BILL NUMBER: SB 475	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Monning

                        FEBRUARY 26, 2015

   An act to amend Section 1788.4 of the Health and Safety Code,
relating to continuing care contracts.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 475, as introduced, 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 states 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 the 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 the provider to pay a lump-sum
payment that is conditioned upon resale of a unit to the resident
within 14 days after resale of the unit.
   This bill would require the continuing care retirement facility to
pay the full lump-sum payment that is conditioned upon resale of a
unit to the resident within 14 days after resale of the unit, and in
any event no later than 90 days after the resident has vacated the
unit. The bill would require any payments not paid to the resident
within the 90-day period to accrue interest at a specified rate until
the full lump-sum payment is made. The bill would require the
facility to make the lump-sum payment to the resident's estate if the
resident is deceased.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 1788.4 of the Health and Safety Code is amended
to read:
   1788.4.  (a)  During the cancellation period, the provider shall
pay all refunds owed to a resident within 14 calendar days after a
resident makes possession of the living unit available to the
provider.
   (b)  After the cancellation period, any refunds due to a resident
under a continuing care contract shall be paid within 14 calendar
days after a resident makes possession of the living unit available
to the provider or 90 calendar days after death or receipt of notice
of termination, whichever is later.
   (c)  In nonequity projects, if the continuing care contract is
canceled by either party during the cancellation period or terminated
by the provider after the cancellation period, the resident shall be
refunded the difference between the total amount of entrance,
monthly, and optional fees paid and the amount used for care of the
resident.
   (d)  If a resident has paid additional amounts for upgrades,
special features, or modifications to the living unit and the
provider terminates the resident's continuing care contract, the
provider shall amortize those additional amounts at the same rate as
the entrance fee and shall refund the unamortized balance to the
resident.
   (e)  (1)    A lump-sum payment to a resident
after termination of a continuing care contract that is conditioned
upon resale of a unit shall not be considered to be a refund and may
not be characterized or advertised as a refund. The  lump sum
  full lump-sum  payment shall be paid to the
resident within 14 calendar days after resale of the unit  , but
in no event later than 90 days after the formerly occupied unit has
been vacated  . 
   (2) Any payments that are not paid to the resident within the
90-day period pursuant to paragraph (1) will accrue interest at a
rate calculated pursuant to paragraph (3). Interest shall continue to
accrue until the date the full lump-sum payment is paid to the
resident.  
   (3) Interest rates and calculations pursuant to paragraph (2) are
identical to interest rates and calculations set forth in Section
685.010 of the Code of Civil Procedure.  
   (f) After the death of a resident, a lump-sum payment that is
conditioned upon resale of a unit shall be subject to subdivision (e)
and the payment and interest, if any, shall be payable to the
resident's estate.  
   (g) Once the unit has been vacated and made available to the
provider, the provider shall not make any further charges to the
resident or his or her estate or charges against the lump-sum payment
that is due to the resident for purposes of continued monthly
payments to the provider or for maintenance or housekeeping on the
vacated unit.