption request and setting forth the reasons supporting such request. The developer shall enumerate and identify prior sales, if any.

(ii) Describing the advertising and promotional media and methods used or to be used in connection with the sale or lease or offers to sell or lease lots in the subdivision. The statement shall describe the area and States in which newspapers and periodicals are distributed, or

in which broadcasts of radio or television stations are received, or to which mailings or other promotional materials are directed. If the request is for the exemption of a single transaction, the statement shall include the details of that transaction only.

(iii) Stating whether any of the holders of an ownership interest in the land, or the developer or any principals in the holder or developer, are directly or indirectly involved in any other subdivision for which they have filed a Statement of Record with or have requested an exemption order, determination or advisory opinion from the Office of Interstate Land Sales Registration. If so, the statement shall identify the subdivision by name, location and OILSR number or numbers. If any of the abovementioned persons are involved in any other subdivision for which they plan to file a Statement of Record or for which they plan to request an exemption order, determination or advisory opinion, the statement shall identify such subdivision by name and location and shall state the proposed number of lots in that subdivision.

(4) Submit such additional information as the Secretary may require in order to make his decision.

(c) Any exemption order issued pursuant to the provisions of this section shall be limited to the facts, affirmations, and methods of operation as represented in the request and any material change in or deviation therefrom shall automatically terminate the effect of such exemption order.

[38 FR 23875, Sept. 4, 1973; 88 FR 32444, Nov. 26, 1973]

§ 1710.15 Exemption advisory opinions.

(a) In general. A developer of a subdivision may obtain an exemption advisory opinion from the Secretary stating whether or not, in the opinion of the Secretary, a particular method of sale or lease is exempt from the requirements of this chapter. An exemption advisory opinion is issued solely in connection with those methods of sale or lease exempted by §§ 1710.10 and 1710.13.

(b) Partial Statement of Record. Any opinion request shall be accompanied by a partial Statement of Record as prescribed in § 1710.125. The partial Statement of Record shall not operate as registration under the Act.

(c) Supporting statement and fees. Any opinion request shall be accompanied by the required fee, set forth in § 1710.35(g), and a comprehensive statement of facts and applicable law under which the developer believes the method of disposition to be exempt. Such statement shall:

(1) Describe the advertising and promotional media and methods used or to be used in connection with the sale or lease or offers to sell or lease lots in the subdivision.

(2) Describe the area and States in which newspapers and periodicals are distributed, or in which broadcast of radio or television stations are received, or to which mailings or other promotional materials are directed.

(3) State whether any of the holders of an ownership interest in the land, or the developer or any principals in the holder or developer, are directly or indirectly involved in any other subdivision for which they have filed a Statement of Record with or have requested an exemption order, determination or advisory opinion from the Office of Interstate Land Sales Registration. If so, the statement shall identify the subdivision by name, location, and OILSR number or numbers. If any of the above-mentioned persons are involved in any other subdivision for which they plan to file a Statement of Record or for which they plan to request an exemption order, determination or advisory opinion, the statement shall identify such subdivision by name and location and shall state the proposed number of lots in that subdivision.

[38 FR 23875, Sept. 4, 1973; 38 FR 32444, Nov. 26, 1973]

§ 1710.17

Concurrent submission-request for exemption/Statement of Record.

A request for an exemption order pursuant to § 1710.14 or for an exemption advisory opinion pursuant to § 1710.15 may be accompanied by the submission of a complete Statement of Record filed in accordance with the procedures described in paragraphs (a) and (b) of this section.

(a) A developer who wishes to begin to offer or to sell lots in a subdivision may submit in connection with a request for an exemption order or for an exemption advisory opinion a complete Statement of Record (§ 1710.20). Such request

shall not affect the date upon which the Statement of Record shall become effective.

(b) If a Statement of Record has become effective prior to the issuance of an exemption order or of an exemption advisory opinion of the Secretary to the effect that the method of disposition is exempt, the developer shall elect within 30 days of the date of such order or opinion whether he intends to rely upon such order or opinion or intends for the Statement of Record to remain in effect. Unless the developer informs the Secretary to the contrary, the Statement of Record shall be deemed ineffective and permanently withdrawn, and it will be presumed that the developer intends to rely upon the order or opinion of the Secretary. Thereafter, the developer shall not represent to a purchaser that:

(1) The subdivision has been registered with the Secretary,

(2) The Statement of Record is in effect, or

(3) The Secretary has accepted any Property Report or similar information given to a purchaser.

If the developer does not intend to rely on the exemption order or on the exemption advisory opinion and so notifies the Secretary of his election within 30 days of the date of such order or opinion, he shall not thereafter represent to a purchaser that his method of sale, lease, or other disposition is exempt from the Act. § 1710.18 No-Action Letters.

Whenever the Secretary determines on the basis of the facts presented that no affirmative action is necessary to protect the public interest or prospective purchasers, a letter stating that no action will be taken by the Secretary may be issued. Any letter by the Secretary that action shall not be taken shall not bind the Secretary with regard to his future actions relating to such matter unless the Secretary shall specifically set forth in writing his determination to be so bound and the extent and nature thereof. Any such No-Action Letter by the Secretary shall not affect any right which any purchaser may have under the Act. § 1710.20 Statement of Record and

Property Report-form and filing. The requirements for registering a subdivision, by filing a Statement of Record and a Property Report with the Secretary and obtaining the Secretary's

determination of a date when such filing becomes effective, are as follows:

(a) Filing. A Statement of Record and a Property Report relating to a subdivision shall be filed with the Secretary by personal delivery or by certified mail, return receipt requested, addressed as shown in § 1710.2.

(b) Form of Statement of Record. The Statement of Record shall be filed in the form, and shall be supported by the documentation, required by § 1710.105. The Statement of Record shall also include such other information as the Secretary may require as being reasonably necessary or appropriate for the protection of purchasers.

(c) Form of Property Report. The Property Report shall be in the form set forth in § 1710.110.

(d) State filings. Instead of the forms required by paragraphs (b) and (c) of this section, a Statement of Record and Property Report may be in the form required by State authorities if filed in accordance with the provisions §§ 1710.25, 1710.115, and 1710.120.

of

(e) Effective date-Property Report. The Property Report shall be considered to be a part of the Statement of Record for the purpose of determining the effective date and the suspension of the effective date thereof. § 1710.21

Statement of Record, consolidations, amendments-effective date. (a) Original filing and amendment thereto effective date. The effective date of a Statement of Record or any amendment thereto shall be the 30th day after the date of filing unless the Secretary shall notify the developer in writing prior to such 30th day either that:

(1) The effective date has been suspended in accordance with § 1710.45(a),