"I'm not naïve about the corporate world," Burton Richter told me when we spoke about the class action lawsuit he and other residents are bringing against Vi at Palo Alto, a very upscale continuing care retirement community.
Dr. Richter, 83, has served on corporate boards. He directed the Stanford Linear Accelerator Center for 15 years, among his other faculty and administrative positions at the university. And his honors include the Nobel Prize in physics.
The five other named plaintiffs in the proposed suit have impressive resumes, too, with an abundance of advanced degrees. Yet when they grasped that Vi's management had not stashed their sizable entrance fees in a reserve account, "it astounded me and a lot of the residents," Dr. Richter said.
C.C.R.C.s are state regulated, and "there is no consistency from state to state as to what residents' rights are," said Katherine Pearson, a Penn State law professor and authority on this type of senior housing. Though such communities come in many configurations — some operate more like rentals, without big upfront fees — buying into a place like the Vi can take most of a resident's life savings.
Yet most state regulations, if they exist at all, emphasize disclosure more than consumer protection. "You can have a financial disclosure law that puts 99 percent of the burden on the resident to understand its significance," Ms. Pearson said. New York and New Jersey have strong C.C.R.C. regulations, she said; Virginia's are weak, and California's have serious gaps. Most don't require reserve funds for the eventual refunds of entrance fees.
So how can older people who aren't Nobel laureates, but are contemplating moving into a C.C.R.C., figure out whether a community is financially stable and smoothly run, whether residents' interests are protected, whether the investment makes sense?
The National Continuing Care Residents Association, incorporated in 1999, works to educate prospective residents and increase state oversight. With its 1,200 individual members, nine state associations and 38 member C.C.R.C.s, it probably represents close to 50,000 people, the group's incoming president, Dan Seeger, estimated.
One of its committees has drafted a national residents' "bill of rights" and expects to present it at the group's semi-annual meeting in Mystic, Conn., next month. Other committees are working on model laws to increase financial transparency and stability, which they hope state governments will adopt. The association also wants to develop an index of financial solvency, with which prospective residents can compare facilities.
"Right now, the average shopper is floundering," Mr. Seeger said. "This is a vulnerable population that probably believes there's more government regulation than there is."
Let me direct you to two association websites. The main site contains information about the organization, including a list of state associations. The site informally dubbed NaCCRA U takes a more educational approach. Jack Cumming, an actuary and the group's research director, has posted scads of videos and consumer guides, research documents and proposals.
Neither site is a model of user-friendly navigation; finding the information you want requires some poking around. To see court filings from C.C.R.C. litigation, including the Vi lawsuit, for instance, you need to look under the News tab on the NaCCRA U top menu bar. (Can't some semi-retired graphic designers and programmers design a snazzier and more serviceable website for these folks?) Nevertheless, novices in the world of C.C.R.C.s can learn a lot from what's there.
"They're a good group, very committed to C.C.R.C.s and wanting to do things to strengthen the industry," said Steve Maag, even though he's often on the other side of the fence as the director of residential communities for Leading Age, which represents nonprofit providers. "The stuff they put out is fairly accurate and well thought out."
Ms. Pearson also recommends an online tool called LifeSite Logics, started by a financial planner and an accountant who operate independently of C.C.R.C. developers and providers. LifeSite delivers financial data for hundreds of C.C.R.C.s — occupancy rates, operating margins, recent fee increases — for about $40 a search. Ms. Pearson discusses and links to LifeSite in a post on the Elder Law Prof Blog, which she writes and edits with other law professors.
People who live in these complexes tend to like them. "All of us believe in the C.C.R.C. way of life, the value and usefulness of seniors banding together to mutually help each other meet the contingencies of growing old," Mr. Seeger said.
But C.C.R.C.s essentially offer a form of long-term care insurance, in which seniors pay in advance to have care later on, with much less state regulation than insurance companies face.
"In boom times, they make so much sense," Ms. Pearson said of C.C.R.C.s. "With the slowdown in the economy, these issues have come about." Now that the recovery means more C.C.R.C.s on drawing boards, she doesn't want those issues forgotten.
Paula Span is the author of "When the Time Comes: Families With Aging Parents Share Their Struggles and Solutions."
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