State Regulations Offer Protection To Seniors
Attorney General Spitzer today announced the adoption of regulations affording protection to prospective occupants of senior residential communities. The regulations apply to senior residential communities organized as co-ops or condominiums and to those which require payment of substantial entry fees.
The new regulations require the filing of an offering plan with detailed disclosure of significant aspects of a senior residential community before the developer can market it to the public. Similar to regulations in effect currently for developers of co-ops and condominiums, the new regulations require that the offering plan contain adequate disclosure of financial information. The new regulations also specifically require disclosure of the amount, use and refundability of entrance fees, and on the specific residential services and amenities and availability of health care services.
The new regulations aim to maintain and enhance the integrity of the industry by allowing senior citizens to make investment decisions armed with the necessary information, while facilitating the development of senior residential communities.
"In most cases, seniors pay senior residence entrance fees with proceeds from the sale of their homes or from their life savings," said Spitzer. "Thanks to the disclosure requirements in these regulations, prospective residents will be fully informed of the risks, obligations and benefits of occupancy before making such a major financial commitment."
Senior residential communities with substantial entry fees often have complex options regarding the amount of fees, and the conditions for full or partial refunds. Policies also differ regarding the purpose of entrance fees and the source of funds for promised refunds. Seniors considering senior residential communities need to know the criteria for terminating residents' occupancy for declining health and their rights to challenge such determinations. Until the promulgation of these regulations, such information was not required to be disclosed.
The new regulations focus on residences with senior-focused facilities, services and/or activities not specifically regulated at present. The regulations will not impose duplicate reporting requirements on senior residential communities. For example, the new regulations exempt continuing care retirement communities (CCRC), which provide independent living and allow senior residents to move to assisted living or nursing facilities on the same campus.
CCRCs are regulated in New York by the Continuing Care Retirement Community Council, which consists of representatives of the Departments of Health, Insurance, Law and Aging. Another senior housing option, assisted living facilities, will be licensed by the Department of Health under the recently enacted Assisted Living Reform Act. The Attorney General's Office will work with the Department of Health to minimize duplicate reporting requirements for assisted living facilities that impose substantial entry fees.
In February, a summary of the regulations was published in the State Register and was posted on the Attorney General's website for public comment. The comments were reviewed and the final version of the regulations reflects revisions made in response.