Georgia Code § 33-45-8 - Portion of Entrance Fee Paid by Resident to Be Held in Escrow Account

(a) Any portion of the entrance fee paid by a resident to the provider shall be held in an escrow account. The escrow agreement shall state that its purpose is to protect the resident or the prospective resident. Escrow funds may be released to the resident, prospective resident, or provider in accordance with the provisions of this Code section.

(b) Entrance fees placed in escrow may be released in accordance with the provisions of this subsection as follows:

(1) Escrow funds may be released to the resident during or following the seven-day right of rescission period required in subsection (b) of Code Section 33-45-7. Such release shall be in accordance with the provisions of that Code section;

(2) When a continuing care agreement between a resident and provider is nonrefundable, escrow funds or a portion thereof may be released to the resident if the resident exercises his or her right to receive a refund as provided in subparagraph (a)(6)(A) of Code Section 33-45-7. The amount and timing of the release of funds to the resident shall be in compliance with the provisions of that subparagraph;

(3) When the continuing care agreement between a provider and resident or prospective resident is refundable, escrow funds may be released by the provider to such resident or prospective resident. The amount and timing of the release of funds to the resident shall be in compliance with the provisions of subparagraph (a)(6)(B) of Code Section 33-45-7;

(4) For a facility under construction or in development, escrow funds may be released to the provider when:

(A) The provider has presold at least 50 percent of the residential units, having received a minimum 10 percent deposit on each of the presold residential units;

(B) The provider has received a commitment for any first mortgage loan or other financing, and any conditions of the commitment prior to disbursement of funds thereunder have been substantially satisfied; and

(C) Aggregate entrance fees received or receivable by the provider pursuant to binding continuing care agreements, plus the anticipated proceeds of any first mortgage loan or other financing commitment, are equal to not less than 90 percent of the aggregate cost of constructing or purchasing, equipping, and furnishing the facility, and not less than 90 percent of the funds estimated in the statement of cash flows submitted by the provider as that part of the disclosure statement required by this chapter, to be necessary to fund start-up losses and assure full performance of the obligations of the provider pursuant to continuing care contracts shall be on hand;

(5) At the time a new project is financed or after the opening of a facility by a provider, escrow funds may be released to the provider, so long as the provider is in compliance with the financial reserves required by Code Section 33-45-11 and sufficient funds are maintained in escrow to meet the provider's obligations under subparagraphs (1) and (2) of this subsection; or

(6) Escrow funds may be released to the provider under terms submitted to and approved by the Commissioner.

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Last modified: October 14, 2016