Lien held by the commissioner in favor of a resident or a group of residents.
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(1) To secure the obligations of the provider to a resident or a group of residents under a continuing care contract, the commissioner holds a lien in favor of the resident or group of residents that attaches on the day the notice described in Subsection (3) is recorded as provided in Subsection (4).
(2) A lien described in Subsection (1) covers the real and personal property of the provider that is used in connection with the facility.
(3) The provider shall prepare, for the county where the facility is located, a written notice, sworn to by each person with an interest in the facility, that contains:
(a) the name of any provider and ground lessor;
(b) a legal description of the provider's real or personal property that is used in connection with the facility; and
(c) a statement that the real or personal property used in connection with the facility is subject to this chapter and to the lien imposed by this section, except that the interest of a ground lessor in the land and infrastructure improvements to the land on which the facility is located is not subject to the lien imposed by this section.
(4) The provider shall record the notice described in Subsection (3) in the real property records of each county where the provider has real property on or before the date the provider first executes a continuing care contract for the facility.
(5) Except as provided in Subsection (6), the lien described in Subsection (1) is subordinate to any lien on the property of the provider.
(6) The amount of any lien on the provider's property that is superior to a lien described in Subsection (1) is limited to the portion of the funds secured by the lien that the provider uses to:
(a) construct, acquire, replace, or improve a facility;
(b) refinance the portion of a loan used to construct, acquire, replace, or improve a facility;
(c) pay, for a loan related to the facility, a reasonable loan fee, a loan expense, or loan interest;
(d) refund an entrance fee to a facility resident;
(e) pay reasonable operating costs of the facility; or
(f) pay an amount for a purpose determined by the commissioner by rule made in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
(7) If a lien on the property of the provider is superior to a lien described in Subsection (1), a provider may only use an entrance fee to:
(a) reduce a debt secured by a superior lien;
(b) construct, acquire, replace, or improve a facility;
(c) fund reserves for the provider's actuarial debt under continuing care contracts for a facility;
(d) refund an entrance fee of a resident of a facility;
(e) pay a facility resident's debt to the provider for a recurring fee due under the resident's continuing care contract; or
(f) pay an amount for a purpose approved by the commissioner.
(8) The commissioner may judicially foreclose a lien described in Subsection (1) if property subject to the lien is liquidated or the provider is insolvent or bankrupt.
(9) The commissioner shall use the proceeds from a lien foreclosed under Subsection (8) to satisfy the provider's obligations under any continuing care contract in effect on the day the commissioner forecloses the lien.