Amended in Senate May 5, 2015

Senate Bill No. 475

Introduced by Senator Monning

February 26, 2015

An act to amend begin delete Section end delete begin insert Sections 1788 and end insert 1788.4 of the Health and Safety Code, relating to continuing care contracts.

LEGISLATIVE COUNSEL’S DIGEST

SB 475, as amended, 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 begin delete unit, and in any event no later than 90 days after the resident has vacated the unit. end delete begin insert unit. The bill would require the continuing care retirement facility, for contracts signed after January 1, 2016, to pay at least 20% of the full lump-sum payment to the resident within 90 days after a formerly occupied unit has been vacated. end insert The bill would require any begin delete payments end delete begin insert payment balance end insert not paid to the resident within begin delete the 90-day period end delete begin insert 90 days end insert to accrue interest at a begin delete specified rate end delete begin insert rate not lower than 2 end insert begin insert % plus the United States prime lending rate end insert until the full lump-sum payment is made. begin insert The bill would require any payment balance not paid to the resident within 180 days to accrue interest at a rate not lower than 5 end insert begin insert % plus the United States prime lending rate until the full lump-sum payment is made. end insert The bill would require the facility to make the lump-sum payment to the resident’s estate if the resident is deceased.

begin insert

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 descendants a monthly fee once a unit has been permanently vacated by the resident. 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.

end insert

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 1788 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

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. begin insert The schedule shall state that a provider is prohibited
from charging the resident or his or her descendants a monthly
fee once a unit has been permanently vacated by the resident. end insert

(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 residents, 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 begin insert , and that a
provider is prohibited from charging the resident or his or her
descendants a monthly fee once a unit has been permanently
vacated by the resident end insert .

(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 this paragraph 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.

begin insert

(G) A statement that the provider is prohibited from charging
the resident or his or her descendants a monthly fee once a unit
has been permanently vacated by the resident.

end insert

(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 begin insert or repaying a lump sum
of end insert any portion of the entrance fee, in the event of cancellation,
termination, or death. Every continuing care contract that provides
for a refund begin insert or repaying a lump end insert begin insert sum end insert 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.

begin insert

(D) State the provider shall make a good faith effort to reoccupy
or resell a unit for which a lump-sum payment is conditioned upon
resale of the unit. No later than July 1, 2016, a provider shall
provide notice to all current residents with contracts applicable
to this subparagraph regarding the statement required by this
subparagraph as a clarification of the resident’s existing contract.

end insert

(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 this paragraph, 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’s or Transferor’s signature)”

 

begin delete SECTION 1. end delete
begin insert SEC. 2. end insert   

Section 1788.4 of the Health and Safety Code is
amended to read:

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) (1) 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 full lump-sum payment shall be paid
to the resident within 14 calendar days after resale of the begin delete unit, but
in no event later than 90 days after the formerly occupied unit has
been vacated. end delete begin insert unit. Contracts signed after January 1, 2016, shall
require that no later than 90 days after a formerly occupied unit
has been vacated, at least 20 percent of the full lump-sum payment end insert
begin insert be paid to the resident. end insert

(2) Any begin delete payments that are not end delete begin insert payment balance that has not
been end insert paid to the resident within begin delete the 90-day period pursuant to
paragraph (1) end delete begin insert 90 days end insert will accrue interest at a rate calculated
pursuant to paragraph (3). begin insert Any payment balance that has not been
paid to the resident within 180 days will accrue interest at a rate
calculated pursuant to paragraph (4). end insert Interest shall continue to
accrue until the date the full lump-sum payment is paid to the
resident. begin insert This paragraph shall apply to existing and prospective
continuing care contracts. end insert

begin delete

(3) Interest rates and calculations pursuant to paragraph (2) are
identical to interest rates and calculations set forth in Section
685.010 of the Code of Civil Procedure.

end delete begin insert

(3) Any payments that are not paid to the resident within the
90-day period pursuant to paragraph (2) will accrue interest at a
rate no lower than 2 percent plus the United States prime lending
rate.

end insert begin insert

(4) Any payments that are not paid to the resident within the
180-day period pursuant to paragraph (2) will accrue interest at
a rate no lower than 5 percent plus the United States prime lending
rate.

end insert

(f) After the death of a resident, a lump-sum payment that is
conditioned upon resale of a unit shall be subject to subdivision
(e) and the payment and interest, if any, shall be payable to the
resident’s estate.

(g) Once the unit has been vacated and made available to the
provider, the provider shall not make any further charges to the
resident or his or her estate or charges against the lump-sum
payment that is due to the resident for purposes of continued
monthly payments to the provider or for maintenance or
housekeeping on the vacated unit. begin insert This subdivision shall apply to
existing and prospective continuing care contracts. end insert