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                                                                   Exhibit 10.19

                          MASTER MODIFICATION AGREEMENT

         THIS MASTER MODIFICATION AGREEMENT (this "Agreement") is made as of
this    day of February, 2002 and effective as between the parties hereto as of
January 1, 2002, by and among RETIREMENT INNS III, LLC, a Delaware limited
liability company (the "Borrower"), ARV ASSISTED LIVING, INC., a Delaware
corporation (the "Guarantor"), and RED MORTGAGE CAPITAL, INC., an Ohio
corporation, formerly known as Provident Mortgage Capital, Inc.,
successor-in-interest to Banc One Capital Funding Corporation (the "Lender").

                                    RECITALS

         WHEREAS, the Lender has previously made a loan to the Borrower in the
original principal sum of Eight Million Two Hundred Nine Thousand Nine Hundred
Dollars ($8,209,900) (the "Loan") pursuant to the terms of that certain
Multifamily Note dated as of June 27, 1999, by the Borrower to the order of the
Lender (the "Original Note"), as amended pursuant to the terms of that certain
First Amendment to Multifamily Note dated as of December 28, 2000 between
Borrower and Lender (the "First Amendment to Note" and together with the
Original Note, the "Existing Note"), and is secured, in part, by a first
mortgage lien on the real property (the "Mortgaged Property") described on
Exhibit A to that certain Multifamily Deed of Trust, Assignment of Rents,
Security Agreement and Fixture Filing dated as of June 27, 1999 by the Borrower
for the benefit of the Lender (the "Original Deed of Trust"), recorded among the
Official Records of Ventura County, California (the "Land Records") on June 28,
1999 as Instrument No. 99-122405, as amended by that certain Amendment to
Multifamily Deed of Trust, Assignment of Rents, Security Agreement and Fixture
Filing dated as of August 31, 1999 between the Borrower and the Lender (the
"First Amendment to Deed of Trust"), recorded among the Land Records on
September 10, 1999 as Instrument No. 99-173435, as affected by that certain
Confirmatory Assignment of Multifamily Deed of Trust, Assignment of Rents,
Security Agreement and Fixture Filing dated as of December 12, 2000, effective
as of October 2, 2000, by Banc One Capital Funding Corporation, an Ohio
corporation to Provident Mortgage Capital, Inc., now known as Red Mortgage
Capital, Inc. (the "Confirmatory Assignment", and together with the Original
Deed of Trust and the First Amendment to Deed of Trust, the "Existing Deed of
Trust"), "), recorded among the Land Records on January 31, 2001 as Instrument
No. 2001-0018605-00; and

         WHEREAS, the Guarantor, in order to induce the Lender to make the Loan
to the Borrower, executed and delivered that certain Limited Guaranty dated as
of June 27, 1999 to and for the benefit of the Lender, thereby guaranteeing,
under certain enumerated circumstances set forth therein, the payment and
performance obligations of the Borrower to the Lender under the Original Note
(which Limited Guaranty, as the same may be from time to time renewed, extended,
amended, restated, supplemented or otherwise modified is herein called the
"Limited Guaranty"); and

         WHEREAS, as additional security for the Borrower's obligations under
the Original Note to the Lender, the Borrower and the Lender entered into that
certain Replacement Reserve and Security Agreement dated as of June 27, 1999
(the "Replacement Reserve Agreement") whereby the Borrower agreed to make
monthly deposits into the Replacement Reserve (as such term is defined in the
Replacement Reserve Agreement) to maintain the Mortgaged Property; and

         WHEREAS, as additional security for the Borrower's obligations under
the Original Note to the Lender, the Borrower, the Guarantor and the Lender also
entered into that certain Assignment and Subordination of Management Agreement
dated as of June 27, 1999 (the "Assignment and Subordination") whereby the
Borrower assigned all of its right, title and interest in and to the Management
Agreement (as such term is defined in the Assignment and Subordination) and the
Guarantor agreed, among other things, (i) to subordinate its right of payment to
certain fees under the Management Agreement to the Loan and to the liens terms,
covenants and conditions of the Existing Deed of Trust, (ii)


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to attorn to the Lender upon an Event of Default (as such term is defined in the
Existing Deed of Trust) under the Existing Deed of Trust and continue to manage
and operate the Mortgaged Property upon the occurrence of an Event of Default at
the request of, and in cooperation with the Lender, due to the special
regulatory requirements of the Mortgaged Property as a seniors housing facility,
until a replacement manager/operator has been obtained, and (iii) to assign to
the Lender all of its right, title and interest in and to all permits, licenses,
operating contracts, certificates and agreements of any nature relating to the
ownership, occupancy, use, operation or management of the Mortgaged Property;
and

         WHEREAS, as additional security for the Borrower's obligations under
the Original Note to the Lender, the Borrower and Lender also entered into that
certain (i) Note and Agreement dated as of June 27, 1999 (the "Additional
Note"), (ii) Letter Agreement dated June 27, 1999 (the "Side Letter Agreement")
and (iii) Agreement to Amend or Comply dated as of June 27, 1999 (the "Agreement
to Amend or Comply"); and

         WHEREAS, pursuant to the terms of that certain Confirmatory Agreement
dated as of December 28, 2000 by and among the Borrower, the Guarantor and the
Lender (the "Confirmatory Agreement"), and the First Amendment to Note, the
Maturity Date (as such term was defined in the Original Note) of the Loan was
extended to January 1, 2002; and

         WHEREAS, the Original Note, the Original Deed of Trust, the Limited
Guaranty, the Replacement Reserve Agreement, the Assignment and Subordination,
the Additional Note, the Side Letter Agreement, the Agreement to Amend or Comply
and any and all other documents, instruments, agreements and certificates
(including, but not limited to, the Certificate of Borrower dated June 27, 1999
executed by Borrower) originally executed in connection with the Loan, as well
as the First Amendment to Note, the First Amendment to Deed of Trust, the
Confirmatory Assignment and the Confirmatory Agreement may sometimes be
collectively referred to herein as the "Original Loan Documents"; and

         WHEREAS, the Borrower has requested and the Lender has agreed, subject
to the terms and conditions of this Agreement, to (i) increase the principal sum
of the Loan to $11,980,000 ) (the "Increase"), (ii) extend the Maturity Date (as
such term is defined in the Existing Note) of the Loan to July 1, 2003 (the
"Extension"), and (iii) change the interest rate of the Loan to 8.50% (the "Rate
Change"); and

         WHEREAS, as a condition to granting the Extension, the Increase and the
Rate Change, Lender has required the Borrower to make a cash deposit to the
Lender and the Guarantor to guaranty a portion of Loan, such guaranty secured in
part by a pledge of certain partnership interests owned by the Guarantor.

         NOW, THEREFORE, for and in consideration of the mutual entry of this
Agreement by the parties hereto, the Extension, the Increase and the Rate Change
and for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged by each party hereto, the parties hereby agree as
follows:

         Section 1. Recitals. The Recitals are hereby incorporated into this
Agreement as a substantive part hereof.


         Section 2. Loan Modifications. The Borrower, the Guarantor and the
Lender hereby acknowledge and agree:

              (a) The Maturity Date of the Loan (defined in Paragraph 3(b)
                  thereof) is hereby extended to July 1, 2003;

              (b) The interest rate of the Loan (referenced in the first
                  paragraph thereof) is changed to 8.50%; and

              (c) The principal sum of the Loan (referenced in the first
                  paragraph thereof) is increased to $11,980,000.


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         Section 3. Amendments to Existing Note. The Existing Note shall be
amended in accordance with the provisions of Section 2 hereof and as further set
forth in the Second Amendment to Multifamily Note dated as of the date hereof
between the Borrower and the Lender (the "Second Amendment to Note") in the form
attached hereto as Exhibit A.

         Section 4. Amendment to Existing Deed of Trust. The Existing Deed of
Trust shall be amended as set forth in the Second Amendment to Multifamily Deed
of Trust, Assignment of Rents, Security Agreement and Fixture Filing dated as of
the date hereof between the Borrower and the Lender (the "Second Amendment to
Deed of Trust") in the form attached hereto as Exhibit B.

         Section 5. Amendments to Original Loan Documents. To the extent not
amended by Sections 2, 3 and 4 hereof, all references to the principal sum of
the Loan in the Original Loan Documents (referenced therein as $8,209,900) is
hereby changed to $11,980,000. From and after the date hereof, references to the
terms "Note" and "Deed of Trust" in the Original Loan Documents shall mean
Existing Note as amended by the Second Amendment to Note on the one hand, and
the Existing Deed of Trust as amended by the Second Amendment to Deed of Trust
on the other hand.

         Section 6. Clarification of the Agreement to Amend or Comply. The
Residual Savings (as defined in the Agreement to Amend or Comply), as calculated
in the Agreement to Amend or Comply, shall be calculated utilizing the interest
rate set forth in the Original Note (i.e., 9.15%).

         Section 7. Conditions and Requirements for the Extension, the Increase
and the Rate Change.


            Section 7.1. The obligation of the Lender to enter into this
Agreement is subject to the satisfaction by Borrower and Guarantor, as
applicable, of the following requirements, each in form and content satisfactory
to the Lender in its sole discretion:

              (a) Receipt by the Lender of the Second Amendment to Note executed
by the Borrower;

              (b) Receipt by the Lender of the Second Amendment to Deed of Trust
executed by the Borrower;

              (c) Receipt by the Lender of that certain Cash Collateral Pledge
Agreement executed by the Borrower for the benefit of the Lender dated as of the
date hereof (the "Cash Pledge Agreement"), pursuant to which the Borrower will
deposit the sum of Two Million Dollars ($2,000,000) (the "Deposit") with the
Lender;

              (d) Receipt by the Lender of the Deposit pursuant to the Cash
Pledge Agreement;

              (e) Receipt by the Lender of that certain Guaranty Agreement
executed by Guarantor for the benefit of the Lender dated as of the date hereof
(the "Guaranty");

              (f) Receipt by the Lender of that certain San Gabriel Retirement
Villa Partnership Interest Pledge Agreement executed by Guarantor for the
benefit of the Lender dated as of the date hereof (the "SGRV Pledge Agreement");

              (g) Receipt by the Lender of that certain American Retirement
Villas Properties III, L.P. Partnership Interest Pledge Agreement executed by
Guarantor for the benefit of the Lender dated as of the date hereof (the "ARV
PIII Pledge Agreement ");

              (h) Receipt by the Lender of a "date-down" endorsement to Policy
Number 27-042-92-1219845 issued by Fidelity National Title Company ("Fidelity")
on June 28, 1999 (the "Title Policy") (or a new title policy if so elected by
Fidelity in lieu of a date-down endorsement) showing


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no other exceptions to title than as excepted in Schedule B-II of the Title
Policy and increasing the insured amount thereof to $11,980,000;

              (i) Receipt by the Lender of an Extension Fee in the amount of
Fifty-Nine Thousand Eight Hundred Fifty and 00/100 Dollars ($59,850.00); and

              (j) Receipt by the Lender of a Financing Fee of Forty Thousand and
00/100 Dollars ($40,000.00).

         The Second Amendment to Note, the Second Amendment to Deed of Trust,
the Guaranty, the ARV PIII Pledge Agreement (ARV), the SGRV Pledge Agreement,
the Cash Pledge Agreement and any and all other documents, instruments,
agreements and certificates executed by Borrower or Guarantor in connection with
this Agreement, the Extension, the Increase or the Rate Change may sometimes be
collectively referred to herein as the "New Loan Documents", and together with
the Original Loan Documents, the "Loan Documents".

         Section 7.2. The obligation of the Lender to enter into this Agreement
shall be further subject to the requirement that the Borrower and the Guarantor,
as applicable, or any other party, execute and deliver to the Lender such other
documents in addition to the New Loan Documents as the Lender may reasonably
require in connection with this Agreement. In addition, the Borrower shall also
pay to the Lender on demand, all costs and expenses both now and hereafter paid
or incurred in connection with the extension and modification of the Loan
pursuant hereto, including, but not limited to, attorney's fees and expenses,
title fees and expenses, recording costs, and surveyor fees and expenses.

         Section 8. Representations and Warranties. The Borrower and the
Guarantor represent and warrant to the Lender as of the date hereof that:

              (a) No Event of Default exists under any of the Loan Documents and
no event or circumstance has occurred which with the passage of time would
constitute an Event of Default under any of the Loan Documents;

              (b) All of the representations and warranties given by each such
party in the Original Loan Documents are true and complete in all material
respects on the date hereof as if made on the date hereof;

              (c) As of the date hereof, there are no actions, suits or
proceedings pending, or to the knowledge of the Borrower and the Guarantor,
threatened, (i) against or affecting the Mortgaged Property, or (ii) involving
the validity or enforceability of the Deed of Trust or the priority of the lien
thereof, or (iii) against the Borrower or the Guarantor, at law or in equity or
before or by any governmental authority except (a) actions, suits and
proceedings against the Borrower or the Guarantor fully covered by insurance and
as to each of which the Borrower or the Guarantor has provided information
satisfactory to the Lender, (b) actions, suits and proceedings against the
Borrower or the Guarantor which will not materially adversely affect their
respective business, financial condition or operations, or (c) otherwise
previously disclosed to the Lender in the Original Loan Documents; and to the
knowledge of the Borrower or the Guarantor, neither the Borrower nor the
Guarantor is in default with respect to any order, writ, injunction, decree or
demand of any court or any governmental authority.

              (d) All federal, state and local tax returns and reports of the
Borrower and the Guarantor required by law to be filed have been duly filed, and
all taxes, assessments, fees and other governmental charges upon the Borrower
and the Guarantor and their respective properties, assets, income and franchises
which are due and payable have been paid in full. The Borrower and the Guarantor
maintain adequate reserves and/or accruals in respect of federal, state and
local taxes for all fiscal periods, and neither the Borrower nor the Guarantor
know of any unpaid assessments for any taxes or any basis therefor.

         Section 9. Ratification, No Novation, Effect of Modifications. Except
as may be amended or modified by this Agreement, the Second Amendment to Note
and the Second Amendment to



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Deed of Trust, the terms of the Original Loan Documents are hereby ratified,
affirmed and confirmed and shall otherwise remain in full force and effect. To
the extent not otherwise specifically provided herein, it is the intention of
the Borrower, the Guarantor and the Lender that nothing in this Agreement shall
be construed to extinguish, release, or discharge or constitute, create or
effect a novation of, or an agreement to extinguish, release or discharge, any
of the obligations, indebtedness and liabilities of the Borrower or the
Guarantor or any other party under the provisions of the Original Loan
Documents. In the event of any conflict between the terms of the Original Loan
Documents and this Agreement, the terms of this Agreement shall control.

         Section 10. Amendments. This Agreement may be amended or supplemented
by and only by an instrument executed and delivered by each party hereto.

         Section 11. Waiver. The Lender shall not be deemed to have waived the
exercise of any right which it holds under the Original Loan Documents unless
such waiver is made expressly and in writing (and no delay or omission by the
Lender in exercising any such right shall be deemed a waiver of its future
exercise). No such waiver made as to any instance involving the exercise of any
such right shall be deemed a waiver as to any other such instance, or any other
such right. Without limiting the operation and effect of the foregoing
provisions hereof, no act done or omitted by the Lender pursuant to the powers
and rights granted to it hereunder shall be deemed a waiver by the Lender of any
of its rights and remedies under any of the provisions of the Original Loan
Documents executed in connection with the Loan, and this Agreement is made and
accepted without prejudice to any of such rights and remedies.

         Section 12. Governing Law. This Agreement shall be given effect and
construed by application of the law of the State of California.

         Section 13. Headings. The headings of the sections, subsections,
paragraphs and subparagraphs hereof are provided herein for and only for
convenience of reference, and shall not be considered in construing their
contents.

         Section 14. References. As used herein, all references made (i) in the
neuter, masculine or feminine gender shall be deemed to have been made in all
such genders and (ii) in the singular or plural number shall be deemed to have
been made, respectively, in the plural or singular number as well.

         Section 15. Severability. No determination by any court, governmental
body or otherwise that any provision of this Agreement or any amendment hereof
is invalid or unenforceable in any instance shall affect the validity or
enforceability of (i) any other such provision or (ii) such provision in any
circumstance not controlled by such determination. Each such provision shall be
valid and enforceable to the fullest extent allowed by, and shall be construed
wherever possible as being consistent with, applicable law.

         Section 16. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the Borrower, the Guarantor, and the Lender and their
respective successors and assigns.

         Section 17. Effectiveness. This Agreement shall become effective on and
only on its execution and delivery by each party hereto.

         Section 18. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original and all of
which shall constitute one and the same instrument.

         Section 19. WAIVER OF JURY TRIAL. THE BORROWER, THE GUARANTOR, THE
ADDITIONAL GUARANTOR AND THE LENDER EACH (i) AGREES NOT TO ELECT A TRIAL BY JURY
WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS AMENDMENT, THE NOTE, ANY OTHER
ORIGINAL LOAN DOCUMENT, OR THE RELATIONSHIP BETWEEN THE PARTIES, AS LENDER,
GUARANTOR AND BORROWER, THAT IS TRIABLE OF RIGHT BY A JURY AND (ii) WAIVES ANY
RIGHT TO TRIAL BY


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JURY WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR
IN THE FUTURE. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY EACH
PARTY, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.


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         IN WITNESS WHEREOF, each of the parties hereto have executed and
delivered this Agreement under their respective seals as of the day and year
first written above.

WITNESS:                               BORROWER:

                                       RETIREMENT INNS III, LLC,
____________________             a Delaware limited liability company


                                       By:________________________________(SEAL)
                                       Name:    Abdo H. Khoury
                                       Title:   Manager


WINTESS:                               GUARANTOR:

                                       ARV ASSISTED LIVING, INC.,
_____________________            a Delaware corporation

                                       By:________________________________(SEAL)
                                       Name:    Abdo H. Khoury
                                       Title:   President




WITNESS:                               LENDER:

                                       RED MORTGAGE CAPITAL, INC.,
_____________________            an Ohio corporation, formerly known as
                                       Provident Mortgage Capital, Inc.,
                                       successor-in-interest to Banc One Capital
                                       Funding Corporation


                                       By:________________________________(SEAL)
                                       Name:
                                       Title:








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