Section R162-2f-307 - Undivided Fractionalized Long-Term EstateA person who sells or offers to sell an undivided fractionalized long-term estate shall disclose to each prospective purchaser certain information related to the real property in which the undivided fractionalized long-term estate is offered, as described in this rule. A real estate licensee who markets an undivided fractionalized long-term estate shall obtain from the sponsor or seller and provide to each prospective purchaser the required information related to the real property in which the undivided fractionalized long-term estate is offered. The information required to be disclosed hereunder shall be in written or documented form, which shall be provided to the purchaser before purchasing, and shall include the following:
(1) for each undivided fractionalized long-term estate:(a) a brief account describing the professional qualifications, background, and experience of the sponsor;(b) any material information that relates to a current lease or sublease that affects the real property in which the undivided fractionalized long-term estate is offered;(c) the tenant in common agreement or other agreement that forms the substance of the undivided fractionalized long-term estate and includes a definition of the undivided fractionalized interest;(d) description of any improvements to the real property in which the undivided fractionalized long-term estate is offered;(e) any defects in the property known by the sponsor that may materially affect the value of the property;(f) material information known by the sponsor concerning any environmental issues affecting the real property; and,(g) a preliminary title report on the real property;(2) in addition to the disclosures required by Subsection (1), if the undivided fractionalized long-term estate includes:(a) management of the real property by the sponsor or an affiliate of the sponsor in accordance with Subsections 61-1-13(1)(ee)(ii)(C)(II) and (III), the information required to be disclosed shall include: (i) the sponsor's continuing interest, if any, in the real property;(ii) any bankruptcies or civil lawsuits involving the sponsor and each affiliate of the sponsor;(iii) whether any affiliate of the sponsor is or is expected to become a third party service provider to the real property;(iv) any relationship between the property managers and the sponsor; and,(v) any property management agreements that would continue after the sale;(b) multiple tenants, the information required to be disclosed shall include:(i) any rent rolls and payment history for the property which the sponsor has in their possession, custody, or control; and(ii) any tenant financial records the sponsor has in their possession, custody, or control;(c) debt on the real property, the information required to be disclosed shall include: (i) each of the loan documents; and (ii) a current loan statement;(d) a master lease agreement, the information required to be disclosed shall include: (i) the master lease agreement;(ii) disclosure of the sponsor's relationship with the master tenant, if any;(iii) if the master lease tenant is an affiliate of the sponsor, or the sponsor participated in establishing the master lease:(A) audited financial statements of the master lease tenant; and(B) each bankruptcy or civil lawsuit involving the sponsor, an affiliate of the sponsor, or the master lease tenant.Utah Admin. Code R162-2f-307
Amended by Utah State Bulletin Number 2016-12, effective 5/31/2016Amended by Utah State Bulletin Number 2022-11, effective 5/25/2022