USA Statutes : oregon
Title : TITLE 09 MORTGAGES AND LIENS
Chapter : Chapter 101 Continuing Care Retirement Communities
The Legislative Assembly finds that continuing care
retirement communities are an important and necessary alternative for the
long term residential, social and health maintenance needs for many of
Oregon’s senior citizens. The Legislative Assembly recognizes the need
for disclosure with respect to the terms of agreements between residents,
prospective residents and the provider. The Legislative Assembly also
recognizes the need to establish reserves and escrow requirements to
provide adequate standards for the development and operation of
continuing care retirement communities. Accordingly, the Legislative
Assembly has determined that these providers should be registered and
should establish reserves and escrows in accordance with this chapter.
[1989 c.693 §2] As used in this chapter:

(1) “Application fee” means a fee charged to an individual or
individuals, prior to execution of a residency agreement, apart from an
entrance fee.

(2) “Audited financial statement” means a provider’s financial
statement that has been prepared in accordance with generally accepted
accounting principles and that has been audited by an independent
certified public accountant in accordance with generally accepted
auditing standards and includes notes to the financial statement that
state whether or not the community is in compliance with its reserve
requirements.

(3) “Closed system long term care facility” means a long term care
facility in a continuing care retirement community that is used
exclusively by the continuing care retirement community’s residents.

(4) “Continuing care” means directly furnishing or indirectly
making available, upon payment of an entrance fee and under a residency
agreement, housing and health related services, including nursing or
assistance with activities of daily living, for a period greater than one
year to an individual not related by blood or marriage to the continuing
care retirement community provider that is furnishing care, whether
provided in the community or in another setting designated by the
residency agreement.

(5) “Continuing care retirement community” or “community” means any
provider that agrees to furnish continuing care to a resident under a
residency agreement.

(6) “Department” means the Department of Human Services.

(7) “Entrance fee” means an initial or deferred transfer to a
provider of a sum of money or other property made or promised to be made
as full or partial consideration for acceptance of one or more residents
in a community. A fee that is less than the sum of the regular periodic
charges for one year of residency is not an entrance fee.

(8) “Living unit” means a room, apartment, cottage or other area
set aside for the exclusive use of the resident.

(9) “Manager” means a person, corporation, partnership, association
or other legal entity that enters into a contractual arrangement with the
provider to manage the continuing care retirement community. However,
“manager” does not include individuals employed by the provider or
corporations affiliated with the provider or other legal entities within
the provider’s supervision or control.

(10) “New continuing care retirement community” or “new community”
means a community established by a provider on or after January 1, 1990.
“New community” does not mean the remodeling or expansion of an existing
continuing care retirement community’s facility on the same or an
adjacent site.

(11) “Omit a material fact” means the failure to state a material
fact required to be stated in any disclosure statement or registration.

(12) “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 agrees to provide continuing care for
an entrance fee.

(13) “Residency agreement” means the contract or contracts between
a provider and a resident for the provision of continuing care.

(14) “Resident” means a person who enters into a residency
agreement with a provider or who is designated in a residency agreement
to be a person being provided with continuing care in a community.

(15) “Solicit” means all actions of a provider in seeking to have
individuals pay an application fee or enter into a residency agreement by
any means including, without limitation, personal, telephone, mail or any
media distributed or communicated by any means. [1989 c.693 §3; 1997
c.633 §4](1) A provider shall register with the Department of Human
Services before the provider:

(a) Enters into a residency agreement with a nonresident;

(b) Extends the terms of a resident’s existing residency agreement;
or

(c) Solicits either a resident or nonresident to pay an application
fee or execute a residency agreement.

(2) The provider shall apply for registration with the department
on forms prescribed by the department. The application shall include a
disclosure statement as described in ORS 101.050.

(3) Within 10 business days after receipt of the application for
registration from a new continuing care retirement community, the
department shall issue a notice of filing to the provider applicant.
Within 60 days of the notice of filing, the department shall enter an
order registering the provider or rejecting the registration. If no order
of rejection is entered within 60 days from the date of notice of filing,
the provider shall be considered registered unless the provider has
consented in writing to an extension of time. If no order of rejection is
entered within the time period as so extended, the provider shall be
considered registered.

(4) If the department determines that the requirements of ORS
101.050, 101.090 and 101.130 have been met, it shall enter an order
registering the provider. If the department determines that any of the
requirements of ORS 101.050 and 101.130 have not been met, the department
shall notify the applicant that the application for registration must be
corrected within 30 days in such particulars as are designated by the
department. If the requirements are not met within the time allowed, the
department may enter an order rejecting the registration. The order shall
include the findings of fact upon which the order is based and which
shall not become effective until 20 days 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 a hearing. An order of rejection
shall not take effect, in any event, until such time as the hearing, once
requested, has been given to the applicant and a decision is rendered by
the administrative law judge that sustains the department’s decision to
reject the registration. [1989 c.693 §7; 1991 c.67 §19; 2003 c.75 §82;
2005 c.22 §79] The initial application for registration
shall be accompanied by a fee of $500. After the initial registration,
the subsequent annual fee shall be $250 per facility. [1989 c.693 §18](1)
After entry of an order registering the provider and before the provider
enters into any residency agreement with or on behalf of the prospective
resident, the provider shall notify prospective residents of their right
to review the initial disclosure statement and shall make copies of the
statement available upon request. The initial disclosure statement shall
be available during regular business hours in the business office of the
continuing care retirement community. The text of the initial disclosure
statement shall contain the following information:

(a) The names of the individual or individuals who constitute the
provider or, if the provider is a partnership, limited liability company,
corporation or other legal entity, whether for profit or not for profit,
the names of the officers, directors, trustees or managing general
partners of the provider and a description of each such individual’s
duties on behalf of the provider.

(b) The business address of the provider and a statement of whether
the provider is an individual, partnership, limited liability company,
corporation or other legal entity.

(c) With respect to a provider that is operated for profit, the
names and business addresses of any individual having any more than a 10
percent ownership or beneficial interest in the provider and a
description of such individual’s interest in or occupation with the
provider.

(d)(A) A statement as to whether the provider is or is not
affiliated with any other organization of any kind, the extent of the
affiliation, if any, and the extent to which any of the affiliate
organizations are responsible for the financial and contractual
obligations of the provider; and

(B) The provision of the Internal Revenue Code, if any, under which
the provider or any of the provider’s affiliates is exempt from the
payment of federal income taxes.

(e) The location and general description of the continuing care
retirement community and any other care facilities, both existing and
proposed, owned or operated by the provider. The provider must disclose
the following about any proposed 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.

(f) A description of services provided or proposed to be furnished
by the provider under its residency agreements including, without
limitation, the extent to which medical care or assisted living is
furnished, the services made available by the continuing care retirement
community at an extra charge over and above the entrance fee and periodic
charges provided for in the residency agreement.

(g) A description of all fees required of each resident, including
the entrance fee, periodic charges and the manner in which any additional
fees or periodic charges will be determined. The description shall
include:

(A) The circumstances under which the resident will be permitted to
remain in the continuing care retirement community in the event the
resident is unable to pay periodic or other charges;

(B) The terms and conditions under which the residency agreement
may be canceled by the provider or the resident or in the event of the
death of the resident prior to or following occupancy of the living unit;

(C) The percentage of the entrance fee refund required by ORS
101.080 and the manner in which this percentage is calculated;

(D) The conditions under which a living unit occupied by a resident
may be made available by the provider to another resident other than on
the death of the resident executing the residency agreement;

(E) The manner by which the provider may adjust periodic charges or
other recurring fees; and

(F) A statement of the fees to be charged if the resident marries
or divorces while at the designated continuing care retirement community,
the terms concerning the entry or departure of a spouse to the community
and the consequences if a new spouse does not meet the requirements for
entry.

(h) The provider’s most recent audited financial statement prepared
in accordance with generally accepted accounting principles by a
certified public accountant. This audited financial statement shall not
have been prepared more than 16 months prior to the date of the initial
application for registration.

(i) A copy of the residency agreement or agreements offered to the
prospective resident by the provider.

(j) A statement on the cover page in a prominent location and
typeface that registration of the continuing care retirement community
does not constitute approval, recommendation or indorsement of the
community by the Department of Human Services, and that such registration
does not evidence the accuracy or completeness of the information set
forth in the disclosure statement.

(k) Copies of the primary written brochures and written promotional
materials furnished to prospective residents.

(2) Any person named in subsection (1)(a) or (c) of this section
and any proposed or existing manager must disclose:

(a) Business experience in operation or management of the
continuing care retirement community or other facilities;

(b) Whether the person or manager has been convicted of a crime;

(c) Whether the person or manager has been a party to any civil
action in which a judgment for damages was obtained or in which an
injunction was issued against the person or proposed manager for fraud,
embezzlement, fraudulent conversion or misappropriation of property;

(d) Whether the person or manager has had any state or federal
permits or licenses suspended or revoked in connection with the person or
proposed manager’s business activities; and

(e) The identity of any business or professional service entity in
which the person or proposed manager has a 10 percent or greater
ownership interest and which the provider intends to employ to provide
goods, services or any other things of value.

(3) In the event subsection (2)(e) of this section applies, the
person or manager must disclose the anticipated costs to the provider or
a statement that such costs cannot presently be estimated.

(4) In addition to complying with all the provisions of this
section, the provider must submit on behalf of a new continuing care
retirement community a statement of the anticipated source and
application of funds used or to be used in the purchase or construction
of the community, including:

(a) An estimate of the cost of purchasing or constructing and
equipping the community which the provider expects to incur or become
obligated for prior to the commencement of the operation of the community;

(b) A description of any mortgage loan or other long term financing
intended to be used for the financing of the community;

(c) An estimate of the total entrance fees to be received from the
residents at or prior to the commencement of operation of the continuing
care retirement community based on projected occupancy at the time the
community commences operation; and

(d) An estimate of the funds, if any, anticipated to be necessary
to pay for start-up losses. [1989 c.693 §8; 1997 c.633 §5](1) The governing body or a designated representative of the
provider shall hold meetings with the residents of the continuing care
retirement community at least twice a year for the purpose of free
discussion of subjects that may include, but are not limited to, facility
income, expenditures, financial trends, resident concerns and proposed
changes in policy, programs and services. The meetings shall be open to a
designated personal representative of a resident. The provider shall
report the dates of the meetings in the annual disclosure statement to
the Department of Human Services.

(2) The provider shall give residents notice of proposed changes in
fees or services and allow residents a reasonable opportunity to comment
on the proposed changes before they become effective. [1997 c.633 §2](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 of all principal and interest payments due during the
next 12 months on account of a mortgage loan or other long term financing
of the continuing care retirement community taking into consideration any
anticipated refinancing; and

(b) An operating liquid reserve in an amount equal to or exceeding
the total of the community’s projected operating expenses for three
months.

(2) The Department of Human Services may require a provider not
meeting its reserve requirements to place the reserves in an escrow
account.

(3) The notes to the provider’s annual audited financial statements
shall state whether or not the reserve requirements have been met.

(4) The department may allow withdrawal or borrowing from the
reserves in an amount not greater than 20 percent of the provider’s total
reserves. The withdrawal or borrowing can be approved by the department
only if required for making an emergency repair or replacement of
equipment, to cover catastrophic loss that is not able to be covered by
insurance or for debt service in a potential default situation. No
withdrawal or borrowing may be made from a reserve without the approval
of the department. All funds borrowed shall be repaid to the reserve
within 18 months in accordance with a payment plan approved by the
department. [1989 c.693 §12; 1997 c.633 §6; 2003 c.14 §40] If the
provider is liquidated, the claims of residents arising under residency
agreements shall be preferred claims having priority over other
unperfected claims against provider assets. [1997 c.633 §3](1) As a condition of registration for a new community, the Department of
Human Services shall require that the provider establish an escrow
account with a bank, trust company or other escrow agent and that any
entrance fees received by the provider prior to the date the resident is
permitted to occupy the living unit in the community be placed in the
escrow account.

(2) These funds shall be released by the department at such time
the department is satisfied that:

(a) The provider has collected no less than 10 percent of each
individual resident’s entrance fee for no less than 50 percent of the
total number of units;

(b) Anticipated proceeds of any first mortgage loan or other long
term financing commitment plus funds from other sources in the actual
possession of the provider are equal to not less than:

(A) Fifty percent of the aggregate cost of constructing or
purchasing and equipping and furnishing the community; and

(B) Fifty percent of the funds, which the provider estimated in its
disclosure pursuant to ORS 101.050, to fund start-up losses of the
community; and

(c) A commitment has been received by the provider for any
permanent mortgage loan or other long term financing commitment, which
commitment the provider disclosed pursuant to ORS 101.050, and any
conditions of this commitment prior to disbursement of funds thereunder,
other than completion of the construction or closing of the purchase of
the community, have been substantially satisfied.

(3) In the event a prospective resident withdraws from the
residency agreement prior to occupancy, the entrance fee described in ORS
101.080 shall not be refunded to the prospective resident until such time
as the prospective resident’s unit has been resold.

(4) If the entrance fees in an escrow account are not released
within 36 months after the escrow account is opened, entrance fees paid,
less the escrow fee, shall be returned to the residents unless an
extension is granted by the department.

(5) Nothing in this section requires the escrow of any
nonrefundable application fee charged to prospective residents.

(6) An entrance fee held in escrow may be returned by the escrow
agent, at any time, to the person or persons who paid the fee to the
provider upon receipt by the escrow agent of notice from the provider
that such person is entitled to a refund of the entrance fee. [1989 c.693
§13](1) Any provider that requires any resident, as a condition
of occupancy or use of the facility, to pay an entrance fee, prior to or
during the first six months of occupancy in addition to monthly payments,
shall provide that a percentage of that entrance fee be refunded to the
resident if the residency agreement is terminated, other than by reason
of death of the resident, within the first six months of occupancy.

(2) The percentage of the entrance fee to be refunded and the
manner in which this percentage is calculated shall be written in
boldfaced type in the residency agreement and disclosed in the initial
disclosure statement required by ORS 101.050. [Formerly 91.690]A closed system long term care facility shall be
subject to the same requirements as all other long term care facilities,
as defined by ORS 442.015, except that it shall be exempt from the
certificate of need process provided by ORS 442.315. However, any closed
system long term care facility which initiates under this exemption any
new institutional health services, as defined in ORS 442.015, and which
subsequently accepts patients who are not residents of the continuing
care retirement community, shall become subject to certificate of need
review for such new institutional health services at the time that
nonresident patients begin to be admitted. [1989 c.693 §10; 1991 c.67 §20] No provider registration shall be
transferred. A registered provider, who wishes to sell or transfer
ownership of the continuing care retirement community to another party,
shall first obtain approval from the Department of Human Services. [1989
c.693 §14] (1) The registration
of a provider shall remain in effect until revoked, after notice and
hearing, upon written findings of fact by the Department of Human
Services that the provider has:

(a) Willfully violated any provision of this chapter or any rule or
order adopted under this chapter;

(b) Failed to file an annual disclosure statement required by ORS
101.130;

(c) Failed to make available to prospective and current residents
the disclosure statements required by ORS 101.050 and 101.130;

(d) Delivered to prospective residents a disclosure statement as
provided by ORS 101.050 and 101.130 that makes an untrue statement of
material fact or omits a material fact and the provider, at the time of
the delivery of the disclosure statement, had actual knowledge of the
misstatement or omission; or

(e) Failed to comply with the terms of a cease and desist order
described in ORS 101.120.

(2) Findings of fact in support of revocation, if set forth in
statutory language, shall be accompanied by a concise and explicit
statement of the underlying facts supporting the findings.

(3) If the department finds, after notice and hearing, that the
provider has been guilty of a violation for which revocation could be
ordered, it may first issue a cease and desist order. If the cease and
desist order is or cannot be effective in remedying the violation, the
department may, after notice and hearing, order that the registration be
revoked. [1989 c.693 §15](1) If the Department of Human Services determines,
after notice and hearing, that any person has violated or is about to
violate any provision of this chapter or any rule or order issued under
this chapter, the department may issue an order requiring the person to
cease and desist from the unlawful practice or to take such affirmative
action as in the judgment of the department carries out the purposes of
this chapter.

(2) If the department makes a finding of fact in writing that the
public interest will be irreparably harmed by delay in issuing a cease
and desist order, it may issue a temporary cease and desist order that
shall include in its terms a provision that, upon request, a hearing
shall be held within 10 days of such a request to determine whether or
not the permanent cease and desist order shall be entered on the person.
The temporary cease and desist order shall be served on the person by
certified mail.

(3) If it appears that a person has engaged, or is about to engage,
in an act or practice constituting a violation of any provision of this
chapter or of a rule or order under this chapter, the department, with or
without prior administrative proceedings, may bring an action in the
circuit court to enjoin the acts or practices or to enforce compliance
with this chapter or any rule or order under this chapter. Upon proper
showing, injunctive relief or temporary restraining orders shall be
granted. The department shall not be required to post a bond in any court
proceeding. [1989 c.693 §16] (1) The provider
shall file annually with the Department of Human Services an annual
disclosure statement for the end of the provider’s fiscal year. The
statement shall be filed within four months following the end of the
provider’s fiscal year unless the time is extended by the department.

(2) The annual disclosure statement shall consist of an audited
financial statement prepared in accordance with generally accepted
accounting principles for the preceding fiscal year and shall disclose
any change in ownership or manager. [1989 c.693 §9] (1) The
Continuing Care Retirement Community Advisory Council is created and
shall consist of nine members appointed by the Director of Human Services
or a designee and shall represent the geographic location of providers in
this state. A member must be a resident of this state. Three members must
represent providers that are registered pursuant to ORS 101.030 and must
have been actively engaged in the offering of residency agreements in
this state for five years before appointment. The remaining members shall
include:

(a) A representative of the business community with expertise in
the area of management;

(b) A certified public accountant;

(c) An attorney; and

(d) Three Oregon residents of continuing care retirement
communities or other consumer representatives.

(2) The term of office for a member shall be three years or until a
successor has been appointed and qualified.

(3) The members of the advisory council shall serve without pay.
They shall be reimbursed by the Department of Human Services for their
actual and necessary traveling expenses incurred while on official
business.

(4) The council shall:

(a) Elect a chairperson from among their number and elect or
appoint a secretary, both of whom shall hold office for one year and
thereafter until a successor is qualified and elected;

(b) Hold an annual meeting and hold other meetings at times and
places the department or the chairperson of the council may direct;

(c) Keep a record of its proceedings. The record is prima facie
evidence of all matters reported and shall be open to inspection at all
times;

(d) Act in an advisory capacity to the department; and

(e) Make recommendations to the department on all proposed rules
pertaining to this chapter. [1989 c.693 §5; 1993 c.18 §21; 1997 c.633 §7;
2001 c.900 §13] (1) The
Department of Human Services shall implement the provisions of this
chapter.

(2) The department shall adopt such rules as are reasonably
necessary for the enforcement of this chapter. The department shall
submit any proposed rules to the advisory council prior to proceeding
with the notice procedures provided for in ORS 183.335. The department
shall consider the comments of the advisory council which pertain to a
proposed rule before the department adopts the rule. [1989 c.693 §§4,17] This chapter may be cited as the Continuing
Care Retirement Community Provider Registration Act. [1989 c.693 §1]

_______________CHAPTERS 102 TO 104[Reserved for expansion]