(1)ESCROW ACCOUNT REQUIRED. Prior to the Division issuing a certificate of registration to a provider for a new CCRC or new CCRC facility, the provider must establish an escrow account with a bank, trust company, or licensed escrow agent. A provider, otherwise in compliance with these rules, may not be required to establish an escrow account if the provider constructs one or more new physical structures, remodels, or expands on an existing CCRC facility on the same or adjacent site.
(a)The provider must directly deposit all entrance fees into the escrow account upon receipt. Entrance fees must be deposited into the escrow account prior to a resident being allowed to occupy the living unit in the new CCRC or new CCRC facility.
(b)The provider must maintain a current list that identifies the name and address of each individual who paid the entrance fee and the amount paid.
(2)ESCROW INSTRUCTIONS FILED WITH AGENT. Written escrow instructions that apply to all funds deposited into the escrow account must be filed with the escrow agent and include the following requirements:
(a)Funds in the escrow account must be placed in an interest-bearing account.
(b)Funds in the escrow account must be released to the provider only after the escrow agent receives a court order or a written authorization from the Division that the provider has complied with the requirements of ORS 101.070 (Escrow account required for registration of new continuing care retirement community) and this rule. If the funds are authorized to be released to the provider by the Division, the accumulated interest must be paid to the provider or as otherwise directed by a court, and the provider shall be responsible for paying the escrow fee.
(c)An entrance fee that has been deposited in the escrow account and earned interest, less a proportionate share of the escrow fee, must be released to the individual who paid the entrance fee upon written authorization from the provider that the individual is entitled to a refund of the entrance fee. The written authorization must contain the name and address of the individual entitled to the refund and the amount of the entrance fee paid by the individual.
(d)If all entrance fees have not been released by 36 months after the date the escrow account is established, all entrance fees in the account and earned interest, less a proportionate share of the escrow fee, must be returned to the individuals who paid the entrance fees, unless the Division notifies the escrow agent in writing, prior to the 36 months, that an extension has been granted. The written notice of extension from the Division shall contain additional instructions for the escrow agent.
(3)ESCROW AGREEMENT. A copy of the escrow agreement must be submitted to the Division as described in OAR 411-067-0050 (Disclosure Statement).
(4)RELEASE OF FUNDS:
(a)Upon written request by the provider on a form prescribed by the Division, the Division shall approve the release of funds from escrow if the Division is satisfied that:
(A)The provider has received a certificate of occupancy by local authorities and has collected no less than 10 percent of entrance fees for each resident 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:
(i)50 percent of the aggregate cost of constructing or purchasing, equipping, and furnishing the CCRC; and
(ii)50 percent of the funds that the provider estimated in the disclosure statement as described in OAR 411-067-0050 (Disclosure Statement), 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 disclosed in OAR 411-067-0050 (Disclosure Statement) and any conditions of this commitment, prior to disbursement of funds, have been substantially satisfied other than completion of the construction or closing of the purchase of the CCRC.
(b)The Division shall review the request within 30 days and issue an order accepting or rejecting the request.
(A)If the Division approves the request, the Division shall notify the provider.
(B)If the Division rejects the release of escrow accounts:
(i)The Division shall issue an order rejecting the request. The order shall include the findings of fact upon which the order is based.
(ii)The provider may request a contested case hearing pursuant to ORS chapter 183 within 20 days after the date of the order.
(c)The provider may apply to the Division for an extension of time for the escrow account to remain open. The request for an extension must be made in writing to the Division before the 35th month after the date the escrow account was opened.
(A)The provider’s request for an extension must contain documentation that demonstrates the requirements of subsection (4)(a) of this section may be met within 60 additional days and that a majority of the individuals, who have paid entrance fees that were deposited in the escrow account, have consented in writing to a 60-day extension. The provider’s request for an extension must meet the requirements of this section or the request may not be considered to be timely.
(B)The Division shall review all timely requests for extension within 14 days of the receipt of the request. If the Division grants an extension, the Division shall send a notice of extension to the escrow agent.
(d)If the funds in the escrow account have not been released by 35 months after the date the escrow account was opened, the provider must deliver a copy of the list required by section (1)(b) of this rule to the escrow agent.
(e)In the event a prospective resident withdraws from the residency agreement prior to occupancy, the entrance fee may not be refunded to the prospective resident until the prospective resident’s unit has been resold by the provider.
(f)If the entrance fees in an escrow account are not released within 48 months after the escrow account is opened, the entrance fees paid, less the escrow fee, must be returned to the resident unless an extension is granted by the Division.
(g)The escrow agent may return the entrance fee held in escrow to the individual who paid the entrance fee, upon receipt of notice from the provider that the individual is entitled to a refund of the entrance fee.
Rule 411-067-0070 — Escrow Accounts,