Beware the ALF Contract

Do you have a loved one who is looking into entering an assisted living facility?  You should beware the ALF contract that obligates your loved one’s agent to be personally liable for the assisted living fees.  Federal laws were enacted which prohibits nursing homes that accept Medicare and Medicaid from requiring someone, such as a family member, to guarantee payment as a condition of admission for a patient.  However, these laws do not apply to assisted living facilities.  It is scary how ALF’s are virtually unregulated by federal laws, and the state statute that regulates them does not prevent ALF’s from having guaranty provisions in their admission agreements.

I see this becoming more and more of a problem.  You may think, well, as long as I sign the agreement “as POA” then I am signing on behalf of mom or dad, and there should not be an issue.  However, there is one national chain of ALF’s that have a provision in their admission agreement that states, regardless of how the person signs, they guarantee payment.  The provision reads as follows:

“If this agreement is signed by a representative on your behalf, you and the representative shall be jointly and severally obligated to the Community for payment of any fees or costs owing by you pursuant to this Agreement.  The Community reserves the right to charge you, or your representative if not paid by you, for such fees and costs.”

Basically, this provision obligates the agent under a power of attorney to pay any debts of the client and acts as a guarantee of that payment.  Whether or not this provision is enforceable is unknown as no one has litigated the issue.  Certainly, this provision defeats the purpose of a DPOA because an agent is not supposed to be personally liable for contracts he or she signs on behalf of the Principal.  Furthermore, in many cases, the resident is not able to sign the contract themselves because they suffer from some mental or physical disability.

It is a good idea, before you sign a contract with an ALF, to have the contract reviewed by an elder law attorney.  Some facilities may even tell the agent to go ahead and sign, they won’t be personally liable anyhow.  If that is the case, then the facility should not have an issue with the agent crossing out the provisions or deleting the provision.  If the facility refuses to admit your loved one without you signing as guarantor, then you may want to consider looking at another facility.

If you have other questions about ALF contracts, please call Board Certified Elder law attorney, Laurie E. Ohall, to set up a free 15 minute phone consultation. Contact Ms. Ohall today if you need estate planningelder lawprobate or guardianship assistance.

By | 2015-03-03T21:19:18+00:00 March 3rd, 2015|Categories: Elder Law, Long Term Care Planning, Medicaid, Medicare|Tags: , , |0 Comments