A. Any deposits or entrance fees paid by or for a resident shall be held in trust for the benefit of the resident in a federally insured New Mexico bank until the resident has occupied the resident's unit or the resident's contract cancellation period has ended, whichever occurs later.

B. In addition to the amounts held in trust for specific residents under Subsection A of this section, a community that provides a type A agreement shall maintain at all times liquid reserves equal to the principal and interest payments due for a twelve-month period on all accounts of any mortgage loan and other long-term debt, as well as three months' worth of net operating expenses.

C. A community that provides a type A or type B agreement shall keep the funds maintained under Subsection A of this section in federally insured bank accounts that are separate from the community's operating accounts.

D. For communities that provide type B agreements, reserves shall be calculated on a prorated basis for residents who fall under type B agreements.

History: Laws 1985, ch. 102, § 6; 2005, ch. 215, § 4; 2010, ch. 88, § 6.

The 2010 amendment, effective May 19, 2010, in Subsection A, at the end of the sentence, added "whichever occurs later"; and added Subsections B, C and D.

The 2005 amendment, effective June 17, 2005, deleted the former requirements that payments be held in trust in a cash escrow account in a New Mexico trust company on a trust department of a federally insured New Mexico bank and that after the resident has notified the trustee that he has occupied his unit, the money, including interest, be released to the provider; and added the provision that the trust be held for the benefit of the resident until the resident's contract cancellation period has ended.