AB 1983 — Continuing care retirement communities: repayable contracts.

Summary

Existing law establishes the State Department of Social Services and sets forth its powers and duties, including the certification and regulation of continuing care retirement communities. Existing law regulates different types of continuing care contracts, including, among others, a repayable contract. A repayable contract is a continuing care contract that includes a promise to repay all or a portion of an entrance fee that is conditioned upon reoccupancy or resale of the unit previously occupied by the resident. This bill would instead refer to the contract described above as a repayable conditioned on resale contract, define a repayable contract to include both a repayable conditioned on resale contract and a repayable in sequential order contract, and would define a repayable in sequential order contract to mean a continuing care contract that includes a promise to repay all or a portion of an entrance fee based on the sequential order in which repayable contracts are terminated. The bill would require a provider that offers or maintains repayable in sequential order contracts to establish a repayment account for these purposes, to assign each terminated contract a sequential repayment number, and to repay those contracts in sequential order from the proceeds of future repayable in sequential order contracts, as specified. Existing law requires all continuing care contracts to include specified provisions, including, among others, that if it's a repayable contract, the average and longest amount of time that it has taken to resell or reoccupy a unit within the last 5 calendar years. This bill would make that provision applicable only to repayable conditioned on resale contracts and would require certain additional disclosures relating to repayable in sequential order contracts to be made, including, among others, the average and longest duration of time elapsed between contract termination and repayment during the last 5 calendar years. Existing law requires a lump sum owed to a resident or a resident's estate, including any interest accrued, to be paid within 14 calendar days after resale of the unit. This bill would make that provision applicable only to repayable conditioned on resale contracts and would make it 14 days after resale or reoccupancy. For repayable conditioned on sequential order contracts, the bill would require the full lump sum to be paid within 14 calendar days after sufficient funds exist in the sequential repayment account to satisfy the contract's assigned sequential repayment number.

Bill Text

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This bill amends 1 section(s) of the California codes: Section 1771 of the Health and Safety Code.

• Section 1771 of the Health and Safety Code

  treasury (4) (5) (6) (7) (8) (A) reoccupancy or resident or (B) based on the sequential order in which repayable contracts are terminated. unit or before the resident’s sequential number is reached. or before the resident’s sequential number is reached (4) (5) (6) (7) (8) (9) his or her his or her his or her his or her his or her his or her his or her his or her his or her refund. his or her contract. (E) contracts with a repayment of all or a portion of the entrance fee conditioned upon the resale of the unit, his or her his or her his or her he or she his or her contract, as defined in paragraph (3) of subdivision (r) of Section 1771, The his or her his or her → Treasury (4) “Entrance fee refund” means the return of all or a portion of the initial entrance fee paid by a resident to a provider, which is required to be paid back to the resident or the resident’s estate upon the termination or cancellation of a refundable contract. (5) (6) (7) (8) (9) (1) (2) “Lump sum payment” means a one-time reimbursement of all or a portion of an entrance fee owed by a provider to a resident or the resident’s estate in the event of cancellation, termination, or death. conditioned on resale or reoccupancy resident. conditioned on resale or reoccupancy or reoccupancy unit. or reoccupancy (4) “Repayable contract” means either a repayable conditioned on resale contract or a repayable in sequential order contract.(5) “Repayable in sequential order contract” means a continuing care contract that includes a promise to repay all or a portion of an entrance fee based strictly on the sequential order in which repayable contracts are terminated. A repayable in sequential order contract shall not be considered a refundable contract for purposes of the refund reserve requirements of Section 1792.6, provided that this conditional promise of repayment is not referred to by the applicant or provider as a “refund.” A provider shall repay entrance fees solely in the sequential order in which the contracts were terminated and shall not repay all or a portion of an entrance fee before the resident’s sequential number is reached. At the time a contract is terminated and all conditions for repayment under the contract have been met, the provider shall provide the resident, the resident’s estate, or other appropriate party with written notice of their sequential number on the repayment log. If the resident, their estate, or other appropriate party is unable to receive the repayment when their sequential number is reached, the provider shall ensure the full repayment amount and any applicable interest is kept in the sequential repayment account until the payment can be made to the resident, their estate, or other appropriate party. The provider shall keep records adequate to show which moneys have been designated for each resident and the moneys shall be held in the account until the resident, their estate, or other appropriate party can receive the payment. (6) (7) (8) (9) (10) (11) (1) a (2) “Sequential repayment account” means a separately accounted for financial bank account established and maintained by a provider for the exclusive purpose of funding repayments of entrance fees under repayable in sequential order contracts. The account shall indicate that the moneys in it are held for the exclusive benefit of the residents or their estates. The money shall remain separate, intact, and free from any liability the provider incurs. The sequential repayment account shall not be deemed a refund reserve and shall not be subject to the refund reserve requirements of Section 1792.6. SEC. 2. Section 1788 of the Health and Safety Code is amended to read: their their their their their their their their their or repay refund or repayable lump sum, as applicable under the contract’s refund or repayment policies. their or repayments contract and shall specify whether repayment is condition upon resale of the unit or subject to the sequential order method. (E) For repayable in sequential order contracts, state that repayment shall be made in the order in which repayable contracts are terminated and shall be paid from a sequential repayment account funded by entrance fees received from the sale of residential living units with repayable in sequential order contracts. (F) repayable conditioned on resale contracts, (G) For all repayable in sequential order contracts, the provider shall include a disclosure stating all of the following:(i) The average and longest duration of time elapsed between contract termination and repayment during the last 5 calendar years.(ii) The total number of repayable in sequential order contracts deposited i

  amended

Action History

1. September 18, 2026

   Chaptered by Secretary of State - Chapter 281, Statutes of 2026.

2. September 18, 2026

   Approved by the Governor.

3. September 10, 2026

   Enrolled and presented to the Governor at 3 p.m.

4. August 30, 2026

   Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 79. Noes 0.).

5. August 28, 2026

   In Assembly. Concurrence in Senate amendments pending.

6. August 28, 2026

   Read third time. Passed. Ordered to the Assembly. (Ayes 40. Noes 0.).

7. August 24, 2026

   Read second time. Ordered to third reading.

8. August 21, 2026

   Read third time and amended. Ordered to second reading.

9. August 20, 2026

   From special consent calendar.

10. August 20, 2026

    Ordered to third reading.

11. August 18, 2026

    Ordered to special consent calendar.

12. August 13, 2026

    From committee: Do pass. (Ayes 7. Noes 0.) (August 13).

13. August 13, 2026

    Read second time. Ordered to third reading.

14. June 29, 2026

    In committee: Referred to APPR. suspense file.

15. June 16, 2026

    From committee: Do pass and re-refer to Com. on APPR. with recommendation: To Consent Calendar. (Ayes 5. Noes 0.) (June 15). Re-referred to Com. on APPR.

16. June 03, 2026

    Referred to Com. on HUMAN S.

17. May 21, 2026

    In Senate. Read first time. To Com. on RLS. for assignment.

18. May 21, 2026

    Read third time. Passed. Ordered to the Senate. (Ayes 72. Noes 0. Page 5213.)

19. May 18, 2026

    Read second time. Ordered to third reading.

20. May 14, 2026

    From committee: Do pass. (Ayes 15. Noes 0.) (May 14).

21. May 14, 2026

    Joint Rule 62(a), file notice suspended. (Page 5030.)

22. May 13, 2026

    In committee: Set, first hearing. Referred to APPR. suspense file.

23. April 23, 2026

    From committee: Do pass and re-refer to Com. on APPR. with recommendation: To Consent Calendar. (Ayes 6. Noes 0.) (April 23). Re-referred to Com. on APPR.

24. April 22, 2026

    From committee: Do pass and re-refer to Com. on HUM. S. (Ayes 6. Noes 0.) (April 21). Re-referred to Com. on HUM. S.

25. April 13, 2026

    (Pending re-refer to Com. on HUM. S.)

26. April 13, 2026

    Assembly Rule 56 suspended. (Page 4580.)

27. March 16, 2026

    Referred to Coms. on AGING & L.T.C and HUM. S.

28. February 14, 2026

    From printer. May be heard in committee March 16.

29. February 13, 2026

    Read first time. To print.

Sponsors

• Blanca E. Rubio · Primary

Votes

Subjects