When a person moves into a unit in a Continuing Care Retirement Community (CCRC),s/he is paying hundreds of thousands of dollars up front for the privilege of exclusively occupying a certain unit. There will also be ongoing monthly service fees, and typically an extra fee if another person resides in the unit such as spouse or friend. The contract must contain explicit provisions explaining what the refund policy is for when the individual vacates the unit, whether that happens as a result of death or choosing to move out. The percentage to be refunded is related to the price paid for the unit, and generally there are a few choices in that regard. Also, the timing for release must be specified in the contract. Click HERE for the New Jersey consumer handbook on CCRCs.
The main problem people run into is that the refund is contingent upon the unit being re-leased to a new individual. At times when the market is very slow, this has caused extravagant delays which have an adverse impact on either the individual or the heirs of their Estate. Legislation was again introduced in the New Jersey legislature this session to try to put limits on how long a CCRC could hold back the release of the deposit. The bills would require the deposit to be refunded no later than 60 days after the unit is resold or one year from the date the individual vacates the unit, whichever is sooner.
I think the bills should be supported. It it is imminently reasonable to put some frame around the refund process, because there are interests on both sides, and so far, it’s been one-sided. If this issue is of interest, spread the news to your colleagues and senior citizen social groups. Contact your legislators. The bills are S1411 and A880.
Call for review of CCRC contracts, senior life care planning, and individualized long term plans … 732-382-6070