On June 7, 2022 Gary Baldwin, Legislative Committee Chair and VP for the Southeast Region of ORANJ, submitted an op-ed to the Star Ledger with the ORANJ position in opposition to Bills re CCRC/LPC Refundable Contracts.
On June 8, 2022, residents of these 13 New Jersey CCRCs/LPCs attended a Zoom Conversation about the bills and ORANJ’s response: Atrium at Navesink, Cedar Crest, Crestwood Manor, Harrogate, Laurel Circle, Meadow Lakes, Medford Leas, Monroe Village, Stonebridge, Oaks at Denville, Pines, Wiley Mission, Winchester Gardens. The invitation had been extended in advance to all 25 member resident associations and participation by all is encouraged.
After the residents’ introductions, a resident of House of Good Shepherd surprised the group by announcing that HGS is no longer a CCRC because of the closure of nursing units. See WRMJ March 29 news about the intent to close certain units. Updates to follow.
Background Concerning Refundable Contracts
- Prior to November 15, 2018, refundable contracts which had refundable entrance fees in whole or in part (100%, 90%, or 50%) contained a process for the return of the fee. In most cases, the obligation for refund was to be made when the departing resident’s apartment was re-occupied by a new resident who in turn made entrance fee to fund the repayment. This led to delays and discounted refunds if the apartment in question was not readily marketable.
- In years leading up to 11/15/2018, there was dissatisfaction with the delays and Resident Associations as well as ORANJ sought change. The result was NJ Public Law 2018, Chapter 98., NJ Statutes § 52:27D-360.7.
- This law provided for a fairer method for return of refundable entrance fees, but it only applies to contracts made after the law was passed. The law did not affect contracts made before 11/15/2018. More details here. This law provided that all refundable entrance fees shall be paid in SEQUENTIAL order of vacating units by all new funds received from all refundable entrance fees received.
- Recently some NJ Legislators have introduced bills to amend this sequential refund law to require facilities satisfy refundable entrance fees within one year of a resident’s departure.
- After due consideration the ORANJ Executive Committee concluded that this proposal in the bills was counterproductive to the interests of residents because of the possible detriment to the financial health of some CCRCs.
- The ORANJ Legislative Committee prepared letters to the sponsoring legislators and an OP-ED to the Star Ledger. Those were approved by the ORANJ Executive Committee and have been sent.
Rick Ober, VP for the Central region of ORANJ explained the background and the Executive Committee’s action. Then there was a screen-share of the op-ed while Rick read the op-ed for the benefit of those without video. Maggie Heineman, Communications Committee Chair, served as Zoom host.
Discussion By Participants
The discussion was facilitated by Barbara Trought, VP for the Southwest Region of ORANJ.
A resident from Meadow Lakes asked if, pre-2018, funds were escrowed. However, each year a budget item in each CCRC was estimated refunds due and line-item expenditure was created. Under 2018 law funds from refundable contract entrance fees, were placed in a “refund account” to be used for the sequential refunds.
Another resident from Meadow Lakes said that refunds there took about a year. She also asked who is behind the laws being proposed?
Rick Ober discussed the 2014 lawsuit against Springpoint and its then five subsidiaries concerning refundable entrance fee contracts by Springpoint before 2018. The 2014 matter in 2021 was certified as a Class Action Suit and is slowly winding its way through the NJ Court System. A possible result could be changes to pre-2018 refund requirements.
A resident of Seabrook asked about reserve requirements and if there is data available on actual time frame of refunds, both pre- & post-2018.
Andy Kleppe, ORANJ Database Coordinator, recommended that participants read the 2017 Financial Guide available on the website concerning NJ State oversite on refund process as well other financial requirements by NJ Dept. of Community Affairs. Andy emphasized the need to obtain data from management about refunds and move-in, move-out, both before and after 2018, in order to determine trends which may raise concern.
Jim Gallagher of Cedar Crest mentioned Cedar Crest’s offer to pre-2018 residents with 100% refundable entrance fees to opt-in to the new sequential system with 90% refunds. Herb Friend, VP for the Northwest Region of ORANJ, and a resident of Cedar Crest, an Erickson community notes that his contract permits the use of his refundable entrance fee for any purpose. Rick Ober suggested that accounting requirements are to the contrary.
A Harrogate resident asked about getting the opportunity to opt into the sequential process. Maggie Heineman suggested that local community residents associations could advocate for this with their managements.
Barry Falk, Monroe village asked about occupancy rates. James Gallagher, ORANJ Research will soon send out questionnaires for the 2022 Occupancy Survey, the first one since 2019 due to the pandemic.
Barbara Trought said Medford Leas is currently refunding fees in about 1.4 years. She also explained that The Evergreens has always had a 120-day refund policy and continues to have that policy after being acquired by Acts.
The Zoom conversation concluded at 11 am.
NOTE: If you have a personal relationship with any of the New Jersey legislators who introduced these bills [Senators Codey and Gill and Assemblywomen Jasey, McKnight, and Munoz] or their staff members, please contact Gary Baldwin, Legislative Committee Chair, at gbaldwin36@verizon.net or 732-922-9227.
2 Responses
May I please comment that it is very difficult to find telephone numbers or E-mail addresses for the people involved in these meetings should I wish to communicate with them. Thank you.
Hmmm. As Communications Chair I do have contact info for most RA presidents or Liaisons. Regional Vice Presidents have access to this information (which changes when different someone else becomes president or liaison). I think the solution may be to provide the presidents/liaisons with the contact info for the VP for their region. Or perhaps for all the executive committee members. I’d have to get permission. The Regional VPs could then work out a way for people within their region to contact each. Other. If there are specific people whom you’d like to contact, you could write to me and I’d get permission from whomever. My email is oranjnewsletter@gmail.com. Since the Pines is in the SE region. I will send email now to both you and Gary Baldwin so you’ll be in touch.