Complaint Investigation Report

415600689-11-14-2023-14-AS-SGRE-DBVUVE-20241212145455

STATE OF CALIFORNIA - HEALTH AND HUMAN SERVICES AGENCY

CCLD Regional Office , 851 TRAEGER AVE., SUITE 360

This is an official report of an unannounced visit/investigation of a complaint received in our office on

06/30/2023 and conducted by Evaluator Christina Hadley

COMPLAINT CONTROL NUMBER: 14-AS-20230630154615

Transfer fees should not be allowed since the provider is not a broker. In the alternative, transfer fees should be limited in accordance with Civil Code section 4575.

During the Course of the investigation into this allegation, the following was determined:

The Transfer Fee is clearly outlined in the Continuing Care Contract and CC&Rs. Residents executed these contracts thereby agreeing to pay a transfer fee upon the sale of their unit. In addition, the department does not interpret the “transfer fee” to be a brokerage fee. The continuing care contract statutes recognize the purchase price of a condominium unit to be an entrance fee and the fees charged upon the sale of the condominium unit to be a resale fee. (See HSC section 1771 subdivisions (e)(3) and (r)(4).) Resale fees or “transfer fees” based on a set fee and appreciation of the unit are not unique to Sunrise. Similar arrangements exist in other equity projects. (See Health and Safety Code (HSC) section 1771(e)(6) [defining “equity project”].) Further, analogous forms of compensation from the sale of a refundable or repayable CCRC unit are standard in the industry. Therefore, the department does not recognize such fees to be brokerage fees. (Cont.....)