Complaint Investigation Report

415600689-11-14-2023-14-AS-SGRE-DBVUVH-20241212145456

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

The attorney for the HOA contends residents should have a vote in selection of a management company, including whether to extend the contract with the current management company.

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

• In a CCRC, the residents are not a party to the management agreement, even in equity projects.

• The provider, as the licensee, is fully responsible for selecting and paying management. In the context of the Stratford, Sunrise’s right act as a provider and to select managers appears to derive from its ownership of certain easements.

• The Department understands these easements to be sufficient to establish Sunrise’s control over the community such that it can be licensed and granted a certificate of authority.

• The Department is responsible for approving and licensing any management company hired to manage a continuing care retirement community.

• It cannot approve of the HOA selecting managers of a licensed community when the HOA does not hold the license. That responsibility lies solely with the licensee, Sunrise. Note that HOAs are prohibited from holding CCRC Certificates of Authority (Health and Safety Code section 1771(p)(10)).