Continuing care retirement communities: repayable contracts.

Plain English Breakdown

The official source material does not provide information on what happens if there is insufficient money in the repayment account or how disputes over repayable contracts will be resolved.

Repayable Contracts for Retirement Communities

This law changes how retirement communities handle repayable contracts, which are agreements that promise to return part of an entrance fee when a resident leaves or sells their unit.

What This Bill Does

• Defines a new type of repayable contract where the repayment depends on the order in which contracts end.
• Requires providers to assign each terminated contract a number based on its termination date.
• Requiring providers to credit a repayment account every time entrance fees are paid for a reoccupied unit.
• Specifies that providers must pay back the next terminated contract within 14 days when there is enough money in the repayment account.

Who It Names or Affects

• Residents of continuing care retirement communities who have repayable contracts.
• Providers of continuing care retirement communities.

Terms To Know

Repayable contract

A type of agreement in a retirement community that promises to return part or all of an entrance fee if certain conditions are met, like reoccupancy or resale of the unit previously occupied by the resident.

Sequential order method

The way repayments are made based on the order in which contracts end.

Limits and Unknowns

• Does not specify what happens if there is not enough money in the repayment account to cover a full repayment.
• It does not explain how disputes over repayable contracts will be resolved.
• The bill has passed both chambers but its final status and any executive action are unknown.

Official Summary Text

AB 1983, as introduced, Blanca Rubio.
Continuing care retirement communities: repayable contracts.
Existing law establishes the State Department of Social Services and sets forth its powers and duties, including the certification and regulation of continuing care retirement communities. Existing law regulates different types of continuing care contracts, including, among others, a repayable contract. A repayable contract is a continuing care contract that includes a promise to repay all or a portion of an entrance fee that is conditioned upon reoccupancy or resale of the unit previously occupied by the resident.
This bill would additionally define a repayable contract to include a continuing care contract that includes a promise to repay all or a portion of an entrance fee based on the sequential order in which repayable contracts are terminated. To repay entrance fees using the sequential order method, the bill would require a provider to
assign each terminated contract a sequential repayment number, and each time entrance fees are paid for a reoccupied unit, a repayment account would be credited until funds are sufficient to repay the next terminated contract in sequential order. The bill would require a provider to issue this repayment within 14 days.

Current Bill Text

Download Bill PDF