Classifies resident entrance fees for residents of continuing care retirement communities as an advance payment of services; imposes a statutory obligation to return any unearned entrance fee funds by an operator to the resident; provides that such statutory obligation shall not be deemed a general unsecured claim for purposes of a bankruptcy proceeding.
STATE OF NEW YORK
________________________________________________________________________
10816
IN ASSEMBLY
April 1, 2026
___________
Introduced by M. of A. LUNSFORD -- read once and referred to the Commit-
tee on Health
AN ACT to amend the public health law, in relation to the classification
of resident entrance fees for residents of continuing care retirement
communities
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The public health law is amended by adding a new section
2 4610-a to read as follows:
3 § 4610-a. Resident entrance fees; statutory obligation upon insolven-
4 cy. 1. For purposes of this article, a resident entrance fee shall be
5 deemed an advance payment for housing, care, or services not yet
6 rendered and shall not be deemed fully earned upon receipt.
7 2. To the extent that housing, care, or services for which a resident
8 entrance fee was paid are not provided, the operator who accepted such
9 entrance fee shall be obligated to refund the unearned portion of such
10 fee to the resident. Such obligation shall exist notwithstanding the
11 terms of any resident contract or agreement.
12 3. In any insolvency, receivership, or bankruptcy proceeding against
13 an operator, the obligation described in subdivision two of this section
14 shall constitute a statutory obligation and shall not be deemed a gener-
15 al unsecured claim for contractual damages.
16 4. Any agreement or contract provision intended to waive or limit the
17 application of this section shall be void as against public policy.
18 § 2. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD14675-01-6
