§ 557B.12 — Nondisturbance provisions

Iowa § 557B.12

• Jurisdiction: Iowa
• Title XIV: PROPERTY
• Ch. 557B: MEMBERSHIP CAMPGROUNDS

Text

1. With respect to any property in this state acquired and put into operation by a
membership camping operator after July 1, 1987, the membership camping operator shall
not offer or execute a membership camping contract in this state granting the right to use
the property until the following requirements are met:
a. Each person holding an interest in a voluntary blanket encumbrance has executed and
delivered a nondisturbance agreement which includes all of the following provisions:
(1) That the rights of the holder or holders of the blanket encumbrance in the affected
campground are subordinate to the rights of purchasers.
(2) That any person who acquires the affected campground or any portion of the
campground by the exercise of any right of sale or foreclosure contained in the blanket
encumbrance takes the campground subject to the rights of purchasers.
(3) That the holder or holders of the blanket encumbrance shall not use or cause the
campground to be used in a manner which interferes with the right of purchasers to use the
campground and its facilities in accordance with the terms and conditions of the membership
camping contract.
b. Each hypothecation lender which has a lien on, or security interest in, the membership
camping operator’s ownership interest in the campground has executed and delivered
a nondisturbance agreement and recorded the agreement in the office of the clerk of
the district court of the county in which the campground is located. In addition, each
person holding an interest in a blanket encumbrance superior to the interest held by the
hypothecation lender has executed, delivered, and recorded an instrument stating that
such person will give the hypothecation lender notice of, and at least thirty days to cure,
any default under the blanket encumbrance before the person commences any foreclosure
action affecting the campground. For the purposes of this section:
(1) “Hypothecation lender” means a financial institution which provides a major
hypothecation loan to a membership camping operator.
(2) “Major hypothecation loan” is a loan or line of credit secured by substantially all of the
contracts receivable arising from the membership camping operator’s sale of membership
camping contracts.
(3) “Nondisturbance agreement” means an instrument by which a hypothecation lender
agrees to conditions substantially the same as those set forth in paragraph “a”.
2. In lieu of compliance with subsection 1, a surety bond or letter of credit satisfying the
requirements of this subsection may be delivered to and accepted by the attorney general.
The surety bond or letter of credit shall be issued to the attorney general for the benefit of
purchasers and shall be in an amount which is not less than one hundred five percent of
9 MEMBERSHIP CAMPGROUNDS, §557B.13
the remaining principal balance of every indebtedness secured by a blanket encumbrance
affecting the campground. The bond shall be issued by a surety which is authorized to do
business in this state and which has sufficient net worth to satisfy the indebtedness. The
aggregate liability of the surety for all damages shall not exceed the amount of the bond.
The letter of credit shall be irrevocable, shall be drawn upon a bank, savings and loan, or
financial institution, and shall be in form and content acceptable to the attorney general.
The bond or letter of credit shall provide for payment of all amounts secured by the blanket
encumbrance including costs, expenses, and legal fees of the lienholder, if for any reason
the blanket encumbrance is enforced. The bond or letter of credit may be reduced at the
option of the membership camping operator periodically in proportion to the reductions of
the amounts secured by the blanket encumbrance.
3. Thenondisturbanceagreementshallberecordedintherealestaterecordsofthecounty
in which the campground is located.