Understanding Assisted Living Residency Agreements: Part Two

In the previous post, we defined what an assisted living residency agreement is and the key tenets of such an agreement. We also worked our way through several basic sections of a sample agreement and highlighted questions to ask and language to look for in each section.

Let’s continue walking through the sections of a sample residency agreement. For each section, we’ll provide some tips and advice on what to look for.

IX. Use of Unit
The purpose of this section is to clearly define how and for what the unit can be used. This section normally addresses issues like pets, parking, guests and storage of materials. The language in this section is usually specific, so make sure and ask questions about items you don’t see in the text.

Some common questions to ask:

  • Is parking included? If not, is there an additional fee?
  • Can your loved one have overnight guests? Are there restrictions to how many nights they can stay? Are there additional costs associated with it?
  • Are pets allowed? How many? Are there optional services available such as dog walking, grooming, etc? What are the additional fees associated with pets?
  • Can there be joint occupancy? This is particularly relevant if spouses want to live together in an assisted living community. How does this affect the cost? Is there a cost benefit to joint occupancy? How do the costs change if one resident leaves? For example, at my mother’s community, a resident’s wife spends the night several times a week, but maintains her own home down the street. How would a scenario such as this be treated under the agreement?
  • Are caregivers considered to be joint occupants? Are the fees or meal charges associated with live-in caregivers? At one local community, a monthly surcharge is assessed for caregivers, which is nearly $1,000.

XI. Termination
The termination section of the contract defines in what situations the contract may be terminated, what money is refunded after termination and what sections of the agreement continue after the end of the contract. Our sample agreement defines termination rules in a variety of scenarios, including: termination by the resident, termination by the community and termination in the event of closure.

Most communities will negotiate little on this section of the agreement, as it defines much of how their business is operated. You should still be aware the rules in each scenario so that you can plan accordingly. It never hurts to ask what can be changed negotiation, so give it a shot!

Some things to be aware of:

  • What are the resident’s termination rights? What notice is required? Thirty days is fair, but don’t let it be more than that, as you will lose your flexibility. Is there a shorter notice period in the case of death or health reasons, such as admission to a hospital or the requirement for extended skilled nursing care?
  • Ensure that you can terminate, with notice, without reason.

So what are the community’s termination rights?

  • Ensure the community can only terminate for cause rather than for any reason. Cause typically includes things like failure to pay rent, failure to meet residency requirements, intentional damage of the community, being a danger to other residents, etc.
  • In the event you are under threat of termination, attempt to negotiate a period of time to remedy the situation. Most contracts allow for thirty days to remedy contractual issues.
  • What is the appeal procedure if you feel you are being terminated or evicted unjustly?
  • The community may also terminate contracts in the event they lose their license or close. What happens in this case?

What happens when the contract is terminated?

  • How long does your loved one have to remove his or her belongings?
  • What should you expect in terms of refunds, e.g. security deposits, community fees or unused monthly fees? Depending on the amount of the community fee that was prepaid, you may be entitled to some type of refund.
  • Within how many days is the community required to issue these refunds?

Other Legal Stuff
Most contacts have several pages of standard legal language. Most of the time, these sections have no impact on the substance of your agreement. While much of this section is standard legal language, it does make sense to alert you to a few “gotchas” below:

  • Costs and attorney’s fees. If there is a provision that resident shall bear all costs and fees (including attorney’s fees) to enforce the agreement, try to remove that language. Attorney’s fees can become quite costly and these fees should be part of the community’s cost of doing business.
  • Insurance and liability. First, most communities will require the resident to maintain their own insurance to cover personal property. You’ll likely be unable to change this, but you should get insurance if it is not provided. Second, the community will likely try and disclaim all liability. You want to try and negotiate this such that the community is at least responsible where the community or its staff has acted intentionally, recklessly or with gross negligence.
  • Assigning or subletting. Most agreements will not allow you to sublet the unit to someone else. However, in the event the community does this, you may still be responsible financial. In other words, make sure you protect yourself in the event of subletting so you are not on the hook for damages, rent and other expenses. Read this section carefully.
  • Arbitration. Arbitration is a clause put into contracts so that disagreements are resolved by a third party and not in court. Arbitration can be conducted anywhere, and many companies would like to have arbitration close to their corporate offices. In the case of a residency agreement, you want to make sure the arbitration location is near your home. You don’t need to incur additional expenses should the need for arbitration arise.
  • Entire agreement. Make sure the residency agreement presented to you represents the entire agreement. You have a right to review all auxiliary materials referenced in the contract, including documents, handbooks or verbal representations.

Residency agreements are not very complex. In fact, they usually very clearly articulate what happens in what scenario and what fee will be assessed. Some key things to remember:

  • Ask questions
  • Negotiate
  • Walk away if you are not comfortable

Photo credit: Waponi

Understanding Assisted Living Residency Agreements: Part One

One of the most daunting tasks of a transition to assisted living is the signing of the residency agreement. Similar to a rental agreement or lease on an apartment, the residency agreement governs cost, services and termination options for your loved one’s stay in assisted living.

It always struck me as odd how little families pay attention to these agreements. We spend hours test driving cars or strolling through the mall, but oddly, very few people read these agreements in detail. And even fewer take them to an attorney for review.

What is a Residency Agreement?

If you Google search “assisted living residency agreement,” you will find many agreements from state or local agencies or assisted living communities. For the purposes of this blog, I’ll be walking through a standard residency agreement from a typical assisted living community. While many agreements may be smaller, this particular agreement is relatively thorough, easy to read and provides a great example for discussion. And with the consolidation occurring in the industry, it makes sense to start there.

Core Components of a Residency Agreement
A residency agreement has many specific sections, but they can be grouped for the sake of discussion into several topics. They are:

  • Accommodations and Term. This topic deals with the actual unit being rented and the duration of the residency agreement.
  • Fees, Core Services and Meals. This topic sets the fee schedule and identifies both included and extra costs. This topic also discusses the “what, when, where, how” of meal service.
  • Residency Qualifications. This topic discusses the qualifications required to be admitted to the community and maintain residency.
  • Maintenance and Use. This topic communicates the service levels regarding building and unit maintenance, and identifies how the rented unit is to be (and not be) used.
  • Termination, Legal Stuff and Arbitration. This topic sets how the agreement can be terminated and includes a lot of standard legal language. One important item discussed in this section it arbitration.

Always remember with contracts that many things are negotiable, so don’t hesitate to ask. This is especially true if the community has many vacancies.

Now we will look at each section of the sample agreement and provide tips, concerns, items to be aware and suggestions to negotiate. I recommend you have an attorney review any contract that is presented to you.

I. Living Accommodations
This section of the contract describes the unit and common areas to be leased by the resident. The language in this section is fairly self-explanatory. Some things to be aware of include:

  • Confirm the exact unit identified in the contract is the unit you’ve agreed to rent
  • Confirm that your loved one, his/her friends and your family have the right to use common areas. These are areas of the community that are freely available to residents, although some communities put restrictions on who other than residents can use them.

II. Term of Residency Agreement
This section of the contract defines the term of the agreement and what happens at termination. Several things are defined: the resident’s rights to ownership (there are none), the length of the agreement, and the “what do to” at termination and with personal property. Things to be aware of in this section include:

  • The length of the agreement should preferably be monthly. Be cautious of longer agreements, especially if you have no termination rights in the event your loved one is no longer able to live there.
  • No auto-renewal. In the event you agree to a term longer than monthly, ensure there is no auto-renewal clause. As you may imagine from its name, auto-renewal automatically renews the contract for a specified period of time, unless you notify in writing your desire not to renew. If the term is monthly, then auto-renewal doesn’t matter as much as you’ll only have 30 days exposure financially.
  • Limit obligations at vacancy. Whether it is due to health or death, inquire about your obligations in the event your loved one is no longer able to reside in the community. Some examples include: How long are you obligated to pay after your loved one has left? How long do you have to remove his or her belongings?
  • Reasonable notice. Ensure your loved one is provided reasonable notice before the community shows your unit to a potential resident. 24-48 hours is reasonable in most situations. Try to avoid anything that doesn’t require notice, as this can be stressful to your loved one.

These sections are fairly standard, but the above tips will help you ask the right questions and negotiate where you feel necessary.

VII. Residency Qualifications
This section is designed to protect both your loved one and the assisted living community. Why? Assisted living communities are only licensed and staffed to provide certain types of care. By defining the qualifications of residency, the community ensures they have the staff and resources to take care of your loved one. There are also requirements to protect other residents such as those requirements around contagions like tuberculosis.
Some things you should be aware of:

  • Review the minimum requirements carefully and make sure your loved one meets these requirements. It’s important to be honest with yourself, as you don’t want to be in a situation where you’ve violated the agreement within the first week.
  • Does the contract state what happens in the event your loved one ceases to meet these requirements? For example, will they be forced to move out and with what notice? Is there an appeal process to dispute whether your loved one meets the requirements? How does that process work?
  • Some communities may require the presentation of medical records or results from a recent medical exam. Make sure the contract ensures the results of the exam are kept confidential except as released by you or your loved one.
  • Some communities may require a pre-admission assessment in which a nurse and community executive conduct an interview and/or medical exam. Make sure to understand in advance the purpose of the exam and what will be covered.

Skilled Nursing Transfers
My mother came to assisted living from a skilled nursing community. In her case, the assisted living community did not conduct a pre-admission assessment. However, they did require medical records from the skilled nursing community and had a lengthy conversation with the head nurse.

In this case, you should follow up with both parties to ensure consistency of the results. The goal here is to avoid any inconsistencies during the admission process. While this part of the contract may in some cases appear intimidating, it is important to realize that it benefits both parties.

VIII. Maintenance, Repairs and Alterations
This section defines the rules to be followed regarding redecoration, alterations and basic housekeeping. It also defines to what extent the assisted living community will be responsible for maintenance and repairs, as well as the resident’s responsibility for damages.

I think most people will find this section to be reasonable and consistent with renting a house or apartment. However, you should read it closely to be sure there are no unreasonable requirements in the contract.
Some things to be aware of:

  • You and your loved one will likely want their unit to feel like home, and therefore may want to redecorate. While our sample agreement provides for things like paint and wallpaper, you should ask specifically if you intend to do something not mentioned. If the community agrees with your request, get it in writing during the contract negotiation. Similar, if you are already a resident, all redecorations should be pre-approved in writing before the project begins.
  • Similar to redecorating, should you wish to make structural or non- structural alterations to the unit, make sure you get written permission during the contract negotiation. Usually, the cost for non-structural alterations like fixtures, toilet items and shelving are the responsibility of the resident. If your loved one is handicap or disabled, the community should make reasonable efforts to accommodate their needs. In our sample agreement, this language is very vague. Make sure you articulate your loved one’s needs and get in writing the community’s intent to provide those alterations. You should also insist that these alterations are completed prior to your agreed up move-in date.
  • Most communities provide some housekeeping services and things like routine carpet cleaning. Some communities charge extra for additional housekeeping. If you intend to have an outside housekeeper visit your loved one’s unit, make sure this is allowed for in the agreement.
  • Damages are often ambiguous in many lease agreements and residency agreements are no different. Ask the community to define damages versus normal wear and tear and to give examples. Some questions to ask: Who conducts the repairs? Are costs based on actual material cost or does the resident pay for asso-ciated labor as well? How do residents resolve situations in which repair costs appear to be abnormally high? If the resident can repair the damage on their own, how much time do they have to complete the project?

Stay tuned for part two of this post next week, where we’ll continue to work our way through the sections of a sample residencey agreement.

Photo credit: Orin Zebest

Understanding Residency Agreements, Part 6 – Termination and Other Legal Stuff

The purpose of the Understanding Residency Agreements series is to provide you with a working knowledge of the contract you’ll likely face should you choose assisted living for your loved one. The contract we’ll use as an example is from a major corporate assisted living company.  Many of these contracts can be found by searching Google, but I believe this agreement serves as a good example.

Part 6, the final part of the series, will discuss termination and other relevant legal sections.

[Read more...]

Understanding Residency Agreements, Part 5 – Maintenance and Use

The purpose of the Understanding Residency Agreements series is to provide you with a working knowledge of the contract you’ll likely face should you choose assisted living for your loved one. The contract we’ll use as an example is from a major corporate assisted living company.  Many of these contracts can be found by searching Google, but I believe this agreement serves as a good example.

Part 5 of the series will discuss maintenance and use.

[Read more...]

Understanding Residency Agreements, Part 4 – Residency Qualifications

The purpose of the Understanding Residency Agreements series is to provide you with a working knowledge of the contract you’ll likely face should you choose assisted living for your loved one. The contract we’ll use as an example is from a major corporate assisted living company.  Many of these contracts can be found by searching Google, but I believe this agreement serves as a good example.

Part 4 of the series will discuss residency qualifications.

[Read more...]

Understanding Residency Agreements, Part 3 – Fees, Core Services and Meals

The purpose of the Understanding Residency Agreements series is to provide you with a working knowledge of the contract you’ll likely face should you choose assisted living for your loved one. The contract we’ll use as an example is from a major corporate assisted living company.  Many of these contracts can be found by searching Google, but I believe this agreement serves as good example.

In Part 1 and Part 2 of the series, we covered some of the basics of an assisted living residency agreement.

This post will discuss fees, core services and meals.

[Read more...]

Understanding Residency Agreements, Part 2 – Accomodations and Term

In a previous post, I introduced the core components of an assisted living residency agreement. Unless you’re an attorney, these agreements can be quite intimidating.  In fact, many families don’t even read them closely, much less bring them to an attorney for review.

With contracts, many things are negotiable, so don’t hesitate to ask.  This is especially true if the facility has many vacancies.

The purpose of the Understanding Residency Agreements series is to provide a basic understanding of these core components. The contract we’ll use as an example is from a major corporate assisted living company.  Many of these contracts can be found by searching Google, but I believe this agreement serves as good example.

This post will discuss living accommodations and the term of the agreement.

I. Living Accommodations

This section of the contract describes the unit and common areas to be leased by the resident.  The language in this section is fairly self-explanatory.

Some things to be aware of include:

  • Confirm the exact unit identified in the contract is the unit you’ve agreed to rent
  • Confirm your loved one, his/her friends and your family have the right to use common areas. These are areas of the facility that are freely available to residents, although some facilities put restrictions on who can use them.

II. Term of Residency Agreement

This section of the contract defines the term of the agreement and what happens at termination.  In the example contract, the resident’s rights to ownership are defined (there are none), the length of the agreement is defined, and the “what do to” at termination and with personal property is defined.

Things to be aware of in this section include:

  • The length of the agreement should be monthly.  Be cautious of longer agreements, especially if you have no termination rights in the event your loved one is no longer able to live there.
  • No auto-renewal.  In the event you agree to a term longer than monthly, ensure there is no auto-renewal clause.  As you may imagine from its name, auto-renewal automatically renews the  contract for a specified period of time, unless you notify in writing your desire not to renew.  If the term is monthly, then auto-renewal doesn’t matter as you’ll only have 30 days exposure financially.
  • Limit obligations at vacancy. Whether it be due to health or death, inquire about your obligations in the event your loved one is no longer able to reside in the community.  Some examples include: How long are you obligated to pay after your loved on has left? How long do you have to remove belongings?
  • Reasonable notice. Ensure your loved one is provided reasonable notice before the facility shows your unit to a potential resident.  24-48 hours is reasonable in most situations. Try to avoid anything that doesn’t require notice, as this can be stressful to your loved one.

These sections are fairly standard, but the above tips will help you ask the write questions and negotiate where you feel necessary.

An article regarding contracts wouldn’t be complete without a disclaimer.

Disclaimer:

I am not an attorney.  I am writing these posts with the input an attorney who specialized in contracts.  The posts are not intended to provide legal advice, and I strongly encourage you to review any legal agreement with a qualified attorney.

Understanding Assisted Living Residency Agreements – Part 1

Hope everyone is well.

Before we get started, I want to update you on the survey.  So far, over 130 people have taken the Inside Assisted Living – Family Attitudes and Preparedness Survey since we announced it on Thursday, August 7.  Thank you!   We’re hoping to get a few hundred in the next 30 days.

Now on to the purpose for the post…

What is a Residency Agreement?

One of the most daunting tasks of a transition to assisted living is the signing of the residency agreement.  Similar to a rental agreement or lease on an apartment, the residency agreement governs cost, services and termination options for your loved one’s stay in assisted living.

It always struck me as odd how little families pay attention to these agreements.  We spend hours test driving  cars or strolling through the mall, but oddly, very few people read these agreements in detail.  And even fewer take them to an attorney for review.

But I guess it’s not so hard to understand, since many of them can run 20+ pages.

At Least a Five-Part Series

I’d like to dedicate a series of posts to help you better understand a typical residency agreement.  My goal is not to drown you in legalese (legal speak for 25 pages of run-on sentence separated by commas), but rather to educate you on their core components and things to avoid.

[Read more...]