Section 1783.3 Of Article 3. Deposit Subscription Period From California Health And Safety Code >> Division 2. >> Chapter 10. >> Article 3.
1783.3
. (a) In order to seek a release of escrowed funds, the
applicant shall petition in writing to the department and certify to
each of the following:
(1) The construction of the proposed continuing care retirement
community or phase is at least 50 percent completed.
(2) At least 10 percent of the total of each applicable entrance
fee has been received and placed in escrow for at least 60 percent of
the total number of residential living units. Any unit for which a
refund is pending may not be counted toward that 60-percent
requirement.
(3) Deposits made with cash equivalents have been either converted
into, or substituted with, cash or held for transfer to the
provider. A cash equivalent deposit may be held for transfer to the
provider, if all of the following conditions exist:
(A) Conversion of the cash equivalent instrument would result in a
penalty or other substantial detriment to the depositor.
(B) The provider and the depositor have a written agreement
stating that the cash equivalent will be transferred to the provider,
without conversion into cash, when the deposit escrow is released to
the provider under this section.
(C) The depositor is credited the amount equal to the value of the
cash equivalent.
(4) The applicant's average performance over any six-month period
substantially equals or exceeds its financial and marketing
projections approved by the department, for that period.
(5) The applicant has received a commitment for any permanent
mortgage loan or other long-term financing.
(b) The department shall instruct the escrow agent to release to
the applicant all deposits in the deposit escrow account when all of
the following requirements have been met:
(1) The department has confirmed the information provided by the
applicant pursuant to subdivision (a).
(2) The department has determined that there has been substantial
compliance with projected annual financial statements that served as
a basis for issuance of the permit to accept deposits.
(3) The applicant has complied with all applicable licensing
requirements in a timely manner.
(4) The applicant has obtained a commitment for any permanent
mortgage loan or other long-term financing that is satisfactory to
the department.
(5) The applicant has complied with any additional reasonable
requirements for release of funds placed in the deposit escrow
accounts, established by the department under Section 1785.
(c) The escrow agent shall release the funds held in escrow to the
applicant only when the department has instructed it to do so in
writing.
(d) When an application describes different phases of construction
that will be completed and commence operating at different times,
the department may apply the 50-percent construction completion
requirement to any one or group of phases requested by the applicant,
provided the phase or group of phases is shown in the applicant's
projections to be economically viable.