It shall be a violation of this chapter for a seller of vacation time sharing lease plans to fail to:

1. (1) Deposit with an escrow agent fifty percent of the cash or receivables received from purchasers of such plans, less applicable local, state and federal sales taxes; provided, that in the event receivables are placed in escrow such receivables shall be set at face value and shall be equal to one hundred ten percent of the fifty percent required in this item.

   1. (a) Its purpose is to protect the purchaser's right to a refund if at any time the accommodations and facilities are no longer available as provided in the contract; "provided, however, nothing contained in this section shall operate to deny the seller the option to repair, replace or reconstruct, within a reasonable time, the accommodations or facilities, if destroyed or damaged."
   2. (b) The purchaser shall be entitled to a refund from the escrow account upon the conditions described above in an amount which represents the buyer's pro rata share of the monies therein.
   3. (c) Funds may be withdrawn from the escrow account in the ratio of the amount of time available for use by the purchaser of the vacation time sharing lease plan in relation to the total time available in the plan.
   4. (d) The escrow agent shall release or dispense funds from the escrow account to the seller of a vacation time sharing lease plan only upon receipt of a sworn statement from the seller that the accommodations and facilities have been available for use by the purchaser according to the terms of the purchaser's contract.
   5. (e) When all outstanding liens, debts or encumbrances on the time sharing accommodations and facilities have been fully discharged, the escrow account may be discontinued.

2. (2) In lieu of the escrow account provided in item (1), a seller of vacation time sharing lease plans may alternatively:

   1. (a) Assign to an escrow agent receivables, the income from which shall be adequate to pay in full and satisfy all liens and encumbrances secured by the time sharing facilities or accommodations.

      1. (i) The escrow agent shall provide to the seller and lender a monthly statement of the account and the seller shall immediately pay to the escrow agent any amount necessary to assure payment of all liens or encumbrances referred to in this item.
      2. (ii) When all liens and encumbrances on the time sharing facilities have been fully discharged, the escrow account may be discontinued.
   2. (b) Sell, hypothecate or discount receivables, the proceeds from which shall be deposited with an escrow agent and administered in the manner prescribed by Section 27-32-90(2) (a) above.
   3. (c) When any portion of the time sharing accommodations and facilities have been fully released from all liens or encumbrances, the escrow requirements of this item may be proportionately decreased.
3. (3) Provide the purchaser with liability and casualty insurance at the seller's expense for the accommodations and facilities to be used by the vacation time sharing lease plan purchaser in an amount equal to the replacement cost of such accommodations and facilities and to deposit with an escrow agent, annually, sufficient funds for the payment of all taxes and assessments levied against the accommodations and facilities. In the alternative, provide for the assessment against the purchaser by an association or duly appointed agent for the owners of such escrow funds for all costs including taxes, assessments, maintenance, repairs and management fees.
4. (4) Provide the purchaser with an instrument, in recordable form, which provides notice to all subsequent creditors of the seller of the existence of the vacation time sharing plan rights of the purchaser. Such instrument shall be provided to the purchaser by the seller at the time of signing of the contract. When recorded, such instrument shall serve to protect the purchaser's interest in the seller's accommodations from any claims by subsequent creditors of the seller.
5. (5) Provide a document which explains the content, purpose and protection afforded to the purchaser by the documents described in item (4) along with the procedure necessary to follow in order to secure to the purchaser the rights and protections which such documents provide.