N.Y. PBH Law § 4663 — New York Code / Act PBH / Article 46-A / Section 4663
Release of escrowed funds to the operator
Status: in_force

* § 4663. Release of escrowed funds to the operator. Escrowed funds\nshall not be released to the operator unless:\n  1. construction or purchase of the community or an approved phase of a\ncommunity has been substantially completed, an occupancy permit covering\nthe living unit has been issued by the local government having authority\nto issue such permits, and the living unit becomes available for\noccupancy; or\n  1-a. the operator has submitted an application to the commissioner, on\nforms approved by the department, for authorization to use escrowed\nentrance fees to assist the operator in financing the construction or\npurchase of a proposed community, and the commissioner, in accordance\nwith such regulations as may be promulgated by the council, has approved\nsuch application. The commissioner shall not approve such application\nunless satisfied that the following conditions have been met:\n  a. the operator has executed contracts accompanied by an entrance fee\nor entrance fee deposit for at least seventy percent of all proposed\nliving units or an approved phase of a community;\n  b. the aggregate entrance fees or deposits received or receivable by\nthe operator pursuant to executed fee for service continuing care\ncontracts equal at least ten percent of the total of the entrance fees\ndue at occupancy for at least seventy percent of all proposed living\nunits or an approved phase of a community;\n  c. the operator has entered into a contract for the construction or\npurchase of the community which contract has a fixed maximum price and,\nif a construction contract, the contractor has secured a performance or\ncompletion bond for the benefit of the operator;\n  d. the operator has received a firm commitment for a permanent\nmortgage loan or other long term financing and conditions to the\ncommitment prior to disbursement of funds thereunder, other than\ncompletion of construction or purchase, are substantially satisfied;\n  e. the total amount of escrowed entrance fees or deposits that may be\napproved for release under this subdivision shall not exceed fifteen\npercent of the total costs of acquiring, constructing and equipping the\nproposed community;\n  f. use of the entrance fees or deposits shall not impair the\noperator's ability to comply with the requirements of section forty-six\nhundred sixty-four of this article;\n  g. the operator's executed contracts or amended contracts referred to\nin paragraph a of this subdivision, and all contracts generating the\nentrance fees for which release is sought, contain a provision\nconspicuously disclosing the intended use of entrance fees, and that all\nrefunds shall be in accordance with the otherwise applicable provisions\nof this article, the regulations adopted pursuant thereto and the\ncontract;\n  h. the use of the entrance fees or deposits under this subdivision\nwill promote the efficient and cost-effective acquisition or development\nof the proposed community; and\n  i. the release, availability and use of the entrance fees comply with\nany other conditions the council shall establish.\n  2. if the entrance fee gives the resident the right to occupy a living\nunit which has been previously occupied, the entrance fee and any\ninterest earned thereon shall be released to the operator when the\nliving unit becomes available for occupancy by the new resident; or\n  3. if the entrance fee applies to a living unit which has not been\npreviously occupied, the entrance fee and any interest earned thereon\nshall be released to the operator when the commissioner is satisfied\nthat:\n  a. Aggregate entrance fees received or receivable by the operator\npursuant to executed fee-for-service continuing care contracts equal at\nleast ten percent of the total of the entrance fees due at occupancy for\nat least seventy percent of all proposed living units or an approved\nphase of a community.\n  b. In lieu of any escrow required pursuant to this article, an\noperator is entitled to post a letter of credit from a financial\ninstitution, negotiable securities or a bond by a surety authorized to\ndo business in this state, in a form approved by the commissioner and in\nan amount not to exceed the amount established in paragraph a of this\nsubdivision. The operator shall execute the letter of credit, negotiable\nsecurities or bond in favor of the commissioner on behalf of individuals\nwho are entitled to a refund of entrance fees from the provider.\n  * NB There are 2 § 4663's\n