Assemblywoman NANCY F. MUNOZ
District 21 (Morris, Somerset and Union)
Assemblyman JOHN S. WISNIEWSKI
District 19 (Middlesex)
Assemblyman JOE DANIELSEN
District 17 (Middlesex and Somerset)
Limits time continuing care retirement communities may retain refundable entrance fee after resident vacates facility to no more than one year.
CURRENT VERSION OF TEXT
An Act concerning continuing care retirement community entrance fees and amending P.L.2013, c.167.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 7 of P.L.2013, c.167 (C.52:27D-360.7) is amended to read as follows:
7. a. A resident may, upon 60-days' written notice, cancel the continuing care agreement for any reason.
b. Upon cancellation of the continuing care agreement by either the resident or the facility, the resident shall have the right to receive a refund of the amount of any entrance fee as provided in the continuing care agreement. The amount of the entrance fee shall be set forth in a clear and conspicuous manner in the continuing care agreement.
c. A resident shall be provided at least 60-days' written notice from the facility if the resident's continuing care agreement is being cancelled due to a violation of the facility's rules or regulations. Notification may be waived if the facility can demonstrate just cause for terminating the continuing care agreement in accordance with N.J.A.C.5:19-6.5(c). The resident may challenge the facility's notice of continuing care agreement cancellation by requesting a hearing in the same manner as for a hearing in a contested case pursuant to section 9 of P.L.1968, c.410 (C.52:14B-9).
d. In a continuing care agreement that provides for a refundable entrance fee, when a resident permanently vacates the facility, or, in the case of two residents occupying the same residence, when both vacate at the same time, the facility shall provide to the resident or residents or the legal representative of the resident's estate, whichever is applicable, a refund of the refundable entrance fee amount without interest, as set forth in the agreement. Any unpaid fees or charges incurred by the resident including unpaid monthly service fees, as well as the amount of any charitable assistance that the facility has provided to the resident, may also be deducted from the remaining balance of the refund of the entrance fee. Any balance to the resident shall be payable within either 60 days from the date the residence is resold and the entrance fee from the new resident has been received or one year from the date the residence was permanently vacated, whichever date is sooner.
e. When an entrance fee deposit is refundable, it shall be paid to either the resident, the resident's named beneficiary, or the legal representative of the resident's estate, whichever is applicable. A resident shall have the right to change, in writing, the named beneficiary for the entrance fee refund at any time.
(cf: P.L.2013, c.167, s.7)
2. This act shall take effect immediately.
This bill would limit the time that a continuing care retirement community may retain a refundable entrance fee after a resident vacates the facility to no more than one year later. Under current law, a continuing care retirement community may retain an entrance fee after a resident vacates the facility for as long as it takes for the unit to be reoccupied by another resident. Absent a maximum refunding period, there is little incentive for the facility managers to aggressively market any particular vacant unit. In some instances, a facility has retained the fee for several years after the unit has been vacated, unreasonably delaying the return of the fee. Further, if the resident has died, an estate may be forced to pay distribution taxes on money representing the fee refund, years before the estate and beneficiaries receive that fee refund. This bill would limit the amount of time an entrance fee may be retained to ensure that the money is returned within a reasonable timeframe.