§484-8.5 Preliminary order of registration. (a) The director shall enter a preliminary order of registration when:
(1) The director receives a request therefor together with a complete application for registration containing all information required under this chapter, including, without limitation, all standardized application forms prescribed by the director;
(2) The director affirmatively determines, upon inquiry and examination, that the applicable requirements of section 484-7 have been met except for some particular requirement or requirements which is, or are, at the time not fulfilled, but which reasonably may be expected to be fulfilled; and
(3) Preliminary subdivision approval has been granted by the county in which the land is situated.
No preliminary order of registration shall be issued unless the director is satisfied that the public offering statement adequately discloses all matters required by section 484-6(a) and the rules adopted by the director hereunder.
(b) If the director determines upon inquiry and examination that any of the requirements for issuance of a preliminary order of registration have not been met, the director shall notify the applicant that the application for a preliminary order of registration must be corrected in the particulars specified within forty-five days. If the requirements are not met within the time allowed the director shall enter an order rejecting the registration, which order shall include the findings of fact upon which the order is based. The order rejecting the registration shall not become effective for twenty days during which time the applicant may petition for reconsideration and shall be entitled to a hearing.
(c) Upon issuance by the director of a preliminary order of registration, the subdivider may solicit and accept binding sales contracts (subject to any rights of rescission in favor of the purchaser as set forth in this chapter) or nonbinding reservation agreements to purchase the subdivided lands, notwithstanding any law requiring that final subdivision approval be granted prior to the offer or sale of subdivided lands; provided that all earnest money deposits, if any, received by the subdivider or the subdivider's agents shall take the form of a check or other instrument within the meaning of article 3 of chapter 490 and shall be payable to the escrow agent, and that no cash shall be accepted by the subdivider or the subdivider's agents.
(d) All sums paid by purchasers and prospective purchasers prior to the time the director issues a final order registering the subdivided lands shall be placed in an escrow account under an escrow agreement which provides that no disbursements shall be made from such escrow account to or on behalf of the subdivider until the director enters a final order registering the subdivided lands and the requirements of sections 484-8.7 and 484-8.6(b) and (c) have been met. However, the subdivider or the subdivider's agents may hold, until the expiration of the seven-day cancellation period provided by section 484-7(6) or any longer purchaser cancellation period (not exceeding sixty days) provided in the sales contract, any instrument made by a purchaser:
(1) For which subsequent holders may not claim holder-in-due-course status within the meaning of article 3 of chapter 490; or
(2) Where the payee is the escrow agent.
(e) Rights under contracts for the sale of subdivided lands, although binding on the purchasers, may not be enforced against the purchasers so as to require the purchasers to close until:
(1) A final order of registration is entered by the director; and
(2) The purchasers have had a full opportunity to obtain a refund of any sums paid and a release from the purchasers' obligations under the purchasers' sales contracts in accordance with section 484-8.7 or section 484-8.6(b) or (c). [L 1983, c 175, pt of §8; am L 1992, c 132, §8]