1787. (a) All continuing care contracts shall be in writing and
shall contain all the information required by Section 1788.
(b) All continuing care contract forms, including all addenda,
exhibits, and any other related documents, incorporated therein, as
well as any modification to these items, shall be approved by the
department prior to their use.
(c) The department shall approve continuing care contract forms
that comply with this chapter. The requirements of this chapter and
Chapter 3.2 (commencing with Section 1569) shall be the bases for
approval by the department. To the extent that this chapter conflicts
with Chapter 3.2 (commencing with Section 1569), this chapter shall
prevail.
(d) A continuing care contract approved by the department shall
constitute the full and complete agreement between the parties.
(e) More than one continuing care contract form may be used by a
provider if multiple program options are available.
(f) All text in continuing care contract forms shall be printed in
at least 10-point typeface.
(g) A clearly legible copy of the continuing care contract,
executed by each provider named on the provisional certificate of
authority or the certificate of authority, the resident, and any
transferor, shall be furnished with all required or included
attachments to the resident at the time the continuing care contract
is executed. A copy shall also be furnished within 10 calendar days
to any transferor who is not a resident.
(h) The provider shall require a written acknowledgment from the
resident (and any transferor who is not a resident) that the executed
copy of the continuing care contract and attachments have been
received.
(i) The continuing care contract shall be an admissions agreement
for purposes of the residential care facility for the elderly and
long-term health care facility requirements and shall state the
resident's entitlement to receive these levels of care. The
continuing care contract may state the entitlement for skilled
nursing care in accordance with the provisions of law governing
admissions to long-term health care facilities in effect at the time
of admission to the skilled nursing facility. The parties may agree
to the terms of nursing facility admission at the time the continuing
care contract is executed, or the provider may present an exemplar
of the then-current nursing facility admission agreement and require
the resident to execute the form of agreement in effect at the time
of admission to the nursing facility. The terms shall include the
nursing fee, or the method of determining the fee, at the time of the
execution of the continuing care contract, the services included in
and excluded from the fee, the grounds for transfers and discharges,
and any other terms required to be included under applicable law.
(j) Only the skilled nursing admission agreement sections of
continuing care contracts which cover long-term health care facility
services are subject to Chapter 3.95 (commencing with Section
1599.60). The provider shall use a skilled nursing admission nursing
agreement that complies with the requirements of Chapter 3.95
(commencing with Section 1599.85).
1788. (a) A continuing care contract shall contain all of the
following:
(1) The legal name and address of each provider.
(2) The name and address of the continuing care retirement
community.
(3) The resident's name and the identity of the unit the resident
will occupy.
(4) If there is a transferor other than the resident, the
transferor shall be a party to the contract and the transferor's name
and address shall be specified.
(5) If the provider has used the name of any charitable or
religious or nonprofit organization in its title before January 1,
1979, and continues to use that name, and that organization is not
responsible for the financial and contractual obligations of the
provider or the obligations specified in the continuing care
contract, the provider shall include in every continuing care
contract a conspicuous statement that clearly informs the resident
that the organization is not financially responsible.
(6) The date the continuing care contract is signed by the
resident and, where applicable, any other transferor.
(7) The duration of the continuing care contract.
(8) A list of the services that will be made available to the
resident as required to provide the appropriate level of care. The
list of services shall include the services required as a condition
for licensure as a residential care facility for the elderly,
including all of the following:
(A) Regular observation of the resident's health status to ensure
that his or her dietary needs, social needs, and needs for special
services are satisfied.
(B) Safe and healthful living accommodations, including
housekeeping services and utilities.
(C) Maintenance of house rules for the protection of residents.
(D) A planned activities program, which includes social and
recreational activities appropriate to the interests and capabilities
of the resident.
(E) Three balanced, nutritious meals and snacks made available
daily, including special diets prescribed by a physician as a medical
necessity.
(F) Assisted living services.
(G) Assistance with taking medications.
(H) Central storing and distribution of medications.
(I) Arrangements to meet health needs, including arranging
transportation.
(9) An itemization of the services that are included in the
monthly fee and the services that are available at an extra charge.
The provider shall attach a current fee schedule to the continuing
care contract.
(10) The procedures and conditions under which a resident may be
voluntarily and involuntarily transferred from a designated living
unit. The transfer procedures, at a minimum, shall include provisions
addressing all of the following circumstances under which a transfer
may be authorized:
(A) A continuing care retirement community may transfer a resident
under the following conditions, taking into account the
appropriateness and necessity of the transfer and the goal of
promoting resident independence:
(i) The resident is nonambulatory. The definition of
"nonambulatory," as provided in Section 13131, shall either be stated
in full in the continuing care contract or be cited. If Section
13131 is cited, a copy of the statute shall be made available to the
resident, either as an attachment to the continuing care contract or
by specifying that it will be provided upon request. If a
nonambulatory resident occupies a room that has a fire clearance for
nonambulatory residence, transfer shall not be necessary.
(ii) The resident develops a physical or mental condition that
endangers the health, safety, or well-being of the resident or
another person.
(iii) The resident's condition or needs require the resident's
transfer to an assisted living care unit or skilled nursing facility,
because the level of care required by the resident exceeds that
which may be lawfully provided in the living unit.
(iv) The resident's condition or needs require the resident's
transfer to a nursing facility, hospital, or other facility, and the
provider has no facilities available to provide that level of care.
(B) Before the continuing care retirement community transfers a
resident under any of the conditions set forth in subparagraph (A),
the community shall satisfy all of the following requirements:
(i) Involve the resident and the resident's responsible person, as
defined in paragraph (6) of subdivision (r) of Section 87101 of
Title 22 of the California Code of Regulations, and upon the resident'
s or responsible person's request, family members, or the resident's
physician or other appropriate health professional, in the assessment
process that forms the basis for the level of care transfer decision
by the provider. The provider shall offer an explanation of the
assessment process. If an assessment tool or tools, including scoring
and evaluating criteria, are used in the determination of the
appropriateness of the transfer, the provider shall make copies of
the completed assessment available upon the request of the resident
or the resident's responsible person.
(ii) Prior to sending a formal notification of transfer, the
provider shall conduct a care conference with the resident and the
resident's responsible person, and upon the resident's or responsible
person's request, family members, and the resident's health care
professionals, to explain the reasons for transfer.
(iii) Notify the resident and the resident's responsible person of
the reasons for the transfer in writing.
(iv) Notwithstanding any other provision of this subparagraph, if
the resident does not have impairment of cognitive abilities, the
resident may request that his or her responsible person not be
involved in the transfer process.
(v) The notice of transfer shall be made at least 30 days before
the transfer is expected to occur, except when the health or safety
of the resident or other residents is in danger, or the transfer is
required by the resident's urgent medical needs. Under those
circumstances, the written notice shall be made as soon as
practicable before the transfer.
(vi) The written notice shall contain the reasons for the
transfer, the effective date, the designated level of care or
location to which the resident will be transferred, a statement of
the resident's right to a review of the transfer decision at a care
conference, as provided for in subparagraph (C), and for disputed
transfer decisions, the right to review by the Continuing Care
Contracts Branch of the State Department of Social Services, as
provided for in subparagraph (D). The notice shall also contain the
name, address, and telephone number of the department's Continuing
Care Contracts Branch.
(vii) The continuing care retirement community shall provide
sufficient preparation and orientation to the resident to ensure a
safe and orderly transfer and to minimize trauma.
(C) The resident has the right to review the transfer decision at
a subsequent care conference that shall include the resident, the
resident's responsible person, and upon the resident's or responsible
person's request, family members, the resident's physician or other
appropriate health care professional, and members of the provider's
interdisciplinary team. The local ombudsperson may also be included
in the care conference, upon the request of the resident, the
resident's responsible person, or the provider.
(D) For disputed transfer decisions, the resident or the resident'
s responsible person has the right to a prompt and timely review of
the transfer process by the Continuing Care Contracts Branch of the
State Department of Social Services.
(E) The decision of the department's Continuing Care Contracts
Branch shall be in writing and shall determine whether the provider
failed to comply with the transfer process pursuant to subparagraphs
(A) to (C), inclusive. Pending the decision of the Continuing Care
Contracts Branch, the provider shall specify any additional care the
provider believes is necessary in order for the resident to remain in
his or her unit. The resident may be required to pay for the extra
care, as provided in the contract.
(F) Transfer of a second resident when a shared accommodation
arrangement is terminated.
(11) Provisions describing any changes in the resident's monthly
fee and any changes in the entrance fee refund payable to the
resident that will occur if the resident transfers from any unit,
including, but not limited to, terminating his or her contract after
18 months of residential temporary relocation, as defined in
paragraph (8) of subdivision (r) of Section 1771.
(12) The provider's continuing obligations, if any, in the event a
resident is transferred from the continuing care retirement
community to another facility.
(13) The provider's obligations, if any, to resume care upon the
resident's return after a transfer from the continuing care
retirement community.
(14) The provider's obligations to provide services to the
resident while the resident is absent from the continuing care
retirement community.
(15) The conditions under which the resident must permanently
release his or her living unit.
(16) If real or personal properties are transferred in lieu of
cash, a statement specifying each item's value at the time of
transfer, and how the value was ascertained.
(A) An itemized receipt that includes the information described
above is acceptable if incorporated as a part of the continuing care
contract.
(B) When real property is or will be transferred, the continuing
care contract shall include a statement that the deed or other
instrument of conveyance shall specify that the real property is
conveyed pursuant to a continuing care contract and may be subject to
rescission by the transferor within 90 days from the date that the
resident first occupies the residential unit.
(C) The failure to comply with paragraph (16) shall not affect the
validity of title to real property transferred pursuant to this
chapter.
(17) The amount of the entrance fee.
(18) In the event two parties have jointly paid the entrance fee
or other payment that allows them to occupy the unit, the continuing
care contract shall describe how any refund of entrance fees is
allocated.
(19) The amount of any processing fee.
(20) The amount of any monthly care fee.
(21) For continuing care contracts that require a monthly care fee
or other periodic payment, the continuing care contract shall
include the following:
(A) A statement that the occupancy and use of the accommodations
by the resident is contingent upon the regular payment of the fee.
(B) The regular rate of payment agreed upon (per day, week, or
month).
(C) A provision specifying whether payment will be made in advance
or after services have been provided.
(D) A provision specifying the provider will adjust monthly care
fees for the resident's support, maintenance, board, or lodging, when
a resident requires medical attention while away from the continuing
care retirement community.
(E) A provision specifying whether a credit or allowance will be
given to a resident who is absent from the continuing care retirement
community or from meals. This provision shall also state, when
applicable, that the credit may be permitted at the discretion or by
special permission of the provider.
(F) A statement of billing practices, procedures, and timelines. A
provider shall allow a minimum of 14 days between the date a bill is
sent and the date payment is due. A charge for a late payment may
only be assessed if the amount and any condition for the penalty is
stated on the bill.
(22) All continuing care contracts that include monthly care fees
shall address changes in monthly care fees by including either of the
following provisions:
(A) For prepaid continuing care contracts, which include monthly
care fees, one of the following methods:
(i) Fees shall not be subject to change during the lifetime of the
agreement.
(ii) Fees shall not be increased by more than a specified number
of dollars in any one year and not more than a specified number of
dollars during the lifetime of the agreement.
(iii) Fees shall not be increased in excess of a specified
percentage over the preceding year and not more than a specified
percentage during the lifetime of the agreement.
(B) For monthly fee continuing care contracts, except prepaid
contracts, changes in monthly care fees shall be based on projected
costs, prior year per capita costs, and economic indicators.
(23) A provision requiring that the provider give written notice
to the resident at least 30 days in advance of any change in the
resident's monthly care fees or in the price or scope of any
component of care or other services.
(24) A provision indicating whether the resident's rights under
the continuing care contract include any proprietary interests in the
assets of the provider or in the continuing care retirement
community, or both. Any statement in a contract concerning an
ownership interest shall appear in a large-sized font or print.
(25) If the continuing care retirement community property is
encumbered by a security interest that is senior to any claims the
residents may have to enforce continuing care contracts, a provision
shall advise the residents that any claims they may have under the
continuing care contract are subordinate to the rights of the secured
lender. For equity projects, the continuing care contract shall
specify the type and extent of the equity interest and whether any
entity holds a security interest.
(26) Notice that the living units are part of a continuing care
retirement community that is licensed as a residential care facility
for the elderly and, as a result, any duly authorized agent of the
department may, upon proper identification and upon stating the
purpose of his or her visit, enter and inspect the entire premises at
any time, without advance notice.
(27) A conspicuous statement, in at least 10-point boldface type
in immediate proximity to the space reserved for the signatures of
the resident and, if applicable, the transferor, that provides as
follows: "You, the resident or transferor, may cancel the transaction
without cause at any time within 90 days from the date you first
occupy your living unit. See the attached notice of cancellation form
for an explanation of this right."
(28) Notice that during the cancellation period, the continuing
care contract may be canceled upon 30 days' written notice by the
provider without cause, or that the provider waives this right.
(29) The terms and conditions under which the continuing care
contract may be terminated after the cancellation period by either
party, including any health or financial conditions.
(30) A statement that, after the cancellation period, a provider
may unilaterally terminate the continuing care contract only if the
provider has good and sufficient cause.
(A) Any continuing care contract containing a clause that provides
for a continuing care contract to be terminated for "just cause,"
"good cause," or other similar provision, shall also include a
provision that none of the following activities by the resident, or
on behalf of the resident, constitutes "just cause," "good cause," or
otherwise activates the termination provision:
(i) Filing or lodging a formal complaint with the department or
other appropriate authority.
(ii) Participation in an organization or affiliation of residents,
or other similar lawful activity.
(B) The provision required by this paragraph shall also state that
the provider shall not discriminate or retaliate in any manner
against any resident of a continuing care retirement community for
contacting the department, or any other state, county, or city
agency, or any elected or appointed government official to file a
complaint or for any other reason, or for participation in a
residents' organization or association.
(C) Nothing in this paragraph diminishes the provider's ability to
terminate the continuing care contract for good and sufficient
cause.
(31) A statement that at least 90 days' written notice to the
resident is required for a unilateral termination of the continuing
care contract by the provider.
(32) A statement concerning the length of notice that a resident
is required to give the provider to voluntarily terminate the
continuing care contract after the cancellation period.
(33) The policy or terms for refunding any portion of the entrance
fee, in the event of cancellation, termination, or death. Every
continuing care contract that provides for a refund of all or a part
of the entrance fee shall also do all of the following:
(A) Specify the amount, if any, the resident has paid or will pay
for upgrades, special features, or modifications to the resident's
unit.
(B) State that if the continuing care contract is canceled or
terminated by the provider, the provider shall do both of the
following:
(i) Amortize the specified amount at the same rate as the resident'
s entrance fee.
(ii) Refund the unamortized balance to the resident at the same
time the provider pays the resident's entrance fee refund.
(C) State that the resident has a right to terminate his or her
contract after 18 months of residential temporary relocation, as
defined in paragraph (8) of subdivision (r) of Section 1771.
Provisions for refunds due to cancellation pursuant to this
subparagraph shall be set forth in the contract.
(34) The following notice at the bottom of the signatory page:
"NOTICE" (date)
This is a continuing care contract as defined by paragraph (8) of
subdivision (c), or subdivision (l) of Section 1771 of the California
Health and Safety Code. This continuing care contract form has been
approved by the State Department of Social Services as required by
subdivision (b) of Section 1787 of the California Health and Safety
Code. The basis for this approval was a determination that (provider
name) has submitted a contract that complies with the minimum
statutory requirements applicable to continuing care contracts. The
department does not approve or disapprove any of the financial or
health care coverage provisions in this contract. Approval by the
department is NOT a guaranty of performance or an endorsement of any
continuing care contract provisions. Prospective transferors and
residents are strongly encouraged to carefully consider the benefits
and risks of this continuing care contract and to seek financial and
legal advice before signing.
(35) The provider may not attempt to absolve itself in the
continuing care contract from liability for its negligence by any
statement to that effect, and shall include the following statement
in the contract: "Nothing in this continuing care contract limits
either the provider's obligation to provide adequate care and
supervision for the resident or any liability on the part of the
provider which may result from the provider's failure to provide this
care and supervision."
(36) Provisions describing how the provider will proceed in the
event of a closure, including an explanation of how the provider will
comply with Sections 1793.80, 1793.81, 1793.82, and 1793.83.
(b) A life care contract shall also provide that:
(1) All levels of care, including acute care and physicians' and
surgeons' services will be provided to a resident.
(2) Care will be provided for the duration of the resident's life
unless the life care contract is canceled or terminated by the
provider during the cancellation period or after the cancellation
period for good cause.
(3) A comprehensive continuum of care will be provided to the
resident, including skilled nursing, in a facility under the
ownership and supervision of the provider on, or adjacent to, the
continuing care retirement community premises.
(4) Monthly care fees will not be changed based on the resident's
level of care or service.
(5) A resident who becomes financially unable to pay his or her
monthly care fees shall be subsidized provided the resident's
financial need does not arise from action by the resident to divest
the resident of his or her assets.
(c) Continuing care contracts may include provisions that do any
of the following:
(1) Subsidize a resident who becomes financially unable to pay for
his or her monthly care fees at some future date. If a continuing
care contract provides for subsidizing a resident, it may also
provide for any of the following:
(A) The resident shall apply for any public assistance or other
aid for which he or she is eligible and that the provider may apply
for assistance on behalf of the resident.
(B) The provider's decision shall be final and conclusive
regarding any adjustments to be made or any action to be taken
regarding any charitable consideration extended to any of its
residents.
(C) The provider is entitled to payment for the actual costs of
care out of any property acquired by the resident subsequent to any
adjustment extended to the resident under paragraph (1), or from any
other property of the resident that the resident failed to disclose.
(D) The provider may pay the monthly premium of the resident's
health insurance coverage under Medicare to ensure that those
payments will be made.
(E) The provider may receive an assignment from the resident of
the right to apply for and to receive the benefits, for and on behalf
of the resident.
(F) The provider is not responsible for the costs of furnishing
the resident with any services, supplies, and medication, when
reimbursement is reasonably available from any governmental agency,
or any private insurance.
(G) Any refund due to the resident at the termination of the
continuing care contract may be offset by any prior subsidy to the
resident by the provider.
(2) Limit responsibility for costs associated with the treatment
or medication of an ailment or illness existing prior to the date of
admission. In these cases, the medical or surgical exceptions, as
disclosed by the medical entrance examination, shall be listed in the
continuing care contract or in a medical report attached to and made
a part of the continuing care contract.
(3) Identify legal remedies that may be available to the provider
if the resident makes any material misrepresentation or omission
pertaining to the resident's assets or health.
(4) Restrict transfer or assignments of the resident's rights and
privileges under a continuing care contract due to the personal
nature of the continuing care contract.
(5) Protect the provider's ability to waive a resident's breach of
the terms or provisions of the continuing care contract in specific
instances without relinquishing its right to insist upon full
compliance by the resident with all terms or provisions in the
contract.
(6) Provide that the resident shall reimburse the provider for any
uninsured loss or damage to the resident's unit, beyond normal wear
and tear, resulting from the resident's carelessness or negligence.
(7) Provide that the resident agrees to observe the off-limit
areas of the continuing care retirement community designated by the
provider for safety reasons. The provider may not include any
provision in a continuing care contract that absolves the provider
from liability for its negligence.
(8) Provide for the subrogation to the provider of the resident's
rights in the case of injury to a resident caused by the acts or
omissions of a third party, or for the assignment of the resident's
recovery or benefits in this case to the provider, to the extent of
the value of the goods and services furnished by the provider to or
on behalf of the resident as a result of the injury.
(9) Provide for a lien on any judgment, settlement, or recovery
for any additional expense incurred by the provider in caring for the
resident as a result of injury.
(10) Require the resident's cooperation and assistance in the
diligent prosecution of any claim or action against any third party.
(11) Provide for the appointment of a conservator or guardian by a
court with jurisdiction in the event a resident becomes unable to
handle his or her personal or financial affairs.
(12) Allow a provider, whose property is tax exempt, to charge the
resident, on a pro rata basis, property taxes, or in-lieu taxes,
that the provider is required to pay.
(13) Make any other provision approved by the department.
(d) A copy of the resident's rights as described in Section 1771.7
shall be attached to every continuing care contract.
(e) A copy of the current audited financial statement of the
provider shall be attached to every continuing care contract. For a
provider whose current audited financial statement does not
accurately reflect the financial ability of the provider to fulfill
the continuing care contract obligations, the financial statement
attached to the continuing care contract shall include all of the
following:
(1) A disclosure that the reserve requirement has not yet been
determined or met, and that entrance fees will not be held in escrow.
(2) A disclosure that the ability to provide the services promised
in the continuing care contract will depend on successful compliance
with the approved financial plan.
(3) A copy of the approved financial plan for meeting the reserve
requirements.
(4) Any other supplemental statements or attachments necessary to
accurately represent the provider's financial ability to fulfill its
continuing care contract obligations.
(f) A schedule of the average monthly care fees charged to
residents for each type of residential living unit for each of the
five years preceding execution of the continuing care contract shall
be attached to every continuing care contract. The provider shall
update this schedule annually at the end of each fiscal year. If the
continuing care retirement community has not been in existence for
five years, the information shall be provided for each of the years
the continuing care retirement community has been in existence.
(g) If any continuing care contract provides for a health
insurance policy for the benefit of the resident, the provider shall
attach to the continuing care contract a binder complying with
Sections 382 and 382.5 of the Insurance Code.
(h) The provider shall attach to every continuing care contract a
completed form in duplicate, captioned "Notice of Cancellation." The
notice shall be easily detachable, and shall contain, in at least
10-point boldface type, the following statement:
"NOTICE OF CANCELLATION" (date)
Your first date of occupancy under this contract
is: _____________________________________________
"You may cancel this transaction, without any penalty within 90
calendar days from the above date.
If you cancel, any property transferred, any payments made by you
under the contract, and any negotiable instrument executed by you
will be returned within 14 calendar days after making possession of
the living unit available to the provider. Any security interest
arising out of the transaction will be canceled.
If you cancel, you are obligated to pay a reasonable processing
fee to cover costs and to pay for the reasonable value of the
services received by you from the provider up to the date you
canceled or made available to the provider the possession of any
living unit delivered to you under this contract, whichever is later.
If you cancel, you must return possession of any living unit
delivered to you under this contract to the provider in substantially
the same condition as when you took possession.
Possession of the living unit must be made available to the
provider within 20 calendar days of your notice of cancellation. If
you fail to make the possession of any living unit available to the
provider, then you remain liable for performance of all obligations
under the contract.
To cancel this transaction, mail or deliver a signed and dated
copy of this cancellation notice, or any other written notice, or
send a telegram
to
(Name of provider)
at
(Address of provider's place of business)
not later than midnight of _____________ (date).
I hereby cancel
this _________________________
transaction
(Resident
or
Transferor's signature)"
1788.2. (a) A continuing care contract may be canceled without
cause by written notice from either party within 90 days from the
date of the resident's initial occupancy.
(b) For all continuing care contracts, death of the resident
before or during the cancellation period shall constitute a
cancellation of the continuing care contract under subdivision (a),
unless the continuing care contract includes specific provisions
otherwise.
(c) The cancellation period and the associated refund obligations
shall apply as follows:
(1) To all executed continuing care contracts regarding a unit in
a continuing care retirement community that is not an equity
continuing care retirement community.
(2) To continuing care contracts executed in conjunction with a
purchase of an equity interest from a provider but not to continuing
care contracts executed in conjunction with sales of an equity
interest by one resident to another.
(d) The following fees may be charged before or during the 90-day
cancellation period:
(1) If possession of the living unit in a continuing care
retirement community that is not an equity continuing care retirement
community is returned to the provider in substantially the same
condition as when received, the resident's only obligations shall be
to pay a reasonable fee to cover costs and to pay the reasonable
value of services rendered pursuant to the canceled continuing care
contract.
(2) Equity project providers may impose a resale fee on sellers.
For contracts entered into after January 1, 1996, upon the
cancellation of a continuing care contract executed in conjunction
with the purchase of an equity interest from the provider, the
provider may charge a resale fee not to exceed the excess of the
gross resale price of the equity interest over the purchase price
paid by the resident or on behalf of the resident for the interest.
(e) No resale fee shall exceed the sum of 10 percent of either the
original or resale price of the equity interest and 100 percent of
the excess if any, of the gross resale price of the equity interest
over the purchase price paid by the resident or on behalf of the
resident for the interest if either of the following applies:
(1) The continuing care contract involved the purchase of an
equity interest from the provider and is terminated after the
cancellation period.
(2) The continuing care contract involved the purchase of an
equity interest from another resident and is terminated at any time.
(f) For purposes of this section, "gross resale price" means the
resale price before any deductions for resale fees, transfer taxes,
real estate commissions, periodic fees, late charges, interest,
escrow fees, or any other fees incidental to the sale of real
property.
(g) This section may not be construed to limit the provider's
ability to withhold delinquent periodic fees, late charges, accrued
interest, or assessments from the sale proceeds, as provided by the
continuing care contract or the real estate documents governing the
equity continuing care retirement community.
1788.4. (a) During the cancellation period, the provider shall pay
all refunds owed to a resident within 14 calendar days after a
resident makes possession of the living unit available to the
provider.
(b) After the cancellation period, any refunds due to a resident
under a continuing care contract shall be paid within 14 calendar
days after a resident makes possession of the living unit available
to the provider or 90 calendar days after death or receipt of notice
of termination, whichever is later.
(c) In nonequity projects, if the continuing care contract is
canceled by either party during the cancellation period or terminated
by the provider after the cancellation period, the resident shall be
refunded the difference between the total amount of entrance,
monthly, and optional fees paid and the amount used for care of the
resident.
(d) If a resident has paid additional amounts for upgrades,
special features, or modifications to the living unit and the
provider terminates the resident's continuing care contract, the
provider shall amortize those additional amounts at the same rate as
the entrance fee and shall refund the unamortized balance to the
resident.
(e) A lump-sum payment to a resident after termination of a
continuing care contract that is conditioned upon resale of a unit
shall not be considered to be a refund and may not be characterized
or advertised as a refund. The lump sum payment shall be paid to the
resident within 14 calendar days after resale of the unit.
1787. (a) All continuing care contracts shall be in writing and
shall contain all the information required by Section 1788.
(b) All continuing care contract forms, including all addenda,
exhibits, and any other related documents, incorporated therein, as
well as any modification to these items, shall be approved by the
department prior to their use.
(c) The department shall approve continuing care contract forms
that comply with this chapter. The requirements of this chapter and
Chapter 3.2 (commencing with Section 1569) shall be the bases for
approval by the department. To the extent that this chapter conflicts
with Chapter 3.2 (commencing with Section 1569), this chapter shall
prevail.
(d) A continuing care contract approved by the department shall
constitute the full and complete agreement between the parties.
(e) More than one continuing care contract form may be used by a
provider if multiple program options are available.
(f) All text in continuing care contract forms shall be printed in
at least 10-point typeface.
(g) A clearly legible copy of the continuing care contract,
executed by each provider named on the provisional certificate of
authority or the certificate of authority, the resident, and any
transferor, shall be furnished with all required or included
attachments to the resident at the time the continuing care contract
is executed. A copy shall also be furnished within 10 calendar days
to any transferor who is not a resident.
(h) The provider shall require a written acknowledgment from the
resident (and any transferor who is not a resident) that the executed
copy of the continuing care contract and attachments have been
received.
(i) The continuing care contract shall be an admissions agreement
for purposes of the residential care facility for the elderly and
long-term health care facility requirements and shall state the
resident's entitlement to receive these levels of care. The
continuing care contract may state the entitlement for skilled
nursing care in accordance with the provisions of law governing
admissions to long-term health care facilities in effect at the time
of admission to the skilled nursing facility. The parties may agree
to the terms of nursing facility admission at the time the continuing
care contract is executed, or the provider may present an exemplar
of the then-current nursing facility admission agreement and require
the resident to execute the form of agreement in effect at the time
of admission to the nursing facility. The terms shall include the
nursing fee, or the method of determining the fee, at the time of the
execution of the continuing care contract, the services included in
and excluded from the fee, the grounds for transfers and discharges,
and any other terms required to be included under applicable law.
(j) Only the skilled nursing admission agreement sections of
continuing care contracts which cover long-term health care facility
services are subject to Chapter 3.95 (commencing with Section
1599.60). The provider shall use a skilled nursing admission nursing
agreement that complies with the requirements of Chapter 3.95
(commencing with Section 1599.85).
1788. (a) A continuing care contract shall contain all of the
following:
(1) The legal name and address of each provider.
(2) The name and address of the continuing care retirement
community.
(3) The resident's name and the identity of the unit the resident
will occupy.
(4) If there is a transferor other than the resident, the
transferor shall be a party to the contract and the transferor's name
and address shall be specified.
(5) If the provider has used the name of any charitable or
religious or nonprofit organization in its title before January 1,
1979, and continues to use that name, and that organization is not
responsible for the financial and contractual obligations of the
provider or the obligations specified in the continuing care
contract, the provider shall include in every continuing care
contract a conspicuous statement that clearly informs the resident
that the organization is not financially responsible.
(6) The date the continuing care contract is signed by the
resident and, where applicable, any other transferor.
(7) The duration of the continuing care contract.
(8) A list of the services that will be made available to the
resident as required to provide the appropriate level of care. The
list of services shall include the services required as a condition
for licensure as a residential care facility for the elderly,
including all of the following:
(A) Regular observation of the resident's health status to ensure
that his or her dietary needs, social needs, and needs for special
services are satisfied.
(B) Safe and healthful living accommodations, including
housekeeping services and utilities.
(C) Maintenance of house rules for the protection of residents.
(D) A planned activities program, which includes social and
recreational activities appropriate to the interests and capabilities
of the resident.
(E) Three balanced, nutritious meals and snacks made available
daily, including special diets prescribed by a physician as a medical
necessity.
(F) Assisted living services.
(G) Assistance with taking medications.
(H) Central storing and distribution of medications.
(I) Arrangements to meet health needs, including arranging
transportation.
(9) An itemization of the services that are included in the
monthly fee and the services that are available at an extra charge.
The provider shall attach a current fee schedule to the continuing
care contract.
(10) The procedures and conditions under which a resident may be
voluntarily and involuntarily transferred from a designated living
unit. The transfer procedures, at a minimum, shall include provisions
addressing all of the following circumstances under which a transfer
may be authorized:
(A) A continuing care retirement community may transfer a resident
under the following conditions, taking into account the
appropriateness and necessity of the transfer and the goal of
promoting resident independence:
(i) The resident is nonambulatory. The definition of
"nonambulatory," as provided in Section 13131, shall either be stated
in full in the continuing care contract or be cited. If Section
13131 is cited, a copy of the statute shall be made available to the
resident, either as an attachment to the continuing care contract or
by specifying that it will be provided upon request. If a
nonambulatory resident occupies a room that has a fire clearance for
nonambulatory residence, transfer shall not be necessary.
(ii) The resident develops a physical or mental condition that
endangers the health, safety, or well-being of the resident or
another person.
(iii) The resident's condition or needs require the resident's
transfer to an assisted living care unit or skilled nursing facility,
because the level of care required by the resident exceeds that
which may be lawfully provided in the living unit.
(iv) The resident's condition or needs require the resident's
transfer to a nursing facility, hospital, or other facility, and the
provider has no facilities available to provide that level of care.
(B) Before the continuing care retirement community transfers a
resident under any of the conditions set forth in subparagraph (A),
the community shall satisfy all of the following requirements:
(i) Involve the resident and the resident's responsible person, as
defined in paragraph (6) of subdivision (r) of Section 87101 of
Title 22 of the California Code of Regulations, and upon the resident'
s or responsible person's request, family members, or the resident's
physician or other appropriate health professional, in the assessment
process that forms the basis for the level of care transfer decision
by the provider. The provider shall offer an explanation of the
assessment process. If an assessment tool or tools, including scoring
and evaluating criteria, are used in the determination of the
appropriateness of the transfer, the provider shall make copies of
the completed assessment available upon the request of the resident
or the resident's responsible person.
(ii) Prior to sending a formal notification of transfer, the
provider shall conduct a care conference with the resident and the
resident's responsible person, and upon the resident's or responsible
person's request, family members, and the resident's health care
professionals, to explain the reasons for transfer.
(iii) Notify the resident and the resident's responsible person of
the reasons for the transfer in writing.
(iv) Notwithstanding any other provision of this subparagraph, if
the resident does not have impairment of cognitive abilities, the
resident may request that his or her responsible person not be
involved in the transfer process.
(v) The notice of transfer shall be made at least 30 days before
the transfer is expected to occur, except when the health or safety
of the resident or other residents is in danger, or the transfer is
required by the resident's urgent medical needs. Under those
circumstances, the written notice shall be made as soon as
practicable before the transfer.
(vi) The written notice shall contain the reasons for the
transfer, the effective date, the designated level of care or
location to which the resident will be transferred, a statement of
the resident's right to a review of the transfer decision at a care
conference, as provided for in subparagraph (C), and for disputed
transfer decisions, the right to review by the Continuing Care
Contracts Branch of the State Department of Social Services, as
provided for in subparagraph (D). The notice shall also contain the
name, address, and telephone number of the department's Continuing
Care Contracts Branch.
(vii) The continuing care retirement community shall provide
sufficient preparation and orientation to the resident to ensure a
safe and orderly transfer and to minimize trauma.
(C) The resident has the right to review the transfer decision at
a subsequent care conference that shall include the resident, the
resident's responsible person, and upon the resident's or responsible
person's request, family members, the resident's physician or other
appropriate health care professional, and members of the provider's
interdisciplinary team. The local ombudsperson may also be included
in the care conference, upon the request of the resident, the
resident's responsible person, or the provider.
(D) For disputed transfer decisions, the resident or the resident'
s responsible person has the right to a prompt and timely review of
the transfer process by the Continuing Care Contracts Branch of the
State Department of Social Services.
(E) The decision of the department's Continuing Care Contracts
Branch shall be in writing and shall determine whether the provider
failed to comply with the transfer process pursuant to subparagraphs
(A) to (C), inclusive. Pending the decision of the Continuing Care
Contracts Branch, the provider shall specify any additional care the
provider believes is necessary in order for the resident to remain in
his or her unit. The resident may be required to pay for the extra
care, as provided in the contract.
(F) Transfer of a second resident when a shared accommodation
arrangement is terminated.
(11) Provisions describing any changes in the resident's monthly
fee and any changes in the entrance fee refund payable to the
resident that will occur if the resident transfers from any unit,
including, but not limited to, terminating his or her contract after
18 months of residential temporary relocation, as defined in
paragraph (8) of subdivision (r) of Section 1771.
(12) The provider's continuing obligations, if any, in the event a
resident is transferred from the continuing care retirement
community to another facility.
(13) The provider's obligations, if any, to resume care upon the
resident's return after a transfer from the continuing care
retirement community.
(14) The provider's obligations to provide services to the
resident while the resident is absent from the continuing care
retirement community.
(15) The conditions under which the resident must permanently
release his or her living unit.
(16) If real or personal properties are transferred in lieu of
cash, a statement specifying each item's value at the time of
transfer, and how the value was ascertained.
(A) An itemized receipt that includes the information described
above is acceptable if incorporated as a part of the continuing care
contract.
(B) When real property is or will be transferred, the continuing
care contract shall include a statement that the deed or other
instrument of conveyance shall specify that the real property is
conveyed pursuant to a continuing care contract and may be subject to
rescission by the transferor within 90 days from the date that the
resident first occupies the residential unit.
(C) The failure to comply with paragraph (16) shall not affect the
validity of title to real property transferred pursuant to this
chapter.
(17) The amount of the entrance fee.
(18) In the event two parties have jointly paid the entrance fee
or other payment that allows them to occupy the unit, the continuing
care contract shall describe how any refund of entrance fees is
allocated.
(19) The amount of any processing fee.
(20) The amount of any monthly care fee.
(21) For continuing care contracts that require a monthly care fee
or other periodic payment, the continuing care contract shall
include the following:
(A) A statement that the occupancy and use of the accommodations
by the resident is contingent upon the regular payment of the fee.
(B) The regular rate of payment agreed upon (per day, week, or
month).
(C) A provision specifying whether payment will be made in advance
or after services have been provided.
(D) A provision specifying the provider will adjust monthly care
fees for the resident's support, maintenance, board, or lodging, when
a resident requires medical attention while away from the continuing
care retirement community.
(E) A provision specifying whether a credit or allowance will be
given to a resident who is absent from the continuing care retirement
community or from meals. This provision shall also state, when
applicable, that the credit may be permitted at the discretion or by
special permission of the provider.
(F) A statement of billing practices, procedures, and timelines. A
provider shall allow a minimum of 14 days between the date a bill is
sent and the date payment is due. A charge for a late payment may
only be assessed if the amount and any condition for the penalty is
stated on the bill.
(22) All continuing care contracts that include monthly care fees
shall address changes in monthly care fees by including either of the
following provisions:
(A) For prepaid continuing care contracts, which include monthly
care fees, one of the following methods:
(i) Fees shall not be subject to change during the lifetime of the
agreement.
(ii) Fees shall not be increased by more than a specified number
of dollars in any one year and not more than a specified number of
dollars during the lifetime of the agreement.
(iii) Fees shall not be increased in excess of a specified
percentage over the preceding year and not more than a specified
percentage during the lifetime of the agreement.
(B) For monthly fee continuing care contracts, except prepaid
contracts, changes in monthly care fees shall be based on projected
costs, prior year per capita costs, and economic indicators.
(23) A provision requiring that the provider give written notice
to the resident at least 30 days in advance of any change in the
resident's monthly care fees or in the price or scope of any
component of care or other services.
(24) A provision indicating whether the resident's rights under
the continuing care contract include any proprietary interests in the
assets of the provider or in the continuing care retirement
community, or both. Any statement in a contract concerning an
ownership interest shall appear in a large-sized font or print.
(25) If the continuing care retirement community property is
encumbered by a security interest that is senior to any claims the
residents may have to enforce continuing care contracts, a provision
shall advise the residents that any claims they may have under the
continuing care contract are subordinate to the rights of the secured
lender. For equity projects, the continuing care contract shall
specify the type and extent of the equity interest and whether any
entity holds a security interest.
(26) Notice that the living units are part of a continuing care
retirement community that is licensed as a residential care facility
for the elderly and, as a result, any duly authorized agent of the
department may, upon proper identification and upon stating the
purpose of his or her visit, enter and inspect the entire premises at
any time, without advance notice.
(27) A conspicuous statement, in at least 10-point boldface type
in immediate proximity to the space reserved for the signatures of
the resident and, if applicable, the transferor, that provides as
follows: "You, the resident or transferor, may cancel the transaction
without cause at any time within 90 days from the date you first
occupy your living unit. See the attached notice of cancellation form
for an explanation of this right."
(28) Notice that during the cancellation period, the continuing
care contract may be canceled upon 30 days' written notice by the
provider without cause, or that the provider waives this right.
(29) The terms and conditions under which the continuing care
contract may be terminated after the cancellation period by either
party, including any health or financial conditions.
(30) A statement that, after the cancellation period, a provider
may unilaterally terminate the continuing care contract only if the
provider has good and sufficient cause.
(A) Any continuing care contract containing a clause that provides
for a continuing care contract to be terminated for "just cause,"
"good cause," or other similar provision, shall also include a
provision that none of the following activities by the resident, or
on behalf of the resident, constitutes "just cause," "good cause," or
otherwise activates the termination provision:
(i) Filing or lodging a formal complaint with the department or
other appropriate authority.
(ii) Participation in an organization or affiliation of residents,
or other similar lawful activity.
(B) The provision required by this paragraph shall also state that
the provider shall not discriminate or retaliate in any manner
against any resident of a continuing care retirement community for
contacting the department, or any other state, county, or city
agency, or any elected or appointed government official to file a
complaint or for any other reason, or for participation in a
residents' organization or association.
(C) Nothing in this paragraph diminishes the provider's ability to
terminate the continuing care contract for good and sufficient
cause.
(31) A statement that at least 90 days' written notice to the
resident is required for a unilateral termination of the continuing
care contract by the provider.
(32) A statement concerning the length of notice that a resident
is required to give the provider to voluntarily terminate the
continuing care contract after the cancellation period.
(33) The policy or terms for refunding any portion of the entrance
fee, in the event of cancellation, termination, or death. Every
continuing care contract that provides for a refund of all or a part
of the entrance fee shall also do all of the following:
(A) Specify the amount, if any, the resident has paid or will pay
for upgrades, special features, or modifications to the resident's
unit.
(B) State that if the continuing care contract is canceled or
terminated by the provider, the provider shall do both of the
following:
(i) Amortize the specified amount at the same rate as the resident'
s entrance fee.
(ii) Refund the unamortized balance to the resident at the same
time the provider pays the resident's entrance fee refund.
(C) State that the resident has a right to terminate his or her
contract after 18 months of residential temporary relocation, as
defined in paragraph (8) of subdivision (r) of Section 1771.
Provisions for refunds due to cancellation pursuant to this
subparagraph shall be set forth in the contract.
(34) The following notice at the bottom of the signatory page:
"NOTICE" (date)
This is a continuing care contract as defined by paragraph (8) of
subdivision (c), or subdivision (l) of Section 1771 of the California
Health and Safety Code. This continuing care contract form has been
approved by the State Department of Social Services as required by
subdivision (b) of Section 1787 of the California Health and Safety
Code. The basis for this approval was a determination that (provider
name) has submitted a contract that complies with the minimum
statutory requirements applicable to continuing care contracts. The
department does not approve or disapprove any of the financial or
health care coverage provisions in this contract. Approval by the
department is NOT a guaranty of performance or an endorsement of any
continuing care contract provisions. Prospective transferors and
residents are strongly encouraged to carefully consider the benefits
and risks of this continuing care contract and to seek financial and
legal advice before signing.
(35) The provider may not attempt to absolve itself in the
continuing care contract from liability for its negligence by any
statement to that effect, and shall include the following statement
in the contract: "Nothing in this continuing care contract limits
either the provider's obligation to provide adequate care and
supervision for the resident or any liability on the part of the
provider which may result from the provider's failure to provide this
care and supervision."
(36) Provisions describing how the provider will proceed in the
event of a closure, including an explanation of how the provider will
comply with Sections 1793.80, 1793.81, 1793.82, and 1793.83.
(b) A life care contract shall also provide that:
(1) All levels of care, including acute care and physicians' and
surgeons' services will be provided to a resident.
(2) Care will be provided for the duration of the resident's life
unless the life care contract is canceled or terminated by the
provider during the cancellation period or after the cancellation
period for good cause.
(3) A comprehensive continuum of care will be provided to the
resident, including skilled nursing, in a facility under the
ownership and supervision of the provider on, or adjacent to, the
continuing care retirement community premises.
(4) Monthly care fees will not be changed based on the resident's
level of care or service.
(5) A resident who becomes financially unable to pay his or her
monthly care fees shall be subsidized provided the resident's
financial need does not arise from action by the resident to divest
the resident of his or her assets.
(c) Continuing care contracts may include provisions that do any
of the following:
(1) Subsidize a resident who becomes financially unable to pay for
his or her monthly care fees at some future date. If a continuing
care contract provides for subsidizing a resident, it may also
provide for any of the following:
(A) The resident shall apply for any public assistance or other
aid for which he or she is eligible and that the provider may apply
for assistance on behalf of the resident.
(B) The provider's decision shall be final and conclusive
regarding any adjustments to be made or any action to be taken
regarding any charitable consideration extended to any of its
residents.
(C) The provider is entitled to payment for the actual costs of
care out of any property acquired by the resident subsequent to any
adjustment extended to the resident under paragraph (1), or from any
other property of the resident that the resident failed to disclose.
(D) The provider may pay the monthly premium of the resident's
health insurance coverage under Medicare to ensure that those
payments will be made.
(E) The provider may receive an assignment from the resident of
the right to apply for and to receive the benefits, for and on behalf
of the resident.
(F) The provider is not responsible for the costs of furnishing
the resident with any services, supplies, and medication, when
reimbursement is reasonably available from any governmental agency,
or any private insurance.
(G) Any refund due to the resident at the termination of the
continuing care contract may be offset by any prior subsidy to the
resident by the provider.
(2) Limit responsibility for costs associated with the treatment
or medication of an ailment or illness existing prior to the date of
admission. In these cases, the medical or surgical exceptions, as
disclosed by the medical entrance examination, shall be listed in the
continuing care contract or in a medical report attached to and made
a part of the continuing care contract.
(3) Identify legal remedies that may be available to the provider
if the resident makes any material misrepresentation or omission
pertaining to the resident's assets or health.
(4) Restrict transfer or assignments of the resident's rights and
privileges under a continuing care contract due to the personal
nature of the continuing care contract.
(5) Protect the provider's ability to waive a resident's breach of
the terms or provisions of the continuing care contract in specific
instances without relinquishing its right to insist upon full
compliance by the resident with all terms or provisions in the
contract.
(6) Provide that the resident shall reimburse the provider for any
uninsured loss or damage to the resident's unit, beyond normal wear
and tear, resulting from the resident's carelessness or negligence.
(7) Provide that the resident agrees to observe the off-limit
areas of the continuing care retirement community designated by the
provider for safety reasons. The provider may not include any
provision in a continuing care contract that absolves the provider
from liability for its negligence.
(8) Provide for the subrogation to the provider of the resident's
rights in the case of injury to a resident caused by the acts or
omissions of a third party, or for the assignment of the resident's
recovery or benefits in this case to the provider, to the extent of
the value of the goods and services furnished by the provider to or
on behalf of the resident as a result of the injury.
(9) Provide for a lien on any judgment, settlement, or recovery
for any additional expense incurred by the provider in caring for the
resident as a result of injury.
(10) Require the resident's cooperation and assistance in the
diligent prosecution of any claim or action against any third party.
(11) Provide for the appointment of a conservator or guardian by a
court with jurisdiction in the event a resident becomes unable to
handle his or her personal or financial affairs.
(12) Allow a provider, whose property is tax exempt, to charge the
resident, on a pro rata basis, property taxes, or in-lieu taxes,
that the provider is required to pay.
(13) Make any other provision approved by the department.
(d) A copy of the resident's rights as described in Section 1771.7
shall be attached to every continuing care contract.
(e) A copy of the current audited financial statement of the
provider shall be attached to every continuing care contract. For a
provider whose current audited financial statement does not
accurately reflect the financial ability of the provider to fulfill
the continuing care contract obligations, the financial statement
attached to the continuing care contract shall include all of the
following:
(1) A disclosure that the reserve requirement has not yet been
determined or met, and that entrance fees will not be held in escrow.
(2) A disclosure that the ability to provide the services promised
in the continuing care contract will depend on successful compliance
with the approved financial plan.
(3) A copy of the approved financial plan for meeting the reserve
requirements.
(4) Any other supplemental statements or attachments necessary to
accurately represent the provider's financial ability to fulfill its
continuing care contract obligations.
(f) A schedule of the average monthly care fees charged to
residents for each type of residential living unit for each of the
five years preceding execution of the continuing care contract shall
be attached to every continuing care contract. The provider shall
update this schedule annually at the end of each fiscal year. If the
continuing care retirement community has not been in existence for
five years, the information shall be provided for each of the years
the continuing care retirement community has been in existence.
(g) If any continuing care contract provides for a health
insurance policy for the benefit of the resident, the provider shall
attach to the continuing care contract a binder complying with
Sections 382 and 382.5 of the Insurance Code.
(h) The provider shall attach to every continuing care contract a
completed form in duplicate, captioned "Notice of Cancellation." The
notice shall be easily detachable, and shall contain, in at least
10-point boldface type, the following statement:
"NOTICE OF CANCELLATION" (date)
Your first date of occupancy under this contract
is: _____________________________________________
"You may cancel this transaction, without any penalty within 90
calendar days from the above date.
If you cancel, any property transferred, any payments made by you
under the contract, and any negotiable instrument executed by you
will be returned within 14 calendar days after making possession of
the living unit available to the provider. Any security interest
arising out of the transaction will be canceled.
If you cancel, you are obligated to pay a reasonable processing
fee to cover costs and to pay for the reasonable value of the
services received by you from the provider up to the date you
canceled or made available to the provider the possession of any
living unit delivered to you under this contract, whichever is later.
If you cancel, you must return possession of any living unit
delivered to you under this contract to the provider in substantially
the same condition as when you took possession.
Possession of the living unit must be made available to the
provider within 20 calendar days of your notice of cancellation. If
you fail to make the possession of any living unit available to the
provider, then you remain liable for performance of all obligations
under the contract.
To cancel this transaction, mail or deliver a signed and dated
copy of this cancellation notice, or any other written notice, or
send a telegram
to
(Name of provider)
at
(Address of provider's place of business)
not later than midnight of _____________ (date).
I hereby cancel
this _________________________
transaction
(Resident
or
Transferor's signature)"
1788.2. (a) A continuing care contract may be canceled without
cause by written notice from either party within 90 days from the
date of the resident's initial occupancy.
(b) For all continuing care contracts, death of the resident
before or during the cancellation period shall constitute a
cancellation of the continuing care contract under subdivision (a),
unless the continuing care contract includes specific provisions
otherwise.
(c) The cancellation period and the associated refund obligations
shall apply as follows:
(1) To all executed continuing care contracts regarding a unit in
a continuing care retirement community that is not an equity
continuing care retirement community.
(2) To continuing care contracts executed in conjunction with a
purchase of an equity interest from a provider but not to continuing
care contracts executed in conjunction with sales of an equity
interest by one resident to another.
(d) The following fees may be charged before or during the 90-day
cancellation period:
(1) If possession of the living unit in a continuing care
retirement community that is not an equity continuing care retirement
community is returned to the provider in substantially the same
condition as when received, the resident's only obligations shall be
to pay a reasonable fee to cover costs and to pay the reasonable
value of services rendered pursuant to the canceled continuing care
contract.
(2) Equity project providers may impose a resale fee on sellers.
For contracts entered into after January 1, 1996, upon the
cancellation of a continuing care contract executed in conjunction
with the purchase of an equity interest from the provider, the
provider may charge a resale fee not to exceed the excess of the
gross resale price of the equity interest over the purchase price
paid by the resident or on behalf of the resident for the interest.
(e) No resale fee shall exceed the sum of 10 percent of either the
original or resale price of the equity interest and 100 percent of
the excess if any, of the gross resale price of the equity interest
over the purchase price paid by the resident or on behalf of the
resident for the interest if either of the following applies:
(1) The continuing care contract involved the purchase of an
equity interest from the provider and is terminated after the
cancellation period.
(2) The continuing care contract involved the purchase of an
equity interest from another resident and is terminated at any time.
(f) For purposes of this section, "gross resale price" means the
resale price before any deductions for resale fees, transfer taxes,
real estate commissions, periodic fees, late charges, interest,
escrow fees, or any other fees incidental to the sale of real
property.
(g) This section may not be construed to limit the provider's
ability to withhold delinquent periodic fees, late charges, accrued
interest, or assessments from the sale proceeds, as provided by the
continuing care contract or the real estate documents governing the
equity continuing care retirement community.
1788.4. (a) During the cancellation period, the provider shall pay
all refunds owed to a resident within 14 calendar days after a
resident makes possession of the living unit available to the
provider.
(b) After the cancellation period, any refunds due to a resident
under a continuing care contract shall be paid within 14 calendar
days after a resident makes possession of the living unit available
to the provider or 90 calendar days after death or receipt of notice
of termination, whichever is later.
(c) In nonequity projects, if the continuing care contract is
canceled by either party during the cancellation period or terminated
by the provider after the cancellation period, the resident shall be
refunded the difference between the total amount of entrance,
monthly, and optional fees paid and the amount used for care of the
resident.
(d) If a resident has paid additional amounts for upgrades,
special features, or modifications to the living unit and the
provider terminates the resident's continuing care contract, the
provider shall amortize those additional amounts at the same rate as
the entrance fee and shall refund the unamortized balance to the
resident.
(e) A lump-sum payment to a resident after termination of a
continuing care contract that is conditioned upon resale of a unit
shall not be considered to be a refund and may not be characterized
or advertised as a refund. The lump sum payment shall be paid to the
resident within 14 calendar days after resale of the unit.
1787. (a) All continuing care contracts shall be in writing and
shall contain all the information required by Section 1788.
(b) All continuing care contract forms, including all addenda,
exhibits, and any other related documents, incorporated therein, as
well as any modification to these items, shall be approved by the
department prior to their use.
(c) The department shall approve continuing care contract forms
that comply with this chapter. The requirements of this chapter and
Chapter 3.2 (commencing with Section 1569) shall be the bases for
approval by the department. To the extent that this chapter conflicts
with Chapter 3.2 (commencing with Section 1569), this chapter shall
prevail.
(d) A continuing care contract approved by the department shall
constitute the full and complete agreement between the parties.
(e) More than one continuing care contract form may be used by a
provider if multiple program options are available.
(f) All text in continuing care contract forms shall be printed in
at least 10-point typeface.
(g) A clearly legible copy of the continuing care contract,
executed by each provider named on the provisional certificate of
authority or the certificate of authority, the resident, and any
transferor, shall be furnished with all required or included
attachments to the resident at the time the continuing care contract
is executed. A copy shall also be furnished within 10 calendar days
to any transferor who is not a resident.
(h) The provider shall require a written acknowledgment from the
resident (and any transferor who is not a resident) that the executed
copy of the continuing care contract and attachments have been
received.
(i) The continuing care contract shall be an admissions agreement
for purposes of the residential care facility for the elderly and
long-term health care facility requirements and shall state the
resident's entitlement to receive these levels of care. The
continuing care contract may state the entitlement for skilled
nursing care in accordance with the provisions of law governing
admissions to long-term health care facilities in effect at the time
of admission to the skilled nursing facility. The parties may agree
to the terms of nursing facility admission at the time the continuing
care contract is executed, or the provider may present an exemplar
of the then-current nursing facility admission agreement and require
the resident to execute the form of agreement in effect at the time
of admission to the nursing facility. The terms shall include the
nursing fee, or the method of determining the fee, at the time of the
execution of the continuing care contract, the services included in
and excluded from the fee, the grounds for transfers and discharges,
and any other terms required to be included under applicable law.
(j) Only the skilled nursing admission agreement sections of
continuing care contracts which cover long-term health care facility
services are subject to Chapter 3.95 (commencing with Section
1599.60). The provider shall use a skilled nursing admission nursing
agreement that complies with the requirements of Chapter 3.95
(commencing with Section 1599.85).
1788. (a) A continuing care contract shall contain all of the
following:
(1) The legal name and address of each provider.
(2) The name and address of the continuing care retirement
community.
(3) The resident's name and the identity of the unit the resident
will occupy.
(4) If there is a transferor other than the resident, the
transferor shall be a party to the contract and the transferor's name
and address shall be specified.
(5) If the provider has used the name of any charitable or
religious or nonprofit organization in its title before January 1,
1979, and continues to use that name, and that organization is not
responsible for the financial and contractual obligations of the
provider or the obligations specified in the continuing care
contract, the provider shall include in every continuing care
contract a conspicuous statement that clearly informs the resident
that the organization is not financially responsible.
(6) The date the continuing care contract is signed by the
resident and, where applicable, any other transferor.
(7) The duration of the continuing care contract.
(8) A list of the services that will be made available to the
resident as required to provide the appropriate level of care. The
list of services shall include the services required as a condition
for licensure as a residential care facility for the elderly,
including all of the following:
(A) Regular observation of the resident's health status to ensure
that his or her dietary needs, social needs, and needs for special
services are satisfied.
(B) Safe and healthful living accommodations, including
housekeeping services and utilities.
(C) Maintenance of house rules for the protection of residents.
(D) A planned activities program, which includes social and
recreational activities appropriate to the interests and capabilities
of the resident.
(E) Three balanced, nutritious meals and snacks made available
daily, including special diets prescribed by a physician as a medical
necessity.
(F) Assisted living services.
(G) Assistance with taking medications.
(H) Central storing and distribution of medications.
(I) Arrangements to meet health needs, including arranging
transportation.
(9) An itemization of the services that are included in the
monthly fee and the services that are available at an extra charge.
The provider shall attach a current fee schedule to the continuing
care contract.
(10) The procedures and conditions under which a resident may be
voluntarily and involuntarily transferred from a designated living
unit. The transfer procedures, at a minimum, shall include provisions
addressing all of the following circumstances under which a transfer
may be authorized:
(A) A continuing care retirement community may transfer a resident
under the following conditions, taking into account the
appropriateness and necessity of the transfer and the goal of
promoting resident independence:
(i) The resident is nonambulatory. The definition of
"nonambulatory," as provided in Section 13131, shall either be stated
in full in the continuing care contract or be cited. If Section
13131 is cited, a copy of the statute shall be made available to the
resident, either as an attachment to the continuing care contract or
by specifying that it will be provided upon request. If a
nonambulatory resident occupies a room that has a fire clearance for
nonambulatory residence, transfer shall not be necessary.
(ii) The resident develops a physical or mental condition that
endangers the health, safety, or well-being of the resident or
another person.
(iii) The resident's condition or needs require the resident's
transfer to an assisted living care unit or skilled nursing facility,
because the level of care required by the resident exceeds that
which may be lawfully provided in the living unit.
(iv) The resident's condition or needs require the resident's
transfer to a nursing facility, hospital, or other facility, and the
provider has no facilities available to provide that level of care.
(B) Before the continuing care retirement community transfers a
resident under any of the conditions set forth in subparagraph (A),
the community shall satisfy all of the following requirements:
(i) Involve the resident and the resident's responsible person, as
defined in paragraph (6) of subdivision (r) of Section 87101 of
Title 22 of the California Code of Regulations, and upon the resident'
s or responsible person's request, family members, or the resident's
physician or other appropriate health professional, in the assessment
process that forms the basis for the level of care transfer decision
by the provider. The provider shall offer an explanation of the
assessment process. If an assessment tool or tools, including scoring
and evaluating criteria, are used in the determination of the
appropriateness of the transfer, the provider shall make copies of
the completed assessment available upon the request of the resident
or the resident's responsible person.
(ii) Prior to sending a formal notification of transfer, the
provider shall conduct a care conference with the resident and the
resident's responsible person, and upon the resident's or responsible
person's request, family members, and the resident's health care
professionals, to explain the reasons for transfer.
(iii) Notify the resident and the resident's responsible person of
the reasons for the transfer in writing.
(iv) Notwithstanding any other provision of this subparagraph, if
the resident does not have impairment of cognitive abilities, the
resident may request that his or her responsible person not be
involved in the transfer process.
(v) The notice of transfer shall be made at least 30 days before
the transfer is expected to occur, except when the health or safety
of the resident or other residents is in danger, or the transfer is
required by the resident's urgent medical needs. Under those
circumstances, the written notice shall be made as soon as
practicable before the transfer.
(vi) The written notice shall contain the reasons for the
transfer, the effective date, the designated level of care or
location to which the resident will be transferred, a statement of
the resident's right to a review of the transfer decision at a care
conference, as provided for in subparagraph (C), and for disputed
transfer decisions, the right to review by the Continuing Care
Contracts Branch of the State Department of Social Services, as
provided for in subparagraph (D). The notice shall also contain the
name, address, and telephone number of the department's Continuing
Care Contracts Branch.
(vii) The continuing care retirement community shall provide
sufficient preparation and orientation to the resident to ensure a
safe and orderly transfer and to minimize trauma.
(C) The resident has the right to review the transfer decision at
a subsequent care conference that shall include the resident, the
resident's responsible person, and upon the resident's or responsible
person's request, family members, the resident's physician or other
appropriate health care professional, and members of the provider's
interdisciplinary team. The local ombudsperson may also be included
in the care conference, upon the request of the resident, the
resident's responsible person, or the provider.
(D) For disputed transfer decisions, the resident or the resident'
s responsible person has the right to a prompt and timely review of
the transfer process by the Continuing Care Contracts Branch of the
State Department of Social Services.
(E) The decision of the department's Continuing Care Contracts
Branch shall be in writing and shall determine whether the provider
failed to comply with the transfer process pursuant to subparagraphs
(A) to (C), inclusive. Pending the decision of the Continuing Care
Contracts Branch, the provider shall specify any additional care the
provider believes is necessary in order for the resident to remain in
his or her unit. The resident may be required to pay for the extra
care, as provided in the contract.
(F) Transfer of a second resident when a shared accommodation
arrangement is terminated.
(11) Provisions describing any changes in the resident's monthly
fee and any changes in the entrance fee refund payable to the
resident that will occur if the resident transfers from any unit,
including, but not limited to, terminating his or her contract after
18 months of residential temporary relocation, as defined in
paragraph (8) of subdivision (r) of Section 1771.
(12) The provider's continuing obligations, if any, in the event a
resident is transferred from the continuing care retirement
community to another facility.
(13) The provider's obligations, if any, to resume care upon the
resident's return after a transfer from the continuing care
retirement community.
(14) The provider's obligations to provide services to the
resident while the resident is absent from the continuing care
retirement community.
(15) The conditions under which the resident must permanently
release his or her living unit.
(16) If real or personal properties are transferred in lieu of
cash, a statement specifying each item's value at the time of
transfer, and how the value was ascertained.
(A) An itemized receipt that includes the information described
above is acceptable if incorporated as a part of the continuing care
contract.
(B) When real property is or will be transferred, the continuing
care contract shall include a statement that the deed or other
instrument of conveyance shall specify that the real property is
conveyed pursuant to a continuing care contract and may be subject to
rescission by the transferor within 90 days from the date that the
resident first occupies the residential unit.
(C) The failure to comply with paragraph (16) shall not affect the
validity of title to real property transferred pursuant to this
chapter.
(17) The amount of the entrance fee.
(18) In the event two parties have jointly paid the entrance fee
or other payment that allows them to occupy the unit, the continuing
care contract shall describe how any refund of entrance fees is
allocated.
(19) The amount of any processing fee.
(20) The amount of any monthly care fee.
(21) For continuing care contracts that require a monthly care fee
or other periodic payment, the continuing care contract shall
include the following:
(A) A statement that the occupancy and use of the accommodations
by the resident is contingent upon the regular payment of the fee.
(B) The regular rate of payment agreed upon (per day, week, or
month).
(C) A provision specifying whether payment will be made in advance
or after services have been provided.
(D) A provision specifying the provider will adjust monthly care
fees for the resident's support, maintenance, board, or lodging, when
a resident requires medical attention while away from the continuing
care retirement community.
(E) A provision specifying whether a credit or allowance will be
given to a resident who is absent from the continuing care retirement
community or from meals. This provision shall also state, when
applicable, that the credit may be permitted at the discretion or by
special permission of the provider.
(F) A statement of billing practices, procedures, and timelines. A
provider shall allow a minimum of 14 days between the date a bill is
sent and the date payment is due. A charge for a late payment may
only be assessed if the amount and any condition for the penalty is
stated on the bill.
(22) All continuing care contracts that include monthly care fees
shall address changes in monthly care fees by including either of the
following provisions:
(A) For prepaid continuing care contracts, which include monthly
care fees, one of the following methods:
(i) Fees shall not be subject to change during the lifetime of the
agreement.
(ii) Fees shall not be increased by more than a specified number
of dollars in any one year and not more than a specified number of
dollars during the lifetime of the agreement.
(iii) Fees shall not be increased in excess of a specified
percentage over the preceding year and not more than a specified
percentage during the lifetime of the agreement.
(B) For monthly fee continuing care contracts, except prepaid
contracts, changes in monthly care fees shall be based on projected
costs, prior year per capita costs, and economic indicators.
(23) A provision requiring that the provider give written notice
to the resident at least 30 days in advance of any change in the
resident's monthly care fees or in the price or scope of any
component of care or other services.
(24) A provision indicating whether the resident's rights under
the continuing care contract include any proprietary interests in the
assets of the provider or in the continuing care retirement
community, or both. Any statement in a contract concerning an
ownership interest shall appear in a large-sized font or print.
(25) If the continuing care retirement community property is
encumbered by a security interest that is senior to any claims the
residents may have to enforce continuing care contracts, a provision
shall advise the residents that any claims they may have under the
continuing care contract are subordinate to the rights of the secured
lender. For equity projects, the continuing care contract shall
specify the type and extent of the equity interest and whether any
entity holds a security interest.
(26) Notice that the living units are part of a continuing care
retirement community that is licensed as a residential care facility
for the elderly and, as a result, any duly authorized agent of the
department may, upon proper identification and upon stating the
purpose of his or her visit, enter and inspect the entire premises at
any time, without advance notice.
(27) A conspicuous statement, in at least 10-point boldface type
in immediate proximity to the space reserved for the signatures of
the resident and, if applicable, the transferor, that provides as
follows: "You, the resident or transferor, may cancel the transaction
without cause at any time within 90 days from the date you first
occupy your living unit. See the attached notice of cancellation form
for an explanation of this right."
(28) Notice that during the cancellation period, the continuing
care contract may be canceled upon 30 days' written notice by the
provider without cause, or that the provider waives this right.
(29) The terms and conditions under which the continuing care
contract may be terminated after the cancellation period by either
party, including any health or financial conditions.
(30) A statement that, after the cancellation period, a provider
may unilaterally terminate the continuing care contract only if the
provider has good and sufficient cause.
(A) Any continuing care contract containing a clause that provides
for a continuing care contract to be terminated for "just cause,"
"good cause," or other similar provision, shall also include a
provision that none of the following activities by the resident, or
on behalf of the resident, constitutes "just cause," "good cause," or
otherwise activates the termination provision:
(i) Filing or lodging a formal complaint with the department or
other appropriate authority.
(ii) Participation in an organization or affiliation of residents,
or other similar lawful activity.
(B) The provision required by this paragraph shall also state that
the provider shall not discriminate or retaliate in any manner
against any resident of a continuing care retirement community for
contacting the department, or any other state, county, or city
agency, or any elected or appointed government official to file a
complaint or for any other reason, or for participation in a
residents' organization or association.
(C) Nothing in this paragraph diminishes the provider's ability to
terminate the continuing care contract for good and sufficient
cause.
(31) A statement that at least 90 days' written notice to the
resident is required for a unilateral termination of the continuing
care contract by the provider.
(32) A statement concerning the length of notice that a resident
is required to give the provider to voluntarily terminate the
continuing care contract after the cancellation period.
(33) The policy or terms for refunding any portion of the entrance
fee, in the event of cancellation, termination, or death. Every
continuing care contract that provides for a refund of all or a part
of the entrance fee shall also do all of the following:
(A) Specify the amount, if any, the resident has paid or will pay
for upgrades, special features, or modifications to the resident's
unit.
(B) State that if the continuing care contract is canceled or
terminated by the provider, the provider shall do both of the
following:
(i) Amortize the specified amount at the same rate as the resident'
s entrance fee.
(ii) Refund the unamortized balance to the resident at the same
time the provider pays the resident's entrance fee refund.
(C) State that the resident has a right to terminate his or her
contract after 18 months of residential temporary relocation, as
defined in paragraph (8) of subdivision (r) of Section 1771.
Provisions for refunds due to cancellation pursuant to this
subparagraph shall be set forth in the contract.
(34) The following notice at the bottom of the signatory page:
"NOTICE" (date)
This is a continuing care contract as defined by paragraph (8) of
subdivision (c), or subdivision (l) of Section 1771 of the California
Health and Safety Code. This continuing care contract form has been
approved by the State Department of Social Services as required by
subdivision (b) of Section 1787 of the California Health and Safety
Code. The basis for this approval was a determination that (provider
name) has submitted a contract that complies with the minimum
statutory requirements applicable to continuing care contracts. The
department does not approve or disapprove any of the financial or
health care coverage provisions in this contract. Approval by the
department is NOT a guaranty of performance or an endorsement of any
continuing care contract provisions. Prospective transferors and
residents are strongly encouraged to carefully consider the benefits
and risks of this continuing care contract and to seek financial and
legal advice before signing.
(35) The provider may not attempt to absolve itself in the
continuing care contract from liability for its negligence by any
statement to that effect, and shall include the following statement
in the contract: "Nothing in this continuing care contract limits
either the provider's obligation to provide adequate care and
supervision for the resident or any liability on the part of the
provider which may result from the provider's failure to provide this
care and supervision."
(36) Provisions describing how the provider will proceed in the
event of a closure, including an explanation of how the provider will
comply with Sections 1793.80, 1793.81, 1793.82, and 1793.83.
(b) A life care contract shall also provide that:
(1) All levels of care, including acute care and physicians' and
surgeons' services will be provided to a resident.
(2) Care will be provided for the duration of the resident's life
unless the life care contract is canceled or terminated by the
provider during the cancellation period or after the cancellation
period for good cause.
(3) A comprehensive continuum of care will be provided to the
resident, including skilled nursing, in a facility under the
ownership and supervision of the provider on, or adjacent to, the
continuing care retirement community premises.
(4) Monthly care fees will not be changed based on the resident's
level of care or service.
(5) A resident who becomes financially unable to pay his or her
monthly care fees shall be subsidized provided the resident's
financial need does not arise from action by the resident to divest
the resident of his or her assets.
(c) Continuing care contracts may include provisions that do any
of the following:
(1) Subsidize a resident who becomes financially unable to pay for
his or her monthly care fees at some future date. If a continuing
care contract provides for subsidizing a resident, it may also
provide for any of the following:
(A) The resident shall apply for any public assistance or other
aid for which he or she is eligible and that the provider may apply
for assistance on behalf of the resident.
(B) The provider's decision shall be final and conclusive
regarding any adjustments to be made or any action to be taken
regarding any charitable consideration extended to any of its
residents.
(C) The provider is entitled to payment for the actual costs of
care out of any property acquired by the resident subsequent to any
adjustment extended to the resident under paragraph (1), or from any
other property of the resident that the resident failed to disclose.
(D) The provider may pay the monthly premium of the resident's
health insurance coverage under Medicare to ensure that those
payments will be made.
(E) The provider may receive an assignment from the resident of
the right to apply for and to receive the benefits, for and on behalf
of the resident.
(F) The provider is not responsible for the costs of furnishing
the resident with any services, supplies, and medication, when
reimbursement is reasonably available from any governmental agency,
or any private insurance.
(G) Any refund due to the resident at the termination of the
continuing care contract may be offset by any prior subsidy to the
resident by the provider.
(2) Limit responsibility for costs associated with the treatment
or medication of an ailment or illness existing prior to the date of
admission. In these cases, the medical or surgical exceptions, as
disclosed by the medical entrance examination, shall be listed in the
continuing care contract or in a medical report attached to and made
a part of the continuing care contract.
(3) Identify legal remedies that may be available to the provider
if the resident makes any material misrepresentation or omission
pertaining to the resident's assets or health.
(4) Restrict transfer or assignments of the resident's rights and
privileges under a continuing care contract due to the personal
nature of the continuing care contract.
(5) Protect the provider's ability to waive a resident's breach of
the terms or provisions of the continuing care contract in specific
instances without relinquishing its right to insist upon full
compliance by the resident with all terms or provisions in the
contract.
(6) Provide that the resident shall reimburse the provider for any
uninsured loss or damage to the resident's unit, beyond normal wear
and tear, resulting from the resident's carelessness or negligence.
(7) Provide that the resident agrees to observe the off-limit
areas of the continuing care retirement community designated by the
provider for safety reasons. The provider may not include any
provision in a continuing care contract that absolves the provider
from liability for its negligence.
(8) Provide for the subrogation to the provider of the resident's
rights in the case of injury to a resident caused by the acts or
omissions of a third party, or for the assignment of the resident's
recovery or benefits in this case to the provider, to the extent of
the value of the goods and services furnished by the provider to or
on behalf of the resident as a result of the injury.
(9) Provide for a lien on any judgment, settlement, or recovery
for any additional expense incurred by the provider in caring for the
resident as a result of injury.
(10) Require the resident's cooperation and assistance in the
diligent prosecution of any claim or action against any third party.
(11) Provide for the appointment of a conservator or guardian by a
court with jurisdiction in the event a resident becomes unable to
handle his or her personal or financial affairs.
(12) Allow a provider, whose property is tax exempt, to charge the
resident, on a pro rata basis, property taxes, or in-lieu taxes,
that the provider is required to pay.
(13) Make any other provision approved by the department.
(d) A copy of the resident's rights as described in Section 1771.7
shall be attached to every continuing care contract.
(e) A copy of the current audited financial statement of the
provider shall be attached to every continuing care contract. For a
provider whose current audited financial statement does not
accurately reflect the financial ability of the provider to fulfill
the continuing care contract obligations, the financial statement
attached to the continuing care contract shall include all of the
following:
(1) A disclosure that the reserve requirement has not yet been
determined or met, and that entrance fees will not be held in escrow.
(2) A disclosure that the ability to provide the services promised
in the continuing care contract will depend on successful compliance
with the approved financial plan.
(3) A copy of the approved financial plan for meeting the reserve
requirements.
(4) Any other supplemental statements or attachments necessary to
accurately represent the provider's financial ability to fulfill its
continuing care contract obligations.
(f) A schedule of the average monthly care fees charged to
residents for each type of residential living unit for each of the
five years preceding execution of the continuing care contract shall
be attached to every continuing care contract. The provider shall
update this schedule annually at the end of each fiscal year. If the
continuing care retirement community has not been in existence for
five years, the information shall be provided for each of the years
the continuing care retirement community has been in existence.
(g) If any continuing care contract provides for a health
insurance policy for the benefit of the resident, the provider shall
attach to the continuing care contract a binder complying with
Sections 382 and 382.5 of the Insurance Code.
(h) The provider shall attach to every continuing care contract a
completed form in duplicate, captioned "Notice of Cancellation." The
notice shall be easily detachable, and shall contain, in at least
10-point boldface type, the following statement:
"NOTICE OF CANCELLATION" (date)
Your first date of occupancy under this contract
is: _____________________________________________
"You may cancel this transaction, without any penalty within 90
calendar days from the above date.
If you cancel, any property transferred, any payments made by you
under the contract, and any negotiable instrument executed by you
will be returned within 14 calendar days after making possession of
the living unit available to the provider. Any security interest
arising out of the transaction will be canceled.
If you cancel, you are obligated to pay a reasonable processing
fee to cover costs and to pay for the reasonable value of the
services received by you from the provider up to the date you
canceled or made available to the provider the possession of any
living unit delivered to you under this contract, whichever is later.
If you cancel, you must return possession of any living unit
delivered to you under this contract to the provider in substantially
the same condition as when you took possession.
Possession of the living unit must be made available to the
provider within 20 calendar days of your notice of cancellation. If
you fail to make the possession of any living unit available to the
provider, then you remain liable for performance of all obligations
under the contract.
To cancel this transaction, mail or deliver a signed and dated
copy of this cancellation notice, or any other written notice, or
send a telegram
to
(Name of provider)
at
(Address of provider's place of business)
not later than midnight of _____________ (date).
I hereby cancel
this _________________________
transaction
(Resident
or
Transferor's signature)"
1788.2. (a) A continuing care contract may be canceled without
cause by written notice from either party within 90 days from the
date of the resident's initial occupancy.
(b) For all continuing care contracts, death of the resident
before or during the cancellation period shall constitute a
cancellation of the continuing care contract under subdivision (a),
unless the continuing care contract includes specific provisions
otherwise.
(c) The cancellation period and the associated refund obligations
shall apply as follows:
(1) To all executed continuing care contracts regarding a unit in
a continuing care retirement community that is not an equity
continuing care retirement community.
(2) To continuing care contracts executed in conjunction with a
purchase of an equity interest from a provider but not to continuing
care contracts executed in conjunction with sales of an equity
interest by one resident to another.
(d) The following fees may be charged before or during the 90-day
cancellation period:
(1) If possession of the living unit in a continuing care
retirement community that is not an equity continuing care retirement
community is returned to the provider in substantially the same
condition as when received, the resident's only obligations shall be
to pay a reasonable fee to cover costs and to pay the reasonable
value of services rendered pursuant to the canceled continuing care
contract.
(2) Equity project providers may impose a resale fee on sellers.
For contracts entered into after January 1, 1996, upon the
cancellation of a continuing care contract executed in conjunction
with the purchase of an equity interest from the provider, the
provider may charge a resale fee not to exceed the excess of the
gross resale price of the equity interest over the purchase price
paid by the resident or on behalf of the resident for the interest.
(e) No resale fee shall exceed the sum of 10 percent of either the
original or resale price of the equity interest and 100 percent of
the excess if any, of the gross resale price of the equity interest
over the purchase price paid by the resident or on behalf of the
resident for the interest if either of the following applies:
(1) The continuing care contract involved the purchase of an
equity interest from the provider and is terminated after the
cancellation period.
(2) The continuing care contract involved the purchase of an
equity interest from another resident and is terminated at any time.
(f) For purposes of this section, "gross resale price" means the
resale price before any deductions for resale fees, transfer taxes,
real estate commissions, periodic fees, late charges, interest,
escrow fees, or any other fees incidental to the sale of real
property.
(g) This section may not be construed to limit the provider's
ability to withhold delinquent periodic fees, late charges, accrued
interest, or assessments from the sale proceeds, as provided by the
continuing care contract or the real estate documents governing the
equity continuing care retirement community.
1788.4. (a) During the cancellation period, the provider shall pay
all refunds owed to a resident within 14 calendar days after a
resident makes possession of the living unit available to the
provider.
(b) After the cancellation period, any refunds due to a resident
under a continuing care contract shall be paid within 14 calendar
days after a resident makes possession of the living unit available
to the provider or 90 calendar days after death or receipt of notice
of termination, whichever is later.
(c) In nonequity projects, if the continuing care contract is
canceled by either party during the cancellation period or terminated
by the provider after the cancellation period, the resident shall be
refunded the difference between the total amount of entrance,
monthly, and optional fees paid and the amount used for care of the
resident.
(d) If a resident has paid additional amounts for upgrades,
special features, or modifications to the living unit and the
provider terminates the resident's continuing care contract, the
provider shall amortize those additional amounts at the same rate as
the entrance fee and shall refund the unamortized balance to the
resident.
(e) A lump-sum payment to a resident after termination of a
continuing care contract that is conditioned upon resale of a unit
shall not be considered to be a refund and may not be characterized
or advertised as a refund. The lump sum payment shall be paid to the
resident within 14 calendar days after resale of the unit.
