CA Health & Safety Code Section 1780.2

(a)

A deposit may be paid in one or several payments, at or after the time the parties enter into the deposit agreement. A deposit shall be paid by cash or cash equivalent, jointly payable to the applicant and the escrow agent or depository. Possession and control of any deposit agreement shall be transferred to the escrow agent at the time the deposit is paid.

(b)

A processing fee may be added to the deposit.

(1)

The processing fee shall not exceed 1 percent of the amount of the average entrance fee or five hundred dollars ($500), whichever is greater.

(2)

A nonrefundable processing fee may be paid directly to the applicant without being placed in the deposit escrow account.

(c)

Payments made by a depositor for upgrades or modifications to the living unit shall not be placed in escrow with deposits. The applicant shall provide written refund policies to the depositor before accepting any payments for modifications or upgrades.

(d)

The applicant shall furnish to the department within the first 10 days of each calendar month a list of all residents who have made payments for modifications or upgrades, the amounts each resident has paid, the date of each payment, and the unit to be modified or upgraded for each resident.

(e)

All payments for modifications or upgrades shall be refunded to the depositor with interest if the applicant does not receive a certificate of authority for the proposed continuing care retirement community or expansion.

(f)

The department may record a lien against the continuing care retirement community property, or any portion of the continuing care retirement community property, to secure the applicant’s obligations to refund the depositor’s payments made for modifications or upgrades. Any lien created under this section shall be to protect depositors and shall be governed by Section 1793.15.