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That, if this request is filed pursuant to 24 CFR 1710.14(a) (2) the developer hereby afirms and represents to the Secretary that the facts, affirmations and method of operation are within the requirements of 24 CFR 1710.14(a) (2) subparagraphs (1), (11), (u), (iv), and (v);

That the fee accompanying this application is in the amount required by the regulations of the Office of Interstate Land Sales Registration;

That I agree that this filing is a partial Statement of Record and that the receipt of this Aling by the Secretary shall not be the date of filing of a Statement of Record for the purpose of determining the effective date thereof; and

That if the Secretary advises that the offering is not exempt, I agree to file the remaining portions of the Statement of Record as set forth in 1710.105 of these rules and regulations prior to any offering and that the date of the receipt of the complete Statement of Record by the Secretary shall be the date of filing for the purpose of determining the effective date of the Statement of Record.

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WARNING: Section 1418 of the Housing and Urban Development Act of 1968 (82 Stat. 598, 15 U.S.C. 1717) provides: “Any person who willfully violates any of the provisions of this title or the rules and regulations prescribed pursuant thereto • *, shall upon conviction be fined not more than $5,000 or imprisoned not more than 5 years, or both.” (Sec. 1419, 82 Stat. 598, 15 U.S.C. 1718, Secretary's delegation published 36 F.R. 5006)

Subpart - Advertising § 1715.5 False or misleading advertising

unlawful. (a) In selling or leasing or offering to sell or lease any lot in a subdivision it shall be unlawful for any developer or agent, directly or indirectly, to prepare, authorize, use, direct, or aid in the publication, distribution, circulation, broadcast, or telecast of any advertisement concerning subdivisions when such advertisement contains any statement or pictorial representation of any kind (1) which is or would be false or misleading or (2) which by such statement or pictorial representation of any kind, or by omission thereof, in this light of applicable circumstances, is misleading or (3) which differs materially from the information contained in the statement of record or property report filed pursuant to § 1710.20 of this chapter, or in state filings made pursuant to § 1710.25 of this chapter.

(b) Whenever it shall appear to the Secretary that any developer or agent is engaged or about to engage in any action made unlawful by this section, he may use any or all of the powers conferred upon him by § 1415 of the Interstate Land Sales Full Disclosure Act.

(c) Nothing in this section shall be construed to subject to civil remedies or criminal penalities any newspaper or periodical publisher, job printer, broadcaster, or telecaster, or any of the employees thereof, for violations of this section unless the publisher, printer, broadcaster, or telecaster (1) has actual knowledge of the falsity of the advertisement or (2) has any interest in the subdivision advertised or (3) also serves directly or indirectly as the advertising agent or agency for the developer. [38 FR 23897, Sept. 4, 1973; 38 FR 32445, Nov. 26, 1973] $ 1715.10 Advertising disclaimer; sub

divisions registered and effective with

HUD. (a) On all printed advertising material and literature used in connection with the sale or lease of lots in a subdivision for which an effective statement of record on file, the following disclaimer statement shall appear at the bottom of the front page thereof or at the bottom of all single page advertisements or newspaper advertisements in type of at least 10 point font.

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PART 1715—ADVERTISING, SALES PRAC

TICES, POSTING OF NOTICES OF
SUSPENSION

Subpart A-Advertising Sec. 1715.5 False or misleading advertising un

lawful. 1715.10 Advertising disclaimer; subdivisions

registered and effective with HUD. 1715.15 Advertising standards and guide

lines.

Subpart B-Sales Practices 1715.25 Sales practices; when unlawful.

Subpart - Posting of Notice of Suspension 1715.50 Posting of notice of suspension.

AUTHORITY: The provisions of this part 1715 are issued under sec. 1419 of the Interstato Land Sales Full Disclosure Act, 82 Stat. 598; 15 U.S.C. 1718.

SOURCE: 38 FR 23897, Sept. 4, 1973, unless otherwise noted.

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Obtain the HUD Property Report from being offered actually fronts on a canal developer and read it before signing any- or other body of water. thing. HUD neither approves the merits (f) Land or lots offered shall not be of the offering nor the value, if any, of represented as offering quick, immedithe property.

ate, certain, or specific profits. Offerings (b) In lieu of the statement required for speculative purposes shall be so repin paragraph (a), above, in all classified resented in type of equal size to other type advertisements not more than 5 statements. inches long and not more than one (g) Advertising shall not contain column in print wide the following state- statements concerning future price inment may be used and shall be set in type creases by the subdivider which are not of at least 6 point font.

specific as to amount and as to the date Obtain the HUD Property Report from of the announced increase. Any such date the developer and read it before signing shall be in the reasonable future and the anything. HUD neither approves the increased price shall be maintained for a merits of the offering nor the value, if reasonable length of time. any, of the property.

(h) Advertising shall not contain (38 FR 23897, ept. 4, 1973; 38 FR 32445, asterisks or any other reference symbol Nov. 26, 1973]

as a means of contradicting or substan$ 1715.15 Advertising standards and

tially changing any previously made guidelines.

statement or as a means of obscuring

material facts. The following standards, while not (i) Advertising shall not use names or deemed to be all inclusive, shall be used trade styles which imply that they are in the process of evaluating all advertis

nonprofit research organizations, public ing and sales presentations or repre- bureaus, groups, etc., when such is not sentations to determine whether there is the case. Advertising of such an orgaa violation of the act or of § 1715.5; nization shall be prohibited when the

(a) All advertising must not be incon- true nature of the plan of sale or ownersistent with the information contained in ship is misrepresented or concealed. the property report. Advertising shall not

(j) Advertising shall not use such misrepresent the facts or create mislead- terms as "minutes away," "short dising impressions or inferences.

tance," "only miles," and "near and (b) Advertisements shall not use art

terms of similar import to indicate disists' sketches to portray proposed im

tance unless the actual distance in road provements or nonexistent scenes with- miles is used in conjunction with such out an indication that such portrayal is terms. an artist's sketch and that the improve

(k) Use of maps to show proximity to ments are proposed or that the scenes do other communities is prohibited unless not exist. Artists' conceptions of existing such maps shall be drawn to scale and improvements or scenes must be repre

scale included, or the specific road milesentative and state that such rendering

age appears in easily readable print. is an artist's conception.

(1) The word "guarantee" or phrase (c) Use of photographs portraying "guaranteed refund” shall not be inscenes not actually on the advertised

cluded in advertising unless the refund land is prohibited unless it is clearly in- is unconditional. dicated that such scene is not on the ad- (m) Advertising which indicates the vertised property and the actual distance size of the lot offered, shall include the in miles from said advertised land is amount of land available for use by the given.

purchaser after all easements except for (d) Use of statements, photographs,

utilities to which his property may be relating to facilities for recreation,

subject have been deducted. If the propsports, or other conveniences which are

erty is subject to easements which are:

unusual in size, then this fact shall also not presently in existence on the lands

be noted. All maps, plats, representaadvertised is prohibited unless it is

tions, or drawings shall show either the clearly stated that such "facilities are not

dimensions of the tract or the amount on said lands" and the distance thereto

of acreage after deductions of easein miles, or that such facility is “merely

ments. proposed."

(n) Maps, plats, or representations (e) Advertising shall not refer to prop- shall clearly indicate the date when the erty as waterfront unless the property improvements will be completed. If com

pletion dates are over a period of years, who is making the comparison and the
then a series of shadings, outlines, or comparison is relevant and fair.
coding may be used to indicate dates of (W) Advertising shall not make refer-
completion.

ence to a public facility unless money
(0) Lots shall not be advertised as has been budgeted for actual construc-
"free" if the prospective purchaser is re- tion of such facility and is available to
quired to give any consideration what- the public authority having the respon-
soever, and lots shall not be advertised sibility of construction or an actual dis-
for "closing costs only” when the closing closure of the existing facts concerning
costs are substantially more than nor- a public facility is made.
mal, or when an additional lot or lots (x) Advertising shall not refer to
must be purchased at a higher price or public facilities under study, unless it
to render the "free" lot usable.

is fully disclosed that the facility is (p) Advertising shall not make refer- merely proposed and under study and ence to pre-development sales at a lower provided that no reference is made to price because the land has not yet been the location or route of the facility until developed unless there are plans of de- such has been decided by the responsible velopment, and a subdivision plat has public authority. been recorded, or reasonable assurance (y) Advertising which refers to the is available that such plan will be purchase price of any lot, parcel, or unit completed.

of land must also include any additional (q) Advertising which makes refer- compulsory assessments or costs to the ence to “roads" and "streets" shall make prospective purchaser. affirmative disclosure as to the nature of (z) Advertising which makes refersuch roads and streets; i.e., paved, gravel, ence to property exchange privileges dirt, etc. All streets and roads reflected must state clearly any qualifications conon subdivision maps used in connection cerning such exchange privileges. If adwith an advertising program will be pre- vertising makes reference to promised sumed to be of an all-weather graded improvements for which the prospective gravel quality or higher and will be pre- purchaser will be assessed, such facts sumed to be traversable by conventional will be clearly disclosed. automobile under all normal weather (aa) Advertising shall not describe conditions unless otherwise reflected land as a homesite or building lot if upon the map.

potable water is not available or will not (r) Legal access referred to in adver- be available at reasonable costs; further, tising shall be accompanied by phrase- there must be reasonable assurance that ology to indicate whether the access is a septic tank will operate or a sewer syspresently usable as a passage for con- tem is in existence unless facts to the ventional automobiles.

contrary are clearly and conspicuously (s) The existence of a road easement included in each such advertisement peror a road right-of-way shall not be ad- taining to that property. vertised unless such easement or right- (bb) Advertising shall be considered of-way has been dedicated to the public misleading if it infers or implies that the or to appropriate property owners or to subdivider will resell or repurchase the the appropriate property owners' associ- property being offered at some future ation or similar organizations or entities time unless the subdivider has made an and recorded in the public records of the undertaking to resell or repurchase propcounty in which the property is located. erty for or on behalf of purchasers and

(t) Advertising shall not contain "be- has the ability to perform this underfore” and “after” pictures for compara

taking. tive purposes without an accurate, de- (cc) Advertising shall be deemed mistailed, comparative analysis of such leading if it represents that the proppictures.

erty being offered for sale may be sub(u) Reprints of published material divided or resubdivided unless it includes shall not be used unless the information all necessary and relevant information contained in the reprint is representa- regarding the cost and feasibility of futive, truthful, relevant, and pertinent to ture subdividing. the subdivision being offered.

(dd) Where a community is referred (V) Advertising shall not make com- to in advertising, the material shall state parison of land values unless it is clear the mileage from the approximate geo

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graphical center of the subdivided lands lots are immediately usable for such purin road miles to the approximate down- pose without any further improvement town or geographical center of the com- or development by the prospective purmunity.

chaser and that there is an adequate (ee) Advertising of improvements to potable water supply available; that the the subdivided lands which are not com- lands have been approved for installation pleted shall not be made unless it is of septic tanks or that an adequate sewstated in unmistakable terms that the age disposal system is installed; that no improvements are "merely proposed" or further major draining, filling, or sub"under construction" and the "date of surface improvement is necessary to conthe promised completion" clearly in- struct dwellings, except for reasonable dicated.

preparation for construction; that the (ff) Advertising which embraces the individual homesites or building lots are term "canal" or "canals” shall contain accessible by automobile without addia full disclosure of the width and depth tional expense to the purchaser over exof water in such “canal" or "canals." isting right-of-way and that no other

(gg) Certificates shall not be distrib- fact such as if the property, or any poruted indicating a discount on property tion of the property, is regularly or pethat appears to effect a price reduction riodically flooded or substantially covered from the advertised price. Discounts may by standing water for extended periods be given for quantity purchases, cash, of time during the year or the land is larger payments, or for any reasonable without available legal access to the purbasis. (The purpose of this standard is chaser or circumstance exists to prohibit to eliminate the use of fictitious pricing the use of the lots as a homesite or buildand illusory discounts.)

ing lot. (hh) When the company offers more (2) When title insurance, abstract, or than one subdivision in a single adver- attorney's opinion is advertised, the intising piece, or an offering exceeding 5 ference is that the seller can and will conmiles in length or width, advertising shall vey fee simple title free and clear of all cari a disclaimer as follows:

liens, encumbrances, and defects except Distances indicated are from the location those which are disclosed in writing to mentioned to (clubhouse, center of subdi- the prospective purchaser prior to purvision, or other pertinent or prominent chase. points), each purchaser should check the (3) When lands are advertised as usexact location of the property being offered

able for any particular purpose other him in relation to the clubhouse, subdivision

than homesites or building lots, the inor other prominent locations.

ference is that said lots or parcels are (ii) Advertising shall not use state- immediately accessible and usable for ments, photographs, or sketches portray- such purpose by purchasers without the ing the use to which advertised land can necessity for draining, filling, or other be put unless the land can be put to such improvement prior to putting the lands use without unreasonable cost.

to use for such purpose, except for rea(jj) Implied representations and pre

sonable preparation for construction, and sumptions. Any inference reasonably to

that no fact or circumstance exists to be drawn from advertising or promo

prohibit the immediate use of said lands tional material will be considered to be

for such purposes. & positive assertion unless the inference is negated therein in clear and un

(4) When any recreational facility, mistakable terms, or unless adequate

improvement, accommodation, or privisafeguards have been provided by the lege is advertised, the inference is that owner to reasonably guarantee the occur- the same is on the lands at the present rence of the thing inferred. Advertising time and available without restriction to or promotional material will be judged on the purchasers of lots at no additional the basis of the positive representations expense. contained therein and the reasonable in- (5) When improvements are adverferences to be drawn therefrom. Unless

tised, the inference is that the same are the contrary affirmatively appears in

completed. promotional material, the following inferences will be assumed to have been

Any statements required to be made by intended in each case mentioned; to wit: this section shall be made in type of the

(1) When homesites or building lots same size as the representations made in are advertised, the inference is that said the advertising.

Subpart B-Sales Practices

subject the developer to the penalties $ 1715.25 Sales practices; when unlaw.

set forth in section 1418 of the Act. Deful.

veloper shall forward to the Secretary a Sales practices shall include any act

photograph of the posted sign within 10 by the developer or his agents to induce

days after it has been posted. a purchaser to buy or lease a lot. The de

(b) The Secretary may, where the developer or any of his agents or em- veloper makes a sales presentation or ployees shall not make any representa- conducts a promotional activity at a lotions which would violate any provision cation away from the subdivision, reof the Act. The criteria set forth as ad- quire the posting of signs at such vertising guidelines in § 1715.15 shall locations. apply to any sales presentations or representations. In addition to the above

PART 1720-FORMAL PROCEDURES criteria the following practices shall be

AND RULES OF PRACTICE deemed to be a violation of the Act. (a) The use of the developer's person

Subpart A-Rules and Rule Making

Sec. nel to repeatedly announce that lots are 1720.1 Scope of rules in this subpart. being sold when in fact this is not the 1720.5 Initiation of proceedings. case or to make repetitive announce- 1720.10 Investigations and conferences. ments of the same lot being sold.

1720.15 Notice. (b) Giving the property report to a

1720.20 Promulgation of rules and regula

tions. purchaser along with other materials

1720.25 Effective date of rules and regulawhen this is done in such a manner as to

tions. conceal the property report from the purchaser.

Subpart B-Filing Assistance (c) Giving a contract to the purchaser

1720.30 Scope of this subpart. or encouraging him to sign anything be

1720.35 Prefiling assistance,

1720.40 fore delivery of the property report.

Processing of filings, (d) Referring to the property report

Subpart C-Formal Investigations or offering statement as anything other 1720.45 Scope of rules in this subpart. than a property report or offering 1720.55 Violations, investigations or instatement.

quiries.

1720.70 Subpoenas in investigations. Subpart C-Posting of Notice of

1720.75 Investigational proceedings. Suspension

1720.80 Rights of witnesses in investiga§ 1715.50 Posting of notice of suspen

gations.

1720.85 Noncompliance. sion.

1720.90 Disposition. (a) Whenever a suspension order has 1720.100 Settlements. been issued under $ 1710.45(b) of this

Subpart D--Proceedings and Hearings chapter, the Secretary may, if deemed

1720.110 Scope of rules in this subpart. necessary in the public interest and for

1720.115 Applicability of sections of this the protection of purchasers, require the

subpart. posting of a sign or signs in a promi- 1720.120 Suspension notice under $ 1710.nent place at the main or most fre

45(a) of this chapter. quently used entrance to the subdivision

1720.125 Notice of proceedings pursuant to and at the place or places where prospec

§ 1710.45(b) (1) of this chapter.

1720.130 Suspension order under $ 1710.45 tive purchasers are taken to sign pur

(b) (2) of this chapter. chase contracts, that indicate the fact 1720.131 Suspension order under $ 1710.45 that the subdivision or a section thereof

(b) (3) of this chapter. is covered by a suspension order and

1720.134 Presumption of hearing request.

1720.135 Motion for more definite statesales made during suspension are unlaw

ment. ful. Appropriate signs will be supplied 1720.140 Time for filing answer to notice of by the Secretary and posted by the de

proceedings. velopers. Posting will be done insofar as

1720.145 Content of answer.

1720.150 Settlements. practicable, in such a manner as not to

1720.155 Hearings—suspension notice purdamage the object or structure to which

suant to § 1710.45(a) of this they are affixed. The developer will be

chapter. responsible for keeping the signs prop- 1720.160 Hearings—notice of proceedings erly posted. Failure to do so will be a

pursuant to § 1710.45(b) (1) of violation of these regulations and it will

this chapter.

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