The Fine Print and the Fault Lines: A Wake-Up Call for CCRC Contracts
When NBC Nightly News aired its March 28 segment, “The New Risk for Residents of Senior Living Communities,” it hit a nerve. The story featured the collapse of River Glen, a continuing care retirement community (CCRC) where residents lost their refundable entrance fees in the wake of bankruptcy. The betrayal was not just financial. As one viewer put it, “They were robbed not only of their money, but of their ability to make good choices for themselves.”
In the days that followed, a flurry of email conversations unfolded among a group of NaCCRA members — longtime residents, advocates, and former industry insiders. The discussion was urgent, impassioned, and often painful. It revealed not only a growing anxiety about the fragility of resident protections but also a reservoir of insight, experience, and determination. This blog post is a distillation of that conversation.
A Moment of Reckoning
“This is a crisis that will get worse,” one resident wrote, “as more boomers age into their later years.” Another added, “For every actual bankruptcy, there may be six to eight fire-sale mergers or acquisitions.” Private equity sees opportunity in troubled CCRCs. Assets are often undervalued and a new owner, not encumbered by the obligations of the original corporate owner, can “harvest” gains by restructuring the business model and selling off pieces.
We are not just watching the occasional community falter. We are witnessing a structural vulnerability — one that raises urgent questions about the way these contracts are written and enforced, and who bears the risk when things go wrong.
The Illusion of Security
A common theme was the mismatch between the appearance of security and the actual legal protections in place. One person put it plainly: “Today’s contracts offer zero protection. Change happens all the time, but if one is protected, the impact is a lot less.”
Several participants recounted how residents often can’t see the contract before putting down significant deposits — a practice one called “absurd and unconscionable.” Another noted bitterly, “Even if you sue or go to arbitration, providers can use your monthly fees to defend themselves.”
That’s the reality: many residents enter these communities in good faith, assuming a covenant of care — only to discover that the contract is written to protect the provider, not them.
Ideas for Reform
In response to the NBC coverage, the conversation turned quickly to what can be done. One idea resurfaced, first proposed years ago by Jack Cumming: a resident-initiated, FDIC-style risk pool to backstop refundable entrance fees. “If providers are right that losses are rare,” one participant noted, “then the fund should be inexpensive to maintain. Perhaps providers would even agree to cover excess losses — putting their assurances to the test.”
Imagine if, when signing your CCRC contract, you had the option to pay 1–2% of your entrance fee into a mutual risk pool, insuring yourself against non-refund in case of bankruptcy or closure. That single change would shift the landscape — and the conversation.
“What Do We Seek in Our Best Model?”
That question, posed by one participant, stayed with me. The answers varied, but certain themes stood out:
- Enforceable contracts with clearly spelled-out services and responsibilities
- Protection of entrance fee refunds in the event of sale, bankruptcy, or closure
- Transparency and disclosure about financial conditions and ownership structures
- Independent oversight and consumer education tools, ideally backed by law
- Exit strategies that don't feel like trapdoors
These aren’t pipe dreams. They are the baseline of what any elder deserves in a community they’ve invested in — financially, emotionally, socially.
Where Do We Go from Here?
Some members are pushing for legislative action. Others are urging NaCCRA to revive its Financial Soundness Committee or to produce consumer guides modeled on materials like Maryland’s CCRC contract checklist.
But beneath these concrete proposals lies a deeper recognition: the old trust-based model is no longer enough. Residents must become active participants in shaping policy, enforcing transparency, and demanding accountability.
As one member wrote, “We need someone fighting for us, because as individuals we cannot make it happen. Again, I hope that the revitalized NaCCRA will do the right thing.”
So do I. Let’s develop model “Best Practices” and tools for evaluating contracts.
Supplemental Reading & Sources
- Disrupting the Status Quo of Senior Living: A Mindshift by Jill Vitale-Aussem
This thoughtful book challenges traditional institutional models in senior living and advocates for resident-centered culture change. A must-read for anyone reimagining what it means to age in community.
- NBC Nightly News – “The New Risk for Residents of Senior Living Communities”
- Aired March 28, 2025. This segment tells the story of River Glen residents who lost their refundable entrance fees after the community filed for bankruptcy.
- 📽️ Watch on YouTube (starts at segment)
- Related Articles on the River Glen Case:
- Troubled New York CCRC Set to Change Hands After Bankruptcy, Senior Housing News
- New Harborside CCRC Owner Seeks Additional Tax Abatements After Bankruptcy Sale, McKnight’s Senior Living
- Maryland Department of Aging
- CCRC Contract Review Guide
- The New Yorker: When Private Equity Takes Over a Nursing Home by Yasmin Rafiei
A deeply reported exposé on the effects of profit-driven ownership in elder care. Though focused on nursing homes, the trends described are creeping into the CCRC world.