N.Y. Public Health Law § 4662: Entrance fee escrow account

* § 4662. Entrance fee escrow account. As a condition for approval to

advertise and collect refundable entry fees/deposits:

1. The operator shall establish an interest-bearing account with a New

York state bank, New York state savings and loan association, or New

York state trust company for any entrance fees received by the operator,

which escrow funds shall be subject to release as provided by section

forty-six hundred sixty-three of this article.

2. An escrow agreement shall be entered into between the bank, savings

and loan association, or trust company and the operator of the

community. The agreement shall state that its purpose is to protect the

resident or the prospective resident and that, upon presentation of

evidence of compliance with applicable portions of this article, or upon

order of a court of competent jurisdiction, the escrow agent shall

release and pay over the funds, or portions thereof, together with any

interest accrued thereon or earned from investment of the funds, to the

operator or resident as directed.

3. Checks, drafts and money orders for deposit from prospective

residents shall be made payable to the escrow agent only.

4. All funds deposited in the escrow account shall remain the property

of the resident until released to the operator in accordance with

section forty-six hundred sixty-three of this article, and the funds

shall not be subject to any liens or charges by the escrow agent or

judgments, garnishments, or creditor's claims against the operator or

community.

5. At the request of the operator or the commissioner, the escrow

agent shall issue a statement indicating the status of the escrow

account.

6. If the funds in an escrow account under this section and any

interest thereon are not released to the operator within such time as

provided by rules and regulations adopted by the council, then such

funds shall be returned by the escrow agent to the persons who had made

payment to the operator.

7. An entrance fee held in escrow may be returned by the escrow agent

to the person who paid the fee upon receipt by the escrow agent of

notice from the operator that such person is entitled to a refund of the

entrance fee.

8. Nothing in this section shall be interpreted as requiring the

escrow of any nonrefundable application fee, designated as such in the

contract, received by the operator from a prospective resident.

9. Occupancy of housing or other facilities shall not begin until:

a. the operator has executed contracts accompanied by a deposit of at

least ten percent of the entry fee payment for fifty percent of all

units or an approved phase of a community; and

b. all permits and approvals necessary for operation of the community,

or an approved phase of a community, have been granted except those

depending upon construction; provided, nothing in this subdivision shall

prohibit an operator, upon the approval of the council, or an applicant

or prospective applicant upon the approval of the commissioner pursuant

to section forty-six hundred seventy-four of this article, from

constructing model units and a sales office.

10. Any entry fee deposit required by an operator shall be fully

refundable if the contract is canceled within seventy-two hours of its

execution. In the event of cancellation, the entry fee deposit shall be

refunded within three business days of receipt of cancellation.

* NB There are 2 § 4662's