2013 New York Consolidated Laws
PBH - Public Health
Article 46-A - (4650 - 4676) FEE-FOR-SERVICE CONTINUING CARE RETIREMENT COMMUNITIES DEMONSTRATION PROGRAM
4675 - Priority reservation agreements; after obtaining a certificate of authority.

 
    § 4675. Priority reservation agreements; after obtaining a certificate
  of authority. The provisions of this section apply to entities that seek
  approval  to  enter into priority reservation agreements and to solicit,
  collect  or  receive  priority  reservation  fees,  with  respect  to  a
  fee-for-service  continuing care retirement community, after obtaining a
  certificate of authority under this article.
    1. No person, partnership, corporation or other entity shall  solicit,
  collect  or  receive  any  priority  reservation  fee  or enter into any
  agreement relating to the payment of any priority reservation  fee  with
  respect  to  any  fee-for-service  continuing  care retirement community
  operated or to be operated within the state without first obtaining  the
  written  authorization  of  the commissioner. The commissioner shall not
  grant such authorization to an entity that has obtained a certificate of
  authority unless the requirements of this  section  and  any  applicable
  regulations   are   met.   Upon   obtaining  the  authorization  of  the
  commissioner under this section, an operator may enter  into  cancelable
  priority  reservation agreements with prospective residents and solicit,
  collect and receive refundable  priority  reservation  fees  for  direct
  deposit  into  an  escrow  account  for  the  purpose of guaranteeing to
  prospective residents an  opportunity  for  priority  placement  in  the
  fee-for-service  continuing  care  retirement  community  for  which the
  operator has obtained a certificate of authority. A priority reservation
  fee shall not exceed two thousand  dollars.  A  non-refundable  priority
  reservation  agreement  application  fee  shall  not  exceed the maximum
  amount for such fee as set forth in regulations adopted by the council.
    2. In order to receive authorization by the commissioner to enter into
  cancelable priority reservation agreements and to  solicit,  collect  or
  receive any refundable priority reservation fee, an operator shall apply
  for  such  authorization  on  forms  or  in  a  format prescribed by the
  commissioner and, as part of such application shall submit the following
  information:
    a. a description of the applicant's plan to implement the  process  of
  entering into cancelable priority reservation agreements and to solicit,
  collect or receive refundable priority reservation fees;
    b.  the  name and address of the escrow agent and a copy of the escrow
  agreement required pursuant to this section;
    c. a copy of the  instructions  to  the  escrow  agent  regarding  the
  issuance of refunds;
    d.  a  copy of the forms to be used to document a request for a refund
  of a priority reservation fee and the issuance of such refund;
    e. draft copies of all proposed  marketing  materials,  provided  that
  copies  of  the  final  marketing materials must be submitted as soon as
  they are available provided further that  provision  of  such  materials
  shall  not  be  construed  to  require approval of such materials by the
  department or the council;
    f. a description of the sales office  and  drawings  of  any  proposed
  model units;
    g. a copy of the proposed priority reservation agreement; and
    h.  any  other  information  as may be required by regulations adopted
  pursuant to this article.
    3. a. As a condition to  receiving  the  commissioner's  authorization
  under  this  section,  an  operator shall establish a government insured
  interest-bearing account, which  earns  interest  at  a  rate  which  is
  consistent  with  prevailing  interest  rates,  and enter into an escrow
  agreement with a New York state bank, New York state  savings  and  loan
  association  or  New  York  state  trust  company for the deposit of any
  priority reservation fees collected by the  operator  pursuant  to  this

  section,  which escrow funds shall be subject to release as provided for
  in this section.
    b.  The  escrow  agreement  shall state that its purpose is to protect
  prospective residents who have paid a priority reservation  fee  to  the
  operator  in order to guarantee prospective residents an opportunity for
  priority placement in the  fee-for-service  continuing  care  retirement
  community  for  which  the  operator  has  been  issued a certificate of
  authority and that, upon presentation of  evidence  of  compliance  with
  applicable  provisions  of  this  article,  or  upon order of a court of
  competent jurisdiction, the escrow agent shall release and pay over  the
  funds,  or  portions thereof, together with any interest accrued thereon
  or earned from investment of the funds, to the operator, the prospective
  resident or the prospective resident's legal representative as directed,
  within fifteen business days of receipt of  the  notice  by  the  escrow
  agent.
    c.  Checks,  drafts,  and  money  orders  for deposit from prospective
  residents shall be made payable to the escrow agent only.
    d. All funds deposited in the escrow account shall remain the property
  of  the  prospective  residents  until  released  to  the  operator   in
  accordance  with this section, and the funds shall not be subject to any
  liens or charges by the escrow  agent  or  judgments,  garnishments,  or
  creditors' claims against the operator.
    e.  At  the request of the operator, the commissioner or a prospective
  resident, the escrow agent shall issue a statement indicating the status
  of the escrow account.
    f. A prospective resident's escrowed funds shall not be released to an
  operator unless the  prospective  resident  has  elected  to  apply  the
  priority  reservation  fee  to  an  actual entrance fee or deposit on an
  entrance fee. Upon release to the  operator,  a  prospective  resident's
  escrowed  priority  reservation  fee  funds  shall be deposited into the
  entrance fee escrow account provided for in  section  forty-six  hundred
  sixty-two  of  this  article; provided that the operator may retain such
  funds and shall not be required to deposit  them  in  the  entrance  fee
  escrow  account  if  the prospective resident's living unit is available
  for occupancy.
    g. If the funds in an escrow  account  under  this  section,  and  any
  interest  thereon,  are not released to the operator within such time as
  provided by rules and regulations adopted  by  the  council,  then  such
  funds  shall be returned by the escrow agent to the persons who had made
  the payments or the person's legal representative.
    h. A priority reservation fee, and the interest accrued thereon,  held
  in  escrow  shall be returned by the escrow agent to the person who paid
  the fee upon receipt by the escrow agent of notice from the operator  or
  the  person  who  paid the fee or the person's legal representative that
  the priority reservation  agreement  has  been  canceled.  Any  priority
  reservation  fee, and the interest accrued thereon, shall be returned by
  the escrow agent to the person who paid the fee or  the  person's  legal
  representative  within  fifteen  business  days of receipt by the escrow
  agent of notice of cancellation of the priority reservation agreement.
    i.  Refunds  of  priority  reservation  fees  upon  the  death  of   a
  prospective  resident  will  be made upon the same basis as refunds upon
  cancellation of a priority reservation agreement.
    j. Nothing in this section  shall  be  interpreted  as  requiring  the
  escrow  of any non-refundable priority reservation agreement application
  fee,  designated  as  such  in  the  cancelable   priority   reservation
  agreement,  which  fee  is  received  by the operator from a prospective
  resident.

    4. Any marketing materials, including all materials associated with  a
  sales  office  and  model  units,  used  in the solicitation of priority
  reservation agreements or priority reservation fees shall, at a  minimum
  contain the following:
    a.  a  statement that the purpose of the marketing material is for the
  operator to offer prospective residents an opportunity for a  guaranteed
  priority  placement  in  a  fee-for-service  continuing  care retirement
  community by entering into cancelable  priority  reservation  agreements
  and accepting refundable priority reservation fees;
    b.  a  statement that the cancelable priority reservation agreement is
  not a fee-for-service continuing care contract and may  be  canceled  by
  the  person  entering the agreement or the person's legal representative
  at any time, without cause; and
    c. a statement that any priority reservation fees paid shall  be  held
  in  escrow  and  shall  be  refunded,  together with interest accrued at
  prevailing rates, to the person paying the fee  or  the  person's  legal
  representative upon request and cancellation of the priority reservation
  agreement.
    5.  Any  priority  reservation  fees with respect to a fee-for-service
  continuing  care  retirement  community  may  be  collected  only  after
  issuance  of  a  cancelable priority reservation agreement to the person
  paying the fee, which agreement shall contain the following information:
    a. the name and location of the community;
    b. the name and address of the operator;
    c. the name, address and phone number of a contact person;
    d. the name and address of the person paying the fee;
    e. the name and address of the escrow agent;
    f. the type of unit being reserved;
    g. the current entry  fee  and  monthly  care  fee,  together  with  a
  statement  explaining  that  these fees are subject to change and may be
  changed by  the  time  the  prospective  resident  has  entered  into  a
  fee-for-service continuing care contract with the operator;
    h.  the  amount  of  any non-refundable priority reservation agreement
  application fee;
    i. a notice in bold twelve point type  that  the  cancelable  priority
  reservation  agreement  does  not  obligate the person entering into the
  agreement in any way; that there is no guarantee by  the  operator  that
  the  current  fees  set forth in the agreement will not change; that the
  person paying the priority reservation fee may receive a refund  of  the
  fee  plus interest accrued at prevailing rates upon request; and that he
  or she shall be entitled on a  priority  basis  to  apply  the  priority
  reservation  fee  to an actual entrance fee or entrance fee deposit on a
  unit not already under contract;
    j. the signature of the person paying the fee and the signature of the
  operator or the operator's agent;
    k. a statement that the effective period of the  agreement  shall  not
  exceed the duration of the commissioner's authorization; and
    l.  an  outline of the fees, their associative service, and guidelines
  used for changing the residency status of a resident.
    6. a. In order to approve  an  application  under  this  section,  the
  commissioner shall have determined that:
    (i)  the  operator  has satisfied the requirements of this section and
  any applicable regulations; and
    (ii)  the  operator  can  be  expected  to  meet  its  obligations  in
  accordance  with  this  section  and  in  accordance  with  its priority
  reservation agreements with prospective residents.
    b. If the commissioner approves an application, the commissioner shall
  issue a written authorization to the operator authorizing  the  operator

  to  enter  into  cancelable  priority reservation agreements and collect
  refundable  priority  reservation  fees   from   prospective   residents
  concerning the fee-for-service continuing care retirement community.
    c.  The commissioner's authorization shall remain in effect as long as
  the operator's certificate of authority for  its  community  remains  in
  effect;  provided that the commissioner may rescind the authorization at
  any time for just cause, including any material misstatement of fact  or
  misrepresentation  in  any of the application materials or any materials
  subsequently disseminated.
    d. The operator shall provide written notice to all parties  who  have
  entered   into   cancelable   priority  reservation  agreements  of  the
  commissioner's  recision  of  authorization  to  enter  into  cancelable
  priority reservation agreements.
    e.  The  commissioner shall provide written notice to the escrow agent
  of the commissioner's recision of authorization to enter into cancelable
  priority reservation agreements, including instructions to release funds
  held in  escrow  to  the  persons  who  have  paid  refundable  priority
  reservation fees.