§ 4610. Entrance fee escrow account. As a condition for approval to\nadvertise and collect refundable entry fees/deposits:\n 1. The operator shall establish an interest-bearing account with a New\nYork bank, New York savings and loan association, or New York trust\ncompany for any entrance fees received by the operator, which escrow\nfunds shall be subject to release as provided by subdivision seven of\nthis section.\n 2. An escrow agreement shall be entered into between the bank, savings\nand loan association, or trust company and the operator of the\ncommunity. The agreement shall state that its purpose is to protect the\nresident or the prospective resident and that, upon presentation of\nevidence of compliance with applicable portions of this article, or upon\norder of a court of competent jurisdiction, the escrow agent shall\nrelease and pay over the funds, or portions thereof, together with any\ninterest accrued thereon or earned from investment of the funds, to the\noperator or resident as directed.\n 3. Checks, drafts, and money orders for deposit from prospective\nresidents shall be made payable to the escrow agent only.\n 4. All funds deposited in the escrow account shall remain the property\nof the resident until released to the operator in accordance with this\nsection, and the funds shall not be subject to any liens or charges by\nthe escrow agent or judgments, garnishments, or creditor's claims\nagainst the operator or community.\n 5. At the request of the operator, the commissioner, or the\nsuperintendent, the escrow agent shall issue a statement indicating the\nstatus of the escrow account.\n 6. Escrowed funds shall not be released to the operator unless:\n a. construction or purchase of the community has been substantially\ncompleted, an occupancy permit covering the living unit has been issued\nby the local government having authority to issue such permits, and the\nliving unit becomes available for occupancy; or\n b. 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, with the advice\nof the superintendent, and in accordance with such regulations as may be\npromulgated by the council, has approved such application. The\ncommissioner shall not approve such application over the objection of\nthe superintendent, and shall not approve it unless satisfied that the\nfollowing conditions have been met:\n (i) the operator has executed contracts accompanied by an entrance fee\nor entrance fee deposit for at least sixty percent of all proposed\nliving units;\n (ii) the aggregate entrance fees or deposits received by the operator\npursuant to executed contracts equal at least twenty-five percent of the\ntotal of the entrance fees due at occupancy for at least sixty percent\nof all proposed living units, or at least ten percent of the total\nentrance fee due at occupancy for at least seventy percent of all\nproposed living units, whichever is less;\n (iii) 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 (iv) 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 (v) the total amount of escrowed entrance fees or deposits that may be\napproved for release under this paragraph shall not exceed fifteen\npercent of the total costs of acquiring, constructing and equipping the\nproposed community;\n (vi) use of the entrance fees or deposits shall not impair the\noperator's ability to comply
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