Continuing Care Retirement Community

Continuing Care Retirement Community / Life Care Community

Continuing Care Retirement Communities (CCRC’s), a.k.a. life care communities, promise a single campus containing independent living and recreational amenities while giving access to an on-site assisted living and nursing home if needed. While most CCRC’s market their worry-free lifestyle, activities, and ability to age in place, not all CCRC’s deliver on these promises. We can help you distinguish between marketing puffery and binding duties so that you fully understand what you get and give up if you buy into a CCRC.

CCRC’s typically require new residents to pay a substantial up front amount, which they claim is largely refundable. However, complex CCRC financial documents usually allow for refunds only after a unit is re-occupied and so long as the CCRC remains solvent. Thus, refunds may prove illusory if the CCRC has many vacancies or goes under. Refunds also may be limited if a resident requires nursing home or other long term care. If the CCRC isn’t fully built out yet, then the common facilities and remaining units promised by the developer may never be built– especially if the CCRC isn’t on sound financial footing.

CCRCS also charge periodic maintenance fees and assessments and it is important to understand how and when charges may arise. When maintenance fees are too low, there may not be sufficient funds to properly maintain the CCRC and provide the promised amenities. If the developer initially subsidizes maintenance fees, long-term maintenance fees may rise dramatically, making it too expensive to remain at the CCRC once the subsidy ends. If the projected number of units isn’t built, then each resident will bear a greater than anticipated share of the common costs, which is likely to further increase maintenance charges. In extreme cases, a CCRC may be unable to meet its financial commitments and can go bankrupt as happened out West when CCRC’s first started.

It tends to be very costly to leave a CCRC, so you should enter a CCRC only if you plan to stay for life. That’s why it is important to quiz existing residents on what life at the CCRC is really like rather than just relying on marketing materials and staff claims. A quality management team also is important, so finding out about management’s experience and track record can be illuminating.

Since CCRC entry usually includes a substantial up-front payment, you’ll want to understand the legal and financial considerations. We have counseled many families through the daunting task of unraveling admission documents and even taught other elder law attorneys about CCRC’s. Don’t make one of the biggest financial decisions of your life without first getting valuable counsel.