(a) Where escrowaccounts are required by this Article, a provider shall establish an escrowaccount with (i) a bank, (ii) a trust company, or (iii) another independentperson or entity agreed upon by the provider and the resident, unless suchaccount arrangement is prohibited by the Commissioner. The terms of thisescrow account shall provide that the total amount of any entrance fee, or anyother fee or deposit that may be applied toward the entrance fee, received bythe provider be placed in this escrow account. These funds may be releasedonly as follows:
(1) The first twenty‑fivepercent (25%) of escrowed monies can be released when: (i) the provider haspresold at least fifty percent (50%) of the independent living units, havingreceived a minimum ten percent (10%) deposit on the presold units; (ii) theprovider has received a commitment for any permanent mortgage loan or otherlong‑term financing, and any conditions of the commitment prior todisbursement of funds thereunder have been substantially satisfied; and (iii)aggregate entrance fees received or receivable by the provider pursuant tobinding continuing care contracts, plus the anticipated proceeds of any firstmortgage loan or other long‑term financing commitment are equal to notless than ninety percent (90%) of the aggregate cost of constructing orpurchasing, equipping, and furnishing the facility plus not less than ninetypercent (90%) of the funds estimated in the statement of cash flows submittedby the provider as that part of the disclosure statement required by G.S. 58‑64‑20,to be necessary to fund start‑up losses and assure full performance ofthe obligations of the provider pursuant to continuing care contracts.
(2) The remainingseventy‑five percent (75%) of escrowed monies can be released when:
a. (i) the provider haspresold a minimum of seventy‑five percent (75%) of the independent livingunits, having received a minimum ten percent (10%) deposit on the presoldunits, or has maintained an independent living unit occupancy minimum ofseventy‑five percent (75%) for at least 60 days; (ii) construction orpurchase of the independent living unit has been completed and an occupancypermit, if applicable, has been issued by the local government having authorityto issue such permits; and (iii) the living unit becomes available foroccupancy by the new resident; or
b. the provider submitsa plan of reorganization that is accepted and approved by the Commissioner.
(b) Upon receipt by theescrow agent of a request by the provider for the release of these escrowfunds, the escrow agent shall approve release of the funds within five workingdays unless the escrow agent finds that the requirements of subsection (a) ofthis section have not been met and notifies the provider of the basis for thisfinding. The request for release of the escrow funds shall be accompanied byany documentation the fiduciary requires.
(b1) Release of anyescrowed funds that may be due to the subscriber or resident shall occur upon:five working days' notice of death, nonacceptance by the facility, or voluntarycancellation. If voluntary cancellation occurs after construction has begun,the refund may be delayed until a new subscriber is obtained for that specificunit, provided it does not exceed a period of two years.
(c) If the providerfails to meet the requirements for release of funds held in this escrow accountwithin a time period the escrow agent considers reasonable, these funds shallbe returned by the escrow agent to the persons who have made payment to theprovider. The escrow agent shall notify the provider of the length of thistime period when the provider requests release of the funds.
(d) Facilities thatcurrently meet the seventy‑five percent (75%) presales or the seventy‑fivepercent (75%) occupancy requirements, as outlined in subdivision (a)(2) of thissection, are not required to escrow entrance fees, unless otherwise required bythe Commissioner. (1989, c. 758, s. 1; 1991, c. 196, s. 6, c. 720, s. 8,c. 761, ss. 11, 12.)
(a) Where escrowaccounts are required by this Article, a provider shall establish an escrowaccount with (i) a bank, (ii) a trust company, or (iii) another independentperson or entity agreed upon by the provider and the resident, unless suchaccount arrangement is prohibited by the Commissioner. The terms of thisescrow account shall provide that the total amount of any entrance fee, or anyother fee or deposit that may be applied toward the entrance fee, received bythe provider be placed in this escrow account. These funds may be releasedonly as follows:
(1) The first twenty‑fivepercent (25%) of escrowed monies can be released when: (i) the provider haspresold at least fifty percent (50%) of the independent living units, havingreceived a minimum ten percent (10%) deposit on the presold units; (ii) theprovider has received a commitment for any permanent mortgage loan or otherlong‑term financing, and any conditions of the commitment prior todisbursement of funds thereunder have been substantially satisfied; and (iii)aggregate entrance fees received or receivable by the provider pursuant tobinding continuing care contracts, plus the anticipated proceeds of any firstmortgage loan or other long‑term financing commitment are equal to notless than ninety percent (90%) of the aggregate cost of constructing orpurchasing, equipping, and furnishing the facility plus not less than ninetypercent (90%) of the funds estimated in the statement of cash flows submittedby the provider as that part of the disclosure statement required by G.S. 58‑64‑20,to be necessary to fund start‑up losses and assure full performance ofthe obligations of the provider pursuant to continuing care contracts.
(2) The remainingseventy‑five percent (75%) of escrowed monies can be released when:
a. (i) the provider haspresold a minimum of seventy‑five percent (75%) of the independent livingunits, having received a minimum ten percent (10%) deposit on the presoldunits, or has maintained an independent living unit occupancy minimum ofseventy‑five percent (75%) for at least 60 days; (ii) construction orpurchase of the independent living unit has been completed and an occupancypermit, if applicable, has been issued by the local government having authorityto issue such permits; and (iii) the living unit becomes available foroccupancy by the new resident; or
b. the provider submitsa plan of reorganization that is accepted and approved by the Commissioner.
(b) Upon receipt by theescrow agent of a request by the provider for the release of these escrowfunds, the escrow agent shall approve release of the funds within five workingdays unless the escrow agent finds that the requirements of subsection (a) ofthis section have not been met and notifies the provider of the basis for thisfinding. The request for release of the escrow funds shall be accompanied byany documentation the fiduciary requires.
(b1) Release of anyescrowed funds that may be due to the subscriber or resident shall occur upon:five working days' notice of death, nonacceptance by the facility, or voluntarycancellation. If voluntary cancellation occurs after construction has begun,the refund may be delayed until a new subscriber is obtained for that specificunit, provided it does not exceed a period of two years.
(c) If the providerfails to meet the requirements for release of funds held in this escrow accountwithin a time period the escrow agent considers reasonable, these funds shallbe returned by the escrow agent to the persons who have made payment to theprovider. The escrow agent shall notify the provider of the length of thistime period when the provider requests release of the funds.
(d) Facilities thatcurrently meet the seventy‑five percent (75%) presales or the seventy‑fivepercent (75%) occupancy requirements, as outlined in subdivision (a)(2) of thissection, are not required to escrow entrance fees, unless otherwise required bythe Commissioner. (1989, c. 758, s. 1; 1991, c. 196, s. 6, c. 720, s. 8,c. 761, ss. 11, 12.)
(a) Where escrowaccounts are required by this Article, a provider shall establish an escrowaccount with (i) a bank, (ii) a trust company, or (iii) another independentperson or entity agreed upon by the provider and the resident, unless suchaccount arrangement is prohibited by the Commissioner. The terms of thisescrow account shall provide that the total amount of any entrance fee, or anyother fee or deposit that may be applied toward the entrance fee, received bythe provider be placed in this escrow account. These funds may be releasedonly as follows:
(1) The first twenty‑fivepercent (25%) of escrowed monies can be released when: (i) the provider haspresold at least fifty percent (50%) of the independent living units, havingreceived a minimum ten percent (10%) deposit on the presold units; (ii) theprovider has received a commitment for any permanent mortgage loan or otherlong‑term financing, and any conditions of the commitment prior todisbursement of funds thereunder have been substantially satisfied; and (iii)aggregate entrance fees received or receivable by the provider pursuant tobinding continuing care contracts, plus the anticipated proceeds of any firstmortgage loan or other long‑term financing commitment are equal to notless than ninety percent (90%) of the aggregate cost of constructing orpurchasing, equipping, and furnishing the facility plus not less than ninetypercent (90%) of the funds estimated in the statement of cash flows submittedby the provider as that part of the disclosure statement required by G.S. 58‑64‑20,to be necessary to fund start‑up losses and assure full performance ofthe obligations of the provider pursuant to continuing care contracts.
(2) The remainingseventy‑five percent (75%) of escrowed monies can be released when:
a. (i) the provider haspresold a minimum of seventy‑five percent (75%) of the independent livingunits, having received a minimum ten percent (10%) deposit on the presoldunits, or has maintained an independent living unit occupancy minimum ofseventy‑five percent (75%) for at least 60 days; (ii) construction orpurchase of the independent living unit has been completed and an occupancypermit, if applicable, has been issued by the local government having authorityto issue such permits; and (iii) the living unit becomes available foroccupancy by the new resident; or
b. the provider submitsa plan of reorganization that is accepted and approved by the Commissioner.
(b) Upon receipt by theescrow agent of a request by the provider for the release of these escrowfunds, the escrow agent shall approve release of the funds within five workingdays unless the escrow agent finds that the requirements of subsection (a) ofthis section have not been met and notifies the provider of the basis for thisfinding. The request for release of the escrow funds shall be accompanied byany documentation the fiduciary requires.
(b1) Release of anyescrowed funds that may be due to the subscriber or resident shall occur upon:five working days' notice of death, nonacceptance by the facility, or voluntarycancellation. If voluntary cancellation occurs after construction has begun,the refund may be delayed until a new subscriber is obtained for that specificunit, provided it does not exceed a period of two years.
(c) If the providerfails to meet the requirements for release of funds held in this escrow accountwithin a time period the escrow agent considers reasonable, these funds shallbe returned by the escrow agent to the persons who have made payment to theprovider. The escrow agent shall notify the provider of the length of thistime period when the provider requests release of the funds.
(d) Facilities thatcurrently meet the seventy‑five percent (75%) presales or the seventy‑fivepercent (75%) occupancy requirements, as outlined in subdivision (a)(2) of thissection, are not required to escrow entrance fees, unless otherwise required bythe Commissioner. (1989, c. 758, s. 1; 1991, c. 196, s. 6, c. 720, s. 8,c. 761, ss. 11, 12.)
