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Notes

12 C.F.R. §§ 1010.5–1010.14

10 sections in range

§1010.5. Statutory exemptions.

12 C.F.R. § 1010.5

A listing of the statutory exemptions is contained in 15 U.S.C. 1702. In accordance with 15 U.S.C. 1702(a)(2), if the sale involves a condominium or multi-unit construction, a presale clause conditioning the sale of a unit on a certain percentage of sales of other units is permissible if it is legally binding on the parties and is for a period not to exceed 180 days. However, the 180-day provision cannot extend the 2-year period for performance. The permissible 180 days is calculated from the date the first purchaser signs a sales contract in the project or, if a phased project, from the date the first purchaser signs the first sales contract in each phase.
Notes, amendments, and revision history

Amendments

[81 FR 29116, May 11, 2016]

Authority

Authority: 12 U.S.C. 5512, 5581; 15 U.S.C. 1718.

Source

Source: 76 FR 79489, Dec. 21, 2011, unless otherwise noted.

Amendments

[81 FR 29116, May 11, 2016]

§1010.6. One hundred lot exemption.

12 C.F.R. § 1010.6

The sale of lots in a subdivision is exempt from the registration requirements of the Act if, since April 28, 1969, the subdivision has contained fewer than 100 lots, exclusive of lots which are exempt from jurisdiction under § 1010.5. In the sale of lots in the subdivision that are not exempt under § 1010.5, the developer must comply with the Act's anti-fraud provisions, set forth in § 1010.4(b) and (c).
Notes, amendments, and revision history

Authority

Authority: 12 U.S.C. 5512, 5581; 15 U.S.C. 1718.

Source

Source: 76 FR 79489, Dec. 21, 2011, unless otherwise noted.

§1010.7. Twelve lot exemption.

12 C.F.R. § 1010.7

(a)
The sale of lots is exempt from the registration requirements of the Act if, beginning with the first sale after June 20, 1980, no more than twelve lots in the subdivision are sold in the subsequent twelve-month period. Thereafter, the sale of the first twelve lots is exempt from the registration requirements if no more than twelve lots were sold in each previous twelve month period which began with the anniversary date of the first sale after June 20, 1980.
(b)
A developer may apply to the Director to establish a different twelve month period for use in determining eligibility for the exemption and the Director may allow the change if it is for good cause and consistent with the purpose of this section.
(c)
In determining eligibility for this exemption, all lots sold or leased in the subdivision after June 20, 1980, are counted, whether or not the transactions are otherwise exempt. Sales or leases made prior to June 21, 1980, are not considered in determining eligibility for the exemption.
(d)
The sale must also comply with the anti-fraud provisions of § 1010.4(b) and (c) of this part.
Notes, amendments, and revision history

Authority

Authority: 12 U.S.C. 5512, 5581; 15 U.S.C. 1718.

Source

Source: 76 FR 79489, Dec. 21, 2011, unless otherwise noted.

§1010.8. Scattered site subdivisions.

12 C.F.R. § 1010.8

(a)
The sale of lots in a subdivision consisting of noncontiguous parts is exempt from the registration requirements of the Act if:
(1)
Each noncontiguous part of the subdivision contains twenty or fewer lots; and
(2)
Each purchaser or purchaser's spouse makes a personal, on-the-lot inspection of the lot purchased prior to signing a contract.
(b)
For purposes of this exemption, interruptions such as roads, parks, small bodies of water or recreational facilities do not serve to break the contiguity of parts of a subdivision.
(c)
The sale must also comply with the anti-fraud provisions of § 1010.4(b) and (c) of this part.
Notes, amendments, and revision history

Authority

Authority: 12 U.S.C. 5512, 5581; 15 U.S.C. 1718.

Source

Source: 76 FR 79489, Dec. 21, 2011, unless otherwise noted.

§1010.9. Twenty acre lots.

12 C.F.R. § 1010.9

(a)
The sale of lots in a subdivision is exempt from the registration requirements of the Act if, since April 28, 1969, each lot in the subdivision has contained at least twenty acres. In determining eligibility for the exemption, easements for ingress and egress or public utilities are considered part of the total acreage of the lot if the purchaser retains ownership of the property affected by the easement.
(b)
The sale must also comply with the anti-fraud provisions of § 1010.4(b) and (c) of this part.
Notes, amendments, and revision history

Authority

Authority: 12 U.S.C. 5512, 5581; 15 U.S.C. 1718.

Source

Source: 76 FR 79489, Dec. 21, 2011, unless otherwise noted.

§1010.10. Single-family residence exemption.

12 C.F.R. § 1010.10

(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 single-family 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 deed. 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-the-lot 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 § 1010.4(b) and (c) of this part.
Notes, amendments, and revision history

Authority

Authority: 12 U.S.C. 5512, 5581; 15 U.S.C. 1718.

Source

Source: 76 FR 79489, Dec. 21, 2011, unless otherwise noted.

§1010.11. Manufactured home exemption.

12 C.F.R. § 1010.11

(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 U.S. Department of Housing and Urban Development (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 § 1010.4(b) and (c) of this part.
Notes, amendments, and revision history

Authority

Authority: 12 U.S.C. 5512, 5581; 15 U.S.C. 1718.

Source

Source: 76 FR 79489, Dec. 21, 2011, unless otherwise noted.

§1010.12. Intrastate exemption.

12 C.F.R. § 1010.12

(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 § 1010.5, § 1010.11, or § 1010.13.
(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
(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.
(4)
The lot being sold is free and clear of all liens, encumbrances and adverse claims except the following:
(i)
Mortgages or deeds of trust which contain release provisions for the individual lot purchased if—
(A)
The contract of sale obligates the developer to deliver, within 180 days, a warranty deed (or its equivalent under local law), which at the time of delivery is free from any monetary liens or encumbrances; and
(B)
The purchaser's payments are deposited in an escrow account independent of the developer until a deed is delivered.
(ii)
Liens which are subordinate to the leasehold interest and do not affect the lessee's right to use or enjoy the lot.
(iii)
Property reservations which are for the purpose of bringing public services to the land being developed, such as easements for water and sewer lines.
(iv)
Taxes or assessments which constitute liens before they are due and payable if imposed by a state or other public body having authority to assess and tax property or by a property owners' association.
(v)
Beneficial property restrictions that are mutually enforceable by the lot owners in the subdivision. Restrictions, whether separately recorded or incorporated into individual deeds, must be applied uniformly to every lot or group of lots. To be considered beneficial and enforceable, any restriction or covenant that imposes an assessment on lot owners must apply to the developer on the same basis as other lot owners. Developers who maintain control of a subdivision through a Property Owners' Association, Architectural Control Committee, restrictive covenant or otherwise, shall transfer such control to the lot owners no later than when the developer ceases to own a majority of total lots in, or planned for, the subdivision. Relinquishment of developer control shall require affirmative action, usually in the form of an election based upon one vote per lot.
(vi)
Reservations contained in United States land patents and similar Federal grants or reservations.
(5)
Prior to the sale the developer discloses in a written statement to the purchaser all qualifying liens, reservations, taxes, assessments and restrictions applicable to the lot purchased. The developer must obtain a written receipt from the purchaser acknowledging that the statement required by this subparagraph was delivered to the purchaser.
(6)
Prior to the sale the developer provides in a written statement good faith estimates of the cost to the purchaser of providing electric, water, sewer, gas and telephone service to the lot. The estimates for unsold lots must be updated every two years or more frequently if the developer has reason to believe that significant cost increases have occurred. The dates on which the estimates were made must be included in the statement. The developer must obtain a written receipt from the purchaser acknowledging that the statement required by this subparagraph was delivered to the purchaser.
(b)
Intrastate Exemption Statement. To satisfy the requirements of paragraphs (a)(5) and (6) of this section, an Intrastate Exemption Statement containing the information prescribed in each such paragraph shall be given to each purchaser. A State-approved disclosure document may be used to satisfy this requirement if all the information required by paragraphs (a)(5) and (6) of this section is included in this disclosure. In such a case, the developer must obtain a written receipt from the purchaser and comply with all other requirements of the exemption. To be acceptable for purposes of the exemption, the statement(s) given to purchasers must contain neither advertising nor promotion on behalf of the developer or subdivision nor references to the Bureau of Consumer Financial Protection or the Consumer Financial Protection Bureau. A sample Intrastate Exemption Statement is included in the exemption guidelines.
(c)
The sale must also comply with the anti-fraud provisions of § 1010.4(b) and (c) of this part.
Notes, amendments, and revision history

Authority

Authority: 12 U.S.C. 5512, 5581; 15 U.S.C. 1718.

Source

Source: 76 FR 79489, Dec. 21, 2011, unless otherwise noted.

§1010.13. Metropolitan Statistical Area (MSA) exemption.

12 C.F.R. § 1010.13

(a)
Eligibility requirements. The sale of a lot which meets the following requirements is exempt from registration requirements of the Act:
(1)
The lot is in a subdivision which contains fewer than 300 lots and has contained fewer than 300 lots since April 28, 1969.
(2)
The lot is located within a Metropolitan Statistical Area (MSA) as defined by the Office of Management and Budget and characterized in paragraph (b) of this section.
(3)
The principal residence of the purchaser is within the same MSA as the subdivision.
(4)
The purchaser or purchaser's spouse makes a personal on-the-lot inspection of the lot to be purchased prior to signing a contract or agreement.
(5)
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 nonwaivable 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, or, 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.
(6)
The lot being sold must be free and clear of liens such as mortgages, deeds of trust, tax liens, mechanics' liens, or judgments. For purposes of this exemption, the term liens does not include the following:
(i)
Mortgages or deeds of trust which contain release provisions for the individual lot purchased if—
(A)
The contract of sale obligates the developer to deliver, within 180 days, a warranty deed (or its equivalent under local law), which at the time of delivery is free from any monetary liens or encumbrances; and
(B)
The purchaser's payments are deposited in an escrow account independent of the developer until a deed is delivered.
(ii)
Liens which are subordinate to the leasehold interest and do not affect the lessee's right to use or enjoy the lot.
(iii)
Property reservations which are for the purpose of bringing public services to the land being developed, such as easements for water and sewer lines.
(iv)
Taxes or assessments which constitute liens before they are due and payable if imposed by a state or other public body having authority to assess and tax property or by a property owners' association.
(v)
Beneficial property restrictions that are mutually enforceable by the lot owners in the subdivision. Restrictions, whether separately recorded or incorporated into individual deeds, must be applied uniformly to every lot or group of lots. To be considered beneficial and enforceable, any restriction or covenant that imposes an assessment on lot owners must apply to the developer on the same basis as other lot owners. Developers who maintain control of a subdivision through a Property Owners' Association, Architectural Control Committee, restrictive covenants, or otherwise, shall transfer such control to the lot owners no later than when the developer ceases to own a majority of total lots in, or planned for, the subdivision. Relinquishment of developer control shall require affirmative action, usually in the form of an election based upon one vote per lot.
(vi)
Reservations contained in United States land patents and similar Federal grants or reservations.
(7)
Before the sale the developer gives a written MSA Exemption Statement to the purchaser and obtains a written receipt acknowledging that the statement was received. A sample MSA Exemption Statement is included in the exemption guidelines. A State-approved disclosure document may be used to satisfy this requirement if all of the information required by this section is included. The statement(s) given to purchasers must contain neither advertising nor promotion on behalf of the developer or the subdivision nor references to the Bureau of Consumer Financial Protection or the Consumer Financial Protection Bureau. In descriptive and concise terms, the statement that the developer must give the purchaser shall disclose the following:
(i)
All liens, reservations, taxes, assessments, beneficial property restrictions which are enforceable by other lot owners in the subdivision, and adverse claims which are applicable to the lot to be purchased.
(ii)
Good faith estimates of the cost to the purchaser of providing electric, water, sewer, gas and telephone service to the lot. The estimates for unsold lots must be updated every two years, or more frequently if the developer has reason to believe that significant cost increases have occurred. The dates on which the estimates were made must be included in the statement.
(8)
The developer executes and gives to the purchaser a written instrument designating a person within the state of residence of the purchaser as the developer's agent for service of process. The developer must also acknowledge in writing that it submits to the legal jurisdiction of the state in which the purchaser or lessee resides.
(9)
The developer executes a written affirmation for each sale made under this exemption. By January 31 of each year, the developer submits to the Director a copy of the executed affirmation for each sale made during the preceding calendar year or a master affirmation in which are listed all purchasers' names and addresses and the identity of the lots purchased. Individual affirmations must be available for the Director's review at all times during the year. The affirmation must be in the form provided in section I of the appendix to this part: Form for Developer's Affirmation for Land Sale.
(b)
Metropolitan Statistical Area. Metropolitan Statistical Areas are defined by the Office of Management and Budget generally on the basis of population statistics reported in a census. To determine whether a subdivision is located within an MSA and the boundaries of an MSA, contact the Office of Information and Regulatory Affairs, Office of Management and Budget, 726 Jackson Place NW., Washington, DC 20503.
(c)
The sale must also comply with the anti-fraud provisions of § 1010.4(b) and (c).
Notes, amendments, and revision history

Authority

Authority: 12 U.S.C. 5512, 5581; 15 U.S.C. 1718.

Source

Source: 76 FR 79489, Dec. 21, 2011, unless otherwise noted.

§1010.14. Regulatory exemptions.

12 C.F.R. § 1010.14

(a)
Eligibility requirements. The following transactions are exempt from the registration requirements of the Act unless the Director has terminated the exemption in accordance with paragraph (b) of this section.
(1)
The sale of lots, each of which will be sold for less than $100, including closing costs, if the purchaser will not be required to purchase more than one lot.
(2)
The lease of lots for a term not to exceed five years if the terms of the lease do not obligate the lessee to renew.
(3)
The sale of lots to a person who is engaged in a bona fide land sales business.
(4)
The sale of a lot to a person who owns the contiguous lot which has a 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 preceding the sale.
(b)
Termination. If the Director has reasonable grounds to believe that exemption from the registration requirements in a particular case is not in the public interest, the Director may, after issuing a notice and giving the respondent an opportunity to request a hearing within fifteen days of receipt of the notice, terminate eligibility 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 § 1012.238.
(c)
The sale must also comply with the anti-fraud provisions of § 1010.4(b) and (c) of this part.
Notes, amendments, and revision history

Authority

Authority: 12 U.S.C. 5512, 5581; 15 U.S.C. 1718.

Source

Source: 76 FR 79489, Dec. 21, 2011, unless otherwise noted.