Oregon Statutes 101.070 – Escrow account required for registration of new continuing care retirement community; entrance fees in escrow; use of escrow funds
(1) As a condition of registration for a new continuing care retirement community, the Department of Human Services shall require that the provider establish an escrow account with a bank, trust company or other escrow agent and that any entrance fees received by the provider prior to the date the resident is permitted to occupy the living unit in the CCRC be placed in the escrow account.
Terms Used In Oregon Statutes 101.070
- Application fee: means a fee charged to an individual or individuals, prior to execution of a residency agreement, apart from an entrance fee. See Oregon Statutes 101.020
- CCRC: means any provider that is registered with the Department of Human Services and agrees to furnish continuing care to a resident under a residency agreement. See Oregon Statutes 101.020
- Continuing care: means directly furnishing or indirectly making available, upon payment of an entrance fee and under a residency agreement, housing and health related services for a period greater than one year to an individual not related by blood or marriage to the continuing care retirement community provider that is furnishing care. See Oregon Statutes 101.020
- Entrance fee: means an initial or deferred transfer to a provider of a sum of money or other property made or promised to be made as full or partial consideration for acceptance of one or more residents in a continuing care retirement community. See Oregon Statutes 101.020
- Escrow: Money given to a third party to be held for payment until certain conditions are met.
- Living unit: means a room, apartment, cottage or other area set aside for the exclusive use of the resident. See Oregon Statutes 101.020
- 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
- Person: includes individuals, corporations, associations, firms, partnerships, limited liability companies and joint stock companies. See Oregon Statutes 174.100
- Provider: means an owner or operator, whether a natural person, partnership, trust, limited liability company, corporation or unincorporated association, however organized, of a new or existing continuing care retirement community, whether operated for profit or not, that provides, plans to provide or agrees to provide continuing care to one or more unrelated residents under a residency agreement. See Oregon Statutes 101.020
- Residency agreement: means a contract between a provider and a resident for the provision of continuing care for a period greater than one year. See Oregon Statutes 101.020
- Resident: means a person who enters into a residency agreement with a provider or who is designated in a residency agreement to be a person being provided with continuing care. See Oregon Statutes 101.020
(2) Upon written request by the provider, the department shall approve the release of the funds from escrow if the department is satisfied that:
(a) The provider has received a certificate of occupancy by local authorities and has collected no less than 10 percent of each individual resident’s entrance fee for no less than 50 percent of the total number of units;
(b) 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 are equal to not less than:
(A) Fifty percent of the aggregate cost of constructing or purchasing and equipping and furnishing the CCRC; and
(B) Fifty percent of the funds, which the provider estimated in its disclosure pursuant to ORS § 101.050, to fund start-up losses of the CCRC; and
(c) A commitment has been received by the provider for any permanent mortgage loan or other long term financing commitment, which commitment the provider disclosed pursuant to ORS § 101.050, and any conditions of this commitment prior to disbursement of funds thereunder, other than completion of the construction or closing of the purchase of the CCRC, have been substantially satisfied.
(3) In the event a prospective resident withdraws from the residency agreement prior to occupancy, the entrance fee described in ORS § 101.080 may not be refunded to the prospective resident until such time as the prospective resident’s unit has been resold.
(4) If the entrance fees in an escrow account are not released within 48 months after the escrow account is opened, entrance fees paid, less the escrow fee, shall be returned to the residents unless an extension is granted by the department.
(5) Nothing in this section requires the escrow of any nonrefundable application fee charged to prospective residents.
(6) An entrance fee held in escrow may be returned by the escrow agent, at any time, to the person or persons who paid the fee to the provider upon receipt by the escrow agent of notice from the provider that such person is entitled to a refund of the entrance fee. [1989 c.693 § 13; 2009 c.201 § 6]