Q: Does new ownership of an asst living facility have to honor prepaid rent?
My mother lives in an assisted living facility and is paid through the end of the year. A new corporation just purchased the facility and they are saying they have no record of the payments. Obviously we have proof of payment but they say we have to go after the old company for a refund and we still owe them rent. This is the case for over half of the residents at this facility, including some that were paid a couple years out.
Is this legal for the new management group to do or how do you recommend resolving it?
A:
Assisted living facilities are regulated in the state of Kansas. https://www.kdads.ks.gov/docs/default-source/General-Provider-Pages/provider-statutes-and-regulations/ksa-and-kar-for-adult-care-homes/assisted-living---residential-health-care-facilities.pdf?sfvrsn=9c9706ee_2 . One of the first steps you should take is to reach out to state regulators and make a formal complaint.
In a typcial transaction where a facility is transferred, a part of the transaction closing would be a true-up of prepaids and deposits. The purchaser of the facility was in the best position to ensure that an accurate true-up was completed. In the true-up, credits and debits would be permitted for oustanding obligations or benefits that were not otherwise accounted for in third party transactions with residents or third party vendors.
You should consult with an attorney immediatly to ensure the options for enforcing the rights of the patient are preserved.
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