If an interest in a condominium is currently registered with the securities and exchange commission of the United States, a declarant satisfies all requirements relating to the preparation of a disclosure statement of the Condominium Act if he delivers to the purchaser a copy of the prospectus approved by the securities and exchange commission.
History: Laws 1982, ch. 27, § 59.
ANNOTATIONSCompiler's notes. — This section is similar to § 4-107 of the Uniform Condominium Act, with the following main exceptions: "disclosure" is substituted for "public offering" and "prospectus approved by" is substituted for "public offering statement filed with"; neither the bracketed language in the first sentence, nor the bracketed second sentence of § 4-107 of the Uniform Condominium Act, are incorporated in this section of the state Condominium Act.
COMMISSIONERS' COMMENT
1. Some condominiums are regarded as "investment contracts" or other "securities"under federal law because they exhibit certain investment features such as mandatory rental pools. See SEC Securities Act Release No. 5347 (January 1973). The purpose of this section is to permit the declarant to file or deliver, in lieu of a public offering statement specifically prepared to comply with the provisions of this act, the prospectus filed with and distributed pursuant to the regulations of the United States securities and exchange commission. Absent this provision, prospective purchasers of condominiums classified by the SEC as "securities" would have to be given two public offering statements, one prepared pursuant to this act and the other prepared pursuant to the Securities Act of 1933 [15 U.S.C. § 77a et seq.]. Not only would this result increase the declarant's costs (and thus the price) of units, it might also reduce the likelihood of either public offering statement actually being read by prospective purchasers.
2. The bracketed language in the first sentence of this section should be inserted by states which choose to adopt the agency provisions of Article 5 [not adopted] of the act. The second sentence should also be inserted by states opting to incorporate Article 5 [not adopted] of the act to avoid duplicative regulation of condominiums by the agency administering the state's securities regulation statutes.
Am. Jur. 2d, A.L.R. and C.J.S. references. — 15A Am. Jur. 2d Condominiums and Cooperative Apartments §§ 11, 19 to 21; 69 Am. Jur. 2d Securities Regulation - Federal § 138 et seq.
31 C.J.S. Estates § 153 et seq.; 79A C.J.S. Securities Regulation § 10 et seq.