Should there not exist in the blanket encumbrance or supplementary agreement a release clause as set forth in Section 11013.1, then it shall be unlawful for the owner, subdivider, or agent to sell or lease lots or parcels within such subdivision unless one of the following conditions is complied with:
(a) The entire sum of money paid or advanced by the purchaser or lessee of any such lot or parcel, or such portion thereof as the commissioner shall determine is sufficient to protect the interest of the purchaser or lessee, shall be deposited into an escrow depository acceptable to the commissioner until either (1) a proper release is obtained from such blanket encumbrance; or (2) either the owner, subdivider, or agent or the purchaser or lessee may default under their contract of sale or lease and there is a determination as to the disposition of such moneys; or (3) the owner, subdivider, or agent orders the return of such moneys to such purchaser or lessee.
(b) The title to the subdivision is to be held in trust under an agreement of trust acceptable to the commissioner until a proper release from such blanket encumbrance is obtained.
(c) A bond to the State of California is furnished to the commissioner for the benefit and protection of purchasers or lessees of such lots or parcels, in such amount and subject to such terms as may be approved by the commissioner, which shall provide for the return of the moneys paid or advanced by any purchaser or lessee, for or on account of the purchase or lease of any such lot or parcel if a proper release from such blanket encumbrance is not obtained; provided, however, that if it should be determined that such purchaser or lessee, by reason of default or otherwise, is not entitled to the return of such moneys, or any portion thereof, then such bond shall be exonerated to the extent of the amount of such moneys to which such purchaser or lessee is not entitled.
(d) There is conformance to such other alternative requirement or method which the commissioner may deem acceptable to carry into effect the intent and provisions of this part.
(Amended by Stats. 1980, Ch. 1335, Sec. 3.)
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