We discussed in our last entry that a CCRC is an acronym for a Continuing Care Retirement Community. It is a facility that allows residents to move from independent living to assisted living to skilled nursing care as their mental and physical states change.
The issue we will discuss today concerns the timetable for the return of the buy-in price when the resident dies or moves from the facility.
Many CCRCs return up to 90% of the buy-in price within 30-60 days of the resident’s death or transfer to another location. This is the optimum mode of distribution for the resident or families of the resident .
However, other CCRCs state in their agreements that the buy-in will be distributed “After the resident’s premises has been sold.” Of course, one can quickly understand why this is not the preferable way of distributing the monies. What if the market for the premises is soft because of a glut of like quarters in the facility or that potential residents can not sell their own homes at a price that would allow them in to fund their own entry into the facility? Would it be necessary that the families of the deceased resident wait an inordinate amount of time to receive the monies?
Again, the courts have been unwilling to force the facilities to refund the monies before the premises is sold unless possibly where it is demonstrated that the facility is showing only newer premises to potential residents that are not subject to a refund agreement. In other words, the facility is not acting in good faith to sell the units where a refund is due.
In one of client’s situation, the last spouse died during the housing downturn in 2009 and owned a unit at a local CCRC. the family had been waiting for more than 2 years to receive their portion of the buy-in. Thinking that the facility was only showing newer units, we sent in a “secret shopper” that was looking for a unit similar to my clients. The salesperson for the facility did show our client’s premises and thus, we were unable to claim that they were acting in bad faith.
Finally, it I wise to have an elder law attorney review these agreements to point out among other issues when and how much of the buy-in monies the CCRC must pay.
William S. Wilson concentrates his practice in elder law and can be reached at 708-482-7090 or at firstname.lastname@example.org.