20-1804
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20-1804. Entrance fee escrow A. As a condition for the issuance of a permit pursuant to section 20-1803, the director shall require that the provider establish an escrow account with a licensed agent which provides that all of any entrance fee received by the provider prior to the date the resident is permitted to occupy his or her living unit in the facility be placed in escrow with a bank, trust company or other escrow agent approved by the director, subject to the condition that such funds may be released only as follows: 1. If the entrance fee applies to a living unit which has been previously occupied in the facility, the entrance fee shall be released to the provider at such time as the living unit becomes available for occupancy by the new resident. 2. If the entrance fee applies to a living unit which has not previously been occupied by any resident, the entrance fee, or that portion of the entrance fee not to be held in escrow pursuant to section 20-1806, shall be released to the provider at such time as the director is satisfied that all of the following conditions exist: (a) Construction or purchase of the facility has been substantially completed and an occupancy permit covering the living unit has been issued by the local government having authority to issue such permits. (b) A commitment has been received by the provider for any permanent mortgage loan or other long-term financing described in the statement of anticipated source and application of funds submitted by the provider as part of its permit application, and any conditions of the commitment prior to disbursement of funds thereunder have been substantially satisfied. (c) Aggregate entrance fees received or receivable by the provider pursuant to binding life care contracts, plus the anticipated proceeds of any first mortgage loan or other long-term financing commitment are equal to not less than ninety per cent of the aggregate cost of constructing or purchasing, equipping and furnishing the facility plus not less than ninety per cent of the funds estimated in the statement of anticipated source and application of funds submitted by the provider as part of its permit application, to be necessary to fund start-up losses and assure full performance of the obligations of the provider pursuant to life care contracts. B. If the funds in an escrow account required to be established under subsection A are not released within such time as provided by rules and regulations issued by the director, then such funds shall be returned by the escrow agent to the persons who had made payment to the provider. C. An entrance fee held in escrow may be returned by the escrow agent to the person or persons who had made payment to the provider at any time upon receipt by the escrow agent of notice from the provider that such person is entitled to a refund of the entrance fee. D. Nothing in this section shall be interpreted as requiring the escrow of any nonrefundable application fee, designated as such in the permit application required by section 20-1802, received by the provider from a prospective resident. |