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Life Care Community Refund

By Terry Savage on November 19, 2021 | Wild Card & Pandemic Related

Over 10 years ago, my elderly parents paid a large initiation fee for an apartment in a nationally owned Continuing Care Community. The contract that was signed indicated that the full amount would be refunded to their heirs when the apartment was “resold”. In addition, Mom & Dad paid a monthly service fee for food, utilities, maintenance, security, etc. It was a great move on their part and we were happy they were able to spend their final days in this environment. Mom died in January of 2020. Soon after, the pandemic took hold and we knew the administration would have difficulty selling residences. My brother, the executor, inquired in December of 2020 and most recently a few months ago as to the status of sales. He was assured that, “things are picking up,” but this specific apartment has not been sold. The amount will be split evenly among my parents’ 8 children, so the amount will certainly not define anyone’s retirement plans, but as a few of us are approaching retirement, would like to know how we can plan on this amount. When I googled the facility as to the current amount of the buy in, it stated that 90% of this initial payment is refundable. My parents would be grandfathered in for 100% . Is it possible that the facility is marketing apartments more aggressively that they only have to refund 90%? We don’t have use of this apartment. Is it reasonable to request interest payments on the asking price? I’m sure this is not the only corporation that is faced with these challenges. Do you know of any that are offering heirs a percentage of the initiation payment in order to settle?

Terry Says

That is a VERY interesting question. And if this is a public company, it could very well be a material issue, and a challenging legal issue as well. I think you should Google search this topic and this company. Could be a class action lawsuit in the making. Or if the company is publicly traded, I would think you should raise this issue with the CEO and CFO — and ask them if they are disclosing this liability in their financial statements.
I’m intrigued, so if you want, please send me an email to Terry@TerrySavage.com and let me know the name of the company and the state in which it is headquartered.



a personal
finance question