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
Rights and Obligations of Participants
Section 260.140.116.5 - Admission into Partnership

(a) Sales by Partnership. Purchasers should be recognized as participants not later than 15 days after the release of their funds from impound, if purchasers' funds are impounded. Otherwise, purchasers should be recognized as participants not later than the last day of the calendar month following the date the partnership accepted the subscription. All subscriptions shall be accepted or rejected by the partnership within 30 days of their receipt; if rejected, all subscription monies should be returned to the subscriber within 10 business days.

(b) Assignees and Substituted Partners. The partnership shall recognize an assignment not later than the first day of the fiscal quarter following the date the notice of assignment and other required documentation is received and accepted by the general partner. The partnership shall admit substitute limited partners on the first day of each fiscal quarter. If the partnership received actual notice of a transfer, it must inform a transferee in writing within 45 days of receipt of such notice whether or not the transferee will be recognized as possessing all of the rights of a limited partner.

(c) Participants holding program interests by assignment from entities holding limited partnership interests in a program for the purpose of assigning all or a portion of such interests to persons investing in such program (hereinafter the "Assignor") shall be expressly granted the same rights as if they were limited partners except as prohibited by applicable local law, including but not limited to, the rights enumerated under Sections 260.140.116.1 to 260.140.116.8 of these Rules.

The assignment agreement and prospectus shall provide that the Assignor's management shall have fiduciary responsibility for the safekeeping and use of all funds and assets of the assignees, whether or not in the Assignor management's possession or control, and that the management of the Assignor shall not employ, or permit another to employ such funds in any manner except for the exclusive benefit of the assignees. In addition, the agreement shall not permit the assignees to contract away the fiduciary duty owed to the assignees by the Assignor's management under the common law of agency.