Arizona continuing care retirement communities would be required to refund entrance fees within a year to residents who move out under a recently introduced bill.
HB 2505 states that the entrance fee, minus deductions for expenses or other fees, would need to be returned to the resident when the resident leaves a community and the unit is re-leased, or within one year, whichever happens first.
The Arizona Health Care Association told McKnight’s Senior Living that it did not see any issues with the legislation.
The bankruptcy filing of Friendship Village of Schaumburg, Illinois’ largest nonprofit retirement community, renewed attention on resident refunds last year. In 2023, a bill similar to a reform measure in New Jersey was introduced in the Illinois legislature, creating a sequence by which residents or their families would be repaid.
Senior living experts cautioned that such legislation could cause disruption and cash flow problems for retirement communities that use entrance fees to help cover residents costs when they no longer have the resources to make payments. The bill was eventually withdrawn with the intention of reintroducing it this year.
Recently, the New Jersey Supreme Court ruled in favor of a CCRC in a class action suit filed by residents and families seeking entrance fee refunds. In that case, the court ruled that the refund provision in the state’s Consumer Fraud Act is limited in scope and did not entitle the plaintiffs to full refunds of their entrance fees, monthly fees or services provided during their residence in the community. In response, the plaintiffs indicated that they would continue to pursue entrance fee refunds.
Source: McKnights Seniorliving