By: Robert J. Shanahan, Jr., Esq.
Community Care Retirement Communities
Continuing Care Retirement Communities, or CCRC’s, have become very popular in New Jersey and elsewhere.
CCRC Entrance Fees
CCRC’s offer seniors a place to live with services that will automatically adjust as care needs change over time. A new resident is required to pay an entrance fee of several hundred thousand dollars, which is held by the CCRC. Much of the fee is refundable to the resident’s estate, if unused, but the entry contract usually states that the resident’s unit must be sold prior to the refund. This is where the battle begins. I have experienced situations, and read stories, where refunds are delayed for years, waiting for the unit to be sold. This creates all kinds of issues for an Executor, and, at times it seems CCRC’s do nothing to sell the unit. See NJ.Com article https://www.nj.com/business/index.ssf/2017/02/bamboozled_holding_hostage_a_dead_seniors_money_-.html
Legislation is Pending In the New Jersey Legislature
To address the issue of CCRC’s releasing entrance fee refunds within a reasonable time, New Jersey Senators, Kip Bateman and Diane Allen, and Co-Sponsor, Anthony Bucco have introduced a bill, S182, which is before the Health, Human Services and Senior Citizens Committee. The bill would require CCRC’s to return the money within one year. Senator Joseph Vitale has promised a hearing sometime in March 2017.
In the State Assembly, Assembly Resolution A4588 has been introduced by Assemblywoman Nancy Munoz. It, too, would require refunds to be made before the expiration of one year. This Bill is before the Assembly’s Health, Human Services and Senior Citizens Committee.
CCRC’s Need to Respond To This Issue Quickly
CCRC’s are a valuable option for seniors who are seeking stability in their lives, and comfort in the knowledge that they will be cared for as they age. Given the population’s demographics, there should be no reason why these units cannot be resold in a reasonable amount of time. To hold a family hostage for two, three, even four years is not acceptable, particularly if it is holding up the closing of an estate, or results in the payment of higher estate taxes. I would prefer that there be no need for legislation, but, frankly, this industry has brought it upon itself.