Understanding Residency Agreements-Part 2

Financial : Understanding Residency Agreements-Part 2

By Ryan Malone – Author of "By Families, For Families Guide to Assisted Living" and Founder of www.insideassistedliving.com

Note: Part 2 is reprinted with permission of www.assistedliving.com. See Part 1 of Understanding Assisted Living Residency Agreements for the discussion of Terms, Accomodations, Core Services, Meals, and Fees,
V. 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.

By Families, For Families Guide to Assisted Living

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 facilities 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 facilities 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 facility.  In her case, the assisted living community did not conduct a pre-admission assessment. However, they did require medical records from the skilled nursing facility 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.

VI. 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 the new apartment 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 their approval in writing during the contract negotiation.  Similar, if you are already a resident, all redecoration plans should be 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 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 move-in date.
    * Most communities provide some housekeeping services and things like routine carpet cleaning.  Some facilities 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 facility to define damages versus normal wear and tear and to give examples.  Some questions to ask may include: Who conducts the repairs?  Are costs based solely on actual material cost or do the residents pay for associated 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?

VII. 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 to 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 on how many nights they can stay?  Are there additional costs associated with those visits?
    * 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 facility, 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 there 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.

VIII. 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 facility, 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 facility 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.  The details of these sections are also outside the scope of the Understand Residency Agreements series.  However, 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 facility’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.  That way, 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.

This concludes the Understanding Residency Agreements series.  You should also have an attorney review any agreement you sign, especially one that has such large financial and emotional implications.  Our hope is that this series will empower you to be a more educated negotiator and have a more fruitful discussion with your attorney.
This article was written by and reprinted with permission of www.InsideAssistedLiving.com – Helping families consider a transition to assisted living. Ryan Malone, Publisher of the best selling guide: "By Families, For Families Guide to Assisted Living".

Note from TopEldercares.com.  This information from  www.insideeldercare.com is extremely helpful. A few additional thoughts from our own experience: “extra” care in an assisted living facility is needed much more frequently than commonly assumed. For example if your elder has Alzheimer’s but not yet in an Alzheimer’s ward,  it is almost a given that that person will need a lot of expensive additional help. Likewise if your elder is living in an independent apartment but needs help dressing, toileting, or bathing; that will almost always become a (very large) extra expense. The best policy: think about various scenarios for your elder’s next stage of life – then ask questions – is this covered?  Another area to examine is transportation. Perhaps free transportation is included to an off-campus doctor’s office. But if your elder needs help getting inside the building and into the office – will that be covered? Part 1 - Understanding Residency Agreements