From the article it sound like there was no maintenance escalation clause limitation - they bought in for, say, $750,000 with a payment of $1000/month in fees, per their contract. Each year the contract maintenance increases (since costs increase) and it had gone up to ~$1300…then, all of a sudden, the owner decided that they weren’t getting enough people with $750k to drop up front and added a $6.5k/month option with little or no buy in. When these residents rolled to their annual renewal, instead of the normal 3-6% increase, they were “upgraded” to the new rental-based prices - $6.5k.mo. Their contract is still valid, and they can still stay there, but based on the lawyers these people have gone to about the increase, it’s all 100% legal because there is no limit in the contract on how much the fee can increase.
The people here never owned their homes. They purchased long-term agreements, and as those agreements expired, the owners moved to a different process.
The “negotiated buyout” is from people ending their leases early.
Okay - you lease a car that includes gasoline and all maintenance. The agreement is that you get to drive it until you die. You pay $80,000 up front for the car and $100/mo for the maintenance, which can increase per the lease. You go along for 4-5 years, and each year your maintenance increases, maybe to $130/mo today, because of the cost of gas and parts needed. You can leave at any time, but if you ever leave or die, you don’t get to keep the car - it still technically belongs to the leaseholder. You forfeit the $80k.
Well, the company sold and the new owners can’t find enough people with $80k lying around to buy in, so they decided they’ll just change the model to include the cost o the car - and charge $650/mo for the service. You get a letter that at your next annual increase, the monthly fee is going to from $130 to $650 because they’ve changed what constitutes “maintenance” as part of their terms and conditions. You can either stay with the package and pay $650/mo or you can leave and have no money to go find a new car. Oh, and you have no job and are on a fixed income because you’re 75 years old.
CCRC buy-ins/contracts are for life. I used to design the buildings for them, I still do design work on existing facilities. I’ve also gone over a contract with my own parents. You essentially pay full price for a residential “unit” and as you require more care you are moved, without additional cost, into a higher care location. The owners than re-“sell” your previous unit to the next resident. When you die, there is no equity that your heirs will receive - in that way it’s like a lease. The contract is for life with an annual escalation for maintenance and service.
You are missing my entire point in order to be pedantic. I know it’s not a mortgage. What part of, “they’re both just contracts with a lot of money attached” did you fail to understand?
The part where you didn’t notice one of those contracts has an expiration date at signing?
It’s just a silly ass comparison man. I genuinely do not believe you’ve read the article. You’re just lashing out at perceived injustice, from your half-understood perspective.
Uhh… that’s EXACTLY what it sounds like? Or are you one of those morons that cannot read between the lines of corpo speak?
“negotiated buyout process” my ass.
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From the article it sound like there was no maintenance escalation clause limitation - they bought in for, say, $750,000 with a payment of $1000/month in fees, per their contract. Each year the contract maintenance increases (since costs increase) and it had gone up to ~$1300…then, all of a sudden, the owner decided that they weren’t getting enough people with $750k to drop up front and added a $6.5k/month option with little or no buy in. When these residents rolled to their annual renewal, instead of the normal 3-6% increase, they were “upgraded” to the new rental-based prices - $6.5k.mo. Their contract is still valid, and they can still stay there, but based on the lawyers these people have gone to about the increase, it’s all 100% legal because there is no limit in the contract on how much the fee can increase.
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The people here never owned their homes. They purchased long-term agreements, and as those agreements expired, the owners moved to a different process.
The “negotiated buyout” is from people ending their leases early.
Okay - you lease a car that includes gasoline and all maintenance. The agreement is that you get to drive it until you die. You pay $80,000 up front for the car and $100/mo for the maintenance, which can increase per the lease. You go along for 4-5 years, and each year your maintenance increases, maybe to $130/mo today, because of the cost of gas and parts needed. You can leave at any time, but if you ever leave or die, you don’t get to keep the car - it still technically belongs to the leaseholder. You forfeit the $80k.
Well, the company sold and the new owners can’t find enough people with $80k lying around to buy in, so they decided they’ll just change the model to include the cost o the car - and charge $650/mo for the service. You get a letter that at your next annual increase, the monthly fee is going to from $130 to $650 because they’ve changed what constitutes “maintenance” as part of their terms and conditions. You can either stay with the package and pay $650/mo or you can leave and have no money to go find a new car. Oh, and you have no job and are on a fixed income because you’re 75 years old.
This was not their rental agreement.
A more apt comparison would be that I’m leasing a car, and after my lease expires, the next lease has higher rates.
This is the opposite of the situation the property owners are in.
It would save you a lot of pointless stress if you read the articles you respond to.
CCRC buy-ins/contracts are for life. I used to design the buildings for them, I still do design work on existing facilities. I’ve also gone over a contract with my own parents. You essentially pay full price for a residential “unit” and as you require more care you are moved, without additional cost, into a higher care location. The owners than re-“sell” your previous unit to the next resident. When you die, there is no equity that your heirs will receive - in that way it’s like a lease. The contract is for life with an annual escalation for maintenance and service.
These contracts aren’t for life, per the article.
So… you’re just going to pretend like a mortgage and their contract aren’t just contracts with large sums of money attached?
Your inability to see this as a problem is hilarious and quite pathetic. Your humanity has been replaced with business speak.
They did not sign a mortgage, because they never one the home. I’d strongly recommend reading the article.
You are missing my entire point in order to be pedantic. I know it’s not a mortgage. What part of, “they’re both just contracts with a lot of money attached” did you fail to understand?
The part where you didn’t notice one of those contracts has an expiration date at signing?
It’s just a silly ass comparison man. I genuinely do not believe you’ve read the article. You’re just lashing out at perceived injustice, from your half-understood perspective.
Just because it was legal does not make it just. The fact you cannot understand that is frankly pathetic.
What is this injustice you perceive? You’ve not articulated any claims of injustice.