                                 CODE OF VIRGINIA

ESCROW OF ENTRANCE FEE TO CONTINUING CARE PROVIDERS AND OTHERS (§ 38.2-4904.1)

A. A provider shall maintain in escrow with a bank or trust company, or other
escrow agent approved by the Commission, all entrance fees or portions thereof
in excess of $1,000 per person received by the provider prior to the date the
resident is permitted to occupy a unit in the facility. Funds or assets
deposited therein shall be kept and maintained in an account separate and apart
from the provider&#8217;s business accounts. For the purposes of this section
only, the term &#8220;entrance fee&#8221; shall include within its meaning any
advanced payment or series of advanced payments totaling $5,000 or more and the
term &#8220;provider&#8221; shall include any person or entity that would be
included in the definition thereof in &#xA7; 38.2-4900 if such fee of $5,000 or
more constituted an entrance fee for the purposes of the definition of
&#8220;continuing care&#8221; in &#xA7; 38.2-4900.

B. All funds or assets deposited in the escrow account shall remain the property
of the prospective resident until released to the provider in accordance with
this section. The funds or assets shall not be subject to any liens, judgments,
garnishments or creditor&#8217;s claims against the provider or facility. The
escrow agreement may provide that charges by the escrow agent may be deducted
from the funds or assets if such provision is disclosed in the disclosure
statement.

C. All funds or assets deposited in escrow pursuant to this section shall be
released to the provider when the provider presents to the escrow agent evidence
that a unit has been occupied by the resident or a unit of the type reserved is
available for immediate occupancy by the resident or prospective resident on
whose behalf the fee was received.

D. Notwithstanding any other provision of this section, all funds or assets
deposited in escrow pursuant to this section shall be released according to the
terms of the escrow agreement to the prospective resident from whom it was
received (i) if such funds or assets have not been released within three years
after placement in escrow or within three years after construction has started,
whichever is later (but in any event within six years after placement in escrow
unless specifically approved by the Commission), or within such longer period as
determined appropriate by the Commission in writing, (ii) if the prospective
resident dies before occupying a unit, (iii) if the construction of a facility,
not yet operating is stopped indefinitely before the facility is completed or
(iv) upon rescission of the contract pursuant to provisions in the contract or
in this chapter. If construction of the unit to be reserved has not started
within three years after the deposit of funds or assets into an escrow account,
the prospective resident may require the return of such funds or assets unless
the Commission determines that construction will begin in a reasonable period of
time and the extension of such three-year period is appropriate. However, funds
or assets subject to release under item (i) of this subsection or under
subsection C of this section may be held in escrow for an additional period at
the mutual consent of the provider and the prospective resident; however, the
prospective resident may consent to such additional period only after his
deposit has been held in escrow for at least two years. Item (i) above shall not
apply if fees are refundable within thirty days of request for refund.

E. Unless otherwise specified in the escrow agreement, funds or assets in an
escrow account pursuant to this section may be held in the form received or if
invested shall be invested in instruments authorized for the investment of
public funds as set forth in Chapter 45 (&#xA7; 2.2-4500 et seq.) of Title 2.2
and not in default as to principal or interest.

F. This section shall not apply to entrance fees for initial occupancy of units
under construction on June 30, 1986.

G. This section shall not apply to application or reservation fees whether or
not such fees are considered to be a portion of the entrance fee, provided such
application or reservation fees are not in excess of $1,000 per person.

HISTORY: 1986, c. 598, § 38.1-959.1.