(a) Prior to soliciting or entering into any contract for the provision of continuing care, the provider shall establish with a bank or trust company as an escrow agent, an entrance fee escrow pursuant to which the provider shall deposit with the escrow agent, within seventy-two hours of receipt by the provider, each entrance fee or portion of an entrance fee received by the provider from or on behalf of a resident prior to the date the resident is permitted to occupy a living unit in the facility. The bank or trust company serving as escrow agent for such fees received from such a resident shall have a place of business in this state. The entrance fee escrow shall be subject to release as follows:
Terms Used In Connecticut General Statutes 17b-524
- 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.
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Mortgage loan: A loan made by a lender to a borrower for the financing of real property. Source: OCC
(1) If the entrance fee applies to a living unit that has been previously occupied in the facility, the entrance fee shall be released to the provider at the time the living unit becomes available for occupancy by the new resident, or shall be returned to the resident or the resident’s personal representative under the conditions described in section 17b-523, if the escrow agent has received written demand by registered or certified mail for return of the entrance fee prior to the release thereof to the provider;
(2) If the entrance fee applies to a living unit which has not previously been occupied by any resident, the entrance fee shall be returned to the resident or the resident’s legal representative under the conditions described in section 17b-523, if the escrow agent receives written demand by registered or certified mail for return of the entrance fee prior to release thereof to the provider, or the entrance fee shall be released to the provider at the time all of the following conditions have been met:
(A) The sum of the entrance fees received or receivable by the provider pursuant to binding contracts for continuing care, plus the anticipated proceeds of any first mortgage loan or other long-term financing commitment, plus funds from other sources in the actual possession of the provider, equals or exceeds the sum of seventy-five per cent of the aggregate cost of constructing or purchasing, equipping and furnishing the facility plus seventy-five per cent of the funds estimated in the statement of anticipated source and application of funds submitted by the provider as part of its disclosure statement to be necessary to fund start-up losses of the facility plus seventy-five per cent of the amount of the reserve fund escrow required to be maintained by the provider pursuant to section 17b-525;
(B) A commitment has been received by the provider for any permanent mortgage loan or other long-term financing described in the statement of anticipated source and application of funds included in the current disclosure statement on file pursuant to section 17b-522, and any conditions of the commitment prior to disbursement of funds thereunder, other than completion of the construction or closing of the purchase of the facility, have been substantially satisfied; and
(C) If construction of the facility has not been substantially completed, all governmental permits or approvals necessary prior to the commencement of construction have been obtained; and a maximum price contract has been entered into between the provider and a general contractor responsible for construction of the facility; a bond covering the faithful performance of the construction contract by the general contractor and the payment of all obligations arising thereunder has been issued by an insurer authorized to do business in this state with the provider as obligee; a loan agreement has been entered into by the provider for an interim construction loan in an amount, when combined with the amount of entrance fees then held in escrow under the provisions of this section plus the amount of funds from other sources then in the actual possession of the provider, that will equal or exceed the estimated cost of constructing, equipping and furnishing the facility; not less than ten per cent of the amount of the construction loan has been disbursed by the lender for physical construction or site preparation work completed; and orders at firm prices have been placed by the provider for not less than fifty per cent in value, including installation charges if applicable, of items necessary for equipping and furnishing the facility in accordance with the description set forth in the disclosure statement required by section 17b-522; or if construction or purchase of the facility has been substantially completed, an occupancy permit covering the living unit has been issued by the local government having authority to issue these permits.
(b) The aggregate amount of entrance fees which may be released to the provider pursuant to subparagraph (A) of subdivision (2) of subsection (a) of this section prior to the date on which any reserve fund escrow required to be established under section 17b-525 is established shall not exceed the aggregate amount of entrance fees then received or receivable by the provider pursuant to binding contracts for continuing care less the amount of the entrance fees received or receivable which may be required to be initially maintained in the reserve fund escrow.
(c) The provider shall provide each prospective resident who has signed a contract for continuing care with the name, address, and telephone number of the escrow agent and shall file a copy of the escrow agreement with the department.
(d) The provisions of this section shall not apply to any continuing-care contract for the provision of care in a person’s home.