ORS Chapter 101
Chapter 101 — ContinuingCare Retirement Communities
2009 EDITION
CONTINUINGCARE RETIREMENT COMMUNITIES
PROPERTYRIGHTS AND TRANSACTIONS
101.010 Policy
101.020 Definitions
101.030 Registrationof continuing care retirement community providers
101.040 Registrationfees
101.050 Preparationof disclosure statement by provider; notice and review of statement byprospective residents; contents of statement
101.052 Annualdisclosure statement
101.060 Providerto maintain financial reserves; amount; escrow account; withdrawal fromreserves
101.065 Providerliquidation; resident claims preferred
101.070 Escrowaccount required for registration of new continuing care retirement community;entrance fees in escrow; use of escrow funds
101.080 Whenresident eligible for refund of entrance fee; notice to resident
101.090 Exemptionof closed bed facilities from certificate of need review; exception
101.100 Transferof registration
101.110 Revocationof registration; findings
101.112 Requiredmeetings with residents; notice of change in fees or services
101.115 Residentrights
101.120 Powerof department to prevent violations; cease and desist order; injunction
101.140 Advisorycouncil; membership; compensation; duties
101.150 Dutiesof Department of Human Services; rules
101.160 Shorttitle
101.010Policy.The Legislative Assembly finds that continuing care retirement communities arean important and necessary alternative for the long term residential, socialand health maintenance needs for many of Oregon’s senior citizens. TheLegislative Assembly recognizes the need for disclosure with respect to theterms of agreements between residents, prospective residents and the provider.The Legislative Assembly also recognizes the need to establish reserves andescrow requirements to provide adequate standards for the development andoperation of continuing care retirement communities. Accordingly, theLegislative Assembly has determined that these providers should be registeredand should establish reserves and escrows in accordance with this chapter. [1989c.693 §2]
101.020Definitions.As used in this chapter:
(1)“Affiliated organization” means any profit or not-for-profit corporation,limited liability company, partnership, sole proprietorship, sponsoring entityor other form of legal entity:
(a)That is the lessor of the real property on which the facilities of the providerare situated;
(b)That a provider has identified in its disclosure statement pursuant to ORS101.050 (1)(e); or
(c)In which any director or executive officer of a provider or of any manager of aprovider has an equity or debtor financial interest in excess of $10,000.
(2)“Applicant” means a provider that has submitted an application and disclosurestatement to register as a continuing care retirement community.
(3)“Application fee” means a fee charged to an individual or individuals, prior toexecution of a residency agreement, apart from an entrance fee.
(4)“Audited financial statement” means a provider’s financial statement that hasbeen prepared in accordance with generally accepted accounting principles andthat has been audited by an independent certified public accountant inaccordance with generally accepted auditing standards and includes notes to thefinancial statement that state whether or not the continuing care retirementcommunity is in compliance with its reserve requirements.
(5)“Closed bed long term care facility” means a licensed long term care facilityin a continuing care retirement community that is used exclusively byindividuals receiving long term care services under a residency agreement.
(6)“Continuing care” means directly furnishing or indirectly making available,upon payment of an entrance fee and under a residency agreement, housing andhealth related services for a period greater than one year to an individual notrelated by blood or marriage to the continuing care retirement communityprovider that is furnishing care.
(7)“Continuing care retirement community” or “CCRC” means any provider that isregistered with the Department of Human Services and agrees to furnishcontinuing care to a resident under a residency agreement.
(8)“Entrance fee” means an initial or deferred transfer to a provider of a sum ofmoney or other property made or promised to be made as full or partialconsideration for acceptance of one or more residents in a continuing careretirement community. A fee that is less than the sum of the regular periodiccharges for one year of residency is not an entrance fee.
(9)“Health related services” includes, but is not limited to, nursing care,assistance with activities of daily living, long term care and rehabilitativeservices.
(10)“Living unit” means a room, apartment, cottage or other area set aside for theexclusive use of the resident.
(11)“Manager” means a person, corporation, partnership, association or other legalentity that enters into a contractual arrangement with the provider to managethe continuing care retirement community. However, “manager” does not includeindividuals employed by the provider or corporations affiliated with theprovider or other legal entities within the provider’s supervision or control.
(12)“New continuing care retirement community” means a continuing care retirementcommunity registered by a provider on or after January 1, 1990. “New continuingcare retirement community” does not mean the remodeling or expansion of anexisting continuing care retirement community’s facility on the same or anadjacent site.
(13)“Omit a material fact” means the failure to state a material fact required tobe stated in any disclosure statement or registration.
(14)“Open bed long term care facility” means a licensed long term care facility ina continuing care retirement community that admits persons who have not signeda residency agreement.
(15)“Provider” means an owner or operator, whether a natural person, partnership,trust, limited liability company, corporation or unincorporated association,however organized, of a new or existing continuing care retirement community,whether operated for profit or not, that provides, plans to provide or agreesto provide continuing care to one or more unrelated residents under a residencyagreement.
(16)“Regular periodic charges” means basic monthly fees charged to a resident on anongoing basis.
(17)“Residency agreement” means a contract between a provider and a resident forthe provision of continuing care for a period greater than one year.
(18)“Resident” means a person who enters into a residency agreement with a provideror who is designated in a residency agreement to be a person being providedwith continuing care.
(19)“Residents’ council” means a body of residents of a continuing care retirementcommunity who are elected by the residents and recognized by the provider asrepresenting the interests of the residents.
(20)“Solicit” means all actions of a provider in seeking to have individuals pay anapplication fee or enter into a residency agreement by any means including,without limitation, personal, telephone, mail or any media distributed orcommunicated by any means. [1989 c.693 §3; 1997 c.633 §4; 2009 c.201 §1]
101.030Registration of continuing care retirement community providers. (1) A newcontinuing care retirement community provider shall register with theDepartment of Human Services before the provider:
(a)Enters into a residency agreement with a nonresident;
(b)Solicits either a prospective resident or nonresident to pay an application feeor execute a residency agreement; or
(c)Collects an entrance fee.
(2)The provider shall apply for registration with the department on formsprescribed by the department. The application shall include a disclosurestatement as described in ORS 101.050. The disclosure statement must include anexplanation, in boldfaced type, whether and in what manner and amount entrancefees are refunded to prospective residents in the event a prospective residentwithdraws from the residency agreement prior to occupancy.
(3)Within 10 business days after receipt of the completed application forregistration of a new continuing care retirement community, the departmentshall issue a notice of filing to the applicant. Within 60 days of the noticeof filing, the department shall enter an order registering the provider orrejecting the registration. If no order of rejection is entered within 60 daysfrom the date of notice of filing, the provider shall be considered registeredunless the provider and the department agree in writing to an extension oftime. If no order of rejection is entered within the time period as soextended, the provider shall be considered registered.
(4)If the department determines that the requirements of ORS 101.050, 101.060,101.070 and 101.090 have been met, it shall enter an order registering theprovider. If the department determines that any of the requirements of ORS101.050, 101.060, 101.070 or 101.090 have not been met, the department shallnotify the applicant that the application for registration must be correctedwithin 30 days in such particulars as are designated by the department. If therequirements are not met within the time allowed, the department may enter anorder rejecting the registration. The order shall include the findings of factupon which the order is based and which shall not become effective until 20days after the end of the foregoing 30-day period. During the 20-day period,the applicant may petition for reconsideration and shall be entitled to ahearing. An order of rejection shall not take effect, in any event, until suchtime as the hearing, once requested, has been given to the applicant and adecision is rendered by the administrative law judge that sustains thedepartment’s decision to reject the registration. [1989 c.693 §7; 1991 c.67 §19;2003 c.75 §82; 2005 c.22 §79; 2009 c.201 §2]
101.040Registration fees.The initial application for registration shall be accompanied by a fee of $500.After the initial registration, the subsequent annual fee shall be $250 perfacility. [1989 c.693 §18]
101.050Preparation of disclosure statement by provider; notice and review of statementby prospective residents; contents of statement. (1) After entryof an order registering the provider and before the provider enters into anyresidency agreement with or on behalf of the prospective resident, the providershall notify prospective residents of their right to review the initialdisclosure statement and shall make copies of the statement available uponrequest. The initial disclosure statement shall be available during regularbusiness hours in the business office of the continuing care retirementcommunity. The text of the initial disclosure statement shall contain thefollowing information:
(a)The rights and requirements contained in ORS 101.115.
(b)The names of the individual or individuals who constitute the provider or, ifthe provider is a partnership, limited liability company, corporation or otherlegal entity, whether for profit or not for profit, the name of the legalentity and each of the officers, directors, trustees or managing generalpartners of the legal entity and a description of each individual’s duties onbehalf of the legal entity.
(c)The business address of the provider and a statement of whether the provider isan individual, partnership, limited liability company, corporation or otherlegal entity.
(d)The names and business addresses of any individual having any more than a 10percent direct or indirect ownership or beneficial interest in the provider,the percentage of the direct or indirect ownership or beneficial interest and adescription of each individual’s interest in or occupation with the provider.
(e)(A)A statement as to whether the provider is or is not affiliated with any otherorganization of any kind, the extent of the affiliation, if any, and the extentto which any of the affiliated organizations are responsible for the financialand contractual obligations of the provider; and
(B)The provision of the Internal Revenue Code, if any, under which the provider orany affiliated organization is exempt from the payment of federal income taxes.
(f)The location and general description of the continuing care retirementcommunity, including the location and number of living units and licensed longterm care beds considered part of the CCRC, and any other care facilities ownedor operated by the provider. The provider must disclose the following about anyproposed continuing care retirement community or other care facilities:
(A)The estimated completion date or dates;
(B)A statement as to whether or not construction has begun; and
(C)Any contingencies subject to which construction may be deferred.
(g)The number of open bed long term care facility beds operated by the CCRC.
(h)A description of services provided or proposed to be furnished by the providerunder its residency agreements including, without limitation:
(A)The extent to which medical care, long term care or health related services arefurnished, and the locations where the services will be furnished. If the servicesare furnished at a facility that is not registered as part of the CCRC’scampus, the provider shall state the location where the services are furnishedand any additional fees associated with the services; and
(B)The services made available by the continuing care retirement community at anextra charge over and above the entrance fee.
(i)A description of all fees required of each resident, including the entrancefee, regular periodic charges and the manner in which any additional fees orregular periodic charges will be determined. The description shall include:
(A)The circumstances under which the resident will be permitted to remain in thecontinuing care retirement community in the event the resident is unable to payregular periodic or other charges;
(B)The terms and conditions under which the residency agreement may be canceled bythe provider or the resident or in the event of the death of the resident priorto or following occupancy of the living unit;
(C)The percentage of the entrance fee refund required by ORS 101.080 and themanner in which this percentage is calculated;
(D)The conditions under which a living unit occupied by a resident may be madeavailable by the provider to another resident other than on the death of theresident executing the residency agreement;
(E)The manner by which the provider may adjust regular periodic charges or otherrecurring fees;
(F)A statement of the fees to be charged if the resident marries or divorces whileat the designated continuing care retirement community, the terms concerning aresident’s spouse’s entry to or departure from a CCRC and the consequences if anew spouse does not meet the requirements for entry; and
(G)The terms and conditions for the transfer of a resident out of the CCRC.
(j)The provider’s most recent audited financial statement prepared in accordancewith generally accepted accounting principles by a certified public accountant.This audited financial statement must not have been prepared more than 16months prior to the date of the initial application for registration.
(k)A copy of the residency agreement or agreements offered to the prospectiveresident by the provider.
(L)A statement on the cover page in a prominent location and typeface thatregistration of the continuing care retirement community does not constituteapproval, recommendation or indorsement of the CCRC by the Department of HumanServices, and that such registration does not evidence the accuracy orcompleteness of the information set forth in the disclosure statement.
(m)Copies of the primary written brochures and written promotional materialsfurnished to prospective residents.
(n)A full description of all contracts that the provider has entered into withaffiliated organizations and an explanation of the financial impact that thecontracts may have on residents.
(o)An affidavit signed by an authorized representative of the CCRC confirming thatthe application and disclosure statement are complete and accurate.
(2)Any individual or legal entity named in subsection (1)(b) or (d) of thissection and any proposed or existing manager must disclose:
(a)Business experience in operation or management of the continuing careretirement community or other licensed long term care facilities;
(b)Whether the person has been convicted of a crime;
(c)Whether the person has been a party to any civil action in which a judgment fordamages was obtained or in which an injunction was issued against the personfor fraud, embezzlement, fraudulent conversion or misappropriation of property;
(d)Whether the person has had any state or federal permits or licenses suspendedor revoked, or if a state or federal authority has disqualified the person fromproviding services in the Medicare or Medicaid program in connection with theperson’s business activities; and
(e)The identity of any business or professional service entity in which the personhas a 10 percent or greater ownership interest and which the provider intendsto employ to provide goods, services or any other things of value.
(3)In the event subsection (2)(e) of this section applies, the person mustdisclose the anticipated costs to the provider or a statement that such costscannot presently be estimated.
(4)In addition to complying with all the provisions of this section, the providermust submit on behalf of a new continuing care retirement community a statementof the anticipated source and application of funds used or to be used in thepurchase or construction of the CCRC, including:
(a)An estimate of the cost of purchasing or constructing and equipping the CCRCthat the provider expects to incur or become obligated for prior to thecommencement of the operation of the CCRC;
(b)A description of any mortgage loan or other long term financing intended to beused for the financing of the CCRC;
(c)An estimate of the total entrance fees to be received from the residents at orprior to the commencement of operation of the continuing care retirementcommunity based on projected occupancy at the time the CCRC commencesoperation; and
(d)An estimate of the funds, if any, anticipated to be necessary to pay forstart-up losses. [1989 c.693 §8; 1997 c.633 §5; 2009 c.201 §3]
101.052Annual disclosure statement. (1) The provider shall file with theDepartment of Human Services an annual disclosure statement for the provider’sfiscal year that satisfies the requirements of this section and ORS 101.050.The statement shall be filed within four months following the end of theprovider’s fiscal year unless the time is extended by the department.
(2)In addition to the information required for an initial statement under ORS101.050, the annual disclosure statement shall include:
(a)An audited financial statement prepared in accordance with generally acceptedaccounting principles for the preceding fiscal year;
(b)A disclosure of any change in ownership or manager;
(c)The frequency of residents’ council meetings and the dates of the meetings; and
(d)Copies of all notices of changes in regular periodic charges or notices ofproposed changes in fees or services that were given to residents during theprovider’s most recently completed fiscal year.
(3)To amend an annual disclosure statement, a provider shall file all amendeddocuments and new materials with the department. [Formerly 101.130]
101.055 [1997 c.633 §2;2009 c.201 §4; renumbered 101.112 in 2009]
101.060Provider to maintain financial reserves; amount; escrow account; withdrawalfrom reserves.(1) A provider shall establish and maintain at all times:
(a)A debt service liquid reserve in an amount equal to or exceeding the total ofall principal and interest payments due during the next 12 months on account ofa mortgage loan or other long term financing of the continuing care retirementcommunity taking into consideration any anticipated refinancing; and
(b)An operating liquid reserve in an amount equal to or exceeding the total of theCCRC’s projected operating expenses for three months. For the purpose ofcalculating the amount required for the operating liquid reserve, projectedoperating expenses include any anticipated expenses associated with providinghousing or health related services under all residency agreements.
(2)The Department of Human Services may require a provider not meeting its reserverequirements to place the reserves in an escrow account.
(3)The notes to the provider’s annual audited financial statements shall statewhether or not the reserve requirements have been met.
(4)The department may allow withdrawal or borrowing from the reserves in an amountnot greater than 20 percent of the provider’s total required reserves. Thewithdrawal or borrowing can be approved by the department only if required formaking an emergency repair or replacement of equipment, to cover catastrophicloss that is not able to be covered by insurance or for debt service in apotential default situation. No withdrawal or borrowing may be made from areserve without the approval of the department. All funds borrowed shall berepaid to the reserve within 18 months in accordance with a payment planapproved by the department. [1989 c.693 §12; 1997 c.633 §6; 2003 c.14 §40; 2009c.201 §5]
101.065Provider liquidation; resident claims preferred. If the provideris liquidated, the claims of residents arising under residency agreements shallbe preferred claims having priority over other unperfected claims againstprovider assets. [1997 c.633 §3]
101.070Escrow account required for registration of new continuing care retirementcommunity; entrance fees in escrow; use of escrow funds. (1) As acondition of registration for a new continuing care retirement community, theDepartment of Human Services shall require that the provider establish anescrow account with a bank, trust company or other escrow agent and that anyentrance fees received by the provider prior to the date the resident ispermitted to occupy the living unit in the CCRC be placed in the escrowaccount.
(2)Upon written request by the provider, the department shall approve the releaseof the funds from escrow if the department is satisfied that:
(a)The provider has received a certificate of occupancy by local authorities andhas collected no less than 10 percent of each individual resident’s entrancefee for no less than 50 percent of the total number of units;
(b)Anticipated proceeds of any first mortgage loan or other long term financingcommitment plus funds from other sources in the actual possession of theprovider are equal to not less than:
(A)Fifty percent of the aggregate cost of constructing or purchasing and equippingand furnishing the CCRC; and
(B)Fifty percent of the funds, which the provider estimated in its disclosurepursuant to ORS 101.050, to fund start-up losses of the CCRC; and
(c)A commitment has been received by the provider for any permanent mortgage loanor other long term financing commitment, which commitment the providerdisclosed pursuant to ORS 101.050, and any conditions of this commitment priorto disbursement of funds thereunder, other than completion of the constructionor closing of the purchase of the CCRC, have been substantially satisfied.
(3)In the event a prospective resident withdraws from the residency agreementprior to occupancy, the entrance fee described in ORS 101.080 may not be refundedto the prospective resident until such time as the prospective resident’s unithas been resold.
(4)If the entrance fees in an escrow account are not released within 48 monthsafter the escrow account is opened, entrance fees paid, less the escrow fee,shall be returned to the residents unless an extension is granted by thedepartment.
(5)Nothing in this section requires the escrow of any nonrefundable applicationfee charged to prospective residents.
(6)An entrance fee held in escrow may be returned by the escrow agent, at anytime, to the person or persons who paid the fee to the provider upon receipt bythe escrow agent of notice from the provider that such person is entitled to arefund of the entrance fee. [1989 c.693 §13; 2009 c.201 §6]
101.080When resident eligible for refund of entrance fee; notice to resident. (1) Anyprovider that requires any resident, as a condition of occupancy or use of thefacility, to pay an entrance fee, prior to or during the first six months ofoccupancy in addition to monthly payments, shall provide that a percentage ofthat entrance fee be refunded to the resident if the residency agreement isterminated, other than by reason of death of the resident, within the first sixmonths of occupancy.
(2)The percentage of the entrance fee to be refunded and the manner in which thispercentage is calculated shall be written in boldfaced type in the residencyagreement and disclosed in the initial and annual disclosure statementsrequired by ORS 101.050 and 101.052. [Formerly 91.690; 2009 c.201 §7]
101.090Exemption of closed bed facilities from certificate of need review; exception. A closed bedlong term care facility shall be subject to the same requirements as all otherlong term care facilities,