Amended in Assembly September 1, 2015

Amended in Assembly August 20, 2015

Amended in Assembly August 17, 2015

Amended in Assembly July 6, 2015

Amended in Assembly June 25, 2015

Amended in Senate May 5, 2015

Senate BillNo. 475


Introduced by Senator Monning

February 26, 2015


An act to amend Sections 1771, 1788, and 1788.4 of, and to add Section 1788.5 to, 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 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 require a continuing care retirement facility to pay the full lump-sum payment that is conditioned upon resale of a unit to a resident within 14 days after resale of a unit. The bill would require a continuing care retirement facility, for contracts signed after January 1, 2016, to pay a resident or his or her estate a specified portion of the full lump-sum payment, notwithstanding a provider’s documented good-faith effort to resell the unit, if the unit remains vacant 120 days after the resident’s termination. The bill would require any payment balance not paid to a resident withinbegin delete 120end deletebegin insert 180end insert days to accrue compound interest every 30 days at a rate not lower than 4% until the full lump-sum payment is made. The bill would require any payment balance not paid to a resident withinbegin delete 180end deletebegin insert 240end insert days to accrue compound interest every 30 days at a rate not lower than 6% until the full lump-sum payment is made. The bill would require a facility to make the lump-sum payment to a resident’s estate if the resident is deceased. 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 authorize any resident whose contract calls for a lump-sum payment conditioned upon resale of a unit to file a complaint with the department if the unit has not been resold for more than 12 months after possession of the unit was made available to the provider. The bill would require the department, in response to the complaint, to perform an investigation, as specified, to determine whether the provider made a sufficient good faith effort to resell or reoccupy the unit. The bill would authorize a resident or a provider to submit a written request to the department for a formal review of the determination. The bill would require the provider to repay the full lump-sum payment owed to the resident within 20 business days of the department’s final determination that the provider did not make a sufficient good faith effort to reoccupy or resell thebegin delete unit, and would require the provider to reimburse the department for reasonable costs associated with the investigation, as specified.end deletebegin insert unit.end 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 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.

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

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

P3    1

SECTION 1.  

Section 1771 of the Health and Safety Code is
2amended to read:

3

1771.  

Unless the context otherwise requires, the definitions in
4this section govern the interpretation of this chapter.

5(a) (1) “Affiliate” means any person, corporation, limited
6liability company, business trust, trust, partnership, unincorporated
7association, or other legal entity that directly or indirectly controls,
8is controlled by, or is under common control with, a provider or
9applicant.

10(2) “Affinity group” means a grouping of entities sharing a
11common interest, philosophy, or connection (e.g., military officers,
12religion).

13(3) “Annual report” means the report each provider is required
14to file annually with the department, as described in Section 1790.

15(4) “Applicant” means any entity, or combination of entities,
16that submits and has pending an application to the department for
17a permit to accept deposits and a certificate of authority.

18(5) “Assisted living services” includes, but is not limited to,
19assistance with personal activities of daily living, including
20dressing, feeding, toileting, bathing, grooming, mobility, and
21associated tasks, to help provide for and maintain physical and
22psychosocial comfort.

23(6) “Assisted living unit” means the living area or unit within
24a continuing care retirement community that is specifically
25designed to provide ongoing assisted living services.

26(7) “Audited financial statement” means financial statements
27prepared in accordance with generally accepted accounting
28begin delete principlesend deletebegin insert principles,end insert including the opinion of an independent
29certified public accountant, and notes to the financial statements
30considered customary or necessary to provide full disclosure and
P4    1complete information regarding the provider’s financial statements,
2financial condition, and operation.

3(b) (reserved)

4(c) (1) “Cancel” means to destroy the force and effect of an
5agreement or continuing care contract.

6(2) “Cancellation period” means the 90-day period, beginning
7when the resident physically moves into the continuing care
8retirement community, during which the resident may cancel the
9continuing care contract, as provided in Section 1788.2.

10(3) “Care” means nursing, medical, or other health-related
11services, protection or supervision, assistance with the personal
12activities of daily living, or any combination of those services.

13(4) “Cash equivalent” means certificates of deposit and United
14States treasury securities with a maturity of five years or less.

15(5) “Certificate” or “certificate of authority” means the
16certificate issued by the department, properly executed and bearing
17the State Seal, authorizing a specified provider to enter into one
18or more continuing care contracts at a single specified continuing
19care retirement community.

20(6) “Condition” means a restriction, specific action, or other
21requirement imposed by the department for the initial or continuing
22validity of a permit to accept deposits, a provisional certificate of
23authority, or a certificate of authority. A condition may limit the
24circumstances under which the provider may enter into any new
25deposit agreement or contract, or may be imposed as a condition
26precedent to the issuance of a permit to accept deposits, a
27provisional certificate of authority, or a certificate of authority.

28(7) “Consideration” means some right, interest, profit, or benefit
29paid, transferred, promised, or provided by one party to another
30as an inducement to contract. Consideration includes some
31forbearance, detriment, loss, or responsibility, that is given,
32suffered, or undertaken by a party as an inducement to another
33party to contract.

34(8) “Continuing care contract” means a contract that includes
35a continuing care promise made, in exchange for an entrance fee,
36the payment of periodic charges, or both types of payments. A
37continuing care contract may consist of one agreement or a series
38of agreements and other writings incorporated by reference.

39(9) “Continuing care promise” means a promise, expressed or
40implied, by a provider to provide one or more elements of care to
P5    1an elderly resident for the duration of his or her life or for a term
2in excess of one year. Any such promise or representation, whether
3part of a continuing care contract, other agreement, or series of
4agreements, or contained in any advertisement, brochure, or other
5material, either written or oral, is a continuing care promise.

6(10) “Continuing care retirement community” means a facility
7located within the State of California where services promised in
8a continuing care contract are provided. A distinct phase of
9development approved by the department may be considered to
10be the continuing care retirement community when a project is
11being developed in successive distinct phases over a period of
12time. When the services are provided in residents’ own homes, the
13homes into which the provider takes those services are considered
14part of the continuing care retirement community.

15(11) “Control” means directing or causing the direction of the
16financial management or the policies of another entity, including
17an operator of a continuing care retirement community, whether
18by means of the controlling entity’s ownership interest, contract,
19or any other involvement. A parent entity or sole member of an
20entity controls a subsidiary entity provider for a continuing care
21retirement community if its officers, directors, or agents directly
22participate in the management of the subsidiary entity or in the
23initiation or approval of policies that affect the continuing care
24retirement community’s operations, including, but not limited to,
25approving budgets or the administrator for a continuing care
26retirement community.

27(d) (1) “Department” means the State Department of Social
28Services.

29(2) “Deposit” means any transfer of consideration, including a
30promise to transfer money or property, made by a depositor to any
31entity that promises or proposes to promise to provide continuing
32care, but is not authorized to enter into a continuing care contract
33with the potential depositor.

34(3) “Deposit agreement” means any agreement made between
35any entity accepting a deposit and a depositor. Deposit agreements
36for deposits received by an applicant prior to the department’s
37release of funds from the deposit escrow account shall be subject
38to the requirements described in Section 1780.4.

P6    1(4) “Depository” means a bank or institution that is a member
2of the Federal Deposit Insurance Corporation or a comparable
3deposit insurance program.

4(5) “Depositor” means any prospective resident who pays a
5deposit. Where any portion of the consideration transferred to an
6applicant as a deposit or to a provider as consideration for a
7continuing care contract is transferred by a person other than the
8prospective resident or a resident, that third-party transferor shall
9have the same cancellation or refund rights as the prospective
10resident or resident for whose benefit the consideration was
11transferred.

12(6) “Director” means the Director of Social Services.

13(e) (1) “Elderly” means an individual who is 60 years of age
14or older.

15(2) “Entity” means an individual, partnership, corporation,
16limited liability company, and any other form for doing business.
17Entity includes a person, sole proprietorship, estate, trust,
18association, and joint venture.

19(3) “Entrance fee” means the sum of any initial, amortized, or
20deferred transfer of consideration made or promised to be made
21by, or on behalf of, a person entering into a continuing care contract
22for the purpose of ensuring care or related services pursuant to that
23continuing care contract or as full or partial payment for the
24promise to provide care for the term of the continuing care contract.
25Entrance fee includes the purchase price of a condominium,
26cooperative, or other interest sold in connection with a promise of
27continuing care. An initial, amortized, or deferred transfer of
28consideration that is greater in value than 12 times the monthly
29care fee shall be presumed to be an entrance fee.

30(4) “Equity” means the value of real property in excess of the
31aggregate amount of all liabilities secured by the property.

32(5) “Equity interest” means an interest held by a resident in a
33continuing care retirement community that consists of either an
34ownership interest in any part of the continuing care retirement
35community property or a transferable membership that entitles the
36holder to reside at the continuing care retirement community.

37(6) “Equity project” means a continuing care retirement
38community where residents receive an equity interest in the
39continuing care retirement community property.

P7    1(7) “Equity securities” shall refer generally to large and
2midcapitalization corporate stocks that are publicly traded and
3readily liquidated for cash, and shall include shares in mutual funds
4that hold portfolios consisting predominantly of these stocks and
5other qualifying assets, as defined by Section 1792.2. Equity
6securities shall also include other similar securities that are
7specifically approved by the department.

8(8) “Escrow agent” means a bank or institution, including, but
9not limited to, a title insurance company, approved by the
10department to hold and render accountings for deposits of cash or
11cash equivalents.

12(f) “Facility” means any place or accommodation where a
13provider provides or will provide a resident with care or related
14services, whether or not the place or accommodation is constructed,
15owned, leased, rented, or otherwise contracted for by the provider.

16(g) (reserved)

17(h) (reserved)

18(i) (1) “Inactive certificate of authority” means a certificate that
19has been terminated under Section 1793.8.

20(2) “Investment securities” means any of the following:

21(A) Direct obligations of the United States, including obligations
22issued or held in book-entry form on the books of the United States
23Department of the Treasury or obligations the timely payment of
24the principal of, and the interest on, which are fully guaranteed by
25the United States.

26(B) Obligations, debentures, notes, or other evidences of
27indebtedness issued or guaranteed by any of the following:

28(i) The Federal Home Loan Bank System.

29(ii) The Export-Import Bank of the United States.

30(iii) The Federal Financing Bank.

31(iv) The Government National Mortgage Association.

32(v) The Farmers Home Administration.

33(vi) The Federal Home Loan Mortgage Corporation of the
34Federal Housing Administration.

35(vii) Any agency, department, or other instrumentality of the
36United States if the obligations are rated in one of the two highest
37rating categories of each rating agency rating those obligations.

38(C) Bonds of the State of California or of any county, city and
39county, or city in this state, if rated in one of the two highest rating
40categories of each rating agency rating those bonds.

P8    1(D) Commercial paper of finance companies and banking
2institutions rated in one of the two highest categories of each rating
3agency rating those instruments.

4(E) Repurchase agreements fully secured by collateral security
5described in subparagraph (A) or (B), as evidenced by an opinion
6of counsel, if the collateral is held by the provider or a third party
7during the term of the repurchase agreement, pursuant to the terms
8of the agreement, subject to liens or claims of third parties, and
9has a market value, which is determined at least every 14 days, at
10least equal to the amount so invested.

11(F) Long-term investment agreements, which have maturity
12dates in excess of one year, with financial institutions, including,
13but not limited to, banks and insurance companies or their affiliates,
14if the financial institution’s paying ability for debt obligations or
15long-term claims or the paying ability of a related guarantor of the
16financial institution for these obligations or claims, is rated in one
17of the two highest rating categories of each rating agency rating
18those instruments, or if the short-term investment agreements are
19with the financial institution or the related guarantor of the financial
20institution, the long-term or short-term debt obligations, whichever
21is applicable, of which are rated in one of the two highest long-term
22or short-term rating categories, of each rating agency rating the
23bonds of the financial institution or the related guarantor, provided
24that if the rating falls below the two highest rating categories, the
25investment agreement shall allow the provider the option to replace
26the financial institution or the related guarantor of the financial
27institution or shall provide for the investment securities to be fully
28collateralized by investments described in subparagraph (A), and,
29provided further, if so collateralized, that the provider has a
30perfected first security lien on the collateral, as evidenced by an
31opinion of counsel and the collateral is held by the provider.

32(G) Banker’s acceptances or certificates of deposit of, or time
33deposits in, any savings and loan association that meets any of the
34following criteria:

35(i) The debt obligations of the savings and loan association, or
36in the case of a principal bank, of the bank holding company, are
37rated in one of the two highest rating categories of each rating
38agency rating those instruments.

39(ii) The certificates of deposit or time deposits are fully insured
40by the Federal Deposit Insurance Corporation.

P9    1(iii) The certificates of deposit or time deposits are secured at
2all times, in the manner and to the extent provided by law, by
3collateral security described in subparagraph (A) or (B) with a
4market value, valued at least quarterly, of no less than the original
5amount of moneys so invested.

6(H) Taxable money market government portfolios restricted to
7obligations issued or guaranteed as to payment of principal and
8interest by the full faith and credit of the United States.

9(I) Obligations the interest on which is excluded from gross
10income for federal income tax purposes and money market mutual
11funds whose portfolios are restricted to these obligations, if the
12obligations or mutual funds are rated in one of the two highest
13rating categories by each rating agency rating those obligations.

14(J) Bonds that are not issued by the United States or any federal
15agency, but that are listed on a national exchange and that are rated
16at least “A” by Moody’s Investors Service, or the equivalent rating
17by Standard and Poor’s Corporation or Fitch Investors Service.

18(K) Bonds not listed on a national exchange that are traded on
19an over-the-counter basis, and that are rated at least “Aa” by
20Moody’s Investors Service or “AA” by Standard and Poor’s
21Corporation or Fitch Investors Service.

22(j) (reserved)

23(k) (reserved)

24(l) “Life care contract” means a continuing care contract that
25includes a promise, expressed or implied, by a provider to provide
26or pay for routine services at all levels of care, including acute
27care and the services of physicians and surgeons, to the extent not
28covered by other public or private insurance benefits, to a resident
29for the duration of his or her life. Care shall be provided under a
30life care contract in a continuing care retirement community having
31a comprehensive continuum of care, including a skilled nursing
32facility, under the ownership and supervision of the provider on
33or adjacent to the premises.begin delete No change mayend deletebegin insert A change shall notend insert be
34made in the monthly fee based on level of care. A life care contract
35shall also include provisions to subsidize residents who become
36financially unable to pay their monthly care fees.

37(m) (1) “Monthly care fee” means the fee charged to a resident
38in a continuing care contract on a monthly or other periodic basis
39for current accommodations andbegin delete servicesend deletebegin insert services,end insert including care,
P10   1board, or lodging. Periodic entrance fee payments or other
2prepayments shall not be monthly care fees.

3(2) “Monthly fee contract” means a continuing care contract
4that requires residents to pay monthly care fees.

5(n) “Nonambulatory person” means a person who is unable to
6leave a building unassisted under emergency conditions in the
7manner described by Section 13131.

8(o) (reserved)

9(p) (1) “Per capita cost” means a continuing care retirement
10community’s operating expenses, excluding depreciation, divided
11by the average number of residents.

12(2) “Periodic charges” means fees paid by a resident on a
13periodic basis.

14(3) “Permanent closure” means the voluntary or involuntary
15termination or forfeiture, as specified in subdivisions (a), (b), (g),
16(h), and (i) of Section 1793.7, of a provider’s certificate of authority
17or license, or another action that results in the permanent relocation
18of residents. Permanent closure does not apply in the case of a
19natural disaster or other event out of the provider’s control.

20(4) “Permit to accept deposits” means a written authorization
21by the department permitting an applicant to enter into deposit
22agreements regarding a single specified continuing care retirement
23community.

24(5) “Prepaid contract” means a continuing care contract in which
25the monthly care fee, if any, may not be adjusted to cover the actual
26cost of care and services.

27(6) “Preferred access” means that residents who have previously
28occupied a residential living unit have a right over other persons
29to any assisted living or skilled nursing beds that are available at
30the community.

31(7) “Processing fee” means a payment to cover administrative
32costs of processing the application of a depositor or prospective
33resident.

34(8) “Promise to provide one or more elements of care” means
35any expressed or implied representation that one or more elements
36of care will be provided or will be available, such as by preferred
37access.

38(9) “Proposes” means a representation that an applicant or
39provider will or intends to make a future promise to provide care,
40including a promise that is subject to a condition, such as the
P11   1construction of a continuing care retirement community or the
2acquisition of a certificate of authority.

3(10) “Provider” means an entity that provides continuing care,
4makes a continuing care promise, or proposes to promise to provide
5continuing care. “Provider” also includes any entity that controls
6an entity that provides continuing care, makes a continuing care
7promise, or proposes to promise to provide continuing care. The
8 department shall determine whether an entity controls another
9entity for purposes of this article. No homeowner’s association,
10cooperative, or condominium association may be a provider.

11(11) “Provisional certificate of authority” means the certificate
12issued by the department, properly executed and bearing the State
13Seal, under Section 1786. A provisional certificate of authority
14shall be limited to the specific continuing care retirement
15community and number of units identified in the applicant’s
16application.

17(q) (reserved)

18(r) (1) “Refund reserve” means the reserve a provider is required
19to maintain, as provided in Section 1792.6.

20(2) (A) “Refundable contract” means a continuing care contract
21that includes a promise, expressed or implied, by the provider to
22pay an entrance fee refund or to repurchase the transferor’s unit,
23membership, stock, or other interest in the continuing care
24retirement community when the promise to refund some or all of
25the initial entrance fee extends beyond the resident’s sixth year of
26residency. Providers that enter into refundable contracts shall be
27subject to the refund reserve requirements of Section 1792.6.

28(B) A continuing care contract that includes a promise to repay
29all or a portion of an entrance fee that is conditioned upon
30reoccupancy or resale of the unit previously occupied by the
31resident shall not be considered a refundable contract for purposes
32of the refund reserve requirements of Section 1792.6, provided
33that this conditional promise of repayment is not referred to by the
34applicant or provider as a “refund.” A provider may repay all or
35a portion of an entrance fee that is conditioned upon resale of the
36unit before the resale of the unit. The repayment of an entrance
37fee before the resale of the unit shall not cause any other entrance
38fee to be subject to the refund reserve requirements of Section
391792.6, provided that the provider does not promise, at the time
40of contracting or thereafter, to make this type of early repayment,
P12   1represent that the provider intends to make this type of early
2repayment, or indicate that the provider has a practice of making
3this type of early repayment.

4(3) “Resale fee” means a levy by the provider against the
5proceeds from the sale of a transferor’s equity interest.

6(4) “Reservation fee” refers to consideration collected by an
7entity that has made a continuing care promise or is proposing to
8make this promise and has complied with Section 1771.4.

9(5) “Resident” means a person who enters into a continuing
10care contract with a provider, or who is designated in a continuing
11care contract to be a person being provided or to be provided
12services, including care, board, or lodging.

13(6) “Residential care facility for the elderly” means a housing
14arrangement as defined by Section 1569.2.

15(7) “Residential living unit” means a living unit in a continuing
16care retirement community that is not used exclusively for assisted
17living services or nursing services.

18(8) “Residential temporary relocation” means the relocation of
19one or more residents, except in the case of a natural disaster that
20is out of the provider’s control, from one or more residential living
21units, assisted living units, skilled nursing units, or a wing, floor,
22or entire continuing care retirement community building, due to a
23change of use or major repairs or renovations. A residential
24temporary relocation shall mean a relocation pursuant to this
25subdivision that lasts for a period of at least nine months but that
26does not exceed 18 months without the written agreement of the
27resident.

28(s) (reserved)

29(t) (1) “Termination” means the ending of a continuing care
30contract as provided for in the terms of the continuing care contract.

31(2) “Transfer trauma” means death, depression, or regressive
32behavior, that is caused by the abrupt and involuntary transfer of
33an elderly resident from one home to another and results from a
34loss of familiar physical environment, loss of well-known
35neighbors, attendants, nurses and medical personnel, the stress of
36an abrupt break in the small routines of daily life, or the loss of
37visits from friends and relatives who may be unable to reach the
38new facility.

39(3) “Transferor” means a person who transfers, or promises to
40transfer, consideration in exchange for care and related services
P13   1under a continuing care contract or proposed continuing care
2contract, for the benefit of another. A transferor shall have the
3same rights to cancel and obtain a refund as the depositor under
4the deposit agreement or the resident under a continuing care
5contract.

6

SEC. 2.  

Section 1788 of the Health and Safety Code is amended
7to read:

8

1788.  

(a) A continuing care contract shall contain all of the
9following:

10(1) The legal name and address of each provider.

11(2) The name and address of the continuing care retirement
12community.

13(3) The resident’s name and the identity of the unit the resident
14will occupy.

15(4) If there is a transferor other than the resident, the transferor
16shall be a party to the contract and the transferor’s name and
17address shall be specified.

18(5) If the provider has used the name of any charitable or
19religious or nonprofit organization in its title before January 1,
201979, and continues to use that name, and that organization is not
21responsible for the financial and contractual obligations of the
22provider or the obligations specified in the continuing care contract,
23the provider shall include in every continuing care contract a
24conspicuous statement that clearly informs the resident that the
25organization is not financially responsible.

26(6) The date the continuing care contract is signed by the
27resident and, where applicable, any other transferor.

28(7) The duration of the continuing care contract.

29(8) A list of the services that will be made available to the
30resident as required to provide the appropriate level of care. The
31list of services shall include the services required as a condition
32for licensure as a residential care facility for the elderly, including
33all of the following:

34(A) Regular observation of the resident’s health status to ensure
35that his or her dietary needs, social needs, and needs for special
36services are satisfied.

37(B) Safe and healthful living accommodations, including
38housekeeping services and utilities.

39(C) Maintenance of house rules for the protection of residents.

P14   1(D) A planned activities program, which includes social and
2recreational activities appropriate to the interests and capabilities
3of the resident.

4(E) Three balanced, nutritious meals and snacks made available
5daily, including special diets prescribed by a physician as a medical
6necessity.

7(F) Assisted living services.

8(G) Assistance with taking medications.

9(H) Central storing and distribution of medications.

10(I) Arrangements to meet health needs, including arranging
11transportation.

12(9) An itemization of the services that are included in the
13monthly fee and the services that are available at an extra charge.
14The provider shall attach a current fee schedule to the continuing
15care contract. The schedule shall state that a provider is prohibited
16from charging the resident or his or her estate a monthly fee once
17a unit has been permanently vacated by the resident, unless the fee
18is part of an equity interest contract.

19(10) The procedures and conditions under which a resident may
20be voluntarily and involuntarily transferred from a designated
21living unit. The transfer procedures, at a minimum, shall include
22provisions addressing all of the following circumstances under
23which a transfer may be authorized:

24(A) A continuing care retirement community may transfer a
25resident under the following conditions, taking into account the
26appropriateness and necessity of the transfer and the goal of
27promoting resident independence:

28(i) The resident is nonambulatory. The definition of
29“nonambulatory,” as provided in Section 13131, shall either be
30stated in full in the continuing care contract or be cited. If Section
3113131 is cited, a copy of the statute shall be made available to the
32resident, either as an attachment to the continuing care contract or
33by specifying that it will be provided upon request. If a
34nonambulatory resident occupies a room that has a fire clearance
35for nonambulatory residents, transfer shall not be necessary.

36(ii) The resident develops a physical or mental condition that
37endangers the health, safety, or well-being of the resident or another
38person.

39(iii) The resident’s condition or needs require the resident’s
40transfer to an assisted living care unit or skilled nursing facility,
P15   1because the level of care required by the resident exceeds that
2which may be lawfully provided in the living unit.

3(iv) The resident’s condition or needs require the resident’s
4transfer to a nursing facility, hospital, or other facility, and the
5provider has no facilities available to provide that level of care.

6(B) Before the continuing care retirement community transfers
7a resident under any of the conditions set forth in subparagraph
8(A), the community shall satisfy all of the following requirements:

9(i) Involve the resident and the resident’s responsible person,
10as defined in paragraph (6) of subdivision (r) of Section 87101 of
11Title 22 of the California Code of Regulations, and upon the
12resident’s or responsible person’s request, family members, or the
13resident’s physician or other appropriate health professional, in
14the assessment process that forms the basis for the level of care
15transfer decision by the provider. The provider shall offer an
16explanation of the assessment process. If an assessment tool or
17tools, including scoring and evaluating criteria, are used in the
18determination of the appropriateness of the transfer, the provider
19shall make copies of the completed assessment available upon the
20request of the resident or the resident’s responsible person.

21(ii) Prior to sending a formal notification of transfer, the provider
22shall conduct a care conference with the resident and the resident’s
23responsible person, and upon the resident’s or responsible person’s
24request, family members, and the resident’s health care
25professionals, to explain the reasons for transfer.

26(iii) Notify the resident and the resident’s responsible person
27of the reasons for the transfer in writing.

28(iv) Notwithstanding any other provision of this subparagraph,
29if the resident does not have impairment of cognitive abilities, the
30resident may request that his or her responsible person not be
31involved in the transfer process.

32(v) The notice of transfer shall be made at least 30 days before
33the transfer is expected to occur, except when the health or safety
34of the resident or other residents is in danger, or the transfer is
35required by the resident’s urgent medical needs. Under those
36circumstances, the written notice shall be made as soon as
37 practicable before the transfer.

38(vi) The written notice shall contain the reasons for the transfer,
39the effective date, the designated level of care or location to which
40the resident will be transferred, a statement of the resident’s right
P16   1to a review of the transfer decision at a care conference, as provided
2for in subparagraph (C), and for disputed transfer decisions, the
3right to review by the Continuing Care Contracts Branch of the
4State Department of Social Services, as provided for in
5subparagraph (D). The notice shall also contain the name, address,
6and telephone number of the department’s Continuing Care
7Contracts Branch.

8(vii) The continuing care retirement community shall provide
9sufficient preparation and orientation to the resident to ensure a
10safe and orderly transfer and to minimize trauma.

11(C) The resident has the right to review the transfer decision at
12a subsequent care conference that shall include the resident, the
13resident’s responsible person, and upon the resident’s or
14responsible person’s request, family members, the resident’s
15physician or other appropriate health care professional, and
16members of the provider’s interdisciplinary team. The local
17ombudsperson may also be included in the care conference, upon
18the request of the resident, the resident’s responsible person, or
19the provider.

20(D) For disputed transfer decisions, the resident or the resident’s
21responsible person has the right to a prompt and timely review of
22the transfer process by the Continuing Care Contracts Branch of
23the State Department of Social Services.

24(E) The decision of the department’s Continuing Care Contracts
25Branch shall be in writing and shall determine whether the provider
26failed to comply with the transfer process pursuant to
27subparagraphs (A) to (C), inclusive. Pending the decision of the
28Continuing Care Contracts Branch, the provider shall specify any
29additional care the provider believes is necessary in order for the
30resident to remain in his or her unit. The resident may be required
31to pay for the extra care, as provided in the contract.

32(F) Transfer of a second resident when a shared accommodation
33arrangement is terminated.

34(11) Provisions describing any changes in the resident’s monthly
35fee and any changes in the entrance fee refund payable to the
36resident that will occur if the resident transfers from any unit,
37including, but not limited to, terminating his or her contract after
3818 months of residential temporary relocation, as defined in
39paragraph (8) of subdivision (r) of Section 1771. Unless the fee is
40part of an equity interest contract, a provider is prohibited from
P17   1charging the resident or his or her estate a monthly fee once a unit
2has been permanently vacated by the resident.

3(12) The provider’s continuing obligations, if any, in the event
4a resident is transferred from the continuing care retirement
5community to another facility.

6(13) The provider’s obligations, if any, to resume care upon the
7resident’s return after a transfer from the continuing care retirement
8community.

9(14) The provider’s obligations to provide services to the
10resident while the resident is absent from the continuing care
11retirement community.

12(15) The conditions under which the resident must permanently
13release his or her living unit.

14(16) If real or personal properties are transferred in lieu of cash,
15a statement specifying each item’s value at the time of transfer,
16and how the value was ascertained.

17(A) An itemized receipt that includes the information described
18above is acceptable if incorporated as a part of the continuing care
19contract.

20(B) When real property is or will be transferred, the continuing
21care contract shall include a statement that the deed or other
22instrument of conveyance shall specify that the real property is
23 conveyed pursuant to a continuing care contract and may be subject
24to rescission by the transferor within 90 days from the date that
25the resident first occupies the residential unit.

26(C) The failure to comply with this paragraph shall not affect
27the validity of title to real property transferred pursuant to this
28chapter.

29(17) The amount of the entrance fee.

30(18) In the event two parties have jointly paid the entrance fee
31or other payment that allows them to occupy the unit, the
32continuing care contract shall describe how any refund of entrance
33fees is allocated.

34(19) The amount of any processing fee.

35(20) The amount of any monthly care fee.

36(21) For continuing care contracts that require a monthly care
37fee or other periodic payment, the continuing care contract shall
38include the following:

P18   1(A) A statement that the occupancy and use of the
2accommodations by the resident is contingent upon the regular
3payment of the fee.

4(B) The regular rate of payment agreed upon (per day, week,
5or month).

6(C) A provision specifying whether payment will be made in
7advance or after services have been provided.

8(D) A provision specifying the provider will adjust monthly
9care fees for the resident’s support, maintenance, board, or lodging,
10when a resident requires medical attention while away from the
11continuing care retirement community.

12(E) A provision specifying whether a credit or allowance will
13be given to a resident who is absent from the continuing care
14retirement community or from meals. This provision shall also
15state, when applicable, that the credit may be permitted at the
16discretion or by special permission of the provider.

17(F) A statement of billing practices, procedures, and timelines.
18A provider shall allow a minimum of 14 days between the date a
19bill is sent and the date payment is due. A charge for a late payment
20may only be assessed if the amount and any condition for the
21penalty is stated on the bill.

22(G) A statement that the provider is prohibited from charging
23the resident or his or her estate a monthly fee once a unit has been
24permanently vacated by the resident, unless the fee is part of an
25equity interest contract.

26(22) All continuing care contracts that include monthly care
27fees shall address changes in monthly care fees by including either
28of the following provisions:

29(A) For prepaid continuing care contracts, which include
30monthly care fees, one of the following methods:

31(i) Fees shall not be subject to change during the lifetime of the
32agreement.

33(ii) Fees shall not be increased by more than a specified number
34of dollars in any one year and not more than a specified number
35of dollars during the lifetime of the agreement.

36(iii) Fees shall not be increased in excess of a specified
37percentage over the preceding year and not more than a specified
38percentage during the lifetime of the agreement.

P19   1(B) For monthly fee continuing care contracts, except prepaid
2contracts, changes in monthly care fees shall be based on projected
3costs, prior year per capita costs, and economic indicators.

4(23) A provision requiring that the provider give written notice
5to the resident at least 30 days in advance of any change in the
6resident’s monthly care fees or in the price or scope of any
7component of care or other services.

8(24) A provision indicating whether the resident’s rights under
9the continuing care contract include any proprietary interests in
10the assets of the provider or in the continuing care retirement
11community, or both. Any statement in a contract concerning an
12ownership interest shall appear in a large-sized font or print.

13(25) If the continuing care retirement community property is
14encumbered by a security interest that is senior to any claims the
15residents may have to enforce continuing care contracts, a provision
16shall advise the residents that any claims they may have under the
17continuing care contract are subordinate to the rights of the secured
18lender. For equity projects, the continuing care contract shall
19specify the type and extent of the equity interest and whether any
20entity holds a security interest.

21(26) Notice that the living units are part of a continuing care
22retirement community that is licensed as a residential care facility
23for the elderly and, as a result, any duly authorized agent of the
24department may, upon proper identification and upon stating the
25purpose of his or her visit, enter and inspect the entire premises at
26any time, without advance notice.

27(27) A conspicuous statement, in at least 10-point boldface type
28in immediate proximity to the space reserved for the signatures of
29the resident and, if applicable, the transferor, that provides as
30follows: “You, the resident or transferor, may cancel the transaction
31without cause at any time within 90 days from the date you first
32occupy your living unit. See the attached notice of cancellation
33form for an explanation of this right.”

34(28) Notice that during the cancellation period, the continuing
35care contract may be canceled upon 30 days’ written notice by the
36provider without cause, or that the provider waives this right.

37(29) The terms and conditions under which the continuing care
38contract may be terminated after the cancellation period by either
39party, including any health or financial conditions.

P20   1(30) A statement that, after the cancellation period, a provider
2may unilaterally terminate the continuing care contract only if the
3provider has good and sufficient cause.

4(A) Any continuing care contract containing a clause that
5provides for a continuing care contract to be terminated for “just
6cause,” “good cause,” or other similar provision, shall also include
7a provision that none of the following activities by the resident,
8or on behalf of the resident, constitutes “just cause,” “good cause,”
9or otherwise activates the termination provision:

10(i) Filing or lodging a formal complaint with the department or
11other appropriate authority.

12(ii) Participation in an organization or affiliation of residents,
13or other similar lawful activity.

14(B) The provision required by this paragraph shall also state
15that the provider shall not discriminate or retaliate in any manner
16against any resident of a continuing care retirement community
17for contacting the department, or any other state, county, or city
18agency, or any elected or appointed government official to file a
19complaint or for any other reason, or for participation in a residents’
20organization or association.

21(C) Nothing in this paragraph diminishes the provider’s ability
22to terminate the continuing care contract for good and sufficient
23cause.

24(31) A statement that at least 90 days’ written notice to the
25resident is required for a unilateral termination of the continuing
26care contract by the provider.

27(32) A statement concerning the length of notice that a resident
28is required to give the provider to voluntarily terminate the
29continuing care contract after the cancellation period.

30(33) The policy or terms for refunding or repaying a lump sum
31of any portion of the entrance fee, in the event of cancellation,
32termination, or death. Every continuing care contract that provides
33for a refund or repaying a lump sum of all or a part of the entrance
34fee shall also do all of the following:

35(A) Specify the amount, if any, the resident has paid or will pay
36for upgrades, special features, or modifications to the resident’s
37unit.

38(B) State that if the continuing care contract is canceled or
39terminated by the provider, the provider shall do both of the
40following:

P21   1(i) Amortize the specified amount at the same rate as the
2resident’s entrance fee.

3(ii) Refund the unamortized balance to the resident at the same
4time the provider pays the resident’s entrance fee refund.

5(C) State that the resident has a right to terminate his or her
6contract after 18 months of residential temporary relocation, as
7defined in paragraph (8) of subdivision (r) of Section 1771.
8Provisions for refunds due to cancellation pursuant to this
9subparagraph shall be set forth in the contract.

10(D) State the provider shall make a good-faith effort to reoccupy
11or resell a unit for which a lump-sum payment is conditioned upon
12resale of the unit. No later than July 1, 2016, a provider shall
13provide notice to all current residents with contracts applicable to
14this subparagraph regarding the statement required by this
15subparagraph as a clarification of the resident’s existing contract.

16(E) For all contracts with a repayment of all or a portion of the
17entrance fee conditioned upon the resale of the unit, the provider
18shall state the average and longest amount of time that it has taken
19to resell a unit within the last five calendar years.

20(34) The following notice at the bottom of the signatory page:


21

 

    “NOTICE”

(date)

P21  2323P21  2712P21  22

 

24“This is a continuing care contract as defined by paragraph (8)
25of subdivision (c), or subdivision (l) of Section 1771 of the
26California Health and Safety Code. This continuing care contract
27form has been approved by the State Department of Social Services
28as required by subdivision (b) of Section 1787 of the California
29Health and Safety Code. The basis for this approval was a
30determination that (provider name) has submitted a contract that
31complies with the minimum statutory requirements applicable to
32continuing care contracts. The department does not approve or
33disapprove any of the financial or health care coverage provisions
34in this contract. Approval by the department is NOT a guaranty
35of performance or an endorsement of any continuing care contract
36 provisions. Prospective transferors and residents are strongly
37encouraged to carefully consider the benefits and risks of this
38continuing care contract and to seek financial and legal advice
39before signing.”

P22   1(35) The provider may not attempt to absolve itself in the
2continuing care contract from liability for its negligence by any
3statement to that effect, and shall include the following statement
4in the contract: “Nothing in this continuing care contract limits
5either the provider’s obligation to provide adequate care and
6supervision for the resident or any liability on the part of the
7provider which may result from the provider’s failure to provide
8this care and supervision.”

9(36) Provisions describing how the provider will proceed in the
10event of a closure, including an explanation of how the provider
11will comply with Sections 1793.80, 1793.81, 1793.82, and 1793.83.

12(b) A life care contract shall also provide that:

13(1) All levels of care, including acute care and physicians’ and
14surgeons’ services, will be provided to a resident.

15(2) Care will be provided for the duration of the resident’s life
16unless the life care contract is canceled or terminated by the
17provider during the cancellation period or after the cancellation
18period for good cause.

19(3) A comprehensive continuum of care will be provided to the
20resident, including skilled nursing, in a facility under the ownership
21and supervision of the provider on, or adjacent to, the continuing
22care retirement community premises.

23(4) Monthly care fees will not be changed based on the resident’s
24level of care or service.

25(5) A resident who becomes financially unable to pay his or her
26monthly care fees shall be subsidized provided the resident’s
27financial need does not arise from action by the resident to divest
28the resident of his or her assets.

29(c) Continuing care contracts may include provisions that do
30any of the following:

31(1) Subsidize a resident who becomes financially unable to pay
32for his or her monthly care fees at some future date. If a continuing
33care contract provides for subsidizing a resident, it may also
34provide for any of the following:

35(A) The resident shall apply for any public assistance or other
36aid for which he or she is eligible and that the provider may apply
37for assistance on behalf of the resident.

38(B) The provider’s decision shall be final and conclusive
39regarding any adjustments to be made or any action to be taken
P23   1regarding any charitable consideration extended to any of its
2residents.

3(C) The provider is entitled to payment for the actual costs of
4care out of any property acquired by the resident subsequent to
5any adjustment extended to the resident under this paragraph, or
6from any other property of the resident that the resident failed to
7disclose.

8(D) The provider may pay the monthly premium of the resident’s
9health insurance coverage under Medicare to ensure that those
10payments will be made.

11(E) The provider may receive an assignment from the resident
12of the right to apply for and to receive the benefits, for and on
13behalf of the resident.

14(F) The provider is not responsible for the costs of furnishing
15the resident with any services, supplies, and medication, when
16reimbursement is reasonably available from any governmental
17agency, or any private insurance.

18(G) Any refund due to the resident at the termination of the
19continuing care contract may be offset by any prior subsidy to the
20resident by the provider.

21(2) Limit responsibility for costs associated with the treatment
22or medication of an ailment or illness existing prior to the date of
23admission. In these cases, the medical or surgical exceptions, as
24disclosed by the medical entrance examination, shall be listed in
25the continuing care contract or in a medical report attached to and
26made a part of the continuing care contract.

27(3) Identify legal remedies that may be available to the provider
28if the resident makes any material misrepresentation or omission
29pertaining to the resident’s assets or health.

30(4) Restrict transfer or assignments of the resident’s rights and
31privileges under a continuing care contract due to the personal
32nature of the continuing care contract.

33(5) Protect the provider’s ability to waive a resident’s breach
34of the terms or provisions of the continuing care contract in specific
35instances without relinquishing its right to insist upon full
36compliance by the resident with all terms or provisions in the
37contract.

38(6) Provide that the resident shall reimburse the provider for
39any uninsured loss or damage to the resident’s unit, beyond normal
P24   1wear and tear, resulting from the resident’s carelessness or
2 negligence.

3(7) Provide that the resident agrees to observe the off-limit areas
4of the continuing care retirement community designated by the
5provider for safety reasons. The provider may not include any
6provision in a continuing care contract that absolves the provider
7from liability for its negligence.

8(8) Provide for the subrogation to the provider of the resident’s
9rights in the case of injury to a resident caused by the acts or
10omissions of a third party, or for the assignment of the resident’s
11recovery or benefits in this case to the provider, to the extent of
12the value of the goods and services furnished by the provider to
13or on behalf of the resident as a result of the injury.

14(9) Provide for a lien on any judgment, settlement, or recovery
15for any additional expense incurred by the provider in caring for
16the resident as a result of injury.

17(10) Require the resident’s cooperation and assistance in the
18diligent prosecution of any claim or action against any third party.

19(11) Provide for the appointment of a conservator or guardian
20by a court with jurisdiction in the event a resident becomes unable
21to handle his or her personal or financial affairs.

22(12) Allow a provider, whose property is tax exempt, to charge
23the resident, on a pro rata basis, property taxes, or in-lieu taxes,
24that the provider is required to pay.

25(13) Make any other provision approved by the department.

26(d) A copy of the resident’s rights as described in Section 1771.7
27shall be attached to every continuing care contract.

28(e) A copy of the current audited financial statement of the
29provider shall be attached to every continuing care contract. For
30a provider whose current audited financial statement does not
31accurately reflect the financial ability of the provider to fulfill the
32continuing care contract obligations, the financial statement
33attached to the continuing care contract shall include all of the
34following:

35(1) A disclosure that the reserve requirement has not yet been
36determined or met, and that entrance fees will not be held in
37escrow.

38(2) A disclosure that the ability to provide the services promised
39in the continuing care contract will depend on successful
40compliance with the approved financial plan.

P25   1(3) A copy of the approved financial plan for meeting the reserve
2requirements.

3(4) Any other supplemental statements or attachments necessary
4to accurately represent the provider’s financial ability to fulfill its
5continuing care contract obligations.

6(f) A schedule of the average monthly care fees charged to
7residents for each type of residential living unit for each of the five
8years preceding execution of the continuing care contract shall be
9attached to every continuing care contract. The provider shall
10update this schedule annually at the end of each fiscal year. If the
11continuing care retirement community has not been in existence
12for five years, the information shall be provided for each of the
13years the continuing care retirement community has been in
14existence.

15(g) If any continuing care contract provides for a health
16insurance policy for the benefit of the resident, the provider shall
17attach to the continuing care contract a binder complying with
18Sections 382 and 382.5 of the Insurance Code.

19(h) The provider shall attach to every continuing care contract
20a completed form in duplicate, captioned “Notice of Cancellation.”
21The notice shall be easily detachable, and shall contain, in at least
2210-point boldface type, the following statement:

 

“NOTICE OF CANCELLATION”

(date)

Your first date of occupancy under this contract   

is: _____________________________________________

P21  2712P21  22

 

28“You may cancel this transaction, without any penalty within
2990 calendar days from the above date.

30If you cancel, any property transferred, any payments made by
31you under the contract, and any negotiable instrument executed
32by you will be returned within 14 calendar days after making
33possession of the living unit available to the provider. Any security
34interest arising out of the transaction will be canceled.

35If you cancel, you are obligated to pay a reasonable processing
36fee to cover costs and to pay for the reasonable value of the services
37received by you from the provider up to the date you canceled or
38made available to the provider the possession of any living unit
39delivered to you under this contract, whichever is later.

P26   1If you cancel, you must return possession of any living unit
2delivered to you under this contract to the provider in substantially
3the same condition as when you took possession.

4Possession of the living unit must be made available to the
5provider within 20 calendar days of your notice of cancellation.
6If you fail to make the possession of any living unit available to
7the provider, then you remain liable for performance of all
8obligations under the contract.

9To cancel this transaction, mail or deliver a signed and dated
10copy of this cancellation notice, or any other written notice, or
11send 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)”

P21  22

 

23

SEC. 3.  

Section 1788.4 of the Health and Safety Code is
24amended to read:

25

1788.4.  

(a) During the cancellation period, the provider shall
26pay all refunds owed to a resident within 14 calendar days after a
27resident makes possession of the living unit available to the
28provider.

29(b) After the cancellation period, any refunds due to a resident
30under a continuing care contract shall be paid within 14 calendar
31days after a resident makes possession of the living unit available
32to the provider or 90 calendar days after death or receipt of notice
33of termination, whichever is later.

34(c) In nonequity projects, if the continuing care contract is
35canceled by either party during the cancellation period or
36terminated by the provider after the cancellation period, the resident
37shall be refunded the difference between the total amount of
38entrance, monthly, and optional fees paid and the amount used for
39care of the resident.

P27   1(d) If a resident has paid additional amounts for upgrades,
2special features, or modifications to the living unit and the provider
3terminates the resident’s continuing care contract, the provider
4shall amortize those additional amounts at the same rate as the
5entrance fee and shall refund the unamortized balance to the
6resident.

7(e) (1) A lump-sum payment to a resident after termination of
8a continuing care contract that is conditioned upon resale of the
9unit shall not be considered to be a refund and may not be
10characterized or advertised as a refund. The full lump-sum payment
11shall be paid to the resident within 14 calendar days after resale
12of the unit. For contracts signed after January 1, 2016,
13notwithstanding a provider’s documented good-faith effort to resell
14the unit, the resident is entitled to the repayment of a specified
15portion, pursuant to subparagraphs (A) and (B), of the full
16lump-sum payment if the unit remains vacant 120 days after the
17resident’s termination. This repayment shall not cause the contract
18in question to be deemed a refundable contract, as defined in
19paragraph (2) of subdivision (r) of Section 1771.

20(A) When a continuing care contract is terminated by the death
21of a resident, at least 10 percent of the full lump-sum payment
22shall be paid to the resident’s estate within 120 days after the
23resident’s termination.

24(B) When a continuing care contract is terminated for a reason
25not described in subparagraph (A), at least 20 percent of the full
26lump-sum payment shall be paid to the resident within 120 days
27after the resident’s termination.

28(2) Any payment balance that has not been paid to the resident
29withinbegin delete 120end deletebegin insert 180end insert days shall accrue interest at a rate calculated
30pursuant to paragraph (3). Any payment balance that has not been
31paid to the resident withinbegin delete 180end deletebegin insert 240end insert days shall accrue interest at a
32rate calculated pursuant to paragraph (4). Interest shall continue
33to accrue until the date the full lump-sum payment is paid to the
34resident. This paragraph shall apply only to continuing care
35contracts entered into on or after January 1, 2016.

36(3) Any payments that are not paid to the resident within the
37begin delete 120-dayend deletebegin insert 180-dayend insert period pursuant to paragraph (2) shall accrue
38compound interest every 30 days at a rate not lower than 4 percent.

P28   1(4) Any payments that are not paid to the resident within the
2begin delete 180-dayend deletebegin insert 240-dayend insert period pursuant to paragraph (2) shall accrue
3compound interest every 30 days at a rate not lower than 6 percent.

4(f) After the death of a resident, a lump-sum payment that is
5conditioned upon resale of a unit shall be subject to subdivision
6(e) and the payment and interest, if any, shall be payable to the
7resident’s estate.

8(g) Except as otherwise obligated by an equity interest contract,
9once the unit has been vacated and made available to the provider,
10the provider shall not make any further charges to the resident or
11his or her estate or charges against the lump-sum payment that is
12due to the resident for purposes of continued monthly payments
13to the provider or for maintenance or housekeeping on the vacated
14unit.

15(h) Nothing in this section shall be construed to limit or alter
16any legal remedies otherwise available to a resident or his or her
17estate.

18

SEC. 4.  

Section 1788.5 is added to the Health and Safety Code,
19to read:

20

1788.5.  

(a) Any resident whose contract calls for a lump-sum
21payment conditioned upon resale of a unit may file a complaint
22with the department if the unit has not been resold for more than
23twelve months after possession of the unit was made available to
24the provider. A resident may file such a complaint regardless of
25whether or not the contract includes a provision expressly requiring
26a good faith effort to resell the unit.

27(b) (1) In response to the complaint, the department shall
28perform an investigation to determine whether the provider has
29made a sufficient good faith effort to resell or reoccupy the unit.
30At the department’s discretion, the investigation may include any
31of the following:

32(A) Inspections of the unit and the continuing care retirement
33community.

34(B) Interviewsbegin delete ofend deletebegin insert with theend insert provider, staff, and employees.

35(C) Opinions and analysis from consultants.

36(D) Written submissions from the resident or provider.

37(E) A hearing.

38(2) The department shall consider whether the provider has
39adequately refurbished the unit for reletting, made necessary
P29   1repairs, reasonably marketed the unit to potential residents, and
2shown the unit to prospective residents.

3(c) Following the investigation, the department shall issue a
4written determination, which includes a statement of the basis for
5the determination.

6(d) A resident, in the case of a determination of sufficient good
7faith, or a provider, in the case of a determination of lack of
8sufficient good faith, shall have the right to submit to the
9department a written request for a formal review of the
10determination within 20 business days after the department issues
11the written determination. The party requesting review shall
12provide all supporting documentation at that time. If no written
13request for review is made, the department’s determination shall
14be considered final. If a written request for review is made, the
15review shall be conducted by the deputy director of the Community
16Care Licensing Division. If the department requires additional
17information from the resident or provider, it shall be requested
18within the first 30 business days after receiving the request for
19review. The resident or provider shall provide this additional
20information within 20 business days after it is requested by the
21department. If the deputy director determines that the previous
22determination was not made in accordance with applicable statutes
23or regulations of the department, the department shall withdraw
24its previous determination and issue a new determination. The
25resident and provider shall be notified in writing of the deputy
26director’s decision within 40 business days from the time when
27all necessary information has been received by the department.
28The deputy director’s decision is considered final and concludes
29the administrative appeal rights of the resident and provider.

30(e) If the department determines that the provider has not made
31a sufficient good faith effort to reoccupy or resell the unit, the
32provider shall repay the full lump-sum payment owed to the
33resident within 20 business days after the department’s
34determination becomes begin delete final, and the provider shall reimburse the
35department for reasonable costs associated with the investigation
36of good faith within 20 business days after the department issues
37a statement of costs.end delete
begin insert final.end insert The department’s final determination
38and its factual findings, and any interim determination and factual
P30   1findings, shall be inadmissible in court or any other proceeding,
2with the exception of any proceeding to enforce this subdivision.



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