New Hampshire Revised Statutes 420-D:10 – Entrance Fee Escrow Account
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I. An escrow account for entrance fees shall be established and approved by the commissioner before a certificate of authority under this chapter shall be issued. Entrance fees paid by prospective residents before occupancy of a facility living unit or by prospective residents under a contract issued pursuant to N.H. Rev. Stat. § 420-D:3-a, and which total over $1,000 shall be placed in this account. All entrance fees subject to this section shall be placed in the account on the first working day after receipt. Interest on such fees shall be paid at the current market rate as established by the commissioner to the prospective resident if the resident is not allowed by the provider, for any reason, to enter the facility, provided however if the entrance fee is paid pursuant to a contract under N.H. Rev. Stat. § 420-D:3-a, the entrance fee shall be returned to the consumer with interest, if the contract is not signed or the consumer exercises the right of rescission under N.H. Rev. Stat. § 420-D:12, I(m).
II. The provider shall deliver to the escrow agent the sum total of all entrance fees paid in for each resident or prospective resident. A list of the names, addresses, and sum totals of all entrance fees paid by each resident or prospective resident shall be maintained by the provider or the escrow agent for the provider. If an entrance fee has been paid by another on behalf of a resident, a statement shall be included as to whom the amount in escrow is to be returned to, should return become necessary.
III. Release of escrowed amounts to the provider shall be made as follows:
(a) For living units that have been previously occupied, when the new resident makes the first monthly payment.
(b) For living units not previously occupied:
(1) When aggregate fees received or receivable equal 50 percent of total entrance fees due at full occupancy, except that any entrance fee payments that are less than 35 percent of the amount due from a resident will not be counted; or
(2) When entrance fees plus proceeds of any first mortgage or other long term loan in lieu of a first mortgage plus other funds on hand equal
1/2 of the total cost of the facility, plus
1/2 of the start-up losses shown in the certificate of authority application; or
(3) When a permanent mortgage or other long term loan commitment has been received and the mortgagee‘s commitment conditions prior to disbursement have been satisfied, other than completing construction and closing purchase.
(c) For a resident that has not moved into the facility pursuant to N.H. Rev. Stat. § 420-D:3-a, 10 days after the contract is fully executed by all parties.
IV. The escrow agent shall return funds, including all interest, to the person who originally made the payment to the provider, if the funds so deposited are not released to the provider under the conditions enumerated in paragraph I or II within 3 years of the escrow date. The commissioner may extend this period for up to 2 years upon written application by the provider.
V. The escrow provisions under this chapter shall not apply to nonrefundable application fees that do not exceed one month‘s periodic payments for services rendered by the provider.
VI. If approved by the commissioner, a provider may post bond, negotiable securities, or a letter of credit with the commissioner in lieu of escrow. The institution providing a bond or a letter of credit must meet all requirements of and have the full approval of the commissioner. The amount of the bond, negotiable securities, or letters of credit shall be in the same amount as if the funds received from residents or prospective residents had been placed in escrow. Under this paragraph, a record of persons who made entrance fee payments and the amount of such payments shall be maintained as required under paragraph I of this section.
VII. An escrow agent shall return funds to the person, or the estate of the person if deceased, who paid the entrance fee, if requested by the provider. A request to return funds to any other person shall be approved by the commissioner.
II. The provider shall deliver to the escrow agent the sum total of all entrance fees paid in for each resident or prospective resident. A list of the names, addresses, and sum totals of all entrance fees paid by each resident or prospective resident shall be maintained by the provider or the escrow agent for the provider. If an entrance fee has been paid by another on behalf of a resident, a statement shall be included as to whom the amount in escrow is to be returned to, should return become necessary.
Terms Used In New Hampshire Revised Statutes 420-D:10
- Contract: A legal written agreement that becomes binding when signed.
- Escrow: Money given to a third party to be held for payment until certain conditions are met.
- month: shall mean a calendar month, and the word "year" a calendar year, unless otherwise expressed; and the word "year" shall be equivalent to the expression "year of our Lord. See New Hampshire Revised Statutes 21:8
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Mortgagee: The person to whom property is mortgaged and who has loaned the money.
- person: may extend and be applied to bodies corporate and politic as well as to individuals. See New Hampshire Revised Statutes 21:9
- Right of rescission: Right to cancel, within three business days, a contract that uses the home of a person as collateral, except in the case of a first mortgage loan. There is no fee to the borrower, who receives a full refund of all fees paid. The right of rescission is guaranteed by the Truth in Lending Act (TILA). Source: OCC
III. Release of escrowed amounts to the provider shall be made as follows:
(a) For living units that have been previously occupied, when the new resident makes the first monthly payment.
(b) For living units not previously occupied:
(1) When aggregate fees received or receivable equal 50 percent of total entrance fees due at full occupancy, except that any entrance fee payments that are less than 35 percent of the amount due from a resident will not be counted; or
(2) When entrance fees plus proceeds of any first mortgage or other long term loan in lieu of a first mortgage plus other funds on hand equal
1/2 of the total cost of the facility, plus
1/2 of the start-up losses shown in the certificate of authority application; or
(3) When a permanent mortgage or other long term loan commitment has been received and the mortgagee‘s commitment conditions prior to disbursement have been satisfied, other than completing construction and closing purchase.
(c) For a resident that has not moved into the facility pursuant to N.H. Rev. Stat. § 420-D:3-a, 10 days after the contract is fully executed by all parties.
IV. The escrow agent shall return funds, including all interest, to the person who originally made the payment to the provider, if the funds so deposited are not released to the provider under the conditions enumerated in paragraph I or II within 3 years of the escrow date. The commissioner may extend this period for up to 2 years upon written application by the provider.
V. The escrow provisions under this chapter shall not apply to nonrefundable application fees that do not exceed one month‘s periodic payments for services rendered by the provider.
VI. If approved by the commissioner, a provider may post bond, negotiable securities, or a letter of credit with the commissioner in lieu of escrow. The institution providing a bond or a letter of credit must meet all requirements of and have the full approval of the commissioner. The amount of the bond, negotiable securities, or letters of credit shall be in the same amount as if the funds received from residents or prospective residents had been placed in escrow. Under this paragraph, a record of persons who made entrance fee payments and the amount of such payments shall be maintained as required under paragraph I of this section.
VII. An escrow agent shall return funds to the person, or the estate of the person if deceased, who paid the entrance fee, if requested by the provider. A request to return funds to any other person shall be approved by the commissioner.