Minnesota Legislature
Office of the Revisor of Statutes
2006 Minnesota Statutes
This is an historical version of this statute chapter. Also view the most recent published version.
80D.06 RESERVE FUND ESCROW.
Subdivision 1. Escrow account; release of funds. At the time a facility is first occupied by
any resident and thereafter, the provider shall establish and maintain on a current basis, in escrow
with a bank or trust company having its principal place of business in this state, as an escrow
agent, a portion of all entrance fees received by the provider in an aggregate amount of up to 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 funds in the escrow account may
be invested with the earnings thereon payable to the provider. If the provider requests and sets
forth its reasons in writing, the escrow agent shall release up to 1/12 of the original principal
balance of the escrow account. A release of funds shall not be made more than once during any
calendar month, and then only after the escrow agent has given written notice of the release and
the reasons therefor to any resident or association of residents, or the legal representative of a
resident or association of residents, that has requested it at least ten days prior to the release.
Any person or affiliate of any person that controls any part of the reserve escrow fund
comprised in part or totally of funds removed from the provider's resources, is liable for the debts
of the provider up to the amount of the provider's contribution to the fund plus any prorated
interest the fund may earn.
Subd. 2. Facilities established prior to 1975. In those instances where a provider has been
offering continuing care in a facility since prior to January 1, 1975, the following shall apply. The
provider shall establish a reserve escrow fund and shall contribute to it 15 percent of each new
entrance fee received by the provider after December 31, 1981. The funds thereby received shall
be permitted to accumulate until there is in the reserve fund an amount equal to 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 obligation of the facility.
History: 1980 c 516 s 8; 1981 c 135 s 7
Subdivision 1. Escrow account; release of funds. At the time a facility is first occupied by
any resident and thereafter, the provider shall establish and maintain on a current basis, in escrow
with a bank or trust company having its principal place of business in this state, as an escrow
agent, a portion of all entrance fees received by the provider in an aggregate amount of up to 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 funds in the escrow account may
be invested with the earnings thereon payable to the provider. If the provider requests and sets
forth its reasons in writing, the escrow agent shall release up to 1/12 of the original principal
balance of the escrow account. A release of funds shall not be made more than once during any
calendar month, and then only after the escrow agent has given written notice of the release and
the reasons therefor to any resident or association of residents, or the legal representative of a
resident or association of residents, that has requested it at least ten days prior to the release.
Any person or affiliate of any person that controls any part of the reserve escrow fund
comprised in part or totally of funds removed from the provider's resources, is liable for the debts
of the provider up to the amount of the provider's contribution to the fund plus any prorated
interest the fund may earn.
Subd. 2. Facilities established prior to 1975. In those instances where a provider has been
offering continuing care in a facility since prior to January 1, 1975, the following shall apply. The
provider shall establish a reserve escrow fund and shall contribute to it 15 percent of each new
entrance fee received by the provider after December 31, 1981. The funds thereby received shall
be permitted to accumulate until there is in the reserve fund an amount equal to 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 obligation of the facility.
History: 1980 c 516 s 8; 1981 c 135 s 7
Official Publication of the State of Minnesota
Revisor of Statutes