§1131.17. Escrow account; establishment; claims for damages

A. The developer of a lease timeshare interest in a multiple use project in Louisiana and the developer of each timeshare plan that has timeshare property located in Louisiana or who maintains a sales office in Louisiana for the sale of timeshare interests shall deposit in an interest bearing account established in the name of the developer at a financial institution in the parish where the timeshare property or sales office is located, the sum of fifty dollars for each timeshare interest sold. The deposit shall be made within thirty days after each sale of a timeshare interest. The funds in the escrow account shall be available to pay judgments against the developer resulting from a violation of this Part.

B. The fifty dollar deposit shall remain in the escrow account for a period of one year from the date of deposit. At the end of one year from the date of deposit, the developer shall be entitled to withdraw each fifty dollar deposit together with all interest earned on the deposit unless the executive director of the Louisiana Real Estate Commission certifies that the deposit is required to satisfy an existing judgment or that an action has been filed against the developer which may reasonably require the deposit to satisfy a judgment. If the executive director of the Louisiana Real Estate Commission thereafter determines that the deposit, or any portion thereof, is not reasonably required to satisfy a judgment, the deposit or the unused portion together with all interest earned may be withdrawn by the developer.

C. If a purchaser or timeshare interest owner receives a final money judgment against a developer for a violation of this Part, or files suit under this Part, the purchaser or timeshare interest owner shall file a notification with the executive director of the Louisiana Real Estate Commission. This notification shall include appropriate evidence of the judgment or the filing of the cause of action. Upon receipt of such notification, the executive director of the Louisiana Real Estate Commission shall give notice to the financial institution holding the escrow account of the judgment or filing of a cause of action. Upon receipt of the notice by a financial institution, no funds in the escrow account established by the developer under the provisions of this Section shall be disbursed by the financial institution unless approved by the executive director of the Louisiana Real Estate Commission.

D. The Louisiana Real Estate Commission shall have the right to require a developer to give reasonable evidence of the deposits required under the provisions of this Section. The commission shall have the power to seek an injunction to prohibit any further sales by a developer who fails to give the evidence of deposits required herein.

E. The Louisiana Real Estate Commission may adopt reasonable rules and regulations necessary to implement the provisions of this Section.

F. The provisions of this Section shall in no way limit recovery of damages from a developer's assets under any appropriate remedy provided by law.

G. If the Louisiana Real Estate Commission determines that a developer is in compliance with the escrow requirements of R.S. 9:1131.16, it may notify the developer that it will no longer require deposits under this Section, and will return all deposits existing on the date of such notification within one year of such notification, provided no judgment or action exists which the deposits may reasonably be required to satisfy, and provided the developer continues to comply with R.S. 9:1131.16.

Added by Acts 1983, No. 552, §1; Acts 1985, No. 999, §3.

{{NOTE: SEE ACTS 1985, NO. 999, §5.}}