12 GCA § 4908: Tenant-Purchaser Escrow Account.

(a) (1) The mortgage loan documents, with respect to a mortgage loan(s) in effect prior to the Tenant-Purchaser’s purchase of their respective units, shall provide there shall be retained over the Tenant-Purchaser’s lease term an amount held as additional security for such loan(s) called the Tenant-Purchaser Escrow Account. The Tenant-Purchaser Escrow Account will receive a predetermined portion of the Tenant-Purchaser’s monthly rental amount as provided for in § 4707(a)(2)(iv) of this Act, such portion to be determined at commencement of the Tenant-Purchaser’s lease. The total amount contributed to the Tenant-Purchaser Escrow Account by the Tenant-Purchaser over the lease term should not be less than ten percent (10%) of the Tenant-Purchaser’s anticipated purchase price. Such Tenant-Purchaser Escrow Account shall be held by a Trustee for the benefit of the Corporation and the first mortgagee(s). The Corporation will approve such Trustee. At the time of the Tenant-Purchaser’s purchase of the respective unit, the Trustee shall release and disperse the Tenant-Purchaser Escrow Account to the unit Seller to meet the Tenant-Purchaser’s down payment requirement.

(2) The escrow amounts pertaining to various lease-to-own loans may be commingled for investment purposes. Trustees shall keep separate records showing the amount in each Tenant-Purchaser Escrow Account. Investment earnings on the Tenant-Purchaser Escrow Account shall accrue to the benefit of the Tenant-Purchaser.

(b) The Trustee shall periodically advise both the Corporation and the Seller as to the amount and earnings in each Tenant-Purchaser Escrow Account.

(c) In the event a default by the Tenant-Purchaser occurs, as provided for in § 4707(a)(5), the Trustee shall release only that portion of the respective Tenant-Purchaser Escrow Account that is needed to meet the following funding requirements:

(1) any costs incurred by the Corporation related to deferred maintenance of the Tenant-Purchaser’s respective housing unit;

(2) any costs to the Corporation due to re-advertising, administrative financial fees and other liabilities that may be a result of the Tenant-Purchaser caused default; and

(3) all funds remaining in the unit specific Tenant-Purchaser Escrow Account will be retained by the Trustee for the benefit of the next prospective Tenant-Purchaser to occupy the defaulted unit, as is intended by and provided for in § 4704(a)(5) of this Act.