The Assisted Living Residency Agreement: Fees, Deposits, Rate Increases, Discharge Rules and What to Negotiate

The assisted living residency agreement

Key point: Five sections decide most disputes: what the fees cover, how and when rates rise, when the community can make your parent leave, what is refunded, and who is personally liable for the bill.

What a good provider should make clear: An agreement read at home, with fees, increase notice, discharge reasons and refunds understood, any unclear clause explained in writing, and the family member signing only in the capacity they intend.

Common mistake: Signing on move-in day without reading it, or signing as a guarantor when you only meant to be the contact person.

Questions to ask: For what reasons can you ask my parent to leave, how much notice will you give, and what happens to the fees we have paid?

The sections to read first

Fees and deposits

The agreement should list every charge, or attach a fee schedule that does. Check:

• The monthly base rate and the apartment it applies to.
• The care level your parent was assessed at, and the charge for it.
• Medication management, if charged separately.
• The community fee: the amount, what it is for, and whether any part is refunded if your parent leaves within the first months or dies soon after move-in.
• Security deposits: refundable, on what conditions, and how quickly.
• Ancillary charges: incontinence supplies, escorts, special diets, laundry, transport, phone and cable.
• Billing: due date, late fees, and whether you pay in advance.

Our cost guide explains how these layers add up to the real bill.

Rate-increase clauses

Expect an annual increase. What you want in writing is how it works:

• How much notice the community gives before an increase takes effect.
• Whether increases happen on one date a year, or whenever the community decides.
• Whether care level charges rise on the same schedule.
• Whether there is any cap.

Ask for the last two or three years' increases. They are not in the agreement, but they tell you how the clause is used.

Discharge and transfer rules

This is the section families most regret not reading. It says when the community can end your parent's residency. Common reasons:

• Your parent's needs exceed what the community can meet under its licence.
• Non-payment.
• Behaviour that endangers your parent or others.
• The community closes or loses its licence.

What to look for:

• Specific reasons, not "at the community's sole discretion".
• Written notice, and how much, except in a genuine emergency.
• A meeting first with the family to discuss a care plan change before a discharge.
• Help with the transition to another setting.
• What happens to fees already paid.

Also ask what happens if your parent goes into hospital and the community decides not to take them back. Hospital discharge planners in Memphis see this regularly; the agreement should say how the decision is made and communicated. If you have a concern about a discharge, the long-term care ombudsman can advise.

Moving out and refunds

• How much notice your family must give to move out, typically thirty days or a month.
• Whether the last month is prorated, or charged in full.
• What happens on death: when charges stop, how long the family has to clear the apartment.
• Whether any part of the community fee is refunded in the first months.
• When deposits are returned, and what can be deducted.

Who signs, and what that means

This is where families get caught out. Agreements often ask for a "responsible party" signature from an adult child. Read exactly what that means in the document:

• As an agent: you sign on your parent's behalf, using your parent's money, under a power of attorney. You are not personally liable for the bill.
• As a contact or representative: you are the person the community calls.
• As a guarantor: you personally promise to pay if your parent cannot. That is a much bigger commitment.

Federal law bars nursing homes that take Medicare or Medicaid from requiring a third-party guarantee of payment as a condition of admission, but that rule does not apply to assisted living. If you do not intend to guarantee the bill personally, say so, cross out the guarantee language with the community's agreement, and sign only as agent. Have a durable power of attorney in place so you can sign as agent.

Arbitration clauses

Many agreements include an arbitration clause: any dispute, including a claim of neglect, is decided by a private arbitrator instead of a court. For nursing homes that take Medicare or Medicaid, federal rules bar requiring a pre-dispute arbitration agreement as a condition of admission. Assisted living is not covered by that rule, but many communities still make arbitration a separate, optional signature. Ask whether signing it is required, read whether there is a window to cancel, and consider declining.

What families can negotiate

• The community fee, especially if the community has empty apartments.
• A start date that gives time to move furniture in.
• Removing personal guarantee language.
• Making arbitration optional.
• A prorated refund of the community fee if your parent leaves in the first months.
• Notice periods for rate and care-level changes.

Get any change in writing, signed by both sides, as part of the agreement.

If your parent may need TennCare CHOICES later

Ask whether the community accepts CHOICES and what the agreement says if your parent's private funds run out. Some communities allow a resident who has paid privately for a period to convert to CHOICES; others require a move. Getting that in writing now can prevent a forced move later. Our guide to when the money runs out explains CHOICES.

Questions to ask before signing

• Can I take the agreement home to read before signing?
• Where is the full fee schedule, and is my parent's care level stated?
• How much notice do you give before rate or care-level increases?
• For what reasons can you end my parent's residency, with how much notice?
• Am I signing as agent, contact or guarantor?
• Is arbitration required for admission?
• What is refunded if my parent leaves or dies in the first months?
• What happens if my parent's money runs out?

Get the paperwork in place first

Before move-in, make sure the family member who will handle the agreement has the authority to do it:

• A durable power of attorney for finances, so they can sign as your parent's agent and manage payments.
• A health care power of attorney or advance directive, so the community knows who can make care decisions if your parent cannot.
• HIPAA authorisations so the community and doctors can share information with named family members.

If your parent still has capacity, these can be signed now. If they no longer do, an elder law attorney can advise on conservatorship. Communities will ask for copies.

House rules worth reading

Agreements usually attach a resident handbook. Check the rules that will affect your parent day to day: visiting hours and overnight guests, pets, smoking, alcohol, cars and parking, furniture and decorating, appliances allowed in the apartment, personal aides hired privately, and how residents can raise complaints. A rule that matters to your parent, such as keeping a small dog, is better settled before signing than discovered afterwards.

Clauses that should slow you down

• Fees "as posted" with no schedule attached.
• Rates that can change at any time without written notice.
• Discharge "at the community's sole discretion".
• No refund of anything, including the final month after a death.
• A personal guarantee hidden in the "responsible party" section.
• Arbitration required to be admitted, with no window to cancel.
• A long notice period for the resident to leave but a short one for the community.

When to have a lawyer read it

Most families read the agreement themselves, and with this guide that is usually enough. Consider an elder law attorney when the agreement asks for a large entrance fee, as life plan communities often do; when a family member is asked to guarantee payment; when TennCare may be needed within a few years; when there is a spouse at home whose income and assets need protecting; or when anything in the agreement does not match what you were told on the tour. A review before signing costs far less than a dispute after.

Keep a signed copy of the agreement, every addendum and the fee schedule together, with the date each was signed. When rates or care levels change, keep the written notice with it. If a disagreement ever arises, a complete file is the family's best protection.