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Texas Statutes (Last Updated: January 4, 2014) |
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PROPERTY CODE |
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Title 12. MISCELLANEOUS SHARED REAL PROPERTY INTERESTS |
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Chapter 221. TEXAS TIMESHARE ACT |
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Subchapter G. ESCROW DEPOSITS |
Sec. 221.062. RELEASE OF ESCROW
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(a) The funds or property constituting the escrow or trust deposit may be released from escrow only in accordance with this section.
(b) If the purchaser cancels the purchase contract as provided by the contract, the funds shall be paid to:
(1) the purchaser; or
(2) the developer if the purchaser's funds have been refunded previously by the developer.
(c) If the purchaser defaults in the performance of obligations under the terms of the purchase contract, the funds shall be paid to the developer.
(d) If the developer defaults in the performance of obligations under the purchase contract, the funds shall be paid to the purchaser.
(e) If the funds of the purchaser have not been disbursed previously as provided by Subsections (a)-(d), the funds may be disbursed to the developer by the escrow or trust agent if acceptable evidence of completion of construction is provided.
(f) If there is a dispute relating to the funds in the escrow or trust account, the agent shall maintain the funds in the account until:
(1) the agent receives written directions agreed to and signed by all parties; or
(2) a civil action relating to the disputed funds is filed.
(g) If a civil action is filed under Subsection (f)(2), the escrow or trust account agent shall deposit the funds with the court in which the action is filed.
(h) Excluding any encumbrance placed against the purchaser's timeshare interest that secures the purchaser's payment of purchase money financing for the purchase, the developer is not entitled to the release of any funds escrowed with respect to each timeshare interest until the developer has provided the commission with satisfactory evidence that:
(1) the timeshare interest and any other property or rights to property appurtenant to the timeshare interest, including any amenities represented to the purchaser as being part of the timeshare plan, are free and clear of any of the claims of the developer, any owner of the underlying fee, a mortgagee, judgment creditor, or other lienor, or any other person having an interest in or lien or encumbrance against the timeshare interest or appurtenant property or property rights;
(2) the developer, any owner of the underlying fee, a mortgagee, judgment creditor, or other lienor, or any other person having an interest in or lien or encumbrance against the timeshare interest or appurtenant property or property rights, including any amenities represented to the purchaser as being part of the timeshare plan, has recorded a subordination and notice to creditors document in the jurisdiction in which the timeshare interest is located that expressly and effectively provides that the interest holder's right, lien, or encumbrance does not adversely affect and is subordinate to the rights of the owners of the timeshare interests in the timeshare plan, regardless of the date of purchase, on and after the effective date of the subordination document;
(3) the developer, any owner of the underlying fee, a mortgagee, judgment creditor, or other lienor, or any other person having an interest in or lien or encumbrance against the timeshare interest or appurtenant property or property rights, including any amenities represented to the purchaser as being part of the timeshare plan, has transferred the subject accommodations or amenities or all use rights therein to a nonprofit organization or an owners' association to be held for the use and benefit of the purchasers of the timeshare plan, which entity shall act as a fiduciary to the purchasers, provided that the developer has transferred control of that entity to the purchasers or does not exercise its voting rights in that entity with respect to the subject accommodations or amenities and, prior to the transfer, any lien or other encumbrance against the accommodation or facility is subject to a subordination and notice to creditors instrument pursuant to this subsection; or
(4) alternative arrangements have been made that are adequate to protect the rights of the purchasers of the timeshare interests and are approved by the commission.