Guam § 4908 - Tenant-Purchaser Escrow Account.

§ 4908. Tenant-Purchaser Escrow Account.

(a) (1) The mortgage loan documents, with respect to a

mortgage loan(s) in effect prior to the Tenant-Purchaser’s

purchase of their respective units, shall provide there shall

be retained over the Tenant-Purchaser’s lease term an

amount held as additional security for such loan(s) called

the Tenant-Purchaser Escrow Account. The Tenant-

Purchaser Escrow Account will receive a predetermined

portion of the Tenant-Purchaser’s monthly rental amount as

provided for in § 4707(a)(2)(iv) of this Act, such portion to

be determined at commencement of the Tenant-Purchaser’s

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lease. The total amount contributed to the Tenant-Purchaser

Escrow Account by the Tenant-Purchaser over the lease

term should not be less than ten percent (10%) of the

Tenant-Purchaser’s anticipated purchase price. Such

Tenant-Purchaser Escrow Account shall be held by a

Trustee for the benefit of the Corporation and the first

mortgagee(s). The Corporation will approve such Trustee.

At the time of the Tenant-Purchaser’s purchase of the

respective unit, the Trustee shall release and disperse the

Tenant-Purchaser Escrow Account to the unit Seller to meet

the Tenant-Purchaser’s down payment requirement.

(2) The escrow amounts pertaining to various lease-to-

own loans may be commingled for investment purposes.

Trustees shall keep separate records showing the amount in

each Tenant-Purchaser Escrow Account. Investment

earnings on the Tenant-Purchaser Escrow Account shall

accrue to the benefit of the Tenant-Purchaser.

(b) The Trustee shall periodically advise both the

Corporation and the Seller as to the amount and earnings in each

Tenant-Purchaser Escrow Account.

(c) In the event a default by the Tenant-Purchaser occurs, as

provided for in § 4707(a)(5), the Trustee shall release only that

portion of the respective Tenant-Purchaser Escrow Account that

is needed to meet the following funding requirements:

(1) any costs incurred by the Corporation related to

deferred maintenance of the Tenant-Purchaser’s respective

housing unit;

(2) any costs to the Corporation due to re-advertising,

administrative financial fees and other liabilities that may be

a result of the Tenant-Purchaser caused default; and

(3) all funds remaining in the unit specific Tenant-

Purchaser Escrow Account will be retained by the Trustee

for the benefit of the next prospective Tenant-Purchaser to

occupy the defaulted unit, as is intended by and provided

for in § 4704(a)(5) of this Act.

2017 NOTE: Subitem designations added to subsection (a) pursuant to

the authority of 1 GCA § 1606.

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2015 NOTE: Subsection designations (c) were altered to adhere to the

Compiler’s alpha-numeric scheme pursuant to the authority granted by 1

GCA § 1606.