§514E-25  Lien payment deposit.  (a) 
The lien payment deposit shall consist of either (i) nondelinquent purchase
money contracts from purchasers of time share interests in the time share plan
or (ii) other assets deposited into trust by the developer and approved by the
director.



  (b)(1)  The purchase money contracts must have an
aggregate remaining principal balance of not less than, and any other assets
deposited must have a liquidated value of not less than, one hundred ten per
cent of the difference between (i) the aggregate remaining principal balance
owing under blanket liens against the time share unit or time share interests
in it, including any prepayment penalties, release prices, and similar charges,
(ii) the amount of money, or its equivalent, in the trust and available at any
time to be applied to the reduction of the principal balance of the blanket
lien.  The developer shall have the burden of establishing to the satisfaction
of the director the liquidated value of assets other than purchase money
contracts from purchasers in the time share plan.



(2)  If the blanket lien payment deposit consists of
purchase money contracts, the payments required to be made by purchasers under
the contracts shall:



(A)  Be due on or before the dates on which payments
become due on the blanket liens;



(B)  If paid when due, be equal to at least one
hundred ten per cent of the amount required to be paid on the blanket liens on
such date; and



(C)  Be sufficient to pay, in full, during the
term of such contracts (i) all amounts secured by the blanket liens, including
prepayment penalties and release prices, if any; and (ii) all service charges
payable to the trustee, any collection agent, and any other servicing agent
pursuant to the trust instrument.



(3)  If the developer proposes to deposit into trust
assets other than purchase money contracts, such assets must be sufficient to
pay debt service installments on the blanket lien as they become due and to
create a sinking fund or other arrangement adequate to extinguish the debt
secured by the blanket lien at its maturity.



  (c)(1)  In lieu of the requirements of subsection (b),
the developer may elect to follow the requirements of paragraphs (2), (3), (4),
and (5) of this subsection if the following requirements are met:



(A)  The developer owns or leases under a lease
for a term of not less than thirty years all the noncommercial portions of a
hotel, condominium, cooperative, or other project;



(B)  No more than seventy-five per cent of the
appraised value of the project is subject to a mortgage or other lien.  The
appraised value shall be based on the use of the project prior to the creation
of the time share plan;



(C)  (i) As security for the obligations of the
developer to the owners, the developer executes and records a mortgage in favor
of the trustee under the lien payment trust or the association, in either case
as trustee on behalf of the owners, twenty-five per cent of the appraised value
of the project; or (ii) the developer conveys or transfers the project to a
trust meeting the requirements of sections 514E-22 and 23, and under the terms
of the trust instrument the twenty-five per cent of the beneficial interest in
the trust is held for the benefit of, or conveyed or transferred to, the
association, acting as trustee for the owners, as security for the obligations
of the developer to owners; and



(D)  The developer files a verified statement
of the program of financing acceptable to the director containing a cash flow
analysis showing that the developer has adequate funds to pay the debt service
installments on the blanket liens on the project during the sales period and to
extinguish the debt secured by the blanket lien at its maturity, whether from
sales proceeds, loan commitments, income from operations of the project, or
other sources.



(2)  The purchase money contracts must have an
aggregate remaining principal balance of not less than, and any other assets
deposited must have a liquidated value of not less than, one hundred ten per
cent of the difference between (i) a pro rata share of the aggregate remaining
principal balance owing under blanket liens against the time share unit or time
share interests in it, including any prepayment penalties, release prices and
similar charges, (ii) a pro rata share of the amount of money, or its
equivalent, in the trust and available at any time to be applied to the
reduction of the principal balance of the blanket lien.  The developer shall
have the burden of establishing to the satisfaction of the director the
liquidated value of assets other than purchase money contracts from purchasers
in the time share plan.



(3)  If the blanket lien payment deposit consists of
purchase money contracts, the payments required to be made by purchasers under
the contracts must:



(A)  Be due on or before the dates on which
payments become due on the blanket liens;



(B)  If paid when due, be equal to at least one
hundred ten per cent of a pro rata share of the amount required to be paid on
the blanket liens on such date; and



(C)  Be sufficient to pay, in full, during the
term of such contracts (i) a pro rata share of all amounts secured by the
blanket liens, including prepayment penalties and release prices, if any; and
(ii) all service charges payable to the trustee, any collection agent, and any
other servicing agent pursuant to the trust instrument.



(4)  If the developer proposes to deposit into trust
assets other than purchase money contracts, such assets must be sufficient to
pay a pro rata share of the debt service installments on the blanket lien as
they become due and to create a sinking fund or other arrangement adequate to
extinguish the debt secured by the blanket lien at its maturity.



(5)  For purposes of this subsection, the term
"pro rata share" means a share proportionate to the ratio that the
number of time share units in which the sale of time share interests have been
closed bears to the total number of time share units in the project.  No more
than fifty-one weeks of use annually may be attributed to each time share unit
in determining the pro rata share.



(6)  The developer may elect to terminate the use of
the provisions of this subsection upon satisfying all of the requirements of
either subsection (b) or section 514E-26(c).



(d)  For purposes of this section, a purchase
money contract is deemed delinquent when an installment payment is more than
fifty-nine days past due. [L 1982, c 186, §13]