OKLAHOMA SUBDIVIDED LAND SALES CODE

ARTICLE I. TITLE AND DEFINITIONS

§ 601. Citation

This Code shall be known and may be cited as the "Oklahoma Subdivided Land Sales Code."

§ 602. Definitions

In this Code, unless the context otherwise requires:

1. "Administrator" means the Administrator of the Department of Securities;

2. "Advertising" means:

a. any circular, prospectus, public offering statement, information, advertisement or other material or communication by radio, television, pictures, newspapers, magazines or similar media used in connection with a disposition, an offer to dispose of, or any inducement to any person to purchase or acquire an interest in the title to any subdivided lands, including any leasehold interest or land contract,

b. any material used to induce prospective purchasers to visit any subdivided lands or submit to a presentation by a subdivider or any of his representatives or agents, and

c. the entire promotional plan for the disposition of subdivided lands, including promotional displays at public or private events, parties, dinners or other meetings;

Advertising shall not mean stockholder communications including, but not limited to, annual reports and interim financial reports, proxy materials, registration statements, securities prospectuses and application for listing securities on stock exchanges; communications addressed to and relating to the account of any persons who have previously executed a contract for the acquisition of any of the subdivider's lands except where directed to the disposition of additional lands; press releases or other communications delivered to newspapers or other periodicals for general information or public relations purposes, provided no charge is made by and nothing of value is given to such newspapers, their employees or other periodicals for the publication or use of any part of such communication;

3. "Agent" means any person who, directly or indirectly, disposes of, or offers to dispose of, or advertises for disposition any lot in a subdivision and includes a real estate salesman, broker or subdivider so engaged;

4. "Blanket encumbrance" means any trust deed, mortgage, judgment, lien or other financial encumbrance securing or evidencing debt and affecting lands to be subdivided or affecting more than one lot of subdivided land, and any agreement by which the subdivider holds more than one lot under an option, contract or deed, contract to purchase or trust agreement. Blanket encumbrance shall not mean a lien or other encumbrance arising as a result of the imposition of a tax assessed by a public authority so long as no portion thereof is past due;

5. "Commission" means Oklahoma Securities Commission;

6. "Disposition" or "dispose of" means every sale, assignment, award by lottery, option, or exchange of a lot and every contract for, or contract to do, any of the foregoing for value, or when given as an incident of any of the foregoing;

7. "License" means a subdivided land sales license as set forth in Article III of this Code;

8. "Lot" means any portion, parcel, piece, division, unit or undivided interest in land if such interest includes the right to the exclusive use of a specified portion of the land;

9. "Notice" means a communication from the Administrator. Notice to a subdivider shall be deemed complete when personally served upon him or mailed to him at the last-known address on file with the Administrator;

10. "Offer" means any inducement, solicitation or attempt to encourage a person to acquire an interest in a lot in a subdivision;

11. "Option" means, and is limited to, an offer to sell or purchase respecting which a consideration of not more than fifteen percent (15%) of the total purchase price is exchanged to guarantee that the offer will not be withdrawn or revoked for an agreed period of time;

12. "Person" means an individual, corporation, partnership, association, joint stock company, or trust where the interests of the beneficiaries are evidenced by a security, an unincorporated organization, government, political subdivision of a government or any other entity;

13. "Purchaser" means a person who acquires, attempts to acquire, is solicited to acquire or succeeds to any interest in a lot in a subdivision, excluding a security interest;

14. "Subdivision" and "subdivided land" means any land, wherever located, whether improved or unimproved, contiguous or not, which is divided into lots or proposed to be divided for the purpose of disposition pursuant to a common promotional scheme or plan of advertising and disposition. If the land is designated or advertised as a common unit or by a common name, the land shall be presumed, without regard to the number of lots covered by each individual offering, to be offered for disposition as part of a common promotional plan. Where the context so requires, it shall also include any lot in a subdivision and any interest therein; and

15. "Subdivider" means a person whose interest in subdivided lands is advertised, offered or disposed of by himself or another person.

ARTICLE II. REGISTRATION OF SUBDIVIDED LAND

§ 621. Registration -- Violations

A. It is unlawful for any person to offer or dispose of any interest in subdivided land located in this state or to offer or dispose of any subdivided land located without this state unless it is registered under this Code or the land or transaction is exempt under Sections 622 or 623 of this Code.

B. It is unlawful for any subdivider or registrant of subdivided lands registered under this Code, or any person in control of, controlled by, or under common control with the subdivider or registrant, or any agent, to offer or dispose of any of the registered subdivided land if the subdivider or registrant is in violation of this Code, or any rule promulgated under this Code, or any order issued under this Code of which he has notice, or if the registration statement relating to the subdivided lands, as of the date of such offer or disposition, is incomplete in any material respect or contains any statement which is false or misleading with respect to any material fact.

§ 622. Exemptions

The following lands, lots, interests and evidences of indebtedness are exempt from Section 621 of this Code:

1. Subdivided land offered or disposed of by the United States, any state, political subdivision of the state or any agency or corporate or other instrumentality of one or more of the foregoing;

2. Cemetery lots or interests;

3. Subdivided lands in which there are fewer than twenty lots or parcels intended for sale or lease, whether immediate or future;

4. Lots on which there is a residential, commercial or industrial building, or as to which there is a legal obligation on the part of the seller to construct such building within two (2) years of the date of disposition;

5. Evidences of indebtedness secured by a real estate mortgage or deed of trust; and

6. Such interests in subdivided lands as are regulated as securities under the Oklahoma Securities Act, as provided by this title, and the Administrator by rule or order exempts.

§ 623. Additional exemptions

The following transactions are exempt from Section 621 of this Code:

1. Offer or disposition of subdivided lands located within the State of Oklahoma;

2. Offer or disposition by a purchaser of subdivided lands for his own account in a single or isolated transaction;

3. Offer or disposition of subdivided lands if not more than ten lots are offered in any period of twelve (12) consecutive months;

4. Offer or disposition of lots to persons who are engaged in the business of construction of buildings for resale, or to persons who acquire an interest in subdivided lands for the purpose of engaging, and do engage in, the business of construction of buildings for resale;

5. Offer or disposition pursuant to an order of a court of competent jurisdiction;

6. Offer or disposition of lots, each of which will be sold for less than One Hundred Dollars ($100.00), including closing costs, provided that the purchaser will not be required to purchase more than one lot;

7. Such leases of lots which the Administrator by rule or order exempts which are for periods not in excess of five (5) years, provided the terms of the lease do not obligate the lessee to renew;

8. Offer or disposition of subdivided lands if each lot within the subdivision exceeds ten (10) acres in size;

9. Sales of securities issued by a real estate investment trust; and

10. Any other transaction as to which the Administrator by rule or order finds that registration is not necessary or appropriate for the protection of purchasers.

§ 624. Burden of proof

In any proceeding under this Code, the burden of proving an exemption or an exclusion from a definition is upon the person claiming it.

§ 625. Application for registration

Application for registration of subdivided land shall be filed with the Administrator in such form as the Administrator may require. The application shall contain the following information and shall be accompanied by the following documents and exhibits, in addition to the information which may be required by the Administrator pursuant to subsection E of Section 627 of this title, the consent to service of process required by subsection A of Section 664 of this title, and the fees required by Section 652 of this title. To the extent that the information required below is included in filings submitted to and approved by the Federal Office of Interstate Land Sales Registration, or its successors, such filing will be accepted in lieu of a separate state filing:

1. The subdivider's name and address, form of business organization, and jurisdiction of its organization and name and address of each of its offices and agents in this state;

2. The name, address and principal occupation for the past five (5) years of every director, officer or partner of the subdivider or other person occupying a similar position or performing similar functions, as well as for each owner of ten percent (10%) or more of the equity of the subdivider; the extent and nature of the interest of each of the foregoing persons in the subdivider and in the subdivided lands as of a date specified by the Administrator within thirty (30) days of filing of the application for registration;

3. If any person named in paragraph 2 of this section has been disciplined, debarred, censured or suspended by any governmental body or agency or convicted by any court for violation of a federal, state or local law or regulation in connection with activities relating to land sales, land investment, securities sales or registration, construction or sale of homes or home improvements or any other similar or related activity, a summary of facts relating thereto;

4. If any person named in paragraph 2 of this section has, during the past thirteen (13) years, filed a petition in bankruptcy or has had an involuntary petition in bankruptcy filed against him or has been an officer, director or controlling person of a business entity which has become insolvent or has voluntarily or involuntarily filed in bankruptcy, a summary of facts relating thereto;

5. The states or jurisdictions in which an application for registration or similar document have been filed, including a copy of any filing with the United States Securities and Exchange Commission or Federal Office of Interstate Land Sales Registration or the successors of either, and a copy of any adverse order, judgment, order permitting withdrawal or decree of any court or regulatory authority in connection with the offering of subdivided lands;

6. A legal description of the subdivided lands and the recorded plat thereof, together with a map showing the division proposed to be made, the dimensions of the lots, and the relation of the subdivided lands to existing streets, roads and other off-site improvements, all verified by affidavit of an independent professional land surveyor and a topographical map;

7. A statement in a form acceptable to the Administrator of the condition of title to the land comprising the lots in this offering and any common areas or facilities related to or included in this offering, including a description of all encumbrances, easements, covenants, conditions, reservations, limitations or restrictions applicable thereto. This requirement may be met by submission of evidence of title in the form of a legal opinion, stating the condition of title, prepared and signed by an attorney-at-law who is experienced in the examination of titles, a member of the Bar Association of the state in which the property is located and who is not a salaried employee, partner, officer or director either of the subdivider or of any of its agents or affiliates; or by any other evidence of title acceptable to the Administrator;

8. Copies of the instruments by which the subdivider's interest in the subdivided land was acquired or, if required by the Administrator, proof of marketable title to the subdivided lands;

9. A statement and such additional assurance as the Administrator may require that the subdivider can convey or cause to be conveyed to the purchaser, upon compliance with the terms of the offer, the interest offered in the subdivided lands;

10. Copies of instruments which will be delivered to the purchaser to evidence his interest in the subdivided lands and copies of the contracts or other agreements which a purchaser will be required to agree to or sign in connection with the offer or disposition, together with the range of selling prices, rates or rentals at which it is proposed to dispose of the lots, and a list of fees the purchaser may be required to pay for membership in groups including, but not limited to, homeowner's associations, country clubs, golf courses and other community organizations associated with the subdivision, together with the description of any qualifications for or restrictions on membership in any of the foregoing;

11. A legal description of any lien or encumbrance affecting the subdivision or any portion thereof and a statement in a form acceptable to the Administrator of the efforts made or to be made to remove such lien or encumbrance and the consequences to the purchasers of the success or failure of the efforts to remove such lien or encumbrance;

12. A summary of any easements or restrictions affecting any of the subdivided lands and copies of any instruments creating, altering or removing such easements or restrictions;

13. Evidence and a statement thereof, in a form satisfactory to the Administrator, indicating compliance with the zoning and other governmental laws, ordinances, and regulations affecting the use of the subdivided lands and adjacent properties, together with dates of the most recent zoning or jurisdictional changes, the nature thereof, any proposed changes now pending or known to be contemplated, and any existing or proposed taxes, special taxes, assessments or levies of a similar nature affecting any of the subdivided land;

14. Evidence and a statement thereof, in a form satisfactory to the Administrator, indicating compliance with the requirements of federal, state and local governments or agencies or instrumentalities thereof which have authority to regulate or issue permits or licenses which may have material effect on the subdivider's plans with respect to the proposed subdivision, its facilities, common areas or improvements, specifically including environmental protection agencies and required environmental impact statements. If any permit, license or approval of any of the foregoing has been refused or conditioned, a summary of the reasons therefor and the effect on the proposed subdivision shall also be included;

15. A description of the land as it existed prior to any changes in connection with the proposed subdivision and any changes which have occurred or are contemplated in connection with the proposed subdivision;

16. A statement, in a form suitable to the Administrator, of the existing provisions for access to the subdivision, the availability of sewage disposal facilities and other public utilities including, but not limited to, water, electricity, gas and telephone facilities, the proximity in miles of the subdivision to nearby municipalities, the availability and scope of community fire and police protection, the location of primary and secondary schools, the improvements installed or to be installed, including off-site and on-site community and recreational facilities, the persons who are to install, maintain and pay for such improvements, and the estimated schedule for completion;

17. If required by the Administrator's rule or order, a performance or completion bond to assure that planned improvements will be completed, in a form suitable to the Administrator;

18. Such financial statements of the subdivider as the Administrator may require;

19. A narrative description of the promotional plan for the disposition of the subdivided lands, together with duplicate copies of all advertising material which has been prepared for public distribution. The subject matter of advertising material which is pictorial in nature shall be limited to a depiction of actual on-site conditions of the subdivided lands as of the date of the filing of the material. No advertising shall be used until a copy thereof has been allowed for use by the Administrator or a person authorized by the Administrator as provided in Section 653 of this title;

20. Three copies of the proposed public offering statement prepared in accordance with Section 626 of this title; and

21. Such additional information or exhibits as the Administrator may require.

Any of the items required under this section may be incorporated in the application for registration by reference provided that such items are contained in the public offering statement and the Administrator so allows.

§ 626. Public offering statements -- Contents -- Violations -- Uses

A. It shall be unlawful for a person to dispose of an interest in subdivided lands, pursuant to a registration under this Code, unless a current public offering statement is delivered to the purchaser at the expense of the subdivider or his agent at least forty-eight (48) hours prior to any sale, contract to sell or option to purchase and unless the purchaser is afforded a reasonable opportunity to examine and is permitted to retain the public offering statement. The subdivider shall obtain and retain a receipt, signed by the purchaser, acknowledging receipt of a copy of the public offering statement prior to the execution by the purchaser of any contract or agreement for the disposition of any lot in a subdivision, which receipt shall be kept in the files of the subdivider and be subject to inspection by the Administrator for a period of three (3) years from the date the receipt is taken.

B. A public offering statement shall disclose fully and accurately all material circumstances or features which affect the subdivided lands or which would be a material consideration in making the purchasing decision. The proposed public offering statement shall be submitted to the Administrator as required by paragraph 20 of Section 625 of this Code and shall be in such form and contain such information as the Administrator by rule requires, including:

1. The name, principal address and telephone number of the subdivider, his offices and agents in this state;

2. A general description of the subdivided lands including a statement of the number of lots to be offered;

3. A statement as to whether the subdivider holds any option to purchase adjacent properties and, if so, a description of such option and the location and zoning of the adjacent properties;

4. The assistance, if any, that the subdivider, his agents or affiliates will provide to the purchaser in the resale of the property and the extent to which the subdivider, his agents or affiliates will be in competition in the event of resale;

5. The material terms of any encumbrances, easements, liens and restrictions including zoning and other regulations affecting the subdivided lands and each unit or lot, the efforts to remove such liens or encumbrances, the results

of the success or failure thereof, and all existing taxes and existing or proposed special taxes or assessments which affect the subdivided lands;

6. The use for which the property is to be offered;

7. Information concerning existing or proposed improvements including, but not limited to, streets, water supply, levees, drainage control systems, irrigation systems, sewage disposal systems and customary utilities and the estimated cost, date of completion and responsibility for construction and maintenance of existing and proposed improvements which are referred to in connection with the offering or disposition of any lot in subdivided lands;

8. Such financial statements of the subdivider as the Administrator may require;

9. The topographic and climatic characteristics of the subdivided lands and adjacent area;

10. A statement of the existing provisions for access of the subdivision to community fire protection, the location of primary and secondary schools, the proximity to municipalities and the population thereof, the improvements installed or to be installed, including off-site and on-site community and recreational facilities, by whom they were or are to be installed, maintained or paid for, and an estimate of completion thereof; and

11. Such additional information as may be required by the Administrator including any of the information contained in the application for registration.

C. The public offering statement shall not be used for any promotional purpose before registration of the subdivided lands and afterwards it shall be used only in its entirety. It shall be unlawful for any person to advertise or represent that the Administrator has approved or recommended the subdivided lands or a disposition thereof. No portion of the public offering statement may be underscored, italicized or printed in larger or heavier or different colored type than the remainder of the statement unless required or approved by the Administrator.

D. The Administrator may require the subdivider or his agent to alter or amend the proposed public offering statement in order to provide full and fair disclosure to prospective purchasers.

§ 627. Orders -- Application for registration -- Filing of documents and information

A. Within ninety (90) days from the date of filing a completed application for registration, the Administrator shall issue an order registering the subdivided lands or denying the application for registration. If an order of denial is not issued within ninety (90) days, the land shall be deemed registered unless the applicant has consented to a delay or the application has been withdrawn. If any amendment to the application is filed prior to the time when the land shall be deemed registered, the application shall be deemed to have been filed when the amendment was filed.

B. An application for registration may be filed by the subdivider, any other person on whose behalf the sales are to be made, or a licensed subdivided land agent, but the Administrator may require that it be executed by the subdivider.

C. Any document filed under this Code within five (5) years preceding the filing of an application for registration may be incorporated by reference in the application for registration to the extent that the document is currently accurate.

D. The Administrator may by rule or otherwise permit the omission of any item of information or document from any application for registration.

E. The Administrator may, as a condition of registration and at the expense of the subdivider, as specified in subsection A of Section 652 of this title, investigate any subdivision required to be registered under this Code for the purpose of verifying statements contained in the application for registration and for the protection of prospective purchasers. For the purposes of such investigation, the Administrator may:

1. Require that a report or opinion by an independent accountant, engineer, appraiser or other expert be prepared and filed;

2. Make an examination of the business and records of the applicant or subdivider;

3. Use and rely on any relevant information or data concerning a subdivision obtained by him from any federal, state or local government or agency thereof;

4. Conduct an on-site inspection of each subdivision;

5. Conduct an annual on-site reinspection of each subdivision for each of the three (3) years after the expiration date of the registration or any renewal thereof;

6. Make on-site examinations or designate a representative to make such examinations. Where additional technical, expert or special services are used, the actual cost of such services may be charged directly to and shall be paid by the person being examined; and

7. Where an on-site inspection of any subdivision has been made under this Code, an inspection of adjacent subdivided lands for which a subsequent application for registration is filed may be waived and an inspection thereof may be made at the time of the next succeeding on-site inspection.

F. The Administrator may require that any subdivided lands be sold by use of a specified form, contract or agreement, and that a signed copy or conformed copy of such signed copy be filed with him or preserved by the subdivider for a period of up to five (5) years.

G. The Administrator may by rule or otherwise impose other conditions under which subdivided lands registered under this Code may be sold, provided such conditions are reasonable and in the public interest. The Administrator may require an escrow, trust or similar arrangement to reasonably assure that all improvements referred to in the application for registration will be completed and that purchasers will receive the interests in land for which they have contracted.

H. A registration is effective for one (1) year from its effective date, or for such longer period as the Administrator may permit by rule or order. No application for registration or effective registration may be withdrawn at any time after its filing unless permitted by rule or order of the Administrator. No registration is effective during the time a stop order is in effect under Section 628 of this title.

I. During the effective period of a registration, the Administrator may by rule or order require the person who filed the application for registration to file reports, not more often than quarterly, to keep reasonably current the information contained in the application for registration and to disclose the progress of the sales. If any of the lands registered have been sold in this state, the Administrator may by rule or order extend the period for filing the reports for an additional period not exceeding two (2) years from the date the registration became effective or the date of the registration period's latest extension.

J. The subdivider or registrant shall immediately report to the Administrator any material changes in the information contained in the application for registration.

K. Upon the expiration of an effective registration, the Administrator may renew the registration for an additional period of one (1) year, provided the registrant is in compliance with this Code, files such reports and applications as the Administrator may require, and pays an annual renewal fee as required by Section 652 of this title, which fee shall not exceed the original registration fee.

§ 628. Denial of effectiveness to, suspension of revocation of effectiveness of registration

A. The Administrator may issue a stop order denying effectiveness to, or suspending or revoking the effectiveness of, any registration if he finds that the order is in the public interest and that:

1. The registration statement as of its effective date or any report under subsections I or J of Section 627 of this Code is incomplete in any material respect or contains any statement which was, in light of the circumstances under which it was made, false or misleading with respect to any material fact;

2. Any provision of this Code or any rule, order or condition lawfully imposed under this Code has been willfully violated in connection with the offer or disposition of subdivided lands by the person filing the registration statement, by the subdivider, any partner, officer or director of the subdivider, by any person occupying a similar status or performing similar functions, by any person directly or indirectly controlling or controlled by the subdivider, or by any subdivided land sales agent or other person involved directly or indirectly in the offer or disposition of subdivided lands;

3. The subdivided lands are the subject of an administrative stop order or similar order or a permanent or temporary injunction of any court of competent jurisdiction entered under any federal or state act applicable to the offer or disposition of the subdivided lands. Provided, that the Administrator may not institute a proceeding against an effective registration statement under this paragraph more than one (1) year from the date of the order or injunction relied on, and he may not enter an order under this paragraph on the basis of an order or injunction entered under any other state or federal act unless that order or injunction was based on facts which would currently constitute a ground for a stop order under this section;

4. The subdivider's enterprise or method of business includes or would include activities which are illegal where performed;

5. The offer or disposition of the subdivided lands is or would be unfair or inequitable to purchasers or has worked, tended to work or would work a fraud upon purchasers;

6. The disposition has been made or would be made with unreasonable commissions or other unreasonable compensation;

7. The applicant or registrant has failed to pay the proper filing fee. Provided, that the Commissioner may enter only a denial order under this paragraph and he shall vacate any such order when the deficiency has been corrected;

8. Advertising prohibited by Section 653 of this Code has been used in connection with the offer or disposition of the subdivided lands;

9. The financial condition of the subdivider or of any other person connected with the offer or disposition of subdivided lands adversely affects or would adversely affect the soundness of the land purchase; or

10. The subdivider is not in compliance with federal, state or local environmental quality standards.

B. The Administrator may not institute a stop order proceeding against an effective registration statement on the basis of a fact or transaction known to him when the registration statement became effective unless the proceeding is instituted within sixty (60) days.

C. In a proceeding for registration, within sixty (60) days of the effective date of such registration statement, the applicant or registrant has the burden of satisfying the requirements of subsection A of this section.

D. The Administrator may issue a summary order denying, postponing, suspending or revoking the effectiveness of the registration statement pending final determination of any proceeding under this section. Upon the entry of the order, the Administrator shall promptly notify each person specified in subsection E of this section that the order has been entered, the reasons for the entry of order and that each such person has a right to request a hearing under subsection A of Section 661 of this Code. If no hearing is requested and none is ordered by the Administrator, the order will remain in effect until it is modified or vacated by the Administrator.

E. No stop order may be entered under this section except under subsection D of this section unless there has been appropriate prior notice to the applicant or registrant, to the subdivider and to the person on whose behalf the lands are to be or have been offered, an opportunity for hearings and the making of written findings of fact and conclusions of law.

F. The Administrator may vacate or modify a stop order if he finds that the conditions which promoted the stop order's entry have changed or that it is otherwise in the public interest to do so.

ARTICLE III. LICENSING

§ 631. Licenses -- Exemptions -- Term -- Suspension, revocation or denial

A. It is unlawful for any person to transact business in this state as an agent unless he has obtained a real estate broker's or real estate sales associate's license from his state of residence, if required, and has obtained a license under this Code to offer or dispose of subdivided lands, provided that the provisions of this section shall not apply to a person whose dealings relate solely to property exempt under Section 622 of this title or to transactions exempt under Section 623 of this title.

B. Every license expires on the thirtieth day of June following the date of issuance. It may be renewed under such rules as the Administrator may establish.

C. Any license may be suspended, revoked or denied as provided in Section 634 of this title.

D. The Administrator may, by rule or order, exempt from the requirements of this section persons as to whom he finds licensing under this Code is not necessary for the protection of purchasers.

§ 632. Application for license

A. An agent may obtain an initial or renewal license by filing with the Administrator an application together with the Consent to Service of Process required by subsection A of Section 664 of this title and the fee required by Section 652 of this title. The application shall contain whatever information the Administrator by rule requires concerning the applicant, including the applicant's finances, qualifications, experience, proposed method of doing business and disclosure of past activities.

B. Before final action on an application, the Administrator may designate a person to make an examination of the books, records and affairs of an applicant at the applicant's expense.

C. The Administrator may by rule prescribe standards of qualification with respect to training, experience and knowledge of the subdivided land sales business and provide for an examination which may be oral or written or both, to be taken by all applicants or any class thereof.

D. The Administrator may by rule or otherwise impose such other conditions in connection with the issuance of licenses under this Code as he deems appropriate in the public interest and for the protection of purchasers.

E. If no denial order is in effect and no proceeding is pending under Section 634 of this title, the license becomes effective thirty (30) days after a completed application is filed. The Administrator may by rule or order specify an earlier effective date. An application is deemed filed when all required information and amendments have been filed. The Administrator may cooperate with regulatory authorities in other states to simplify and coordinate license applications and renewal procedures.

§ 633. Records -- Copies -- Inspection -- Reports -- Examination -- Rules and regulations

A. Agents shall make and keep all accounts, correspondence, memoranda, papers, books and other records as the Administrator by rule requires and shall keep them for at least six (6) years, and for the first three (3) years in a readily accessible location, unless the Administrator by rule prescribes otherwise. The Administrator may require that copies of any such records be provided by the agent to the subdivider for retention and inspection by the Administrator under such rules as he may prescribe. All required records shall be made available to the Administrator upon request for his inspection at his office or such other place as he may require. The Administrator may accept copies of records at his discretion.

B. Every agent shall file such reports as the Administrator by rule prescribes.

C. If the information contained in any application for a license or other document filed with the Administrator is or becomes inaccurate or incomplete in any material respect, the licensee shall file a corrective amendment within ten (10) days.

D. The Administrator may make periodic examinations, within or without this state, of the business and records of each licensed agent at such times and in such scope as he determines. The examinations may be made without prior notice. The Administrator shall charge all expenses incurred in such examination to the licensed agent whose business is being examined in the amount as provided in Section 652 of this title. For the purpose of avoiding unnecessary duplication of examinations, the Administrator, insofar as he deems practical, may cooperate with other regulatory agencies. The Administrator may not be compelled to make public the information obtained in the course of the examinations except when his duty under this Code requires him to take action regarding an agent or to make information available to other regulatory agencies, or when the Administrator is called as a witness in any criminal proceeding.

E. The Administrator may prescribe rules for the conduct of business by agents as he finds appropriate in the public interest for the protection of purchasers.

§ 634. Denial, revocation or suspension of license

A. The Administrator may by order deny effectiveness to, suspend or revoke any license or may censure the licensee if he finds that the order is in the public interest and that the applicant or licensee:

1. Has filed an application for a license which as of its effective date, or as of any date after filing in the case of an order denying effectiveness, was incomplete in any material respect or contained any statement which was, in light of the circumstances under which it was made, false or misleading with respect to any material facts;

2. Has violated or failed to comply with any provision of this article or any rule promulgated hereunder, or any order of which he has notice;

3. Has been convicted within the past ten (10) years of any crime involving a land sale or any aspect of the real estate business;

4. Is permanently or temporarily enjoined by any court of competent jurisdiction from engaging in or continuing any conduct or practice involving any aspect of the real estate business;

5. Is the subject of an order entered within the past ten (10) years by a regulatory agency exercising jurisdiction similar to the Administrator's jurisdiction, which order denies, suspends or revokes a real estate broker's or subdivided land sales agent's license, or is the subject of a United States Post Office fraud order. The Administrator may not enter an order under this paragraph on the basis of an order under another state or federal law unless the order was based on facts which would currently constitute a ground for an order under this section;

6. Has engaged in dishonest or unethical practices in the real estate or subdivided land business or has taken unfair advantage of a purchaser;

7. Is insolvent, either in the sense that his liabilities exceed his assets or in the sense that he cannot meet his obligations as they mature;

8. Has failed to pay the proper filing fee, provided that the Administrator shall vacate any such order when the deficiency has been corrected;

9. Is disposing or has disposed of, or is offering or has offered for disposition in this state, subdivided land through any unlicensed agent with knowledge or reason to know that such agent had not or has not complied with this Code; or

10. Has made any material misrepresentation to, withheld or concealed any material fact from the Administrator or any of his representatives, or has failed to furnish information reasonably requested by the Administrator.

B. The Administrator may not institute a suspension or revocation proceeding on the basis of a fact or transaction known to him when the license was issued unless the proceeding is instituted within sixty (60) days of the issuance of said license.

C. The Administrator may by order summarily deny, postpone the effectiveness of, or suspend a license pending final determination of any proceeding under this section. Upon the entry of the order the Administrator shall promptly notify the applicant or licensee, as well as the employer or prospective employer, if any, that the order has been entered, the reasons for the entry of order and the right of each person to a hearing under subsection A of Section 661 of this Code. If no hearing is requested within thirty (30) days and none is ordered by the Administrator, the order remains in effect until it is modified or vacated by the Administrator.

D. If the Administrator finds that any licensee or applicant is no longer in existence or has ceased to do business as an agent, or is subject to an adjudication of mental incompetence or to the control of a committee, conservator or guardian, or cannot be located after reasonable search, the Administrator may by order revoke the license or deny the application.

E. Withdrawal from the status of a licensed agent becomes effective thirty (30) days after receipt of an application to withdraw or such shorter period as the Administrator determines. Provided, that if a revocation or suspension proceeding is pending when the application is filed or a proceeding to revoke or suspend or to impose conditions upon the withdrawal is instituted, withdrawal becomes effective at such time and upon such conditions as the Administrator by order determines. If no proceeding is pending or instituted and withdrawal becomes effective, the Administrator may institute a revocation or suspension proceeding under subsection A of this section within one (1) year after withdrawal became effective and enter a revocation or suspension order as of the last date on which the license was in effect.

F. No order may be entered under this section except under subsection D of this section without appropriate prior notice to the applicant or licensee, opportunity for hearing and written findings of fact and conclusions of law. In cases of denial orders, such findings and conclusions shall be provided only if requested by the applicant.

ARTICLE IV. SALES PRACTICES

§ 641. Fraud -- Penalty

It is unlawful for any subdivider, agent, or affiliate of either, in connection with the offer or disposition in this state of any subdivided land, directly or indirectly, to:

1. Employ any device, scheme or artifice to defraud;

2. Make any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; or

3. Engage in any act, practice or course of business which operates or would operate as a fraud or deceit upon any person.

§642. Liens and encumbrances

No agent may offer or dispose of lots within a subdivision required to be registered under this Code which is subject to a blanket encumbrance, option or contract for deed unless such offer or disposition is in compliance with such rules as may be prescribed by the Administrator for the protection of purchasers.

§ 643. Contracts -- Voiding -- Rescinding -- Revoking

In connection with dispositions of subdivided lands required to be registered under this Code:

1. Any contract or agreement for the disposition is voidable at the discretion of the purchasers if the public offering statement has not been given to the purchasers as required by subsection A of Section 626 of this Code; and

2. A purchaser has an unconditional right to rescind any contract, agreement or other evidence of indebtedness, or to revoke any offer, until five (5) days after the date the purchaser actually receives a legible copy of the signed contract, agreement or other evidence of indebtedness or offer and the public offering statement. Until five (5) days after a purchaser actually receives all documents, a right to rescind may be exercised. Predating of a document does not defeat the time in which the right to rescind may be exercised.

§ 644. Notice to purchaser -- Signatures -- Rescission of contract

In connection with the offer or disposition of subdivided land required to be registered under this Code:

1. Each contract, agreement or evidence of indebtedness shall prominently contain upon its face the following notice printed in at least sixteen-point bold type which shall be at least four (4) type points larger than the body of the document stating:

    NOTICE TO PURCHASER

    YOU ARE ENTITLED TO CANCEL THIS AGREEMENT AT ANY TIME IF YOU HAVE NOT RECEIVED THE PUBLIC OFFERING STATEMENT IN ADVANCE OF YOUR SIGNING THIS AGREEMENT. IN ADDITION, YOU ARE ENTITLED TO CANCEL THIS AGREEMENT FOR ANY REASON WITHIN FIVE (5) DAYS FROM THE DAY YOU ACTUALLY RECEIVE A LEGIBLE COPY OF THIS DOCUMENT. DO NOT SIGN A RECEIPT FOR THIS DOCUMENT UNLESS YOU HAVE ACTUALLY RECEIVED A LEGIBLE COPY OF IT.

The contract, agreement or evidence of indebtedness shall contain sufficient space upon its face in immediate conjunction with the above notice for the signature of each person obligated under such instrument. The signature shall acknowledge that such person has read the notice and received a legible copy of the document.

2. Exercise of the purchaser's right to rescission occurs when the purchaser gives written notice to the subdivider or agent at the address stated in the contract, agreement, or evidence of indebtedness. Notice of rescission if given by mail is effective when it is deposited in a mailbox properly addressed and postage prepaid. A notice of rescission given by a purchaser need not take a particular form and is sufficient if it indicates by any form or written expression the intention of the purchaser not to be bound by the contract, agreement or evidence of indebtedness.

3. No act of the purchaser shall be effective to waive the right to rescind as provided in this Code.

ARTICLE V. GENERAL PROVISIONS

§ 651. Administration of code -- Personal use of information -- Privileges and immunities

A. This Code shall be administered by the Administrator of the Department of Securities.

B. It is unlawful for the Administrator or any of his officers or employees to use for personal benefit any information which is filed with or obtained by the Administrator and which is not generally available to the public. No provision of this Code, except subsection D of Section 633 of this Code, either creates or derogates from any privilege which exists at common law or otherwise when documentary or other evidence is sought under a subpoena directed to the Administrator or any of his officers or employees.

§ 652. Disposition

A. Unless otherwise provided by law, the following are the fees that shall be charged by the Administrator pursuant to the Oklahoma Subdivided Land Sales Code. No additional fees shall be assessed or charged pursuant to rule or regulation of the Administrator. Once paid, such fees shall be nonrefundable.

1. Agent License registration fee or renewal fee................$30.00

2. Agent License examination fee......................................$30.00

3. Filing fee for advertising or promotional materials.........$10.00

4. Exemption notification filing fee....................................$250.00

5. Interpretive opinion or no-action request......................$250.00

6. Affidavit request.............................................................$10.00

7. Service of process upon the Administrator....................$10.00

8. Copying fee:

    a. 8 1/2" by 14" or smaller................................................ $ .25 per page

    b. Larger than 8 1/2" by 14".............................................$1.00 per page

    c. Certified copy 8 1/2" by 14" or smaller.........................$1.00 per page

    d. Certified copy larger than 8 1/2" by 14"........................$2.00 per page

9. Document search fee for commercial purpose..............$20.00 per hour

10. Initial application for registration of subdivided land pursuant to Section 625 of this title:

    a. Examination fee...........................................$250.00

    b. Registration fee....................................$1.00 per lot

11. Renewal application for registration of subdivided land pursuant to Section 627 of this title:

    a. Examination fee...........................................$250.00

    b. Registration fee................ $1.00 per lot not previously registered pursuant to the Initial Application or prior Renewal Application filed pursuant to this Code.

12. Charges for an on-site examination of a subdivision conducted pursuant to Section 627 of this title or of a licensed agent pursuant to Section 633 of this title, shall be billed to the person being examined at a rate of $25.00 per hour per employee for the time spent by each Department employee in traveling to and from the examination site, conducting the examination, and preparing the examination report. In addition, the Department shall be reimbursed for all such expenses incurred in conducting such examinations, including travel expenses, per diem, lodging, and other related expenses of Department employees conducting the examination, the cost of supplies, materials, photocopying, long distance telephone calls and postage; and costs of technical, expert or special services required in connection with such examination.

B. All fees and other charges collected by the Administrator pursuant to this section shall be deposited in the General Revenue Fund except for the following fees and charges which shall be deposited in the Oklahoma Securities Commission Revolving Fund established pursuant to Section 412 of this title:

1. The fees collected pursuant to paragraphs 5, 6, 7, 8 and 9 of subsection A of this section;

2. The fees collected pursuant to the provisions of Sections 627 and 633 of this title as provided in paragraph 12 of subsection A of this section;

3. The examination fees collected pursuant to subparagraph a of paragraph 10 and subparagraph a of paragraph 11 of subsection A of this section.

§ 653. Advertising

A. It is unlawful for any person, in connection with the offer or disposition of subdivided land, to publish, circulate or use any advertising concerning the subdivided land which contains:

1. Any untrue statement, omission or pictorial representation of a material fact which under the circumstances makes the statement, omission or pictorial representation misleading; or

2. Any statement which differs materially from the information contained in a registration application or public offering statement.

B. All advertising except advertising relating to subdivided land or transactions exempt pursuant to Sections 622 and 623 shall be filed with the Administrator not later than ten (10) days prior to its use and shall not be used until a copy thereof has been approved for use by the Administrator, except advertising which the Administrator exempts by rule or order. Any advertising filed with the Administrator pursuant to this section shall be accompanied by the filling fee specified in Section 652 of this title.

§ 654. Fraud -- Filing of documents and information

It is unlawful for any person to make or cause to be made, in any document filed under this Code or in any proceeding under this Code, any false or misleading statement in any material respect or, in connection with such statement, to omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading.

§ 655. Presumptions -- Fraud -- Violations

Neither the fact that a registration statement or an application for a license has been filed nor the fact that any subdivided lands are registered or that any person is licensed constitutes a finding by the Administrator that any document filed under this Code is true, complete and not misleading. Neither any such fact nor the fact that an exemption or exclusion is available for an agent, subdivided land, or a transaction means that the Administrator has passed in any way upon the merits or qualifications of, or recommended or given approval to, any person, subdivided land or transaction. It is unlawful to make, or cause to be made, to any prospective purchaser, any representation inconsistent with the foregoing.

§ 656. Power and duties of Administrator

A. The Administrator may:

1. Make such public or private investigations within or without this state as he deems necessary to determine whether any person has violated or is about to violate this Code or any rule or order issued hereunder, or to aid in the enforcement of this Code or in the prescribing of rules and forms hereunder;

2. Require or permit any person to file a statement in writing, under oath or otherwise as the Administrator determines, as to all of the facts and circumstances concerning the matter being investigated;

3. Publish information concerning any violation of this Code or any rule or order issued hereunder or concerning subdivided lands, or practices in the disposition thereof, which appear or tend to be unfair, inequitable or fraudulent; and

4. Hold hearings upon reasonable notice in respect of any matter arising out of the administration of this Code.

B. For the purpose of any investigation, hearing or proceeding under this Code, the Administrator or any officer designated by him may administer oaths and affirmations,subpoena witnesses, compel their attendance, take evidence and require the production of any books, papers, correspondence, memoranda, agreements or other documents or records which the Administrator deems relevant or material to the inquiry.

C. In case of contumacy by or refusal to obey a subpoena issued to any person, the district court of Oklahoma County or the district court in any other county where service can be obtained on one or more of the defendants, upon application by the Administrator, may issue to the person an order requiring him to appear before the Administrator, or the officer designated by him, there to produce documentary evidence if so ordered or to give evidence touching the matter under investigation or in question. Failure to obey the order of the court may be punished by the court as a contempt of court.

D. No person is excused from attending and testifying or from producing any document or record before the Administrator, or in obedience to the subpoena of the Administrator or any officer designated by him, or in any proceeding instituted by the Administrator, on the ground that the testimony or evidence required of him may tend to incriminate him or subject him to a penalty or forfeiture; but no individual may be prosecuted or subjected to any penalty or forfeiture for or on account of any transaction, matter or thing concerning which he is compelled, after claiming his privilege against self-incrimination, to testify or produce evidence, except that the individual testifying is not exempt from prosecution and punishment for perjury or contempt committed in testifying.

§ 657. Injunctions -- Intervention in suits involving subdivided land

A. Whenever it appears to the Administrator that any person has engaged or is about to engage in any act or practice constituting a violation of this Code or any rule or order hereunder, he may bring an action in the name of the state in the District Court of Oklahoma County or the district court in any other county where service can be obtained on one or more of the defendants to enjoin the acts or practices and to enforce compliance with this Code or any rule or order hereunder, or he may refer the matter to the Attorney General or the district attorney of the appropriate district. Upon a proper showing, the court may grant a permanent or temporary injunction or restraining order, or may appoint a receiver for the defendant or the defendant's assets or may order rescission of any sales or purchases of subdivided lands determined to be unlawful under this Code or any rule or order hereunder. The court may not require the Administrator to post a bond.

B. The Administrator may intervene in a suit involving subdivided land required to be registered under this Code. In any suit by or against a subdivider or agent involving subdivided lands required to be registered under this Code, the subdivider or agent shall promptly furnish the Administrator with notice of the suit and copies of all pleadings.

§ 658. Violation of Code -- Fines and Penalties

A. Any person who willfully violates any provision of this Code except Section 654 of this title, or any rule under this Code, or any order of which he has notice, or who violates Section 654 of this title, knowing or having reasonable cause to believe that the statement made was false or misleading in any material respect, may be fined not more than Twenty-five Thousand Dollars ($25,000.00) or imprisoned not more than three (3) years, or both.

B. The Administrator may refer such evidence as is available concerning violations of this Code or any rule or order hereunder to the Attorney General or the district attorney of the appropriate district, who may, with or without any reference, institute the appropriate criminal proceedings. The Attorney General or district attorney may designate and appoint one or more lawyers of the Department of Securities as special assistants as available for the purpose of assisting in or conducting all criminal prosecutions arising by reason of proceedings under this section.

C. Nothing in this Code limits the power of the state to punish any person for any conduct which constitutes a crime under any other statute.

§ 659. Liability to purchaser -- Persons liable -- Limitation of actions

A. Any person who:

1. Offers or disposes of subdivided land in violation of Sections 621, 631 or 653 of this Code, or any rule relating thereto, or any condition imposed under Sections 625 through 627 of this Code, or any order under this Code of which he has notice; or

2. Offers or disposes of subdivided land by means of any untrue statement of a material fact or any omission to state a material fact necessary to make the statement, in light of the circumstances under which it was made, not misleading, where the purchaser is unaware of the untruth or omission; shall be liable to the person purchasing the subdivided land from him. Such purchaser may sue to recover the consideration paid for the subdivided land and any taxes, assessments, membership fees or consideration of a similar nature paid thereon or in connection therewith, together with reasonable attorney fees and interest at the rate of ten percent (10%) per year from the date of payment, less the amount of any income received on the land, upon the tender of the land, or for damages if he no longer owns the land. Damages are the amount that would be recoverable upon a tender less the value of the land when the purchaser disposed of it and interest at a legal rate from the date of disposition. Tender shall require only notice of willingness to exchange the land for the amount specified. Any notice may be given by service as in civil actions or by certified mail addressed to the last-known address of the person liable.

B. 1. Every person who directly or indirectly controls a subdivider who may be liable under this Code, every general partner, officer or director of a subdivider, every person occupying a similar status or performing a similar function, every employee of the subdivider who materially aids in the disposition and every agent who materially aids in the disposition is also liable jointly and severally with and to the same extent as any person liable under subsection A of this section, if he knew or in the exercise of reasonable care should have known of the existence of the facts by reason of which the liability is alleged to exist. There is a right to contribution as in cases of contract among persons so liable.

2. Every person whose occupation gives authority to a statement which with his consent has been used in an application for registration or public offering statement, if he is not otherwise associated with the subdivision and development plan in a material way, is liable only for false statements and omissions in his statement if he knew or in the exercise of the reasonable care of a person in his occupation should have known of the existence of the facts by reason of which the liability is alleged to exist.

C. No action shall be maintained under this section unless commenced before the expiration of five (5) years after the act or transaction constituting the violation.

D. 1. No purchaser may commence an action under this section if, before suit is commenced, the purchaser has received a written offer stating the respect in which liability under this section may have arisen, thoroughly advising the purchaser of his rights, offering to repurchase the land or interest held by the purchaser for cash on the same basis as provided in subsection A of this section, payable on delivery of title to the land or other interest therein or, if the purchaser no longer owns the land, offering to pay the purchaser upon acceptance of the offer an amount in cash equal to the damages computed in accordance with subsection A of this section, and stating that the offer may be accepted by the purchaser at any time within a specified period of not less than sixty (60) days after the date of receipt thereof or such shorter or longer period as the Administrator may by rule prescribe, and the purchaser has failed to accept such offering in writing within the specified period.

2. Offers shall be in the form and contain the information the Administrator by rule prescribes. Every offer under this subsection shall be delivered to the offeree or sent by certified mail addressed to him at his last-known address. Notwithstanding the provisions of this subsection, suit by the offeree for breach of the terms in the offer pursuant to this section shall be permitted.

E. Any condition, stipulation or provision binding any person acquiring any subdivided land to waive compliance with any provision of this Code or any rule or order hereunder is void.

F. The rights and remedies under this Code are in addition to any other rights or remedies that may exist at law or in equity.

§ 660. Summary prohibition of offers or dispositions

If the Administrator has reason to believe that any offer or disposition of subdivided land required to be registered under this Code is or would be fraudulent to purchasers, he may by order summarily prohibit further offers or dispositions in this state of such land until it is registered under this Code. If the Administrator has reason to believe that any subdivided land is being offered or disposed of in this state by any unlicensed person in violation of this Code or any rule or order hereunder, he may by order summarily prohibit such person from further offers or dispositions in this state of such subdivided lands until he is licensed under this Code.

§ 661. Review of orders

A. Any person aggrieved by final order of the Administrator may obtain a review by the Commission by filing with the Administrator, within fifteen (15) days after the entry of the order, a written petition praying that the order be modified or set aside in whole or in part and stating his ground therefor. The application and petition shall within sixty (60) days be heard de novo by the Commission en banc. The applicant may offer evidence and it shall be the duty of the Administrator to offer such evidence as is relied upon in the entry of his order and such further evidence as he may deem relevant. Upon the written request of the party on whose behalf the appeal is brought, or upon his own motion, the Administrator shall cause complete stenographic notes to be taken. If requested by the appealing party, the cost of taking and transcribing such notes shall be borne by the said appealing party. If such notes are taken upon the motion of the Administrator, the cost shall be borne by the Commission. The Commission or a majority thereof shall make such order as is deemed proper, just and equitable.

B. Any person aggrieved by a final order of the Commission may obtain a review of the order by the district court of Oklahoma County.

C. The commencement of proceedings under this section before the Commission shall not operate as a stay of the Administrator's order, unless so ordered by the Commission. The commencement of proceedings under this section before the district court shall not operate as a stay of the Commission order, unless so ordered by the court.

§ 662. Rules, forms and orders -- Making, amending or rescinding -- Exemption from liability

A. The Administrator may make, amend and rescind any rules, forms and orders that are necessary to carry out this Code, including rules and forms governing applications for registration or licensing, reports and defining any terms, whether or not used in this Code, insofar as the definitions are not inconsistent with this Code. For the purpose of rules and forms, the Administrator may classify subdivided lands, persons and matters within his jurisdiction, and prescribe different requirements for different classes.

B. No rule, form or order may be made, amended or rescinded unless the Administrator finds that the action is necessary or appropriate in the public interest and for the protection of purchasers. In prescribing rules and forms, the Administrator may cooperate with regulatory agencies of other units of government with a view to achieving maximum uniformity in the form and content of registration statements, applications and reports wherever practicable.

C. The Administrator may by rule or order prescribe the form and content of financial statements required under this Code, the circumstances under which consolidated financial statements shall be filed and whether any required financial statements shall be certified by independent or certified public accountants. All financial statements shall be prepared in accordance with generally accepted accounting practices unless otherwise permitted by rule or order.

D. No provision of this Code imposing any liability applies to any act done or omitted in good faith and conformity with any rule, form or order of the Administrator, notwithstanding that the rule, form or order may later be amended or rescinded or be determined to be invalid for any reason.

E. All rules and forms of the Administrator shall be published.

§ 663. Filing of documents -- Register -- Inspection -- Copies -- Interpretative opinions

A. A document is filed when it is received by the Administrator.

B. The Administrator shall keep a register of all licenses and registration statements which are or have been effective under this Code and all denial, suspension or revocation orders which have been entered under this Code. The register shall be open for public inspection.

C. The information contained in or filed with any application for registration, licensing or report shall be made available to the public in accordance with rules prescribed by the Administrator.

D. Subject to the provisions of subsection D of Section 633 of this Code, the Administrator upon request shall furnish to any person at a reasonable charge photostatic or other copies, certified under his seal of office, if certification is requested, of any entry in the register or any order on file in his office. Any copy so certified is admissible in evidence in trials and other proceedings.

E. The Administrator may honor requests from interested persons for interpretative opinions.

§ 664. Consent to service of process -- Service

A. Every applicant for a license or registration under this Code shall file with the Administrator, in such form as he by rule prescribes, an irrevocable consent appointing the Administrator or his successor in office to be his attorney to receive service of any lawful process in any noncriminal suit, action or proceeding against him or his successor, executor or administrator which arises under this Code or any rule or order issued hereunder after the consent has been filed, with the same validity as if served personally on the person filing the consent. The consent need not be filed by a person who has filed a consent in connection with a previous registration or license which is then in effect. Service may be made by leaving a copy of the process in the office of the Administrator, but is not effective unless the plaintiff, who may be the Administrator in the suit, action or proceeding instituted by him, promptly sends notice of the service and a copy of the process by registered or certified mail to the defendant or respondent at his last address on file with the Administrator, and the plaintiff's affidavit of compliance with this subsection is filed in the case on or before the return of the process, or within such time as the court allows.

B. When any person, including any nonresident in this state, engages in conduct prohibited or made actionable by this Code or any rule or order hereunder, and he has not filed a consent to service of process under subsection A of this section and personal jurisdiction over him cannot otherwise be obtained in this state, that conduct shall be considered equivalent to his appointment of the Administrator to be his attorney to receive service of any lawful process in any noncriminal suit, action or proceeding against him or his successor, executor or administrator which arises out of that conduct and which is brought under this Code or any rule or order hereunder, with the same validity as if served on him personally. Service may be made by leaving a copyof the process in the office of the Administrator, but it is not effective unless the plaintiff, who may be the Administrator in a suit, action or proceeding instituted by him, promptly sends notice of the service and a copy of the process by registered or certified mail to the defendant or respondent at his last-known address or takes other steps which are reasonably calculated to give actual notice, and the plaintiff's affidavit of compliance with this subsection is filed in the case on or before the return day of the process or within such time as the court allows.

C. When process is served under this section, the court or the Administrator in a proceeding before him, shall order such continuance as is necessary to afford the defendant or respondent reasonable opportunity to defend.

§ 665. Dispositions and offers -- Application of law -- Acceptance

A. The provisions of this Code concerning dispositions and offers to dispose of subdivided land apply when a disposition or offer to dispose is made in this state or when an offer to purchase is made and accepted in this state. An offer to dispose includes solicitation of any offer to purchase. The provisions concerning purchases and offers to purchase apply when a purchase or offer to purchase is made in this state or an offer to dispose is made and accepted in this state.

B. For the purpose of this section, an offer to dispose or to purchase subdivided land is made in this state, whether or not either party is then present in this state, when the offer originates from this state or is directed by the offeror to this state and received by the offeree in this state, but, for the purpose of Section 621 of this Code, an offer to dispose which is not directed to or received by the offeree in this state is not made in this state. An offer which is made to or accepted by a person who has been induced to travel from this state for the purpose of receiving the offer or making the acceptance shall be deemed to have been made or accepted in this state.

C. For the purpose of this section, an offer to purchase or dispose is accepted in this state when acceptance is communicated to the offeror in this state. Acceptance is communicated to the offeror in this state, whether or not either party is then present, when the offeree directs the acceptance to the offeror in this state reasonably believing the offeror to be in this state and the acceptance is received by the offeror in this state.

D. An offer to dispose or to purchase subdivided land is not made in this state when the publisher circulates or there is circulated on his behalf in this state any bona fide newspaper or other publication of general, regular and paid circulation which is not published in this state, or when a radio or television program originating outside this state is received in this state.

§ 666. Liens and encumbrances

Notwithstanding any other provision of this Code, nothing contained herein shall apply to or invalidate the lien of a mortgagee who is not affiliated with the subdivider, when such lien attaches to land pledged as collateral in a transaction negotiated directly with the purchaser.

§ 667. Construction of act

Article headings contained herein shall not be deemed to govern, limit or in any manner affect the scope, meaning or intent of the provisions of any article or section hereof.