2023 New York Laws › PBH - Public Health › 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