61B-17.009. Alternative Assurances

(1) This rule governs alternative assurances provided for in Section 718.202, F.S. An alternative assurance must be approved by the Division Director prior to the use by a Developer of the sales deposits intended to be assured. Pending approval, sales deposit funds to be assured by the alternative assurance must be placed in escrow.

(2) Procedure for Filing. A proposed alternative assurance filing should be submitted under cover separate from any condominium filing. The alternative assurance filing must include:

(a) A cover letter explaining the details of the alternative assurance. The letter must include the name and address of the condominium for which the assurance is intended;

(b) A copy of the instrument evidencing the proposed alternative assurance; and

(c) A copy of the purchase deposit escrow agreement. The escrow agreement shall contain the following minimum provisions:

1. The developer and escrow agent must have the Division Director’s written approval of the use of an assurance prior to its use by the developer.

2. The amount of any assurance plus the amount of any sales deposits in escrow must at all times equal or exceed the amount of sales deposits required to be assured by Section 718.202, F.S. It is the developer’s duty to ensure that the assurances are adequate.

3. The developer shall provide the escrow agent with a monthly report of the amount of funds currently assured. The developer shall provide the division with a quarterly report of the amount of funds currently assured.

4. The developer shall ensure that the Division Director, escrow agent and the developer receive at least a 30-day notice prior to the cancellation of any assurance.

5. At least 15 days prior to the expiration of any assurance posted in lieu of the escrow requirements of Section 718.202, F.S., the developer must place funds assured by the instrument into escrow.

(3) Types of assurances. As provided by Section 718.202(1), F.S., the Division Director is authorized to accept the following types of assurances:

(a) A surety bond issued by a company authorized and licensed to issue surety bonds in Florida;

(b) An irrevocable letter of credit issued by a financial institution as defined by Section 655.005, F.S., and located in Florida; or

(c) A cash bond held by the escrow agent.

(4) Minimum terms and conditions. The assurance instrument shall include the following minimum terms and conditions:

(a) The escrow agent has authority to draw on the assurance and treat the drawn funds as if they were escrowed funds;

(b) The Division Director has authority to draw on the assurance when circumstances warrant a draw and the escrow agent fails to do so;

(c) The original expiration date of any letter of credit or surety bond shall be not less than one year from the date of issuance; and

(d) If the assurance is automatically renewable the issuer shall give the escrow agent and the Division Director not less than 30 days notice of cancellation.

(5) Purchaser Refunds: During the period in which any letter of credit is in effect, if any purchaser is entitled to a refund as provided in Section 718.202(1), F.S., the refund must be made to the purchaser within thirty (30) days after the purchaser’s request.

Rulemaking Authority 718.501(1)(f) FS. Law Implemented 718.202(1), 718.501(1)(d)2. FS. History–New 4-12-82, Formerly 7D-17.09, 7D-17.009, Amended 1-26-03.