Section 1781.4 Of Article 3. Deposit Subscription Period From California Health And Safety Code >> Division 2. >> Chapter 10. >> Article 3.
1781.4
. The deposit escrow account agreement between the applicant
and the escrow agent shall include all of the following:
(a) The amount of the processing fee.
(b) A provision requiring that all deposits shall be placed into
the deposit escrow account upon delivery.
(c) A provision requiring that monthly progress reports be sent by
the escrow agent directly to the department, beginning the month
after the deposit escrow account is opened and continuing through the
month funds are released from escrow. These reports shall be
prepared every month that there are any funds in the account and
shall show each of the following in separate columns:
(1) The name and address of each depositor or resident.
(2) The designation of the living unit being provided.
(3) Any processing fee which is deposited into escrow.
(4) The total deposit required for the unit.
(5) The total entrance fee for the unit.
(6) Twenty percent of the total entrance fee.
(7) Each deposit payment made by or on behalf of the depositor and
any refunds paid to the depositor.
(8) The unpaid balance for each depositor's deposit.
(9) The unpaid balance for each depositor's entrance fee.
(10) The current balance in the deposit escrow account for each
depositor and the collective balance.
(11) The dollar amount, type, and maturity date of any cash
equivalent paid by each depositor.
(d) A provision for investment of escrow account funds in a manner
consistent with Section 1781.
(e) A provision for refunds to depositors in the manner specified
by Section 1783.2.
(f) A provision regarding the payment of interest earned on the
funds held in escrow in the manner specified in the applicant's
deposit agreement.
(g) Release of deposit escrow account funds in the manner
specified in Section 1783.3, including to whom payment of interest
earned on the funds will be made.
(h) Representations by the escrow agent that it is not, and shall
not be during the term of the deposit escrow account, a lender to the
applicant or for the proposed continuing care retirement community,
or a fiduciary for any lender or bondholder for that continuing care
retirement community, unless approved by the department.
(i) If cash equivalents may be accepted as a deposit in lieu of
cash, the deposit escrow account agreement shall also include all of
the following:
(1) Authorization for the escrow agent to convert instruments to
cash when they mature. The escrow agent may notify all financial
institutions whose securities are held by the escrow agent that all
interest and other payments due upon these instruments shall be paid
to the escrow agent. The escrow agent shall collect, hold, invest,
and disburse these funds as provided under the escrow agreement.
(2) Authorization for the escrow agent to deliver the instruments
in its possession and release funds from escrow according to written
directions from the applicant, consistent with the terms provided in
the applicant's deposit escrow account agreement. The escrow agent
shall distribute cash and other property to an individual depositor
only upon either of the following occurrences:
(A) The depositor's written request to receive monthly payments of
interest accrued on his or her deposits.
(B) Receipt of notice from the applicant to pay a refund to the
depositor.
(3) A provision that the escrow agent shall maintain, at all
times, adequate records showing the beneficial ownership of the
instruments.
(4) A provision that the escrow agent shall have no responsibility
or authority to initiate any transfer of the instruments or conduct
any other transaction without specific written instructions from the
applicant.
(5) A provision authorizing, instructing, and directing the escrow
agent to do all of the following:
(A) Redeem and roll over matured investments into money market
accounts or other department approved instruments with the escrow
agent or an outside financial institution.
(B) Collect and receive interest, principal, and other things of
value in connection with the instruments.
(C) Sign for the depositors any declarations, affidavits,
certificates, and other documents that may be required to collect or
receive payments or distributions with respect to the instruments.