New Jersey § 26:2h-14

§ 26:2h-14.

If a residential health care facility requires a security deposit advanced prior to

the admission of a person to the residential health care facility, the money or other

form of security, until repaid or applied to payments in accordance with the terms

of the contract or agreement, including the resident's portion of the interest or

earnings accumulated thereon as hereinafter provided, shall continue to be the property

of the resident and shall be held in trust by the residential health care facility

and shall not be mingled with the personal property or become an asset of the residential

health care facility, except as provided in section 2 of this act. 1 a. The residential health care facility shall: (1) invest that money in shares of

an insured money market fund established by an investment company based in this State

and registered under the “Investment Company Act of 1940,” 54 Stat. 789 ( 15 U.S.C. s. 80a-1 et seq. ) whose shares are registered under the “Securities Act of 1933,” 48 Stat. 74 ( 15 U.S.C. s. 77a et seq. ) and the only investments of which fund are instruments maturing in one year or less,

or (2) deposit that money in a State or federally chartered bank, savings bank or

savings and loan association in this State insured by an agency of the federal government

in an account bearing a variable rate of interest, which shall be established at least

quarterly, which is similar to the average rate of interest on active interest-bearing

money market transaction accounts paid by the bank or association, or equal to similar

accounts of an investment company described in paragraph (1) of this subsection, less

an amount not to exceed 1% per annum of the amount so invested or deposited for the

costs of servicing and processing the accounts. b. Immediately after the security money is invested, the residential health care facility

shall notify the resident in writing of the name and address of the investment company,

State or federally chartered bank, savings bank or savings and loan association in

which the deposit or investment of security money is made, and the amount of the deposit. c. All of the money so deposited or advanced may be deposited or invested by the residential

health care facility in one interest-bearing or dividend yielding account as long

as the residential health care facility complies with all the other requirements of

this act. d. The residential health care facility is entitled to receive as administration expenses,

a sum equivalent to 1% per annum thereon or 12.5% of the aggregate interest yield

on the security deposit, whichever is greater, less the amount of any service fee

charged by an investment company, a State or federally chartered bank, savings bank

or savings and loan association for money deposited pursuant to this section, which

is in lieu of all other administrative and custodial expenses. The balance of the interest or earnings paid thereon by the investment company,

State or federally chartered bank, savings bank or savings and loan association shall

belong to the resident and shall be permitted to compound to the benefit of the resident,

or be paid to the resident in cash, or be credited toward the payments due on the

anniversary of the resident's admission to the residential health care facility in

accordance with the terms of the contract or agreement. e. If the residential health care facility fails to notify the resident of the name

and address of the investment company, State or federally chartered bank, savings

bank or savings and loan association in which the deposit or investment of the security

is made, and the amount thereof, within 30 days after receipt of the money from the

resident, the resident may give written notice to the residential health care facility

that the security money shall be applied on account of payments due or to become due

from the resident, and thereafter the resident shall be without obligation to make

any further security deposit and the residential health care facility shall not be

entitled to make further demand for a security deposit. f. Within 60 days after the person is no longer a resident of the residential health

care facility, the residential health care facility shall return to the former resident

or, if appropriate, to the resident's estate, by personal delivery or by registered

or certified mail the sum so deposited plus the former resident's portion of the interest

or earnings accumulated thereon, less any charges expended in accordance with the

terms of a contract or agreement. The interest or earnings and any such deductions shall be itemized and the resident

or, if appropriate, the resident's estate, notified thereof by personal delivery or

by registered or certified mail. g. The Commissioner of Banking may promulgate rules and regulations with respect to

the establishment of the method of computing the interest due to either the residential

health care facility or to the resident pursuant to the provisions of this act in

accordance with the “Administrative Procedure Act,” P.L.1968, c. 410 ( C. 52:14B-1 et seq. ) if the money is deposited in an account or in shares of an investment company upon

which the interest varies on a periodic basis. 1

N.J.S.A. § 26:2H-14.6.