SECTION 660:20-9-8. Guidelines for advertising

  No precise rules to determine what material is misleading, or that a plan of sale or development lacks adequate safeguards and assurances to prospective purchasers, can be made which will be applicable in all situations. Without any intent to limit its consideration or determination to the general standards herein set forth and without any attempt to compel any particular form or method of advertising, promotion, development or sale of subdivided lands, the standards set forth in this Section are adopted as a guide to persons preparing to file advertising material and to be used by Department personnel in reviewing advertising materials submitted pursuant to Section 653 of the Land Sales Act.

(1)   General guidelines. The following guidelines apply to all advertising or sales literature:

(A)   Claims or representations contained in the advertising shall be accurate and provable.

(B)   Advertising shall not misrepresent the facts or create misleading impressions.

(C)   Advertising shall not use statements, photographs, or sketches portraying the use to which advertised land can be put unless the land can be put to such use without unreasonable cost.

(D)   Advertising shall not make a derogatory or unfair reference to competitive developments or properties.

(E)   Advertising shall not contain asterisks or any other reference symbol as a means of contradicting or substantially changing any previously made statement or as a means of obscuring material facts.

(F)   Advertising shall not use names or trade styles which imply that they are nonprofit research organizations, public bureaus, groups, etc. when such is not the case. Advertising of such an organization shall be prohibited when the true nature of the plan of sale or ownership is misrepresented or concealed.

(G)   Maps, plats or representations shall clearly indicate the estimated date that the development will be completed. If completion dates are over a period of years, then a series of shadings, outlines, or coding may be used to indicate estimated dates of completion.

(2)   Distances. The following standards apply to advertising relating to distances:

(A)   When a community is referred to, advertising must include the location of the subdivision and the mileage from the approximate geographical center of the subdivision in road miles to the approximate geographical center of the community.

(B)   Where a facility is referred to, advertising shall disclose with reasonable specificity, the location of such facility in relation to the geographic center of the subdivision.

(C)   Advertising shall not use such terms as "minutes away", "short distance", "only miles" and "near" and terms of similar import to indicate distance unless the actual distance in road miles is used in conjunction with such terms.

(D)   When the company offers more than one subdivision in a single advertising piece, or an offering exceeding five miles in length or width, advertising shall carry a disclaimer as follows:

"Distances indicated are from the location mentioned to (club house, center of subdivision, or other pertinent or prominent points); each purchaser should check the exact location of the property being offered him in relation to the club house, subdivision or other prominent locations."

(3)   Sketches and pictorial representations. The following guidelines apply to sketches and pictures used in advertising:

(A)   Advertisements shall not use artists' sketches to portray proposed improvements or nonexistent scenes without an indication that such portrayal is an artist's sketch and that the improvements or scenes must be representative and state that such rendering is an artist's conception.

(B)   Advertising shall not contain before and after pictures for comparative purposes without an accurate, detailed, comparative analysis of such pictures.

(4)   Improvements and facilities. The following guidelines apply to advertising about improvements of facilities connected with subdivided land:

(A)   Advertising of improvements on or to the property which are not completed must state in unmistakable terms that the improvements are merely proposed or under construction. Advertising of improvements on or to the property which are not completed must state precisely the anticipated price to the consumer to complete and the date of the promised completion.

(B)   Advertising shall not make reference to a public facility unless money has been budgeted for actual construction of such facility and is available to the public authority having the responsibility of construction or an actual disclosure of the existing facts concerning a public facility is made.

(C)   Advertising shall not refer to public facilities under study unless it is fully disclosed that the facility is merely proposed and under study and provided that no reference is made to the location or route of the facility until such has been decided by the responsible public authority.

(D)   Advertising shall not contain a statement, photograph, or sketch relating to a facility for recreation, sports or other activities not presently in existence, unless it is stated that the facility is not completed or is merely proposed. If such a facility exists and it is not located within the subdivision the distance by conventional automobile must be given.

(5)   Roads, streets, waterways. The following guidelines apply to advertising about roads, streets or waterways connected with subdivided land:

(A)   Advertising which refers to "roads" and "streets" shall make affirmative disclosure as to the nature of the roads and streets, such as paved, gravel or dirt. To be described as improved or paved, a road and a street shall be constructed and surfaced according to county, city, or other acceptable authority specifications or satisfactory guarantees made for such construction and surfacing.

(B)   Advertising shall not refer to property as waterfront unless the property being offered actually fronts on a canal or other body of water.

(C)   Advertising which uses the term "canal" shall disclose the approximate width and approximate depth of water in the canal and whether or not it provides access to open water.

(6)   Special risks. The following risks shall be included, if applicable, in advertising related to subdivided land:

(A)   Advertising shall disclose if the land or any part of it is regularly flooded or substantially covered by standing water for extended periods of time during the year, unless adequate drainage is assured by bonding or other means acceptable to the Department.

(B)   Advertising shall disclose if the land or any part of it is subject to mudslides, rockslides or other natural phenomena.

(7)   Access and easements. The following guidelines apply to advertising describing access and easements relating to subdivided land:

(A)   Advertising of land which does not have available legal access to the purchaser shall disclose that fact and its effect.

(B)   Advertising which refers to legal access shall be accompanied by phraseology to indicate whether the access is usable as a passage for conventional automobiles.

(C)   Advertising shall not refer to the existence of a road easement or a road right-of-way unless the easement or right-of-way has been dedicated to the public or to appropriate property owners and recorded in the public records of the county where the property is located.

(D)   Advertising which indicates the size of the tract offered shall indicate the size and kind of all easements to which the property may be subject. If the property is subject to easements which are unusual in size, this fact shall also be noted. Maps, plats, representations, or drawings shall indicate the dimensions of the tract and all easements.

(8)   Consideration, prices, values and additional costs. The following guidelines apply to advertising relating to consideration, prices, values and additional costs of subdivided land:

(A)   Land shall not be advertised as "free" if the prospective purchaser is required to give any consideration therefor. Land shall not be advertised for "closing costs only" when these costs are substantially more than normal, or when additional land has to be purchased at a higher price to render the land usable.

(B)   Advertising which refers to a property exchange privilege shall state clearly any qualification concerning the exchange privilege.

(C)   Advertising shall not refer to a predevelopment sale at a lower price because the land has not yet been developed unless there is a plan of development, and a subdivision plat has been recorded, or reasonable assurance is available that the plan will be completed.

(D)   Advertising shall not indicate a discount on property that appears to effect a price reduction from the advertised price. A discount may be given for quantity purchases, cash, larger payments, or for any reasonable basis. The purpose of this standard is to eliminate the use of fictitious pricing and illusory discount.

(E)   Advertising shall not contain statements concerning future price increases by the subdeveloper which are not specific as to amount and as to the date of the announced increase. Any such date shall be in the reasonable future and the increased price shall be maintained for a reasonable length of time.

(F)   Advertising shall not make predictions of specific or immediate price or value increases of lots or parcels or units of advertised lands over which the subdivider does not have control.

(G)   Forecasts of future events or population trends contained in advertising shall be made by qualified persons based upon objective criteria and shall pertain to the offering.

(H)   Advertising shall be considered misleading if it infers or implies that the subdivider will resell or repurchase the property being offered at some future time unless the subdivider has made an undertaking with the Department to resell or repurchase property for or on behalf of purchasers and has given reasonable assurances to the Department to demonstrate his ability to perform this undertaking.

(I)   Advertising shall be deemed misleading if it represents that the property being offered for sale may be subdivided or resubdivided unless it includes all necessary and relevant information regarding the cost and feasibility of future subdividing.

(J)   Advertising which contains statements regarding taxes and the amounts thereof shall employ the latest available figures.

(K)   The word "guarantee" or phrase "guaranteed refund" or phrases of a similar import shall not be approved in advertising unless the refund is unconditional.