Mass. commission presses for clearer entrance-fee refunds as legislators consider disclosure bill

Members of the Commission on Aging and Independence on a tour at Brookhaven at Lexington focused public attention on entrance-fee refund practices at continuing-care retirement communities and on a pending state disclosure bill.

The commission discussed a LeadingAge Massachusetts member survey reporting an average of about 117 days for communities to provide refunds of entrance fees after resale of a unit. Alyssa, a LeadingAge Massachusetts representative who presented the survey results, said the association collected responses from 20 of its 22 member CCRCs in Massachusetts and that most refunds occur only after receipt of a new entrance fee.

The commission tied the refund discussion to broader questions about financial viability. Several speakers noted that resident refunds are generally treated as unsecured claims in bankruptcy, behind lenders and bondholders, but that purchasers and bankruptcy courts commonly preserve refunds when possible so communities remain marketable and operations stable. Commissioners cited two Massachusetts examples where takeover purchases kept residents in place: Reed's Landing and the Groves in Lincoln, each purchased after financial distress without disrupting residents'day'to'day living.

Commissioners and stakeholders raised consumer-protection questions that the legislature is now considering. A disclosure bill on Beacon Hill had a committee hearing on May 12 and, according to commission staff, remains under committee consideration; the commission announced a public hearing (described to the meeting as a virtual listening session) set for Monday, June 16, and a commission meeting on June 23 that will continue consumer-rights discussion. Organizers said the virtual access details will be posted by legislative IT services and the clerk's office once scheduled.

Speakers warned that refunds can be delayed when resale is slow; several participants recalled that the 2008 housing downturn and the 2020 COVID-19 interruptions caused refund and occupancy risks for some communities. A LeadingAge speaker urged balance in any statutory approach: consumers should understand contract terms, but rules should not make it impossible for communities to remain financially viable.

Participants identified existing Massachusetts statutory language affecting refunds and resale. One meeting participant summarized that state law permits entrance fees to decline by 1% per month of occupancy, and that contracts commonly cap the refundable percentage (for example, 90% or another negotiated rate) subject to the condition of reoccupation. Commissioners asked staff to circulate prior presentations and a spreadsheet documenting which CCRCs report on-site skilled nursing and which do not, so the panel can further align recommendations on disclosure and consumer protection.

The meeting produced no formal vote or directive; commissioners urged more outreach and public comment ahead of the June 16 listening session and asked staff to share survey slides and the list of CCRCs with skilled nursing affiliations.

The commission emphasized two immediate public steps: (1) a virtual listening session on June 16 for residents and families to share concerns about entrance fees and refunds, and (2) a June 23 commission meeting to address consumer rights and advertising practices. Staff said they will circulate meeting access information when Legislative Information Services creates the virtual session.

Ending: The commission closed the session to begin a site tour at Brookhaven; it asked members and community residents to spread the word about the upcoming virtual listening session and to submit written materials for the record ahead of the June 16 date.