(1) With respect to any property in this state acquired and put into operation by a membership camping operator on or after January 1, 1991, the membership camping operator shall not offer or execute a membership camping contract in this state granting the right to use the property until the following requirements are met:
(a) Each person holding an interest in a voluntary blanket encumbrance has executed and delivered to the commission a nondisturbance agreement and recorded the agreement in the real estate records of the county in which the campground is located. The agreement shall include all of the following:
(i) That the rights of the holder or holders of the blanket encumbrance in the affected campground are subordinate to the rights of purchasers;
(ii) That any person who acquires the affected campground or any portion of the campground by the exercise of any right of sale or foreclosure contained in the blanket encumbrance takes the campground subject to the rights of purchasers; and
(iii) That the holder or holders of the blanket encumbrance shall not use or cause the campground to be used in a manner which interferes with the right of purchasers to use the campground and its facilities in accordance with the terms and conditions of the membership camping contract; and
(b) Each hypothecation lender which has a lien on or security interest in the membership camping operator's ownership interest in the campground has executed and delivered to the commission a nondisturbance agreement and recorded the agreement in the real estate records of the county in which the campground is located. In addition, each person holding an interest in a blanket encumbrance superior to the interest held by the hypothecation lender has executed, delivered, and recorded an instrument stating that such person will give the hypothecation lender notice of, and at least thirty days to cure, any default under the blanket encumbrance before the person commences any foreclosure action affecting the campground. For the purposes of this section:
(i) Hypothecation lender shall mean a financial institution which provides a major hypothecation loan to a membership camping operator;
(ii) Major hypothecation loan shall mean a loan or line of credit secured by substantially all of the contracts receivable arising from the membership camping operator's sale of membership camping contracts; and
(iii) Nondisturbance agreement shall mean an instrument by which a hypothecation lender agrees to conditions substantially the same as those set forth in subdivision (a) of this subsection.
(2) In lieu of compliance with subsection (1) of this section, a surety bond or letter of credit satisfying the requirements of this subsection may be delivered to and accepted by the commission. The surety bond or letter of credit shall be issued to the commission for the benefit of purchasers and shall be in an amount which is not less than one hundred five percent of the remaining principal balance of every indebtedness secured by a blanket encumbrance affecting the campground. The bond shall be issued by a surety which is authorized to do business in this state and which has sufficient net worth to satisfy the indebtedness. The aggregate liability of the surety for all damages shall not exceed the amount of the bond. The letter of credit shall be irrevocable, shall be drawn upon a bank, savings and loan association, or other financial institution, and shall be in form and content acceptable to the commission. The bond or letter of credit shall provide for payment of all amounts secured by the blanket encumbrance, including costs, expenses, and legal fees of the lienholder, if for any reason the blanket encumbrance is enforced.