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pletion dates are over a period of years, then a series of shadings, outlines, or coding may be used to indicate dates of completion.

(0) Lots shall not be advertised as "free" if the prospective purchaser is required to give any consideration whatsoever, and lots shall not be advertised for "closing costs only" when the closing costs are substantially more than normal, or when an additional lot or lots must be purchased at a higher price or to render the "free" lot usable.

(p) Advertising shall not make reference to pre-development sales at a lower price because the land has not yet been developed unless there are plans of development, and a subdivision plat has been recorded, or reasonable assurance is available that such plan will be completed.

(q) Advertising which makes reference to "roads" and "streets" shall make affirmative disclosure as to the nature of such roads and streets; i.e., paved, gravel, dirt, etc. All streets and roads reflected on subdivision maps used in connection with an advertising program will be presumed to be of an all-weather graded gravel quality or higher and will be presumed to be traversable by conventional automobile under all normal weather conditions unless otherwise reflected upon the map.

(r) Legal access referred to in advertising shall be accompanied by phraseology to indicate whether the access is presently usable as a passage for conventional automobiles.

(s) The existence of a road easement or a road right-of-way shall not be advertised unless such easement or rightof-way has been dedicated to the public or to appropriate property owners or to the appropriate property owners' association or similar organizations or entities and recorded in the public records of the county in which the property is located.

(t) Advertising shall not contain “before" and "after" pictures for comparative purposes without an accurate, detailed, comparative analysis of such pictures.

(u) Reprints of published material shall not be used unless the information contained in the reprint is representative, truthful, relevant, and pertinent to the subdivision being offered.

(v) Advertising shall not make comparison of land values unless it is clear

who is making the comparison and the comparison is relevant and fair.

(w) Advertising shall not make reference to a public facility unless money has been budgeted for actual construction of such facility and is available to the public authority having the responsibility of construction or an actual disclosure of the existing facts concerning a public facility is made.

(x) Advertising shall not refer to public facilities under study, unless it is fully disclosed that the facility is merely proposed and under study and provided that no reference is made to the location or route of the facility until such has been decided by the responsible public authority.

(y) Advertising which refers to the purchase price of any lot, parcel, or unit of land must also include any additional compulsory assessments or costs to the prospective purchaser.

(z) Advertising which makes reference to property exchange privileges must state clearly any qualifications concerning such exchange privileges. If advertising makes reference to promised improvements for which the prospective purchaser will be assessed, such facts will be clearly disclosed.

(aa) Advertising shall not describe land as a homesite or building lot if potable water is not available or will not be available at reasonable costs; further, there must be reasonable assurance that a septic tank will operate or a sewer system is in existence unless facts to the contrary are clearly and conspicuously included in each such advertisement pertaining to that property.

(bb) Advertising shall be considered misleading if it infers or implies that the subdivider will resell or repurchase the property being offered at some future time unless the subdivider has made an undertaking to resell or repurchase property for or on behalf of purchasers and has the ability to perform this undertaking.

(cc) Advertising shall be deemed misleading if it represents that the property being offered for sale may be subdivided or resubdivided unless it includes all necessary and relevant information regarding the cost and feasibility of future subdividing.

(dd) Where a community is referred to in advertising, the material shall state the mileage from the approximate geo

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graphical center of the subdivided lands in road miles to the approximate downtown or geographical center of the community.

(ee) Advertising of improvements to the subdivided lands which are not completed shall not be made unless it is stated in unmistakable terms that the improvements are "merely proposed" or "under construction" and the "date of the promised completion" clearly indicated.

(ff) Advertising which embraces the term "canal" or "canals" shall contain a full disclosure of the width and depth of water in such "canal" or "canals."

(gg) Certificates shall not be distributed indicating a discount on property that appears to effect a price reduction from the advertised price. Discounts may be given for quantity purchases, cash, larger payments, or for any reasonable basis. (The purpose of this standard is to eliminate the use of fictitious pricing and illusory discounts.)

(hh) When the company offers more than one subdivision in a single advertising piece, or an offering exceeding 5 miles in length or width, advertising shall carry a disclaimer as follows:

Distances indicated are from the location mentioned to (clubhouse, center of subdivision, or other pertinent or prominent points), each purchaser should check the exact location of the property being offered him in relation to the clubhouse, subdivision or other prominent locations.

(ii) Advertising shall not use statements, photographs, or sketches portraying the use to which advertised land can be put unless the land can be put to such use without unreasonable cost.

(jj) Implied representations and presumptions. Any inference reasonably to be drawn from advertising or promotional material will be considered to be a positive assertion unless the inference is negated therein in clear and unmistakable terms, or unless adequate safeguards have been provided by the owner to reasonably guarantee the occurrence of the thing inferred. Advertising or promotional material will be judged on the basis of the positive representations contained therein and the reasonable inferences to be drawn therefrom. Unless the contrary affirmatively appears in promotional material, the following inferences will be assumed to have been intended in each case mentioned; to wit:

(1) When homesites or building lots are advertised, the inference is that said

lots are immediately usable for such purpose without any further improvement or development by the prospective purchaser and that there is an adequate potable water supply available; that the lands have been approved for installation of septic tanks or that an adequate sewage disposal system is installed; that no further major draining, filling, or subsurface improvement is necessary to construct dwellings, except for reasonable preparation for construction; that the individual homesites or building lots are accessible by automobile without additional expense to the purchaser over existing right-of-way and that no other fact such as if the property, or any portion of the property, is regularly or periodically flooded or substantially covered by standing water for extended periods of time during the year or the land is without available legal access to the purchaser or circumstance exists to prohibit the use of the lots as a homesite or building lot.

(2) When title insurance, abstract, or attorney's opinion is advertised, the inference is that the seller can and will convey fee simple title free and clear of all liens, encumbrances, and defects except those which are disclosed in writing to the prospective purchaser prior to purchase.

(3) When lands are advertised as usable for any particular purpose other than homesites or building lots, the inference is that said lots or parcels are immediately accessible and usable for such purpose by purchasers without the necessity for draining, filling, or other improvement prior to putting the lands to use for such purpose, except for reasonable preparation for construction, and that no fact or circumstance exists to prohibit the immediate use of said lands for such purposes.

(4) When any recreational facility, improvement, accommodation, or privilege is advertised, the inference is that the same is on the lands at the present time and available without restriction to the purchasers of lots at no additional expense.

(5) When improvements are advertised, the inference is that the same are completed.

Any statements required to be made by this section shall be made in type of the same size as the representations made in the advertising.

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Sales practices shall include any act by the developer or his agents to induce a purchaser to buy or lease a lot. The developer or any of his agents or employees shall not make any representations which would violate any provision of the Act. The criteria set forth as advertising guidelines in § 1715.15 shall apply to any sales presentations or representations. In addition to the above criteria the following practices shall be deemed to be a violation of the Act.

(a) The use of the developer's personnel to repeatedly announce that lots are being sold when in fact this is not the case or to make repetitive announcements of the same lot being sold.

(b) Giving the property report to a purchaser along with other materials when this is done in such a manner as to conceal the property report from the purchaser.

(c) Giving a contract to the purchaser or encouraging him to sign anything before delivery of the property report.

(d) Referring to the property report or offering statement as anything other than a property report or offering statement.

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Subpart C-Posting of Notice of Suspension

1720.75

1720.80

Rights of witnesses in investigagations.

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(a) Whenever a suspension order has been issued under § 1710.45 (b) of this chapter, the Secretary may, if deemed necessary in the public interest and for the protection of purchasers, require the posting of a sign or signs in a prominent place at the main or most frequently used entrance to the subdivision and at the place or places where prospective purchasers are taken to sign purchase contracts, that indicate the fact that the subdivision or a section thereof is covered by a suspension order and sales made during suspension are unlawful. Appropriate signs will be supplied by the Secretary and posted by the developers. Posting will be done insofar as practicable, in such a manner as not to damage the object or structure to which they are affixed. The developer will be responsible for keeping the signs properly posted. Failure to do so will be a violation of these regulations and it will

1720.90 1720.100

Noncompliance. Disposition.

Settlements.

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1720.520 1720.525

Decisions of appeals officer.

Reconsideration of final decision of appeals officer.

1720.530 Department representative.

AUTHORITY: The provisions of this Part 1720 are issued under sec. 1419 of the Interstate Land Sales Full Disclosure Act, 82 Stat. 598; 15 U.S.C. 1718.

SOURCE: 38 FR 23899, Sept. 4, 1973, unless otherwise noted.

Subpart A-Rules and Rule Making

§ 1720.1 Scope of rules in this subpart. The rules in this subpart apply to and govern procedure for the promulgation of rules and regulations under the Act. The rules in this subpart do not apply to interpretative rules, general statements of policy, rules of organization procedure, or practice or in any situation in which the Secretary for good cause finds (and incorporates the findings and brief statement of the reasons therefor in the rules issued) that notice and public procedure thereon are impracticable, unnecessary or contrary to the public interest. § 1720.5 Initiation of proceedings.

Proceedings for the issuance of rules and regulations may be commenced by the Secretary upon his own initiative or pursuant to petition filed with the Secretary by any interested person stating reasonable grounds therefor. If the Secretary determines that a petition is not sufficient to warrant the holding of a rule making proceeding, the petitioner shall be promptly notified and given an opportunity to submit additional data. Procedures for the amendment or repeal of a rule or regulation are the same as for the issuance thereof.

§ 1720.10 Investigations and confer

ences.

(a) In connection with a rule making proceeding, the Secretary may conduct such investigations, make such studies and hold such conferences as he may deem necessary. All or any part of such investigations may be conducted under the provisions of Subpart C of this part.

(b) At any such conferences, interested persons may appear to express views and suggest amendments relative to proposed rules and regulations.

§ 1720.15 Notice.

General notice of proposed rule making shall be published in the FEDERAL REGISTER and, to the extent practicable, otherwise made available to interested persons. Such notice shall include a statement of the time, place and nature of the proceeding; reference to the authority under which the rule or regulation is proposed; either the terms or substance of the proposed rule or regulation or a description of the subjects and issues involved and the manner in which interested persons shall be afforded the opportunity to participate in the proceeding. If the rule making proceeding was instituted pursuant to petition, a copy of the notice shall be served on the petitioner.

§ 1720.20 Promulgation of rules and regulations.

The Secretary, after consideration of all relevant matters of fact, law, policy and discretion, including all relevant matters presented by interested persons in the rule making proceedings, shall adopt and publish in the FEDERAL REGISTER an appropriate rule or regulation together with a concise general statement of its basis and purpose and any necessary findings; or the Secretary shall give other appropriate public notice of disposition of the rule making proceeding.

§ 1720.25 Effective date of rules and regulations.

The effective date of any rule or regulation or of an amendment, suspension, or repeal of any rule or regulation shall be specified in a notice published in the FEDERAL REGISTER. Such date shall not be less than 30 days after the date of such publication unless the Secretary specifies an earlier effective date for good cause found and published with the rule or regulation.

Subpart B-Filing Assistance

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may receive advice of a general nature as to the preparation of the filing, including information as to proper format to be used and the scope of the items to be included in the format. Inquiries and requests for informal discussions with staff members should be directed to the Administrator, Office of Interstate Land Sales Registration, Department of Housing and Urban Development, 451 Seventh Street SW., Washington, DC 20411. § 1720.40 Processing of filings.

(a) Statements of Record and accompanying filing fees will be received on behalf of the Secretary by the Administrator, Office of Interstate Land Sales Registration, for determination of (1) completeness of the statement, (2) adequacy of the filing fee and (3) adequacy of disclosure. Where it appears that all three criteria are satisfied and it is otherwise practicable, acceleration of the effectiveness of the Statement of Record will normally be granted.

(b) Filings intended as Statements of Record but which do not comply in form with §§ 1710.105 and 1710.120 of this chapter, whichever is applicable, and Statements of Record accompanied by inadequate filing fees will not be accepted as Statements of Record within the meaning of the Act and will not be effective to accomplish any purpose under the Act. At the discretion of the Administrator, such filings and any moneys accompanying them may be immediately returned to the sender or after notification may be held pending the sender's appropriate response.

(c) Persons filing incomplete or inaccurate Statements of Record which are nevertheless, correct in form and accompanied by adequate filing fees will be notified and given reasonable opportunity to correct deficiencies. Failure to correct will result in the application of the suspension procedures in § 1710.45 of this chapter.

[38 FR 23899, Sept. 4, 1973; 38 FR 32445, Nov. 26, 1973]

Subpart C-Formal Investigations § 1720.45 Scope of rules in this subpart. (a) The rules in this subpart apply to and govern procedures for the conduct of formal inquiries and investigations undertaken by the Secretary and the manner in which persons alleged to have

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