[§514B-136]  Transfer
of developer rights.  (a)  A
developer right created or reserved under this chapter may be transferred only
by a recorded instrument evidencing the transfer.  The instrument is not
effective unless executed by the transferee.



(b)  Upon
transfer of any developer right, the liability of a transferor developer is as
follows:



(1)  A transferor
is not relieved of any obligation or liability arising before the transfer, and
remains liable for warranty obligations imposed upon the transferor by this
chapter, if any.  Lack of privity does not deprive any unit owner of standing
to maintain an action to enforce any obligation of the transferor;



(2)  If a
successor to any developer right is an affiliate of a developer, the transferor
is jointly and severally liable with the successor for any obligations or
liabilities of the successor relating to the condominium;



(3)  If a
transferor retains any developer rights, but transfers other developer rights
to a successor who is not an affiliate of the developer, the transferor is
liable for any obligations or liabilities imposed on a developer by this
chapter or by the declaration relating to the retained developer rights and
arising after the transfer; and



(4)  A transferor
has no liability for any act or omission or any breach of a contractual or
warranty obligation arising from the exercise of a developer right by a
successor developer who is not an affiliate of the transferor.



(c)  Unless
otherwise provided in a mortgage instrument or other agreement creating a
security interest, in case of foreclosure of a security interest, sale by a
trustee under an agreement creating a security interest, tax sale, judicial
sale, or sale under bankruptcy code or receivership proceedings, of any units
owned by a developer or real estate in a condominium subject to development
rights, a person acquiring title to all the property being foreclosed or sold,
but only upon request, succeeds to all developer rights related to that
property held by that developer.  The judgment or instrument conveying title
must provide for the transfer of only the developer rights requested.



(d)  Upon
foreclosure of a security interest, sale by a trustee under an agreement
creating a security interest, tax sale, judicial sale, or sale under bankruptcy
code or receivership proceedings, of all interests in a condominium owned by a
developer:



(1)  The developer
ceases to have any developer rights; and



(2)  The period of
developer control under section 514B‑106(d) terminates unless the
judgment or instrument conveying title provides for transfer of all developer
rights held by that developer to a successor developer.



(e)  The
liabilities and obligations of a person who succeeds to developer rights are as
follows:



(1)  A successor
to any developer right who is an affiliate of a developer is subject to all
obligations and liabilities imposed on the transferor by this chapter or by the
declaration;



(2)  A successor
to any developer right, other than a successor described in paragraph (3) or
(4) or a successor who is an affiliate of a developer, is subject to the
obligations and liabilities imposed by this chapter or the declaration:



(A)  On a
developer which relate to the successor's exercise or nonexercise of developer
rights; or



(B)  On the
transferor, other than:



(i)  Misrepresentations
by any previous developer;



(ii)  Warranty
obligations on improvements made by any previous developer, or made before the
condominium was created;



(iii)  Breach
of any fiduciary obligation by any previous developer or the developer's
appointees to the board; or



(iv)  Any
liability or obligation imposed on the transferor as a result of the
transferor's acts or omissions after the transfer;



(3)  A successor
to only a right reserved in the declaration to maintain models, sales offices,
and signs, and who may not exercise any other developer right, is not subject
to any liability or obligation as a developer, except the obligation to provide
a public report, any liability arising as a result thereof, and the obligations
under part IV; and



(4)  A successor
to all developer rights held by a transferor who succeeded to those rights
pursuant to a deed or other instrument of conveyance in lieu of foreclosure or
a judgment or instrument conveying title under subsection (c), may declare in a
recorded instrument the intention to hold those rights solely for transfer to
another person.  Thereafter, until transferring all developer rights to any
person acquiring title to any unit or real estate subject to development rights
owned by the successor, or until recording an instrument permitting exercise of
all those rights, that successor may not exercise any of those rights other
than any right held by the transferor to control the board in accordance with
section 514B‑106(d) for the
duration of any period of developer control, and any attempted exercise of
those rights is void.  So long as a successor developer may not exercise
developer rights under this subsection, the successor developer is not subject
to any liability or obligation as a developer other than liability for the
developer's acts and omissions under section 514B‑106(d).



(f) 
Nothing in this section subjects any successor to a developer right to any
claims against or other obligations of a transferor developer, other than
claims and obligations arising under this chapter or the declaration. [L 2004,
c 164, pt of §2]