52:27D-340 - Escrow account - New Jersey Statutes

52:27D-340.  Escrow account
    a.   The commissioner may require a provider to establish and maintain in escrow, on a current basis with a bank, trust company or other escrow agent approved by the department, a portion of all entrance fees received by the provider in an aggregate amount not to exceed the total of all principal and interest payments due during the next 12 months on account of any first mortgage loan or other long-term financing of the facility.  The provider may invest the funds in the escrow account, with the earnings thereon payable to the provider.  If the provider so requests in writing, the escrow agent shall release up to 1/12 of the original principal balance of the escrow account. The escrow agent shall not so release funds more than once during any calendar month, and then only after the escrow agent has given written notice to the commissioner at least 10 days prior to the release. The amount of this escrow fund shall be included in satisfying the reserves required pursuant to section 10 of this act.

   b.   This section is applicable only when the commissioner has cause to believe that additional protection is necessary to secure the provider's performance of the terms of all resident agreements.

   L. 1986, c. 103, s. 11.