Escrow Funds

(1) Where a developer is required by T.C.A. § 66-32-113 to pay funds received from a buyer towards the sales price of a time-share estate into an escrow account held in this state by an independent bonded escrow company or insured financial institution, the escrow agent shall not be: (a) The developer; (b) An employer or employee of the developer; (c) A project broker or sales agent for any time-share property of the developer; or (d) Any person who otherwise controls, is controlled by or is under common control with a developer. (2) Where a developer is permitted by T.C.A. § 66-32-113(d) to withdraw payments received from the buyer toward the sales price of a time-share estate prior to substantial completion, the developer may use such payments only to pay for construction costs of the improvements comprising the time-share project. For purposes of this rule, "construction costs" means expenses reasonably incurred in connection with the building, furnishing, and landscaping of the time-share project, including architectural, engineering, finance, and legal fees. TIME-SHARE PROGRAMS CHAPTER 1260-06 (3) Each escrow agent shall maintain, in accordance with generally accepted accounting principles, separate records for each time-share project containing the following information: (a) Name of the owner of the time-share estate. (b) Identification of time-share interval involved. (c) Amount and date of deposit. (d) Amount, date, and payee of each check drawn on the trust account. (4) The Commission or its authorized representatives may, at all reasonable hours, examine and copy such books, accounts, documents, or records as are relevant to a determination of whether a developer or escrow agent has complied with the provisions of T.C.A. § 66-32-113 and this rule.