70-23-205. Final report prior to completion of project -- supplementary report. (1) The department may not issue a final report prior to completion of construction of a project unless:
     (a) there is filed with the department:
     (i) a verified statement showing all costs involved in completing the project, including land, ground lease payments, and equipment lease payments, real property taxes, construction costs, architect, engineering, and attorneys' fees, financing costs, provisions for contingency, and other costs which must be paid on or before the completion of construction of the building;
     (ii) a verified estimate of the time of completion of construction of the total project;
     (iii) satisfactory evidence of sufficient funds to cover the total project cost from purchasers' funds, equity funds, interim or permanent loan commitments, or other sources;
     (iv) a copy of the executed construction contract;
     (v) satisfactory evidence of a performance bond of not less than 100% of the cost of construction with a reliable surety company;
     (vi) if purchasers' funds are to be used for construction, an executed copy of the escrow agreement for the escrow fund required under 70-23-201 for financing construction, which shall expressly provide for:
     (A) no disbursements by the escrow agent for payment of construction costs unless bills are submitted with the request for such disbursements which have been approved or certified for payment by the mortgagee or a financially disinterested person; and
     (B) no disbursements from the balance of the escrow fund after payment of construction costs pursuant to subsection (1)(a)(vi)(A) until the escrow agent receives satisfactory evidence that all construction and materialmen's liens have been cleared, unless sufficient funds are set aside for any bona fide dispute;
     (b) the declaration provided for in 70-23-301 has been filed.
     (2) If after a final report has been issued any circumstance occurs which would render the final report misleading as to purchasers or if the developer proposes to materially change the project, the developer shall stop all sales and immediately submit sufficient information to the department to enable it to issue a supplementary report describing the changes. Sales shall not resume until the supplementary report has been issued.

     History: En. 67-2303.5 by Sec. 7, Ch. 150, L. 1973; R.C.M. 1947, 67-2303.5.