2023 California Code › Health and Safety Code - HSC › DIVISION 2 - LICENSING PROVISIONS › CHAPTER 10 - Continuing Care Contracts › ARTICLE 5 - Contract › Section 1788.4.

1788.4. (a) During the cancellation period, the provider shall pay all refunds owed to a resident within 14 calendar days after a resident makes possession of the living unit available to the provider.
(b) After the cancellation period, any refunds due to a resident under a continuing care contract shall be paid within 14 calendar days after a resident makes possession of the living unit available to the provider or 90 calendar days after death or receipt of notice of termination, whichever is later.
(c) In nonequity projects, if the continuing care contract is canceled by either party during the cancellation period or terminated by the provider after the cancellation period, the resident shall be refunded the difference between the total amount of entrance, monthly, and optional fees paid and the amount used for care of the resident.
(d) If a resident has paid additional amounts for upgrades, special features, or modifications to the living unit and the provider terminates the resident’s continuing care contract, the provider shall amortize those additional amounts at the same rate as the entrance fee and shall refund the unamortized balance to the resident.
(e) A lump-sum payment after termination of a repayable contract, as defined in paragraph (3) of subdivision (r) of Section 1771, shall not be considered to be a refund and may not be characterized or advertised as a refund. The full lump sum owed, including any interest accrued, shall be paid to the resident or the resident’s estate within 14 calendar days after resale of the unit.
(f) (1) Any balance of the lump sum owed that has not been paid to the resident or the resident’s estate within 180 days after termination of a repayable contract shall accrue interest at a rate calculated pursuant to paragraph (2). Any balance of the lump sum owed that has not been paid to the resident or the resident’s estate within 240 days after termination of a repayable contract shall accrue interest at a rate calculated pursuant to paragraph (3). Interest shall continue to accrue annually pursuant to paragraph (4) until the date the full lump sum owed is paid to the resident or the resident’s estate. This subdivision shall apply only to repayable contracts entered into on or after January 1, 2017.
(2) Any amount owed that is not paid to the resident or the resident’s estate within the 180-day period pursuant to paragraph (1) shall accrue simple interest at a rate of 4 percent of the amount owed.
(3) Any amount owed that is not paid to the resident or the resident’s estate within the 240-day period pursuant to paragraph (1) shall accrue simple interest at a rate of 6 percent of the amount owed.
(4) Any amount owed that is not paid to the resident or the resident’s estate within one year after the 240-day period pursuant to paragraph (3) shall accrue interest at a rate of 6 percent, compounded annually.
(5) Until January 1, 2018, this subdivision shall not apply to a project that is in development prior to January 1, 2017, including current repayable agreements, current deposit agreements that contemplate repayable entrance fees, and other projects that have received department approval to market units pursuant to Section 1771.4, or have received issuer, lender, or bond insurer approval to obtain bond financing, or other governmental approval based on a repayable entrance fee option, if the initial contract for the project is entered into on or before January 1, 2018.
(g) Except as otherwise obligated by an equity interest contract, once the unit has been vacated and made available to the provider, the provider shall not make any further charges to the resident or his or her estate or charges against the lump sum owed to the resident or the resident’s estate for purposes of continued monthly payments to the provider or for maintenance or housekeeping on the vacated unit.
(h) Nothing in this section shall be construed to limit or alter any legal remedies otherwise available to a resident or his or her estate.
(Amended by Stats. 2016, Ch. 112, Sec. 3. (SB 939) Effective January 1, 2017.)