CA Health & Safety Code Section 1788.2

(a)

A continuing care contract may be canceled without cause by written notice from either party within 90 days from the date of the resident’s initial occupancy.

(b)

For all continuing care contracts, death of the resident before or during the cancellation period shall constitute a cancellation of the continuing care contract under subdivision (a), unless the continuing care contract includes specific provisions otherwise.

(c)

The cancellation period and the associated refund obligations shall apply as follows:

(1)

To all executed continuing care contracts regarding a unit in a continuing care retirement community that is not an equity continuing care retirement community.

(2)

To continuing care contracts executed in conjunction with a purchase of an equity interest from a provider but not to continuing care contracts executed in conjunction with sales of an equity interest by one resident to another.

(d)

The following fees may be charged before or during the 90-day cancellation period:

(1)

If possession of the living unit in a continuing care retirement community that is not an equity continuing care retirement community is returned to the provider in substantially the same condition as when received, the resident’s only obligations shall be to pay a reasonable fee to cover costs and to pay the reasonable value of services rendered pursuant to the canceled continuing care contract.

(2)

Equity project providers may impose a resale fee on sellers. For contracts entered into after January 1, 1996, upon the cancellation of a continuing care contract executed in conjunction with the purchase of an equity interest from the provider, the provider may charge a resale fee not to exceed the excess of the gross resale price of the equity interest over the purchase price paid by the resident or on behalf of the resident for the interest.

(e)

No resale fee shall exceed the sum of 10 percent of either the original or resale price of the equity interest and 100 percent of the excess if any, of the gross resale price of the equity interest over the purchase price paid by the resident or on behalf of the resident for the interest if either of the following applies:

(1)

The continuing care contract involved the purchase of an equity interest from the provider and is terminated after the cancellation period.

(2)

The continuing care contract involved the purchase of an equity interest from another resident and is terminated at any time.

(f)

For purposes of this section, “gross resale price” means the resale price before any deductions for resale fees, transfer taxes, real estate commissions, periodic fees, late charges, interest, escrow fees, or any other fees incidental to the sale of real property.

(g)

This section may not be construed to limit the provider’s ability to withhold delinquent periodic fees, late charges, accrued interest, or assessments from the sale proceeds, as provided by the continuing care contract or the real estate documents governing the equity continuing care retirement community.