(a) In order to advertise and collect refundable entrance fees and deposits subsequent to the issuance of a certificate of authority but prior to substantial completion of construction or purchase of the community or approved phase of the community, issuance of an occupancy permit and the availability of the unit for occupancy, the operator shall:

1. (1) establish a federally insured interest-bearing account with a New York bank, New York savings and loan association or New York trust company for the deposit of such fees and deposits; and

2. (2) enter into an escrow agreement with the bank, savings and loan association or trust company which shall state that:

   1. (i) the purpose of the agreement is for the protection of the prospective resident; and
   2. (ii) the escrow agent shall release all or portions of the funds on deposit including interest accrued or earned from investment of funds at prevailing rates to the operator or resident as directed pursuant to subdivisions (e)-(g) of this section or upon order of a court of competent jurisdiction.

(e) The escrowed funds including earned interest shall be released by the escrow agent to the operator upon order of a court of competent jurisdiction or upon notice by the commissioner. Such notice shall be provided upon presentation to the commissioner of evidence of compliance with the following conditions:

1. (1) substantial completion of the construction or purchase of the community or phase of the community if the community was approved by the Life Care Community Council to be established in phases;
2. (2) issuance of an occupancy permit covering all of the living units in the community or in an approved phase of the community by the local government having authority to issue such permits; and
3. (3) availability for occupancy of the specific living units for which deposits have been collected.