367.474 Performance bond by subdivider -- Cash in lieu of bond.

369 words·~2 min read·/ky/chapter-367/367-474

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

(1)In the sale or offering for sale of any subdivision which is primarily directed toward

recreational or retirement use, in the sale of which any improvements are advertised

but not completed, or which are completed but for which supplies of labor and

material have not been paid, the subdivider shall furnish a performance bond

payable to the Attorney General in an amount equal to the costs of all the

improvements, including, but not limited to, roads, lakes, golf courses, and stables

which are advertised prior to the sale of the land or property. The bond shall remain

in effect until the advertised improvements are made; and if they are not completed

within a time deemed reasonable by the Attorney General, the bond shall, after a

hearing, be forfeited to the Attorney General for the use and benefit of the

purchasers of the property. Surety for the bond shall be by a company authorized to

write surety bonds in this state. Upon completion of the promised improvements

and production of releases by all creditors with a potential lien interest in the

improvements and production of a verified statement to this effect, the subdivider

may petition the Attorney General for release of the bond.

(2)If the land or property offered for sale by the subdivider is located outside of the

Commonwealth of Kentucky and is sold both to Kentucky residents and residents of

other jurisdictions, the Attorney General may accept a bond as described in

subsection

(1)of this section equal to the pro rata share of improvements for that

property that is reasonably anticipated to be sold to Kentucky residents.

(3)In lieu of the bonding requirements appearing in subsection

(1)of this section, a

subdivider may, with the approval of the Attorney General, place in an approved

escrow account fifty percent (50%) of receipts of sales of the subdivided lots until

the amount necessary to make the improvements has been accumulated or the

improvements advertised by the subdivider made and the suppliers of labor and

material paid. If the improvements are not made within a reasonable time as

determined by the Attorney General, the escrow account, after hearing, shall revert

to the benefit of the subdivision purchasers.