38-U.S.C.-3706
§3706 – Escrow of Deposits and Downpayments
Pathway
Title 38 > Part III > Chapter 37 > Subchapter I > Section 3706
Details
- Reference: Section 3706
- Legend: §3706 – Escrow of Deposits and Downpayments
- USCode Year: 2013
Provision Content
(a) Any deposit or downpayment made by an eligible veteran in connection with the purchase of proposed or newly constructed and previously unoccupied residential property in a project on which the Secretary has issued a Certificate of Reasonable Value, which purchase is to be financed with a loan guaranteed, insured, or made under the provisions of this chapter, shall be deposited forthwith by the seller, or the agent of the seller, receiving such deposit or payment, in a trust account to safeguard such deposit or payment from the claims of creditors of the seller. The failure of the seller or the sellers agent to create such trust account and to maintain it until the deposit or payment has been disbursed for the benefit of the veteran purchaser at settlement or, if the transaction does not materialize, is otherwise disposed of in accordance with the terms of the contract, may constitute an unfair marketing practice within the meaning of section 3704(b) of this title.
(b) If an eligible veteran contracts for the construction of a property in a project on which the Secretary has issued a Certificate of Reasonable Value and such construction is to be financed with the assistance of a construction loan to be guaranteed, insured, or made under the provisions of this chapter, it may be considered an unfair marketing practice under section 3704(b) of this title if any deposit or downpayment of the veteran is not maintained in a special trust account by the recipient until it is either (1) applied on behalf of the veteran to the cost of the land or to the cost of construction or (2), if the transaction does not materialize, is otherwise disposed of in accordance with the terms of the contract.
(Added Pub. L. 86–665, §6(a), July 14, 1960, 74 Stat. 532, §1806; amended Pub. L. 94–324, §7(10), June 30, 1976, 90 Stat. 721; Pub. L. 101–237, title III, §313(b)(1), Dec. 18, 1989, 103 Stat. 2077; renumbered §3706 and amended Pub. L. 102–83, §5(a), (c)(1), Aug. 6, 1991, 105 Stat. 406; Pub. L. 103–446, title XII, §1201(e)(13), Nov. 2, 1994, 108 Stat. 4685.)
Amendments
1994—Pub. L. 103–446, which directed the substitution of of this title for of this chapter the second and third places appearing, was executed by making the substitution the second and fourth places appearing to reflect the probable intent of Congress.
1991—Pub. L. 102–83, §5(a), renumbered section 1806 of this title as this section.
Pub. L. 102–83, §5(c)(1), substituted 3704(b) for 1804(b) in subsecs. (a) and (b).
1989—Pub. L. 101–237 substituted Secretary for Administrator wherever appearing.
1976—Subsec. (a). Pub. L. 94–324 substituted the sellers for his.
Effective Date of 1976 Amendment
Amendment by Pub. L. 94–324 effective June 30, 1976, see section 9(a) of Pub. L. 94–324, set out as a note under section 3701 of this title.
U.S. Encyclopedia of Law Coverage
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