(a) The assurance specified in Section 11241 and, if applicable, the assurance specified in Section 11242, shall be delivered to the trustee or an escrow depository acceptable to the department
along with an executed copy of the subsidization contract and instructions to the
escrow depository signed by the developer and on behalf of the association. The instructions shall provide for both of the following:
(1) The escrow agent shall not release or exonerate the security device until it has
received written notice from the association that the developer has faithfully performed
all of the developer's obligations under the subsidization contract, if applicable, and the escrow agent
has received the written notices specified in paragraph (1) of subdivision (c) of Section 11241.
(2) If there is a dispute between the developer and the association with respect to
the questions of satisfaction of the conditions for exoneration or release of the
security, the issue or issues shall, at the request of either party, be submitted
to arbitration in accordance with the Commercial Arbitration Rules of the American
Arbitration Association or another third-party arbitration organization selected by the parties and in accordance
with Title 9 (commencing with Section 1280) of Part 3 of the Code of Civil Procedure.
(b) Any fee to initiate arbitration shall be submitted by the developer. The costs of arbitration shall be borne by the party as determined by the arbitrator.
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