In an effort to accommodate industry, the Department of Real Estate (DRE) created a “Limited Term” Final Public Report option. The Limited Term Final Public Report (LTFPR) is an option available to those builders and developers who are faced with circumstances limiting their ability to comply with all of the requirements necessary to obtain a full term (5 year) Final Public Report. A LTFPR is a “full-fledged” Final Public report, however the cover sheet of the Report includes the words “LIMITED TERM” on the face page, and allows the Subdivider (applicant) to open and close escrows during the term of the Report. The term of the Report is less than the five-year report and thus “limited.”
One situation where the LTFPR is effective is when the applicant is acquiring lots in a subdivision on a take-down schedule over a period of time. In this instance, the application package must include fully executed documentation evidencing the future vesting. The documents must include an outside date for the acquisition to be completed. The expiration of the LTFPR will be set to 30 days following that outside date. The assumption is that during that 30-day period, the applicant can obtain an updated preliminary title report reflecting their ownership of the property, and the Final Public Report will be issued for the remainder of the five-year validity period. It is important to note, that in order to obtain a LTFPR in this scenario, the applicant may have to acquire title to at least one lot included in the application. Conversion of the Limited Term to a full term Final Public Report comes with no additional fees. If title to all of the lots are acquired and sold prior to the expiration of the Limited Term Report, no further action or submission to DRE is required.
The Public Report in this instance would include a statement similar to the following:
“At the time of issuance of this public report, title to the lots/units is vested in ________. The Subdivider has entered into an option agreement to purchase the lots/units covered by this public report. If the Subdivider has not exercised the option within the term of the public report, you may request that your money be refunded.”
If the Subdivider is not able to exercise the option during the agreed-upon time, but is able to extend or renew the option agreement for an additional time, a renewed public report may be requested to extend the public report expiration date upon submittal of an amendment application, renewal fee and evidence of the extension of the option. The renewed public report would be assigned an Amendment file number. It is important to note that in such a case, any purchaser who entered into a contract to purchase, and whose funds have been held in escrow, must be offered a full refund after they are furnished a copy of the renewed public report reflecting the extension of time for the Subdivider to exercise the option.
Another scenario where a LTFPR is advantageous is when a service district cannot commit resources to the development on an open-ended “will-serve” letter. For example, if an agency is reluctant to issue a will-serve letter that would meet the DRE’s requirements for issuance of a Final Public Report due to constraints on a water or sewer retrofit system, the DRE may be enticed to issue a Limited Term Public Report for the period of time in which the agency would commit to the foreseeable future (i.e.: two years). Once the retrofit is completed, the LTFPR could be converted to a full-term Report with the appropriate unlimited will-serve letter.
When a LTFPR is issued under a situation concerning a will-serve resource, a statement similar to the following would be inserted in the Report:
“There is no assurance for _______, from the _____ supplier, beyond a two-year period. The _____ supplier advises in a letter dated (date) …. then the will-serve letter would be quoted.”