residential, commercial or industrial building on it.

(5) The sale of real estate to a government or government agency.

(6) The sale of a lot to a person who has leased and resided primarily on the lot for at least the year preceeding the sale.

(b) Termination. If the Secretary has reasonable grounds to believe that exemption from the registration requirements in a particular case is not in the public interest, the Secretary may, after issuing a notice and giving the respondent an opportunity to request a hearing within fifteen days of receipt of the notice, terminate eligiblity for exemption. The basis for issuing a notice may be the conduct of the developer or agent, such as unlawful conduct or insolvency, or adverse information about the lots or real estate that should be disclosed to the purchasers. Proceedings will be governed by § 1720.238.

(c) The sale must also comply with the anti-fraud provisions of § 1710.4 (b) and (c) of this part.

[45 FR 40479, June 13, 1980, as amended at 49 FR 31370, Aug. 6, 1984]

§ 1710.15 [Reserved]

§ 1710.16 Regulatory exemption-determination required.

(a) General. The Secretary may exempt from the registration requirements of the Act any subdivision or lots in a subdivision by issuing an order in writing if it is determined that registration is not necessary in the public interest and for the protection of purchasers on the basis of the small amount or limited character of the offering and the requirements contained in paragraph (b) of this section.

(b) Eligibility requirements. An exemption order may be issued at the discretion of the Secretary on the basis of the small amount or limited character of the offering if the following requirements are met:

(1) The subdivision or sales substantially meet the requirements of one of the exemptions available under this chapter.

(2) Each contract

(i) Specifies the developer's and purchaser's responsibilities for providing

and maintaining roads, water and sewer facilities and any existing or promised amenities;

(ii) Contains a good faith estimate of the year in which the roads, water and sewer facilities and promised amenities will be completed;

(iii) Contains a non-waivable provision giving the purchaser the opportunity to revoke the contract until at least midnight of the seventh calendar day following the date the purchaser signed the contract. If the purchaser is entitled to a longer revocation period by operation of State law, that period becomes the Federal revocation period and the contract must reflect the requirements of the longer period.

(iv) Contains a provision that obligates the developer to deliver to the purchaser within 180 days of the date the purchaser signed the sales contract, a warranty deed, or its equivalent under local law, which at the time of delivery is free from any monetary liens or encumbrances.

(3) The purchaser or purchaser's spouse makes a personal on-the-lot inspection of the lot to be purchased before signing a contract.

(4) The developer files a request for an exemption order and supporting documentation in accordance with paragraphs (c) and (d) of this section and submits a filing fee of $500.00 in accordance with § 1710.35(a) of this part. This fee is not refundable.

(c) Request. The request for an Exemption Order must be in the following format:

REQUEST FOR EXEMPTION ORDER

Subdivision

Location (including county)-
Developer
Address

Authorized Agent or President of Developer

Address

Number of Lots Subject to Exemption RequestDescription of Lots (list lot and block number or other identifying designation)

I affirm that I am the developer or owner of the property described above or will be the developer or owner at the time the lots are offered for sale to the public, or that I am the agent authorized by the developer or owner to complete this statement.

I further affirm that the statements contained in all documents submitted with the request for an exemption order are true and complete.

(Date)

(Signature of Developer, Owner or Authorized Agent)

(Title)

WARNING: Section 1418 of the Housing and Urban Development Act of 1968 (83 Stat. 598, 15 U.S.C. 1717 as amended) 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 $10,000.00 or imprisoned not more than five years, or both."

(d) Supporting documentation. A request for an exemption order must be accompanied by the following documentation:

(1) A plat of the entire subdivision with the lots subject to the exemption request delineated thereon.

(2) A copy of the contract to be used. (3) A clear and specific statement detailing how the proposed sales of lots subject to the exemption request substantially complies with one of the available exemption provisions.

(4) A description of the method by which the lots have been and will be promoted and to which population centers the promotion has been and will be directed.

(e) The sale must also comply with the anti-fraud provisions of § 1710.4 (b) and (c) of this part.

(f) Termination. If, subsequent to the issuance of an exemption order, the Secretary has reasonable grounds to believe that exemption from the registration requirements in the particular case is not in the public interest, the Secretary may, after issuing a notice and giving the respondent an opportunity to request a hearing within fifteen days of receipt of the notice, terminate the exemption order. The basis for issuing a notice may be apparent omissions or misrepresentations in the documents submitted to the Secretary, the conduct of the developer or agent, such as unlawful conduct or insolvency, or adverse information about the real estate that should be disclosed to purchasers. Proceedings will be governed by § 1720.238.

[45 FR 40479, June 13, 1980, as amended at 49 FR 31370, 31373, Aug. 6, 1984]

§ 1710.17 Advisory opinion.

(a) General. A developer may request an opinion from the Secretary as to whether an offering qualifies for an exemption or is subject to the jurisdiction of the Act.

(b) Requirements. All requests for Advisory Opinions must be accompanied by the following:

(1) A $500.00 filing fee submitted in accordance with § 1710.35(a). This fee is not refundable.

(2) A comprehensive description of the conditions and operations of the offering. There is no prescribed format for submitting this information, but the developer should at least cite the applicable statutory or regulatory basis for the exemption or lack of jurisdiction and thoroughly explain how the offering either satisfies the requirements for exemption or falls outside the purview of the Act.

(3) An affirmation as shown below:

[45 FR 40479, June 13, 1980, as amended at 49 FR 31370, 31373, Aug. 6, 1984]

§ 1710.18 No action letter.

(a) If the sale of lots is subject to the registration requirements of the Act but the circumstances of the sale are such that no affirmative action to enforce the registration requirements is needed to protect the public interest or prospective purchasers, the Secretary may issue a No Action Letter.

a

(b) To obtain a No Action Letter a developer must submit request which includes a thorough description of the proposed transaction, the property involved, and the circumstances surrounding the sale.

(c) The issuance of a No Action Letter will not affect any right which a purchaser has under the Act, and it will not limit future action by the Secretary if there is evidence to show that affirmative action is necessary to protect the public interest or prospective purchasers. In no event will a No Action Letter be issued after the sale has occurred.

§ 1710.20 Requirements for registering a subdivision-Statement of Recordfiling and form.

(a) Filing. In order to register a subdivision and receive an effective date, the developer or owner of the subdivision must file a Statement of Record with the Secretary. The official address to be used is:

Office of Interstate Land Sales Registration, Department of Housing and Urban Development, 451 Seventh Street, S.W., Washington, D.C. 20410.

A fee, in the amount and the form set out in § 1710.35, must accompany the Statement of Record.

(b) Form. The Statement of Record shall be in the format specified in § 1710.100 and shall be completed in accordance with the instructions in §§ 1710.102, 1710.105 through 1710.118, 1710.200, 1710.208 through 1710.216 and 1710.219. It shall be supported by the documents required by §§ 1710.208 through 1710.216 and 1710.219. It shall include any other information or documents which the Secretary may require as being necessary or appropriate for the protection of purchasers.

(c) State filings. A Statement of Record submitted under the provisions of 24 CFR Part 1710, Subpart C-Certification of Substantially Equivalent State Law, shall consist of the materials designated by the Certification Agreement between the Secretary and the certified State in which the subdivision is located.

(Pub. L. 90-448, 82 Stat. 476, 590; 15 U.S.C. 1701 et seq.)

[44 FR 21453, Apr. 10, 1979, as amended at 50 FR 10942, Mar. 19, 1985]

EFFECTIVE DATE NOTE: At 50 FR 10942, Mar. 19, 1985, effective April 29, 1985, in § 1710.20 the section heading and paragraph (c) were revised. For the convenience of the user, the superseded text is set forth below. § 1710.20 Requirements for registering a subdivision-Statement of record-filing and form.

(a) General. The effective date of an initial, consolidated or amended Statement of Record is the 30th day after the filing of the latest amendatory material unless the Secretary notifies the developer in writing prior to such 30th day that:

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

(2) An earlier effective date has been determined.

(b) Suspension of effective date by developer. (1) A developer, or owner, may request that the effective date of its Statement of Record be suspended, provided there are no administrative proceedings pending against either of them at the time the request is submitted. The request must include any consolidations or amendments which have been made to the initial Statement of Record. Forms for this purpose will be furnished by the Secretary upon request.

[45 FR 40479, June 13, 1980, as amended at 49 FR 31368, Aug. 6, 1984]

§ 1710.10 Single-family residence exemption.

(a) General. The sale of a lot which meets the requirements specified under paragraphs (b) and (c) of this section is exempt from the registration requirements of the Act.

(b) Subdivision requirements. (1) The subdivision must meet all local codes and standards.

(2) In the promotion of the subdivision there must be no offers, by direct mail or telephone solicitation, of gifts, trips, dinners or use of similar promotional techniques to induce prospective purchasers to visit the subdivision or to purchase a lot.

(c) Lot requirements. (1) The lot must be located within a municipality or county where a unit of local government or the State specifies minimum standards in the following areas for the development of subdivision lots taking place within its boundaries:

(i) Lot dimensions.

(ii) Plat approval and recordation. (iii) Roads and access.

(iv) Drainage.

(v) Flooding.

(vi) Water supply.

(vii) Sewage disposal.

(2) Each lot sold under the exemption must be either zoned for singlefamily residences or, in the absence of a zoning ordinance, limited exclusively by enforceable covenants or restrictions to single-family residences. Manufactured homes, townhouses, and residences for one-to-four family use are considered single-family residences for purposes of this exemption provision.

(3) The lot must be situated on a paved street or highway which has been built to standards established by the State or the unit of local government in which the subdivision is located. If the roads are to be public roads they must be acceptable to the unit of local government that will be responsible for maintenance. If the street or highway is not complete, the developer must post a bond or other surety acceptable to the municipality or county in the full amount of the cost of completing the street or highway to assure

completion to local standards. For purposes of this exemption, "paved" means concrete or pavement with a bituminous surface that is impervious to water, protects the base and is durable under the traffic load and maintenance contemplated.

(4) The unit of local government or a homeowners association must have accepted or be obligated to accept the responsibility for maintaining the street or highway upon which the lot is situated. In any case in which a homeowners association has accepted or is obligated to accept maintenance responsibility, the developer must, prior to signing of a contract or agreement to purchase, provide the purchaser with a good faith written estimate of the cost of carrying out the responsibility over the first ten years of ownership.

(5) At the time of closing, potable water, sanitary sewage disposal, and electricity must be extended to the lot or the unit of local government must be obligated to install the facilities within 180 days following closing. For subdivisions which will not have a central water or sewage disposal system, there must be assurances that an adequate potable water supply is available year-round and that the lot is approved for the installation of a septic tank.

(6) The contract of sale must require delivery within 180 days after the signing of the sales contract of a warranty deed, which at the time of delivery is free from monetary liens and encumbrances. If a warranty deed is not commonly used in the jurisdiction where the lot is located, a deed or grant which warrants that the seller has not conveyed the lot to another person may be delivered in lieu of a warranty Ideed. The deed or grant used must warrant that the lot is free from encumbrances made by the seller or any other person claiming by, through, or under the seller.

(7) At the time of closing, a title insurance binder or title opinion reflecting the condition of title must be in existence and issued or presented to the purchaser showing that, subject only to exceptions which are approved in writing by the purchaser at the

time of closing, marketable title to the lot is vested in the seller.

(8) The purchaser or purchaser's spouse must make a personal, on-thelot inspection of the lot purchased prior to signing a contract or agreement to purchase.

(d) The sale must also comply with the anti-fraud provisions of § 1710.4 (b) and (c) of this part.

[45 FR 40479, June 13, 1980, as amended at 49 FR 31368, Aug. 6, 1984; 50 FR 9269, Mar. 7, 1985]

EFFECTIVE DATE NOTE: At 50 FR 9269, Mar. 7, 1985, § 1710.10 was amended by removing the reference "mobile homes" and adding the reference "manufactured homes", effective April 17, 1985.

§ 1710.11 Manufactured home exemption.

(a) The sale of a lot is exempt from the registration requirements of the Act when the following eligibility requirements are met:

(1) The lot is sold as a homesite by one party and a manufactured home is sold by another party and the contracts of sale

(i) Obligate the sellers to perform, contingent upon the other seller carrying out its obligations so that a completed manufactured home will be erected on a completed homesite within two years after the date the purchaser signed the contract to purchase the lot;

(ii) Provide that all funds received by the sellers are to be deposited in escrow accounts independent of the sellers until the transactions are completed;

(iii) Provide that funds received by the sellers will be released to the buyer upon demand if the lot on which the manufactured home has been erected is not conveyed within two years; and

(iv) Contain no provisions which restrict the purchaser's remedy of bringing suit for specific performance.

(2) The homesite is developed in conformance with all local codes and standards, if any, for manufactured home subdivisions.

(3) At the time of closing—

(i) Potable water and sanitary sewage disposal are available to the homesite and electricity has been extended to the lot line;

(ii) The homesite is accessible by roads;

(iii) The purchaser receives marketable title to the lot; and

(iv) Other common facilities represented in any manner by the developer or agent to be provided are completed or there are letters of credit, cash escrows or surety bonds in the form acceptable to the local government in an amount equal to 100 percent of the estimated cost of completion. Corporate bonds are not acceptable for purposes of the exemption.

(4) For purposes of this section, a manufactured home is a unit receiving a label in conformance with HUD regulations implementing the National Manufactured Housing Construction and Safety Standards Act of 1974 (42 U.S.C. 5401).

(b) The sale must also comply with the anti-fraud provisions of § 1710.4 (b) and (c) of this part.

[45 FR 40479, June 13, 1980, as amended at 49 FR 31368, Aug. 6, 1984; 49 FR 33644, Aug. 24, 1984; 50 FR 9269, Mar. 7, 1985]

EFFECTIVE DATE NOTE: At 50 FR 9269, Mar. 7, 1985, § 1710.11 was amended by removing the reference "mobile home" and adding the reference "manufactured home", effective April 17, 1985.

§ 1710.12 Intrastate exemption.

(a) Eligibility requirements. The sale of a lot is exempt from the registration requirements of the Act if the following requirements are met:

(1) The sale of lots in the subdivision after December 20, 1979, is restricted solely to residents of the State in which the subdivision is located unless the sale is exempt under § 1710.5, § 1710.11 or § 1710.13.

(2) The purchaser or purchaser's spouse makes a personal on-the-lot inspection of the lot to be purchased before signing a contract.

(3) Each contract

(i) Specifies the developer's and purchaser's responsibilities for providing and maintaining roads, water and sewer facilities and any existing or promised amenities;

(ii) Contains a good faith estimate of the year in which the roads, water and sewer facilities and promised amenities will be completed; and