SB 475, as introduced, Monning. 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 states 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 the 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 the provider to pay a lump-sum payment that is conditioned upon resale of a unit to the resident within 14 days after resale of the unit.
This bill would require the continuing care retirement facility to pay the full lump-sum payment that is conditioned upon resale of a unit to the resident within 14 days after resale of the unit, and in any event no later than 90 days after the resident has vacated the unit. The bill would require any payments not paid to the resident within the 90-day period to accrue interest at a specified rate until the full lump-sum payment is made. The bill would require the facility to make the lump-sum payment to the resident’s estate if the resident is deceased.
Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 1788.4 of the Health and Safety Code is
2amended to read:
(a) During the cancellation period, the provider shall
4pay all refunds owed to a resident within 14 calendar days after a
5resident makes possession of the living unit available to the
6provider.
7(b) After the cancellation period, any refunds due to a resident
8under a continuing care contract shall be paid within 14 calendar
9days after a resident makes possession of the living unit available
10to the provider or 90 calendar days after death or receipt of notice
11of termination, whichever is later.
12(c) In nonequity projects, if the continuing care contract is
13canceled by either party during the cancellation period or
14terminated by the provider after the
cancellation period, the resident
15shall be refunded the difference between the total amount of
16entrance, monthly, and optional fees paid and the amount used for
17care of the resident.
18(d) If a resident has paid additional amounts for upgrades,
19special features, or modifications to the living unit and the provider
20terminates the resident’s continuing care contract, the provider
21shall amortize those additional amounts at the same rate as the
22entrance fee and shall refund the unamortized balance to the
23resident.
24(e) begin insert(1)end insertbegin insert end insertA lump-sum payment to a resident after termination of
25a continuing care contract that is conditioned upon resale of a unit
26shall not be considered to be a refund and may not be characterized
27or advertised as a refund. Thebegin delete lump sumend deletebegin insert
full lump-sumend insert payment
28shall be paid to the resident within 14 calendar days after resale
29of the unitbegin insert, but in no event later than 90 days after the formerly
30occupied unit has been vacatedend insert.
31(2) Any payments that are not paid to the resident within the
3290-day period pursuant to paragraph (1) will accrue interest at a
33rate calculated pursuant to paragraph (3). Interest shall continue
P3 1to accrue until the date the full lump-sum payment is paid to the
2resident.
3(3) Interest rates and calculations pursuant to paragraph (2)
4are identical to interest rates
and calculations set forth in Section
5685.010 of the Code of Civil Procedure.
6(f) After the death of a resident, a lump-sum payment that is
7conditioned upon resale of a unit shall be subject to subdivision
8(e) and the payment and interest, if any, shall be payable to the
9resident’s estate.
10(g) Once the unit has been vacated and made available to the
11provider, the provider shall not make any further charges to the
12resident or his or her estate or charges against the lump-sum
13payment that is due to the resident for purposes of continued
14monthly payments to the provider or for maintenance or
15housekeeping on the vacated unit.
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