§ 657 — Escrow

New York § 657

• Jurisdiction: New York
• Law GBS: General Business
• Art. 31: Membership Campgrounds

Text

§ 657. Escrow. 1. All monies, except dues, paid under a membership\ncamping contract that is sold under a representation that a major\ncapital improvement shall be constructed shall be placed in escrow.\n 2. All such funds received by a membership campground operator shall\nbe kept and maintained in an interest bearing account separate and apart\nfrom any account maintained by or for the operator's personal use or the\nuse and the construction or operation of the campground or for the\npayment or benefit of employees of the campground.\n 3. The escrow account shall be established in a bank or trust company\ndoing business in the state of New York.\n 4. The escrow account shall provide that the purpose of the account is\nto protect the purchaser in the event that the operator fails to\nsubstantially complete and make available for use the major capital\nimprovement within one year following establishment of the account.\n 5. Any purchaser who has advanced monies on deposit in the escrow\naccount may maintain a representative action pursuant to the provisions\nof the civil practice law and rules to close the account and release\nsuch monies and interest, pro rata, to all purchasers similarly\nsituated, if the major capital improvement has not been substantially\ncompleted and made available for use within one year of the\nestablishment of the account or if the purchaser has not had the full\nuse of another similar facility during such period.\n 6. So long as any such escrow account shall remain in existence,\nwithin five business days of a request therefor, a monthly statement of\nthe escrow account is to be furnished to all purchasers who have\nadvanced funds which are held in the account, provided that only one\nsuch statement need be given each month.\n 7. The escrow account shall provide that funds deposited therein may\nbe withdrawn by the membership campground operator upon the completion\nof the proposed construction in the following manner:\n a. One-third of the funds may be distributed to the membership\ncampground operator upon completion of one-half of the proposed\nconstruction;\n b. Two-thirds of the fund may be released upon completion of\nthree-fourths of the proposed construction; and\n c. The balance of the fund may be distributed upon completion of all\nof the proposed construction.\n 8. The escrow agent may accept as evidence of partial or full\ncompletion of such major capital improvement, the certification by any\narchitect or engineer licensed pursuant to the provisions of the\neducation law or the laws of the state in which the campground is\nlocated, that the proposed construction has been completed in accordance\nwith the plans and specifications.\n 9. The escrow account shall be released by the escrow agent to the\nmembership campground operator not more than thirty days following\ncompletion of instruction and the submission to the escrow agent of a\ncertification from an architect or engineer that construction is\ncomplete.\n 10. In lieu of making such deposit of monies in escrow, the membership\ncampground operator may post a bond or contract of indemnity issued by a\nsurety company licensed to execute such an instrument, or an irrevocable\nletter of credit issued by a bank to guarantee the completion of the\nmajor capital improvement.\n