Section 1781.4 - Deposit escrow account agreementThe deposit escrow account agreement between the applicant and the escrow agent shall include all of the following:
(a) The amount of the processing fee. (b) A provision requiring that all deposits shall be placed into the deposit escrow account upon delivery. (c) A provision requiring that monthly progress reports be sent by the escrow agent directly to the department, beginning the month after the deposit escrow account is opened and continuing through the month funds are released from escrow. These reports shall be prepared every month that there are any funds in the account and shall show each of the following in separate columns: (1) The name and address of each depositor or resident.(2) The designation of the living unit being provided.(3) Any processing fee which is deposited into escrow.(4) The total deposit required for the unit.(5) The total entrance fee for the unit.(6) Twenty percent of the total entrance fee. (7) Each deposit payment made by or on behalf of the depositor and any refunds paid to the depositor.(8) The unpaid balance for each depositor's deposit.(9) The unpaid balance for each depositor's entrance fee.(10) The current balance in the deposit escrow account for each depositor and the collective balance.(11) The dollar amount, type, and maturity date of any cash equivalent paid by each depositor.(d) A provision for investment of escrow account funds in a manner consistent with Section 1781.(e) A provision for refunds to depositors in the manner specified by Section 1783.2.(f) A provision regarding the payment of interest earned on the funds held in escrow in the manner specified in the applicant's deposit agreement.(g) Release of deposit escrow account funds in the manner specified in Section 1783.3, including to whom payment of interest earned on the funds will be made. (h) Representations by the escrow agent that it is not, and shall not be during the term of the deposit escrow account, a lender to the applicant or for the proposed continuing care retirement community, or a fiduciary for any lender or bondholder for that continuing care retirement community, unless approved by the department. (i) If cash equivalents may be accepted as a deposit in lieu of cash, the deposit escrow account agreement shall also include all of the following: (1) Authorization for the escrow agent to convert instruments to cash when they mature. The escrow agent may notify all financial institutions whose securities are held by the escrow agent that all interest and other payments due upon these instruments shall be paid to the escrow agent. The escrow agent shall collect, hold, invest, and disburse these funds as provided under the escrow agreement.(2) Authorization for the escrow agent to deliver the instruments in its possession and release funds from escrow according to written directions from the applicant, consistent with the terms provided in the applicant's deposit escrow account agreement. The escrow agent shall distribute cash and other property to an individual depositor only upon either of the following occurrences: (A) The depositor's written request to receive monthly payments of interest accrued on his or her deposits.(B) Receipt of notice from the applicant to pay a refund to the depositor.(3) A provision that the escrow agent shall maintain, at all times, adequate records showing the beneficial ownership of the instruments.(4) A provision that the escrow agent shall have no responsibility or authority to initiate any transfer of the instruments or conduct any other transaction without specific written instructions from the applicant.(5) A provision authorizing, instructing, and directing the escrow agent to do all of the following: (A) Redeem and roll over matured investments into money market accounts or other department approved instruments with the escrow agent or an outside financial institution.(B) Collect and receive interest, principal, and other things of value in connection with the instruments.(C) Sign for the depositors any declarations, affidavits, certificates, and other documents that may be required to collect or receive payments or distributions with respect to the instruments. Ca. Health and Saf. Code § 1781.4
Amended by Stats 2000 ch 820 (SB 2077), s 36, eff. 1/1/2001.