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

1. (1) Deposit with an escrow agent fifty percent of the cash or receivables received from the purchasers of such plans, less applicable local, state or federal sales taxes; provided, however, 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 ownership interest in the accommodations or facilities and to provide funds from which periodic payments can be made to retire any outstanding indebtedness on the time sharing facilities or accommodations.
   2. (b) The escrow agent shall release or dispense to the seller of the vacation time sharing ownership plan funds from the escrow account, at least quarterly but not more frequently than monthly, in an amount which shall not exceed one hundred percent of the sum of all accrued indebtedness secured by the time sharing accommodations or facilities.
   3. (c) Prior to the release or dispensation of such escrow funds, the seller shall furnish the escrow agent with a sworn statement which reveals by category the total amount of all liens or indebtedness secured by the time sharing accommodations or facilities, the amount of indebtedness anticipated during the next succeeding reporting period and the amount of any deficit or surplus accruing from the preceding reporting period.
   4. (d) When all outstanding liens or encumbrances secured by the time sharing facilities or accommodations have been fully discharged, the escrow account may be discontinued.

2. (2) In lieu of the escrow account provided in Section 27-32-95(1) above, a seller of vacation time sharing ownership 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 and accommodations.

      1. (i) The escrow agent shall provide to the lender a monthly statement of the account and the seller shall immediately pay to the escrow agent an amount necessary to assure payment of all recurring debts as referred to in this item.
      2. (ii) When all liens and encumbrances on the time sharing facilities have been fully discharged, the escrow amount 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 27-32-95(2) (a) above.
   3. (c) When any portion of the time sharing accommodations and facilities have been fully released from all debts, 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.