§ 4662 — Entrance fee escrow account

* § 4662. 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 state bank, New York state savings and loan association, or New\nYork state trust company for any entrance fees received by the operator,\nwhich escrow funds shall be subject to release as provided by section\nforty-six hundred sixty-three of this article.\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\nsection forty-six hundred sixty-three of this article, and the funds\nshall not be subject to any liens or charges by the escrow agent or\njudgments, garnishments, or creditor's claims against the operator or\ncommunity.\n 5. At the request of the operator or the commissioner, the escrow\nagent shall issue a statement indicating the status of the escrow\naccount.\n 6. If the funds in an escrow account under this section and any\ninterest thereon are not released to the operator within such time as\nprovided by rules and regulations adopted by the council, then such\nfunds shall be returned by the escrow agent to the persons who had made\npayment to the operator.\n 7. An entrance fee held in escrow may be returned by the escrow agent\nto the person who paid the fee upon receipt by the escrow agent of\nnotice from the operator that such person is entitled to a refund of the\nentrance fee.\n 8. Nothing in this section shall be interpreted as requiring the\nescrow of any nonrefundable application fee, designated as such in the\ncontract, received by the operator from a prospective resident.\n 9. Occupancy of housing or other facilities shall not begin until:\n a. the operator has executed contracts accompanied by a deposit of at\nleast ten percent of the entry fee payment for fifty percent of all\nunits or an approved phase of a community; and\n b. all permits and approvals necessary for operation of the community,\nor an approved phase of a community, have been granted except those\ndepending upon construction; provided, nothing in this subdivision shall\nprohibit an operator, upon the approval of the council, or an applicant\nor prospective applicant upon the approval of the commissioner pursuant\nto section forty-six hundred seventy-four of this article, from\nconstructing model units and a sales office.\n 10. Any entry fee deposit required by an operator shall be fully\nrefundable if the contract is canceled within seventy-two hours of its\nexecution. In the event of cancellation, the entry fee deposit shall be\nrefunded within three business days of receipt of cancellation.\n * NB There are 2 § 4662's\n