Or. Admin. R. 411-067-0070 - Escrow Accounts
(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 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. .
(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, 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 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.
Notes
Stat. Auth.: ORS 101.150 & 410.090
Stats. Implemented: ORS 101.070
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