Assessment Security Agreement And Instructions To Escrow Depository {RE 643}

RE 643 - ASSESSMENT SECURITY AGREEMENT AND INSTRUCTIONS TO ESCROW DEPOSITORY - REG. 2792.9. This form, issued by the California Department of Real Estate, is used to establish an Assessment Security Agreement between a subdivider (developer) and a homeowners association (HOA) in relation to a subdivision development. It ensures that the subdivider meets financial obligations for regular and special assessments on properties they still own within the subdivision. The agreement is required before the subdivider can obtain a Public Report from the Department of Real Estate, which is necessary for selling or leasing units in the development. To secure these obligations, the subdivider must provide financial security in the form of a surety bond, letter of credit, set-aside letter, or cash deposit, held by an escrow holder. If the subdivider fails to pay assessments, the HOA can request funds from the escrow to cover the unpaid amounts. The escrow holder is responsible for managing the security funds according to the agreement's terms. The agreement remains in effect until 80% of the subdivision’s units are sold or leased. The form includes detailed instructions to the escrow depository regarding how and when funds should be released to either the subdivider or the HOA, depending on payment status and disputes. If there are disagreements, the form outlines arbitration procedures to resolve them. www.FormsWorkflow.com