No deposit or any other asset held in a deposit escrow account, shall be encumbered or used as collateral for any obligation of the applicant or any other person, unless the applicant obtains prior written approval from the department for the encumbrance or use as collateral. The department shall not approve any encumbrance or use as collateral under this section unless the encumbrance or use as collateral is expressly subordinated to the rights of depositors under this chapter to refunds of their deposits.

(Amended by Stats. 2000, Ch. 820, Sec. 39. Effective January 1, 2001.)

Terms Used In California Health and Safety Code 1781.10

  • department: means State Department of Health Services. See California Health and Safety Code 20
  • Escrow: Money given to a third party to be held for payment until certain conditions are met.
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • Person: means any person, firm, association, organization, partnership, business trust, corporation, limited liability company, or company. See California Health and Safety Code 19
  Previous section
Next section  
 Article 3 Contents