Continuing care contracts: cancellation: payments.

Existing law requires a continuing care retirement facility, as defined, to possess a certificate of authority issued by the State Department of Social Services before it can enter into a continuing care contract, as defined. Existing law requires that a continuing care contract be in writing and contain specified information. Existing law provides that a continuing care contract may be canceled without cause by written notice from either party within 90 days of the resident's initial occupancy. Existing law requires a provider to pay, during the cancellation period, all refunds owed to a resident within 14 days after a resident makes possession of the living unit available to the provider. Existing law requires a provider to pay a lump-sum payment that is conditioned upon resale of a unit to a resident within 14 days after resale of the unit. This bill would define a repayable contract as 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. The bill would require any amount owed that is not paid to a resident or the resident's estate within 180 days after termination of a repayable contract to accrue simple interest at a rate of 4% until the full amount owed is paid. The bill would require any amount owed that is not paid to a resident or the resident's estate within 240 days after termination of a repayable contract to accrue simple interest at a rate of 6% until the full amount owed is paid. The bill would require any amount owed that is not paid to a resident or the resident's estate within one year after the 240-day period to accrue compound interest annually at a rate of 6% until the amount owed is paid. The bill would provide that the above-mentioned provisions apply only to repayable contracts entered into on or after January 1, 2017. The bill would provide that, until January 1, 2018, these provisions do not apply to specified projects that are in development prior to January 1, 2017, provided that the initial contract for the project is entered into on or before January 1, 2018. The bill would provide that the repayment by a provider of all or a portion of an entrance fee before the resale of a unit would not subject any other entrance fee to the refund reserve requirements, except as provided. The bill would make corresponding changes to require a continuing care contract to contain a statement that a provider is prohibited from charging the resident or his or her estate a monthly fee once a unit has been permanently vacated by the resident, unless the fee is part of an equity interest contract. The bill would also require a continuing care contract that provides for a refund or repayment of a lump sum of all or part of the entrance fee to include a statement that the provider will make a good-faith effort to reoccupy or resell a unit for which a lump-sum payment is conditioned upon resale of the unit.