New York Laws
Article 46-A - Fee-for-Service Continuing Care Retirement Communities Demonstration Program
4663 - Release of Escrowed Funds to the Operator.

* § 4663. Release of escrowed funds to the operator. Escrowed funds
shall not be released to the operator unless:

1. construction or purchase of the community or an approved phase of a
community has been substantially completed, an occupancy permit covering
the living unit has been issued by the local government having authority
to issue such permits, and the living unit becomes available for
occupancy; or

1-a. the operator has submitted an application to the commissioner, on
forms approved by the department, for authorization to use escrowed
entrance fees to assist the operator in financing the construction or
purchase of a proposed community, and the commissioner, in accordance
with such regulations as may be promulgated by the council, has approved
such application. The commissioner shall not approve such application
unless satisfied that the following conditions have been met:

a. the operator has executed contracts accompanied by an entrance fee
or entrance fee deposit for at least seventy percent of all proposed
living units or an approved phase of a community;

b. the aggregate entrance fees or deposits received or receivable by
the operator pursuant to executed fee for service continuing care
contracts equal at least ten percent of the total of the entrance fees
due at occupancy for at least seventy percent of all proposed living
units or an approved phase of a community;

c. the operator has entered into a contract for the construction or
purchase of the community which contract has a fixed maximum price and,
if a construction contract, the contractor has secured a performance or
completion bond for the benefit of the operator;

d. the operator has received a firm commitment for a permanent
mortgage loan or other long term financing and conditions to the
commitment prior to disbursement of funds thereunder, other than
completion of construction or purchase, are substantially satisfied;

e. the total amount of escrowed entrance fees or deposits that may be
approved for release under this subdivision shall not exceed fifteen
percent of the total costs of acquiring, constructing and equipping the
proposed community;

f. use of the entrance fees or deposits shall not impair the
operator's ability to comply with the requirements of section forty-six
hundred sixty-four of this article;

g. the operator's executed contracts or amended contracts referred to
in paragraph a of this subdivision, and all contracts generating the
entrance fees for which release is sought, contain a provision
conspicuously disclosing the intended use of entrance fees, and that all
refunds shall be in accordance with the otherwise applicable provisions
of this article, the regulations adopted pursuant thereto and the
contract;

h. the use of the entrance fees or deposits under this subdivision
will promote the efficient and cost-effective acquisition or development
of the proposed community; and

i. the release, availability and use of the entrance fees comply with
any other conditions the council shall establish.

2. if the entrance fee gives the resident the right to occupy a living
unit which has been previously occupied, the entrance fee and any
interest earned thereon shall be released to the operator when the
living unit becomes available for occupancy by the new resident; or

3. if the entrance fee applies to a living unit which has not been
previously occupied, the entrance fee and any interest earned thereon
shall be released to the operator when the commissioner is satisfied
that:

a. Aggregate entrance fees received or receivable by the operator
pursuant to executed fee-for-service continuing care contracts equal at
least ten percent of the total of the entrance fees due at occupancy for
at least seventy percent of all proposed living units or an approved
phase of a community.

b. In lieu of any escrow required pursuant to this article, an
operator is entitled to post a letter of credit from a financial
institution, negotiable securities or a bond by a surety authorized to
do business in this state, in a form approved by the commissioner and in
an amount not to exceed the amount established in paragraph a of this
subdivision. The operator shall execute the letter of credit, negotiable
securities or bond in favor of the commissioner on behalf of individuals
who are entitled to a refund of entrance fees from the provider.

* NB There are 2 § 4663's