California Code of Regulations
Title 10 - Investment
Chapter 3 - Commissioner of Financial Protection and Innovation
Subchapter 2 - Corporate Securities
Article 4 - Standards for the Exercise of the Commissioner's Authority
Subarticle 10 - Real Estate Programs
Conflicts of Interest and Investment Restrictions
Section 260.140.114.11 - Completion Bond Requirement

Universal Citation: 10 CA Code of Regs 260.140.114.11

Current through Register 2024 Notice Reg. No. 38, September 20, 2024

(a) The completion of property acquired by the program which is under construction shall be guaranteed at the price contracted by an adequate completion bond or other satisfactory arrangements.

(b) For purposes of this section, satisfactory arrangements include, but are not limited to, the following:

(1) A written guarantee of completion by a person, supported by financial statements demonstrating sufficient net worth or adequately collateralized by real or personal properties or other personal guarantees.

(2) A retention of a reasonable portion of the purchase consideration as a potential offset to such purchase consideration in the event the seller does not perform in accordance with the purchase and sale agreement.

(c) Other satisfactory arrangements to guarantee completion may be made, provided they are disclosed in the prospectus and the prior written approval of the Commissioner of Corporations has been obtained.

1. Amendment filed 3-12-74; effective thirtieth day thereafter (Register 74, No. 11).
2. Amendment of subsection (e) filed 1-22-75; effective thirtieth day thereafter (Register 75, No. 4).
3. Amendment filed 1-27-84; effective thirtieth day thereafter (Register 84, No. 4).
4. Amendment of subsections (a) and (b)(1) filed 5-18-92; operative 6-17-92 (Register 92, No. 22).

Note: Authority cited: Section 25610, Corporations Code. Reference: Section 25140, Corporations Code.

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