(a) At the time of, orprior to, the execution of a contract to provide continuing care, or at thetime of, or prior to, the transfer of any money or other property to a providerby or on behalf of a prospective resident, whichever occurs first, the providershall deliver a current disclosure statement to the person with whom thecontract is to be entered into, the text of which shall contain at least:
(1) The name andbusiness address of the provider and a statement of whether the provider is apartnership, corporation, or other type of legal entity.
(2) The names andbusiness addresses of the officers, directors, trustees, managing or generalpartners, any person having a ten percent (10%) or greater equity or beneficialinterest in the provider, and any person who will be managing the facility on aday‑to‑day basis, and a description of these persons' interests inor occupations with the provider.
(3) The followinginformation on all persons named in response to subdivision (2) of thissection:
a. A description of thebusiness experience of this person, if any, in the operation or management ofsimilar facilities;
b. The name and addressof any professional service firm, association, trust, partnership, orcorporation in which this person has, or which has in this person, a tenpercent (10%) or greater interest and which it is presently intended shallcurrently or in the future provide goods, leases, or services to the facility,or to residents of the facility, of an aggregate value of five hundred dollars($500.00) or more within any year, including a description of the goods,leases, or services and the probable or anticipated cost thereof to thefacility, provider, or residents or a statement that this cost cannot presentlybe estimated; and
c. A description of anymatter in which the person (i) has been convicted of a felony or pleaded nolocontendere to a felony charge, or been held liable or enjoined in a civilaction by final judgment, if the felony or civil action involved fraud,embezzlement, fraudulent conversion, or misappropriation of property; or (ii)is subject to a currently effective injunctive or restrictive court order, orwithin the past five years, had any State or federal license or permitsuspended or revoked as a result of an action brought by a governmental agencyor department, if the order or action arose out of or related to businessactivity of health care, including actions affecting a license to operate afoster care facility, nursing home, retirement home, home for aged, or facilitysubject to this Article or a similar law in another state.
(4) A statement as towhether the provider is, or is not affiliated with, a religious, charitable, orother nonprofit organization, the extent of the affiliation, if any, the extentto which the affiliate organization will be responsible for the financial andcontract obligations of the provider, and the provision of the Federal InternalRevenue Code, if any, under which the provider or affiliate is exempt from thepayment of income tax.
(5) The location anddescription of the physical property or properties of the facility, existing orproposed, and to the extent proposed, the estimated completion date or dates,whether construction has begun, and the contingencies subject to whichconstruction may be deferred.
(6) The servicesprovided or proposed to be provided pursuant to contracts for continuing careat the facility, including the extent to which medical care is furnished, and aclear statement of which services are included for specified basic fees forcontinuing care and which services are made available at or by the facility atextra charge.
(7) A description of allfees required of residents, including the entrance fee and periodic charges, ifany. The description shall include:
a. A statement of thefees that will be charged if the resident marries while at the facility, and astatement of the terms concerning the entry of a spouse to the facility and theconsequences if the spouse does not meet the requirements for entry;
b. The circumstancesunder which the resident will be permitted to remain in the facility in theevent of possible financial difficulties of the resident;
c. The terms andconditions under which a contract for continuing care at the facility may becanceled by the provider or by the resident, and the conditions, if any, underwhich all or any portion of the entrance fee or any other fee will be refundedin the event of cancellation of the contract by the provider or by the residentor in the event of the death of the resident prior to or following occupancy ofa living unit;
d. The conditions underwhich a living unit occupied by a resident may be made available by theprovider to a different or new resident other than on the death of the priorresident; and
e. The manner by whichthe provider may adjust periodic charges or other recurring fees and thelimitations on these adjustments, if any; and, if the facility is already inoperation, or if the provider or manager operates one or more similarcontinuing care locations within this State, tables shall be included showingthe frequency and average dollar amount of each increase in periodic charges,or other recurring fees at each facility or location for the previous fiveyears, or such shorter period as the facility or location may have beenoperated by the provider or manager.
(8) The health andfinancial condition required for an individual to be accepted as a resident andto continue as a resident once accepted, including the effect of any change inthe health or financial condition of a person between the date of entering intoa contract for continuing care and the date of initial occupancy of a livingunit by that person.
(9) The provisions thathave been made or will be made, including, but not limited to, the requirementsof G.S. 58‑64‑33 and G.S. 58‑64‑35, to provide reservefunding or security to enable the provider to perform its obligations fullyunder contracts to provide continuing care at the facility, including theestablishment of escrow accounts, trusts, or reserve funds, together with themanner in which these funds will be invested, and the names and experience ofany individuals in the direct employment of the provider who will make theinvestment decisions.
(10) Financial statementsof the provider certified to by an independent public accountant as of the endof the most recent fiscal year or such shorter period of time as the providershall have been in existence. If the provider's fiscal year ended more than 120days prior to the date the disclosure statement is recorded, interim financialstatements as of a date not more than 90 days prior to the date of recordingthe statement shall also be included, but need not be certified to by anindependent certified public accountant.
(11) In the event theprovider has had an actuarial report prepared within the prior two years, thesummary of a report of an actuary that estimates the capacity of the providerto meet its contractual obligations to the residents.
(12) Forecasted financialstatements for the provider of the next five years, including a balance sheet,a statement of operations, a statement of cash flows, and a statement detailingall significant assumptions, compiled by an independent certified publicaccountant. Reporting routine, categories, and structure may be further definedby regulations or forms adopted by the Commissioner.
(13) The estimated numberof residents of the facility to be provided services by the provider pursuantto the contract for continuing care.
a. The summary of thereport of an actuary estimating the capacity of the provider to meet itscontractual obligation to the residents;
b. Narrative disclosuredetailing all significant assumptions used in the preparation of the forecastedfinancial statements, including:
1. Details of any long‑termfinancing for the purchase or construction of the facility including interestrate, repayment terms, loan covenants, and assets pledged;
2. Details of any otherfunding sources that the provider anticipates using to fund any start‑uplosses or to provide reserve funds to assure full performance of theobligations of the provider under contracts for the provision of continuingcare;
3. The total lifeoccupancy fees to be received from or on behalf of, residents at, or prior to,commencement of operations along with anticipated accounting methods used inthe recognition of revenues from and expected refunds of life occupancy fees;
4. A description of anyequity capital to be received by the facility;
5. The cost of theacquisition of the facility or, if the facility is to be constructed, theestimated cost of the acquisition of the land and construction cost of thefacility;
6. Related costs, suchas financing any development costs that the provider expects to incur or becomeobligated for prior to the commencement of operations;
7. The marketing andresident acquisition costs to be incurred prior to commencement of operations;and
8. A description of theassumptions used for calculating the estimated occupancy rate of the facilityand the effect on the income of the facility of government subsidies for healthcare services.
(15) Any other materialinformation concerning the facility or the provider which, if omitted, wouldlead a reasonable person not to enter into this contract.
(b) The cover page ofthe disclosure statement shall state, in a prominent location and in boldfacetype, the date of the disclosure statement, the last date through which thatdisclosure statement may be delivered if not earlier revised, and that thedelivery of the disclosure statement to a contracting party before theexecution of a contract for the provision of continuing care is required bythis Article but that the disclosure statement has not been reviewed orapproved by any government agency or representative to ensure accuracy orcompleteness of the information set out.
(c) A copy of thestandard form of contract for continuing care used by the provider shall be attachedto each disclosure statement.
(d) The Commissioner,by rules adopted by him under this Article, may prescribe a standardized formatfor the disclosure statement required by this section.
(e) The disclosurestatement shall be in plain English and in language understandable by alayperson and combine simplicity and accuracy to fully advise residents of theitems required by this section.
(f) The Department mayrequire a provider to alter or amend its disclosure statement in order toprovide full and fair disclosure to prospective residents. The Department mayalso require the revision of a disclosure statement which it finds to beunnecessarily complex, confusing or illegible. (1989, c. 758, s. 1; 1991, c. 196, s. 3; c. 720, s.89; 1993, c. 452, s. 63; 2001‑223, s. 22.2; 2003‑193, ss. 3, 4, 5,6.)
(a) At the time of, orprior to, the execution of a contract to provide continuing care, or at thetime of, or prior to, the transfer of any money or other property to a providerby or on behalf of a prospective resident, whichever occurs first, the providershall deliver a current disclosure statement to the person with whom thecontract is to be entered into, the text of which shall contain at least:
(1) The name andbusiness address of the provider and a statement of whether the provider is apartnership, corporation, or other type of legal entity.
(2) The names andbusiness addresses of the officers, directors, trustees, managing or generalpartners, any person having a ten percent (10%) or greater equity or beneficialinterest in the provider, and any person who will be managing the facility on aday‑to‑day basis, and a description of these persons' interests inor occupations with the provider.
(3) The followinginformation on all persons named in response to subdivision (2) of thissection:
a. A description of thebusiness experience of this person, if any, in the operation or management ofsimilar facilities;
b. The name and addressof any professional service firm, association, trust, partnership, orcorporation in which this person has, or which has in this person, a tenpercent (10%) or greater interest and which it is presently intended shallcurrently or in the future provide goods, leases, or services to the facility,or to residents of the facility, of an aggregate value of five hundred dollars($500.00) or more within any year, including a description of the goods,leases, or services and the probable or anticipated cost thereof to thefacility, provider, or residents or a statement that this cost cannot presentlybe estimated; and
c. A description of anymatter in which the person (i) has been convicted of a felony or pleaded nolocontendere to a felony charge, or been held liable or enjoined in a civilaction by final judgment, if the felony or civil action involved fraud,embezzlement, fraudulent conversion, or misappropriation of property; or (ii)is subject to a currently effective injunctive or restrictive court order, orwithin the past five years, had any State or federal license or permitsuspended or revoked as a result of an action brought by a governmental agencyor department, if the order or action arose out of or related to businessactivity of health care, including actions affecting a license to operate afoster care facility, nursing home, retirement home, home for aged, or facilitysubject to this Article or a similar law in another state.
(4) A statement as towhether the provider is, or is not affiliated with, a religious, charitable, orother nonprofit organization, the extent of the affiliation, if any, the extentto which the affiliate organization will be responsible for the financial andcontract obligations of the provider, and the provision of the Federal InternalRevenue Code, if any, under which the provider or affiliate is exempt from thepayment of income tax.
(5) The location anddescription of the physical property or properties of the facility, existing orproposed, and to the extent proposed, the estimated completion date or dates,whether construction has begun, and the contingencies subject to whichconstruction may be deferred.
(6) The servicesprovided or proposed to be provided pursuant to contracts for continuing careat the facility, including the extent to which medical care is furnished, and aclear statement of which services are included for specified basic fees forcontinuing care and which services are made available at or by the facility atextra charge.
(7) A description of allfees required of residents, including the entrance fee and periodic charges, ifany. The description shall include:
a. A statement of thefees that will be charged if the resident marries while at the facility, and astatement of the terms concerning the entry of a spouse to the facility and theconsequences if the spouse does not meet the requirements for entry;
b. The circumstancesunder which the resident will be permitted to remain in the facility in theevent of possible financial difficulties of the resident;
c. The terms andconditions under which a contract for continuing care at the facility may becanceled by the provider or by the resident, and the conditions, if any, underwhich all or any portion of the entrance fee or any other fee will be refundedin the event of cancellation of the contract by the provider or by the residentor in the event of the death of the resident prior to or following occupancy ofa living unit;
d. The conditions underwhich a living unit occupied by a resident may be made available by theprovider to a different or new resident other than on the death of the priorresident; and
e. The manner by whichthe provider may adjust periodic charges or other recurring fees and thelimitations on these adjustments, if any; and, if the facility is already inoperation, or if the provider or manager operates one or more similarcontinuing care locations within this State, tables shall be included showingthe frequency and average dollar amount of each increase in periodic charges,or other recurring fees at each facility or location for the previous fiveyears, or such shorter period as the facility or location may have beenoperated by the provider or manager.
(8) The health andfinancial condition required for an individual to be accepted as a resident andto continue as a resident once accepted, including the effect of any change inthe health or financial condition of a person between the date of entering intoa contract for continuing care and the date of initial occupancy of a livingunit by that person.
(9) The provisions thathave been made or will be made, including, but not limited to, the requirementsof G.S. 58‑64‑33 and G.S. 58‑64‑35, to provide reservefunding or security to enable the provider to perform its obligations fullyunder contracts to provide continuing care at the facility, including theestablishment of escrow accounts, trusts, or reserve funds, together with themanner in which these funds will be invested, and the names and experience ofany individuals in the direct employment of the provider who will make theinvestment decisions.
(10) Financial statementsof the provider certified to by an independent public accountant as of the endof the most recent fiscal year or such shorter period of time as the providershall have been in existence. If the provider's fiscal year ended more than 120days prior to the date the disclosure statement is recorded, interim financialstatements as of a date not more than 90 days prior to the date of recordingthe statement shall also be included, but need not be certified to by anindependent certified public accountant.
(11) In the event theprovider has had an actuarial report prepared within the prior two years, thesummary of a report of an actuary that estimates the capacity of the providerto meet its contractual obligations to the residents.
(12) Forecasted financialstatements for the provider of the next five years, including a balance sheet,a statement of operations, a statement of cash flows, and a statement detailingall significant assumptions, compiled by an independent certified publicaccountant. Reporting routine, categories, and structure may be further definedby regulations or forms adopted by the Commissioner.
(13) The estimated numberof residents of the facility to be provided services by the provider pursuantto the contract for continuing care.
a. The summary of thereport of an actuary estimating the capacity of the provider to meet itscontractual obligation to the residents;
b. Narrative disclosuredetailing all significant assumptions used in the preparation of the forecastedfinancial statements, including:
1. Details of any long‑termfinancing for the purchase or construction of the facility including interestrate, repayment terms, loan covenants, and assets pledged;
2. Details of any otherfunding sources that the provider anticipates using to fund any start‑uplosses or to provide reserve funds to assure full performance of theobligations of the provider under contracts for the provision of continuingcare;
3. The total lifeoccupancy fees to be received from or on behalf of, residents at, or prior to,commencement of operations along with anticipated accounting methods used inthe recognition of revenues from and expected refunds of life occupancy fees;
4. A description of anyequity capital to be received by the facility;
5. The cost of theacquisition of the facility or, if the facility is to be constructed, theestimated cost of the acquisition of the land and construction cost of thefacility;
6. Related costs, suchas financing any development costs that the provider expects to incur or becomeobligated for prior to the commencement of operations;
7. The marketing andresident acquisition costs to be incurred prior to commencement of operations;and
8. A description of theassumptions used for calculating the estimated occupancy rate of the facilityand the effect on the income of the facility of government subsidies for healthcare services.
(15) Any other materialinformation concerning the facility or the provider which, if omitted, wouldlead a reasonable person not to enter into this contract.
(b) The cover page ofthe disclosure statement shall state, in a prominent location and in boldfacetype, the date of the disclosure statement, the last date through which thatdisclosure statement may be delivered if not earlier revised, and that thedelivery of the disclosure statement to a contracting party before theexecution of a contract for the provision of continuing care is required bythis Article but that the disclosure statement has not been reviewed orapproved by any government agency or representative to ensure accuracy orcompleteness of the information set out.
(c) A copy of thestandard form of contract for continuing care used by the provider shall be attachedto each disclosure statement.
(d) The Commissioner,by rules adopted by him under this Article, may prescribe a standardized formatfor the disclosure statement required by this section.
(e) The disclosurestatement shall be in plain English and in language understandable by alayperson and combine simplicity and accuracy to fully advise residents of theitems required by this section.
(f) The Department mayrequire a provider to alter or amend its disclosure statement in order toprovide full and fair disclosure to prospective residents. The Department mayalso require the revision of a disclosure statement which it finds to beunnecessarily complex, confusing or illegible. (1989, c. 758, s. 1; 1991, c. 196, s. 3; c. 720, s.89; 1993, c. 452, s. 63; 2001‑223, s. 22.2; 2003‑193, ss. 3, 4, 5,6.)
(a) At the time of, orprior to, the execution of a contract to provide continuing care, or at thetime of, or prior to, the transfer of any money or other property to a providerby or on behalf of a prospective resident, whichever occurs first, the providershall deliver a current disclosure statement to the person with whom thecontract is to be entered into, the text of which shall contain at least:
(1) The name andbusiness address of the provider and a statement of whether the provider is apartnership, corporation, or other type of legal entity.
(2) The names andbusiness addresses of the officers, directors, trustees, managing or generalpartners, any person having a ten percent (10%) or greater equity or beneficialinterest in the provider, and any person who will be managing the facility on aday‑to‑day basis, and a description of these persons' interests inor occupations with the provider.
(3) The followinginformation on all persons named in response to subdivision (2) of thissection:
a. A description of thebusiness experience of this person, if any, in the operation or management ofsimilar facilities;
b. The name and addressof any professional service firm, association, trust, partnership, orcorporation in which this person has, or which has in this person, a tenpercent (10%) or greater interest and which it is presently intended shallcurrently or in the future provide goods, leases, or services to the facility,or to residents of the facility, of an aggregate value of five hundred dollars($500.00) or more within any year, including a description of the goods,leases, or services and the probable or anticipated cost thereof to thefacility, provider, or residents or a statement that this cost cannot presentlybe estimated; and
c. A description of anymatter in which the person (i) has been convicted of a felony or pleaded nolocontendere to a felony charge, or been held liable or enjoined in a civilaction by final judgment, if the felony or civil action involved fraud,embezzlement, fraudulent conversion, or misappropriation of property; or (ii)is subject to a currently effective injunctive or restrictive court order, orwithin the past five years, had any State or federal license or permitsuspended or revoked as a result of an action brought by a governmental agencyor department, if the order or action arose out of or related to businessactivity of health care, including actions affecting a license to operate afoster care facility, nursing home, retirement home, home for aged, or facilitysubject to this Article or a similar law in another state.
(4) A statement as towhether the provider is, or is not affiliated with, a religious, charitable, orother nonprofit organization, the extent of the affiliation, if any, the extentto which the affiliate organization will be responsible for the financial andcontract obligations of the provider, and the provision of the Federal InternalRevenue Code, if any, under which the provider or affiliate is exempt from thepayment of income tax.
(5) The location anddescription of the physical property or properties of the facility, existing orproposed, and to the extent proposed, the estimated completion date or dates,whether construction has begun, and the contingencies subject to whichconstruction may be deferred.
(6) The servicesprovided or proposed to be provided pursuant to contracts for continuing careat the facility, including the extent to which medical care is furnished, and aclear statement of which services are included for specified basic fees forcontinuing care and which services are made available at or by the facility atextra charge.
(7) A description of allfees required of residents, including the entrance fee and periodic charges, ifany. The description shall include:
a. A statement of thefees that will be charged if the resident marries while at the facility, and astatement of the terms concerning the entry of a spouse to the facility and theconsequences if the spouse does not meet the requirements for entry;
b. The circumstancesunder which the resident will be permitted to remain in the facility in theevent of possible financial difficulties of the resident;
c. The terms andconditions under which a contract for continuing care at the facility may becanceled by the provider or by the resident, and the conditions, if any, underwhich all or any portion of the entrance fee or any other fee will be refundedin the event of cancellation of the contract by the provider or by the residentor in the event of the death of the resident prior to or following occupancy ofa living unit;
d. The conditions underwhich a living unit occupied by a resident may be made available by theprovider to a different or new resident other than on the death of the priorresident; and
e. The manner by whichthe provider may adjust periodic charges or other recurring fees and thelimitations on these adjustments, if any; and, if the facility is already inoperation, or if the provider or manager operates one or more similarcontinuing care locations within this State, tables shall be included showingthe frequency and average dollar amount of each increase in periodic charges,or other recurring fees at each facility or location for the previous fiveyears, or such shorter period as the facility or location may have beenoperated by the provider or manager.
(8) The health andfinancial condition required for an individual to be accepted as a resident andto continue as a resident once accepted, including the effect of any change inthe health or financial condition of a person between the date of entering intoa contract for continuing care and the date of initial occupancy of a livingunit by that person.
(9) The provisions thathave been made or will be made, including, but not limited to, the requirementsof G.S. 58‑64‑33 and G.S. 58‑64‑35, to provide reservefunding or security to enable the provider to perform its obligations fullyunder contracts to provide continuing care at the facility, including theestablishment of escrow accounts, trusts, or reserve funds, together with themanner in which these funds will be invested, and the names and experience ofany individuals in the direct employment of the provider who will make theinvestment decisions.
(10) Financial statementsof the provider certified to by an independent public accountant as of the endof the most recent fiscal year or such shorter period of time as the providershall have been in existence. If the provider's fiscal year ended more than 120days prior to the date the disclosure statement is recorded, interim financialstatements as of a date not more than 90 days prior to the date of recordingthe statement shall also be included, but need not be certified to by anindependent certified public accountant.
(11) In the event theprovider has had an actuarial report prepared within the prior two years, thesummary of a report of an actuary that estimates the capacity of the providerto meet its contractual obligations to the residents.
(12) Forecasted financialstatements for the provider of the next five years, including a balance sheet,a statement of operations, a statement of cash flows, and a statement detailingall significant assumptions, compiled by an independent certified publicaccountant. Reporting routine, categories, and structure may be further definedby regulations or forms adopted by the Commissioner.
(13) The estimated numberof residents of the facility to be provided services by the provider pursuantto the contract for continuing care.
a. The summary of thereport of an actuary estimating the capacity of the provider to meet itscontractual obligation to the residents;
b. Narrative disclosuredetailing all significant assumptions used in the preparation of the forecastedfinancial statements, including:
1. Details of any long‑termfinancing for the purchase or construction of the facility including interestrate, repayment terms, loan covenants, and assets pledged;
2. Details of any otherfunding sources that the provider anticipates using to fund any start‑uplosses or to provide reserve funds to assure full performance of theobligations of the provider under contracts for the provision of continuingcare;
3. The total lifeoccupancy fees to be received from or on behalf of, residents at, or prior to,commencement of operations along with anticipated accounting methods used inthe recognition of revenues from and expected refunds of life occupancy fees;
4. A description of anyequity capital to be received by the facility;
5. The cost of theacquisition of the facility or, if the facility is to be constructed, theestimated cost of the acquisition of the land and construction cost of thefacility;
6. Related costs, suchas financing any development costs that the provider expects to incur or becomeobligated for prior to the commencement of operations;
7. The marketing andresident acquisition costs to be incurred prior to commencement of operations;and
8. A description of theassumptions used for calculating the estimated occupancy rate of the facilityand the effect on the income of the facility of government subsidies for healthcare services.
(15) Any other materialinformation concerning the facility or the provider which, if omitted, wouldlead a reasonable person not to enter into this contract.
(b) The cover page ofthe disclosure statement shall state, in a prominent location and in boldfacetype, the date of the disclosure statement, the last date through which thatdisclosure statement may be delivered if not earlier revised, and that thedelivery of the disclosure statement to a contracting party before theexecution of a contract for the provision of continuing care is required bythis Article but that the disclosure statement has not been reviewed orapproved by any government agency or representative to ensure accuracy orcompleteness of the information set out.
(c) A copy of thestandard form of contract for continuing care used by the provider shall be attachedto each disclosure statement.
(d) The Commissioner,by rules adopted by him under this Article, may prescribe a standardized formatfor the disclosure statement required by this section.
(e) The disclosurestatement shall be in plain English and in language understandable by alayperson and combine simplicity and accuracy to fully advise residents of theitems required by this section.
(f) The Department mayrequire a provider to alter or amend its disclosure statement in order toprovide full and fair disclosure to prospective residents. The Department mayalso require the revision of a disclosure statement which it finds to beunnecessarily complex, confusing or illegible. (1989, c. 758, s. 1; 1991, c. 196, s. 3; c. 720, s.89; 1993, c. 452, s. 63; 2001‑223, s. 22.2; 2003‑193, ss. 3, 4, 5,6.)
