Sale under blanket encumbrance unlawful; exceptions

It is unlawful for the owner or subdivider to sell lots or parcels within a subdivision subject to a blanket encumbrance unless one of the following conditions is complied with: 1. All sums paid or advanced by purchasers are placed in an escrow or other depository acceptable to the Division until the fee title contracted for is delivered to such purchaser by deed together with complete release from all financial encumbrances; or 2. The fee title to the subdivision is placed in trust under an agreement or trust acceptable to the Division until a proper release from each blanket encumbrance, including all taxes, is obtained and title contracted for is delivered to such purchaser; or 3. Such blanket encumbrance contains provisions evidencing the subordination or release of the lien of the holder or holders of the blanket encumbrance to the rights of those persons purchasing from the subdivider, and further evidencing that the subdivider is able to secure releases from such blanket encumbrances with respect to the property upon full payment of the purchase price owed by such person.