Choosing a senior living community is a major decision—one that brings with it significant emotional, logistical, and financial considerations. Once you’ve found a community that feels like a good fit, the next critical step is reviewing the contract. This document outlines your loved one’s rights, responsibilities, services, costs, and the fine print that could have long-term implications.
But senior living contracts can be complex, filled with legal terminology and subtle clauses that many families aren’t prepared for. Without proper understanding, it’s easy to overlook key terms or be caught off guard by hidden fees later.
At ElderLink, we’ve helped countless families navigate this crucial part of the journey. In this blog, we’ll break down what to expect from a senior living contract, explain common terms, highlight potential hidden fees, and offer tips to ensure you make a fully informed decision.
What Is a Senior Living Contract?
A senior living contract is a legally binding agreement between a resident (or their family) and the community. It outlines the terms of residency, including:
- The type and level of care being provided
- What’s included in the base monthly fee
- Additional services and their associated costs
- Policies on termination, refunds, and transfers
- Resident rights and community rules
There are several types of contracts, and the structure often depends on the kind of facility—independent living, assisted living, memory care, or continuing care retirement communities (CCRCs).
Common Types of Senior Living Contracts
Understanding the contract model can help you anticipate long-term financial implications:
Rental Agreements (Most Common)
Used primarily in independent or assisted living settings, these contracts require a monthly payment with no long-term commitment. You can usually give notice to terminate the agreement with 30-60 days’ notice.
Pros: Flexibility and less upfront cost
Cons: Prices can increase annually, and fees may not include all services
Life Care or Continuing Care Contracts (Type A)
Offered by CCRCs, this contract includes housing, services, and future healthcare needs—often at a higher upfront cost.
Pros: Predictable long-term costs, guaranteed care
Cons: Large entrance fees and complex terms
Modified Contracts (Type B)
These provide a set amount of healthcare services, with additional services available for extra fees.
Fee-for-Service Contracts (Type C)
Residents pay only for services used. Monthly fees are lower initially but may increase significantly with care needs.
Key Terms to Know
While contracts vary, here are essential terms and sections you should understand:
Base Monthly Fee
This covers room and board, utilities, meals, housekeeping, and access to amenities. Be clear on what’s included—and what’s not.
Care Services Fee
Assisted living and memory care communities often assess a separate fee for personal care services such as help with bathing, dressing, or medication management. This may be flat-rate or tiered based on care needs.
Level of Care Assessment
Most communities perform an initial assessment to determine the resident’s care level. Be aware that if your loved one’s needs increase, fees may rise.
Entrance Fee
Primarily used in CCRCs or life care contracts, this is a one-time upfront payment to secure residency and future care.
Refund Policy
Entrance fees may be partially refundable under certain conditions. Always ask what portion, if any, is refundable and under what circumstances.
Termination Clause
Understand the terms for ending the contract. Is there a notice period? What happens if the resident passes away or needs to move to a higher level of care?
Annual Rate Increases
Most communities raise rates annually for cost-of-living adjustments. Know the typical percentage and how much notice is given.
Medical and Emergency Protocols
What happens in a medical emergency? Will the community coordinate with hospitals or family members?
Hidden Fees to Watch Out For
Beyond the base rate, many families are surprised by additional charges. Here are common “hidden” fees to ask about:
Move-In Fees
One-time administrative or community fees due at the start of residency.
Second Occupant Fees
For couples sharing a unit, a secondary fee may apply for the second resident.
A La Carte Services
Services like laundry, escort to meals, in-room dining, or additional housekeeping may incur separate charges.
Medication Management
Some communities charge based on the number or complexity of medications.
Transportation
Scheduled transportation may be included, but additional trips (e.g., to personal appointments) often cost extra.
Social or Lifestyle Fees
Some communities charge for premium activity programs, outings, or fitness classes.
Maintenance or Damage Fees
Check for clauses regarding charges for apartment maintenance or accidental damage.
Questions to Ask Before Signing
Here’s a list of smart questions to bring up during contract review:
- What services are included in the monthly fee?
- What happens if my loved one’s care needs change?
- How is the level of care determined and reassessed?
- Are there any refundable portions of entrance or deposit fees?
- What is the community’s policy on rate increases?
- What are the rules for terminating the contract or moving out?
- What happens if a resident runs out of money?
- Is long-term care insurance accepted?
- Can we take the contract home to review with a lawyer or advisor?
Tips for Reviewing a Contract
- Take Your Time – Don’t feel pressured to sign on the spot. Request a copy to review at home.
- Involve a Professional – Consider having an elder law attorney or financial advisor review the contract with you.
- Compare Contracts – If you’re touring multiple communities, compare contract terms side by side.
- Ask for Clarification – If anything is unclear, don’t hesitate to ask for plain-language explanations.
Understanding a senior living contract is just as important as finding the right community. It sets the foundation for a transparent, trusting relationship and protects your loved one’s rights and well-being. By knowing what to look for, what questions to ask, and how to spot hidden fees, you’ll be in a strong position to make a choice that’s not only caring—but financially sound.
