1. (1) When a nondisturbance agreement has been executed by the lienholder and recorded, the lienholder, its successors and anyone who acquires the property through foreclosure, by deed, assignment or transfer in lieu of foreclosure, shall take the property subject to the rights of the owners under the timeshare plan.

2. (2) When a notice of timeshare plan is recorded, any claim by the developer’s creditors and any claim upon or by a successor to the interest of the titleholder who executed the notice shall be subordinate to the interest of the timeshare owners if the sale is closed after the notice is recorded. The recording of notice shall not affect:

   1. (a) The rights or lien of a lienholder whose lien was recorded before the notice of timeshare plan;
   2. (b) The rights of a person holding an option in the timeshare property if the option was recorded before the notice of timeshare plan; and
   3. (c) The rights or lien of a lienholder having a recorded purchase money mortgage, recorded purchase money trust deed or recorded purchase agreement on the timeshare.

3. (3) As used in ORS 94.873, 94.876 and 94.885 to 94.905:

   1. (a) “Nondisturbance agreement” means an instrument by which the holder of a blanket encumbrance agrees that the holder’s rights in the timeshare property shall be subordinate to the rights of any timeshare owner. Every nondisturbance agreement shall contain a covenant by the lienholder that the lienholder, its successors, and anyone who acquires the timeshare property through the blanket lien shall not use, or cause or permit the property to be used in a manner that prevents a timeshare owner from using the timeshare property in the manner contemplated by the timeshare plan. The lienholder’s agreement not to disturb an owner may require as a continuing condition that the owner perform all obligations and make all payments due under any purchase money agreement for the owner’s timeshare and, if the timeshare is held as a leasehold, under the lease for the owner’s timeshare.
   2. (b) “Notice of timeshare plan” means an instrument executed by the holder of the legal and equitable title to the fee or long-term leasehold interest in a timeshare property which provides notice of the existence of the timeshare plan and of the rights of timeshare owners. The notice of timeshare plan must identify the timeshare period for each timeshare. For a timeshare property located wholly within this state, recording of the timeshare instrument for the property under ORS 94.818 shall be considered the recording of a notice of timeshare plan for the property. If the timeshare property is located outside the state, the notice may be contained in a declaration of covenants, conditions and restrictions that provides that as a matter of covenant, the notice shall have the effects described in subsection (2) of this section. The notice must be prepared to constitute a covenant running with an equitable servitude upon the timeshare property for the duration of the timeshare plan and to have the effects described in subsection (2) of this section.
4. (4) If the developer proposes use of a nondisturbance agreement, the public report issued for the timeshare plan under ORS 94.828 (1), (2) and (4) shall include disclosure of the nature and limitations of nondisturbance agreements, the nature and amount of outstanding blanket encumbrances and the potential impact upon timeshare purchasers of failure to pay off the outstanding blanket encumbrances.

[1983 c.530 §31]