(a) In order to approve a priority reservation application submitted pursuant to section 903.3 of this Part, the commissioner shall have determined that the prospective applicant or applicant or in the case of an existing life care community operating under a certificate of the authority, the operator:

1. (1) has complied with all applicable requirements of this Part;
2. (2) has demonstrated the capability of conducting an analysis of the market demand for the proposed life care community, if applicable; and
3. (3) can be expected to meet its obligations pursuant to this Part and in accordance with any priority reservation agreements entered into with prospective residents.

(b) If the commissioner approves the priority reservation application, the commissioner shall issue a written authorization to the proposed applicant, applicant or operator authorizing that entity to:

1. (1) construct or otherwise maintain a sales office;
2. (2) construct model units;
3. (3) enter into cancelable priority reservation agreements with prospective residents;
4. (4) solicit, collect and receive priority reservation fees for direct deposit to an escrow account pursuant to section 903.5 of this Part; and
5. (5) collect priority reservation application fees not to exceed $250.

(c) The commissioner's authorization shall remain in effect as follows:

1. (1) in the case of a proposed community, for a period not to exceed 18 months from the commencement date specifically stated in the commissioner's authorization, subject to the following conditions:

   1. (i) The commissioner may rescind such authorization, including any extension thereof, at any time for just cause, including any material misstatement of fact or misrepresentation in any of the priority reservation application materials or any materials subsequently disseminated.
   2. (ii) The commissioner may extend the authorization upon approval of a written request for such extension. The duration of such extension shall be specified in the commissioner's written approval.
   3. (iii) The commissioner's authorization shall be automatically extended upon submission by the proposed applicant of a certificate of authority application pursuant to section 900.3 of this Title unless such authorization has already expired, in which case an application must be resubmitted. The authorization shall remain in effect as long as the certificate of authority application remains active.
   4. (iv) The commissioner's authorization shall be automatically extended upon issuance of a certificate of authority to the applicant pursuant to section 900.7 of this Title unless such authorization has already expired in which case an application must be resubmitted. The authorization shall remain in effect as long as the certificate of authority remains active.
2. (2) In the case of an existing community operating under a certificate of authority, the commissioner's authorization shall remain in effect as long as the operator's certificate of authority remains in effect provided that the commissioner may rescind such authorization at any time for just cause, including any material misstatement of fact or misrepresentation in any of the priority reservation application materials or any materials subsequently disseminated.

(d) If the commissioner proposes to reject the priority reservation application, the priority reservation applicant shall be notified in writing of the proposed rejection including the reason(s) for such action.

1. (1) The priority reservation applicant shall have 30 days from receipt of such notice to request a reconsideration by the Life Care Community Council.
2. (2) The Life Care Community Council shall make a final determination regarding the application within 90 days of receipt of the request for reconsideration.

(e) If the commissioner proposes to rescind an existing authorization, the approved applicant shall be notified in writing of the proposed rescission including the reason(s) for such action.

1. (1) The approved applicant shall have 30 days from receipt of such notice to request a reconsideration by the Life Care Community Council.
2. (2) The Life Care Community Council shall make a final determination regarding the proposed rescission within 90 days of receipt of the request for reconsideration.
3. (3) The approved applicant shall not enter into any additional priority reservation agreements from the date of receipt of notification of the proposed rescission unless the council overturns the commissioner's proposed rescission.

(f) The following notices regarding the commissioner's authorization shall be provided in writing to all parties who have entered into priority reservation agreements.

1. (1) In the case of a proposed community:

   1. (i) notice by the prospective applicant or applicant of the commissioner's rescission of authorization to enter into priority reservation agreements and the prospective resident's right to a refund pursuant to section 903.5(g) of this Part. If a reconsideration has been requested pursuant to section 903.4(e) of this Part, notice pursuant to this section shall be required only if the rescission of authorization is upheld by the Life Care Community Council;
   2. (ii) notice by the prospective applicant or applicant of the commissioner's extension of authorization to enter into priority reservation agreements including the new authorization expiration date and reason for the extension; and
   3. (iii) notice by an approved applicant upon issuance of a certificate of authority pursuant to section 900.7 of this Title that the person who paid the reservation fee has the option on a priority basis to apply the reservation fee to an actual entrance fee or deposit on an entrance fee, pursuant to section 903.5(f) of this Part.
2. (2) In the case of an existing community operating under a certificate of authority, notice by the operator of the commissioner's rescission of authorization to enter into cancelable priority reservation agreements and the prospective resident's right to a refund pursuant to section 903.5(g) of this Part. If a reconsideration has been requested pursuant to section 903.4(e) of this Part, notice pursuant to this section shall be required only if the rescission of authorization is upheld by the Life Care Community Council.

(g) The commissioner shall provide written notice to the escrow agent of the commissioner's rescission of authorization to enter into priority reservation agreements including instructions to release all reservation fees held in escrow to the parties who paid the fees.

1. (1) An entity whose authorization pursuant to this section has expired shall require a new approval to enter into priority reservation agreements and to solicit, collect and receive priority reservation application fees and priority reservation fees in the same manner as the original application provided that the commissioner may waive any requirement to submit information deemed not relevant to such application.
2. (2) Where there has been any change in the legal entity which has received the commissioner's authorization pursuant to this section, the entity shall require a new approval to enter into priority reservation agreements and to solicit, collect and receive priority reservation application fees and priority reservation fees in the same manner as the original application provided that the commissioner may waive any requirement to submit information deemed not relevant to such change.

(h)