§ 23-2-4-10 — Conditions of registration; deposit of entrance and refurbishment fees into escrow account; limitations

Indiana § 23-2-4-10

• Jurisdiction: Indiana
• Title 23: BUSINESS AND OTHER ASSOCIATIONS
• Art. 2: SECURITIES AND FRANCHISES
• Ch. 4: Supervision of Continuing Care Contracts

Text

(a) Except as provided by section 11 of this
chapter, the commissioner shall require, as a condition of registration,
that:
(1) the provider establish an interest-bearing escrow account with
a bank, trust company, or other escrow agent approved by the
commissioner; and
(2) any entrance fees received by the provider prior to the date the
resident is permitted to occupy the living unit in the continuing
care retirement community be placed in the escrow account,
subject to release as provided by subsection (b).
(b) If the entrance fee gives the resident the right to occupy a living
unit that has been previously occupied, the entrance fee and any
income earned thereon shall be released to the provider when the living
unit is first occupied by the new resident. If the entrance fee applies to
a living unit that has not been previously occupied by any resident, the
entrance fee and any income earned thereon shall be released to the
provider when the commissioner is satisfied that:
(1) aggregate entrance fees received or receivable by the provider
pursuant to executed continuing care agreements, plus:
(A) anticipated proceeds of any first mortgage loan or other
long term financing commitment; and
(B) funds from other sources in the actual possession of the
provider;
are equal to at least fifty percent (50%) of the aggregate cost of
constructing, purchasing, equipping, and furnishing the
continuing care retirement community and equal to at least fifty
percent (50%) of the estimate of funds necessary to fund startup
losses of the continuing care retirement community, as reported
under section 4(12) of this chapter; and
(2) a commitment has been received by the provider for any
permanent mortgage loan or other long term financing described
in the statement of anticipated source and application of funds to
be used in the purchase or construction of the continuing care
retirement community under section 4(12) of this chapter, and any
conditions of the commitment prior to disbursement of funds
thereunder, other than completion of the construction or closing
of the purchase of the continuing care retirement community,
have been substantially satisfied.
(c) If the funds in an escrow account under this section and any
interest earned thereon are not released within the time provided by this
section or by rules adopted by the commissioner, then the funds shall
be returned by the escrow agent to the persons who made the payment
to the provider.
(d) An entrance fee held in escrow shall be returned by the escrow
agent to the person who paid the fee in the following instances:
(1) At the election of the person who paid the fee, at any time
before the fee is released to the provider under subsection (b).
(2) Upon receipt by the escrow agent of notice from the provider
that the person is entitled to a refund of the entrance fee.
(e) This section does not require a provider to place a nonrefundable
application fee charged to prospective residents in escrow.
(f) A provider is not required to place a refurbishment fee of a
prospective resident in escrow if a continuing care agreement provides
that the prospective resident:
(1) will occupy the living unit within sixty (60) days after the
refurbishment fee is paid; and
(2) will receive a refund of any portion of the refurbishment fee
not expended for refurbishment if the continuing care agreement
is cancelled before occupancy.
As added by Acts 1982, P.L.145, SEC.1. Amended by
P.L.234-1985, SEC.3; P.L.153-2009, SEC.10.