ยง 657. Escrow. 1. All monies, except dues, paid under a membership
camping contract that is sold under a representation that a major
capital improvement shall be constructed shall be placed in escrow.
2. All such funds received by a membership campground operator shall
be kept and maintained in an interest bearing account separate and apart
from any account maintained by or for the operator's personal use or the
use and the construction or operation of the campground or for the
payment or benefit of employees of the campground.
3. The escrow account shall be established in a bank or trust company
doing business in the state of New York.
4. The escrow account shall provide that the purpose of the account is
to protect the purchaser in the event that the operator fails to
substantially complete and make available for use the major capital
improvement within one year following establishment of the account.
5. Any purchaser who has advanced monies on deposit in the escrow
account may maintain a representative action pursuant to the provisions
of the civil practice law and rules to close the account and release
such monies and interest, pro rata, to all purchasers similarly
situated, if the major capital improvement has not been substantially
completed and made available for use within one year of the
establishment of the account or if the purchaser has not had the full
use of another similar facility during such period.
6. So long as any such escrow account shall remain in existence,
within five business days of a request therefor, a monthly statement of
the escrow account is to be furnished to all purchasers who have
advanced funds which are held in the account, provided that only one
such statement need be given each month.
7. The escrow account shall provide that funds deposited therein may
be withdrawn by the membership campground operator upon the completion
of the proposed construction in the following manner:
a. One-third of the funds may be distributed to the membership
campground operator upon completion of one-half of the proposed
construction;
b. Two-thirds of the fund may be released upon completion of
three-fourths of the proposed construction; and
c. The balance of the fund may be distributed upon completion of all
of the proposed construction.
8. The escrow agent may accept as evidence of partial or full
completion of such major capital improvement, the certification by any
architect or engineer licensed pursuant to the provisions of the
education law or the laws of the state in which the campground is
located, that the proposed construction has been completed in accordance
with the plans and specifications.
9. The escrow account shall be released by the escrow agent to the
membership campground operator not more than thirty days following
completion of instruction and the submission to the escrow agent of a
certification from an architect or engineer that construction is
complete.
10. In lieu of making such deposit of monies in escrow, the membership
campground operator may post a bond or contract of indemnity issued by a
surety company licensed to execute such an instrument, or an irrevocable
letter of credit issued by a bank to guarantee the completion of the
major capital improvement.