Section 1771.4 Of Article 1. General Provisions From California Health And Safety Code >> Division 2. >> Chapter 10. >> Article 1.
1771.4
. An entity may conduct a market test for a proposed
continuing care retirement community and collect reservation fees
from persons interested in residing at the proposed continuing care
retirement community without violating this chapter if all of the
following conditions are met:
(a) The entity has filed with the department an application for a
permit to accept deposits and a certificate of authority for the
project.
(b) The entity's application includes the proposed reservation
agreement form and a proposed escrow agreement that provide all of
the following:
(1) All fees shall be deposited in escrow.
(2) Refunds shall be made within 10 calendar days after the payer'
s or proposed resident's request or 10 days after denial of the
application for a permit to accept deposits.
(3) All reservation fees shall be converted to deposits within 15
days after a permit to accept deposits is issued.
(c) The department has acknowledged in writing its receipt of the
entity's application and its approval of the entity's proposed
reservation agreement between the payer and the entity and the escrow
agreement between the escrow holder and the entity.
(d) The amount of any reservation fee collected by the entity does
not exceed one thousand dollars ($1,000) or 1 percent of the average
entrance fee amount as determined from the entity's application,
whichever is greater.
(e) The entity places all reservation fees collected by the entity
into an escrow under the terms of the approved reservation agreement
and escrow agreement.