Indiana Code 23-2-4-10. Conditions of registration; deposit of entrance and refurbishment fees into escrow account; limitations
(1) the provider establish an interest-bearing escrow account with a bank, trust company, or other escrow agent approved by the commissioner; and
Terms Used In Indiana Code 23-2-4-10
- Application fee: means the fee charged an individual, in addition to the entrance fee or any other fee, to cover the provider's reasonable costs in processing the individual's application to become a resident. See Indiana Code 23-2-4-1
- Commissioner: means the securities commissioner as provided in IC 23-19-6-1(a). See Indiana Code 23-2-4-1
- Continuing care agreement: means the following:
Indiana Code 23-2-4-1
- Continuing care retirement community: includes both of the following:
Indiana Code 23-2-4-1
- Entrance fee: means the sum of money or other property paid or transferred, or promised to be paid or transferred, to a provider in consideration for one (1) or more individuals becoming a resident of a continuing care retirement community under a continuing care agreement. See Indiana Code 23-2-4-1
- 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 within a continuing care retirement community set aside for the use of one (1) or more identified residents. See Indiana Code 23-2-4-1
- Long term financing: means financing for a period in excess of one (1) year. See Indiana Code 23-2-4-1
- 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: means an individual, a corporation, a partnership, an association, a limited liability company, or other legal entity. See Indiana Code 23-2-4-1
- Provider: means a person that agrees to provide care under a continuing care agreement. See Indiana Code 23-2-4-1
- Refurbishment fee: means the fee charged an individual, in addition to the entrance fee or any other fee, to cover the provider's reasonable costs in refurbishing a previously occupied living unit specifically designated for occupancy by that individual. See Indiana Code 23-2-4-1
- Resident: means an individual who is entitled to receive benefits under a continuing care agreement. See Indiana Code 23-2-4-1
(b) If the entrance fee gives the resident the right to occupy a living unit that has been previously occupied, the entrance fee and any income earned thereon shall be released to the provider when the living unit is first occupied by the new resident. If the entrance fee applies to a living unit that has not been previously occupied by any resident, the entrance fee and any income earned thereon shall be released to the provider when the commissioner is satisfied that:
(1) aggregate entrance fees received or receivable by the provider pursuant to executed continuing care agreements, plus:
(A) anticipated proceeds of any first mortgage loan or other long term financing commitment; and
(B) funds from other sources in the actual possession of the provider;
are equal to at least fifty percent (50%) of the aggregate cost of constructing, purchasing, equipping, and furnishing the continuing care retirement community and equal to at least fifty percent (50%) of the estimate of funds necessary to fund startup losses of the continuing care retirement community, as reported under section 4(12) of this chapter; and
(2) a commitment has been received by the provider for any permanent mortgage loan or other long term financing described in the statement of anticipated source and application of funds to be used in the purchase or construction of the continuing care retirement community under section 4(12) of this chapter, and any conditions of the commitment prior to disbursement of funds thereunder, other than completion of the construction or closing of the purchase of the continuing care retirement community, have been substantially satisfied.
(c) If the funds in an escrow account under this section and any interest earned thereon are not released within the time provided by this section or by rules adopted by the commissioner, then the funds shall be returned by the escrow agent to the persons who made the payment to the provider.
(d) An entrance fee held in escrow shall be returned by the escrow agent to the person who paid the fee in the following instances:
(1) At the election of the person who paid the fee, at any time before the fee is released to the provider under subsection (b).
(2) Upon receipt by the escrow agent of notice from the provider that the person is entitled to a refund of the entrance fee.
(e) This section does not require a provider to place a nonrefundable application fee charged to prospective residents in escrow.
(f) A provider is not required to place a refurbishment fee of a prospective resident in escrow if a continuing care agreement provides that the prospective resident:
(1) will occupy the living unit within sixty (60) days after the refurbishment fee is paid; and
(2) will receive a refund of any portion of the refurbishment fee not expended for refurbishment if the continuing care agreement is cancelled before occupancy.
As added by Acts 1982, P.L.145, SEC.1. Amended by P.L.234-1985, SEC.3; P.L.153-2009, SEC.10.