§ 4622. 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
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 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 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 bank, New York savings and loan association or
New York 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 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 portions 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
ten of this article; provided that the operator may retain such funds
and shall not be required to deposit them into 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 cancelled. 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 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 continuing care retirement contract and may be cancelled 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 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 enters into a continuing
care retirement 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; and

k. a statement that the effective period of the agreement shall not
exceed the duration of the commissioner's authorization.

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 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.