In the past most CCRC refundable conracts provided that refunds would not be paid until the vacated unit was recontracted. The 2018 fair refund legislation disallows this requirement. The Governor signed the fair return legislation and it is now Chapter Law. The law took effect on November 15, 2018. Prior to that time, on October, 2018 the Department of Community affairs sent Guidelines to the CCRCs in the state on the requirements before the deadline. Here are two excerpts from the October 1, 2018, DCA A2747 guidelines:
…all providers are required to amend all contracts with refundable entrance fees to comply with the new law … if the continuing care agreement provides for a refund of the entrance fee, the provider shall assign the vacant unit a sequential refund number … refund payments are to be made to vacating residents based on their assigned sequential refund number. This payment is to be made based on the availability of funds from the proceeds of the reoccupancy of all vacated units for which a continuing care contract has been entered into on or after November 15, 2018.
On Saturday June 30, 2018, eight residents wearing ORANJ T-shirts watched from the gallery as Assembly Bill 2747 was adopted. It wasn’t easy. Along the way, ORANJ had to work against amendments introduced by LeadingAge NJ, the trade association of providers of CCRCs, and its lobbyist, Princeton Public Affairs Group.
Here’s a relatively short version of a long story. Last year, ORANJ crafted a draft bill which would eliminate the provision currently in contracts that requires a vacated unit to be re-contracted before a deposit is returned to the estate. The law would direct all newly-signed refundable contracts to provide for the return of the refundable deposit based upon a first-in-first-out (FIFO) process, which assigns a sequential ‘refund’ number, among all available units with refundable entrance deposits, once the unit is restored pursuant to the contract. Refunds would then be returned in the number sequence of the FIFO process.