When choosing an Assisted Living Facility (ALF), my clients often make decisions based solely upon amenities, location or the pet policy. Too rarely, attention is paid to the lease agreement. In most cases, residents sign a contract to rent an apartment with additional features such as prepared meals, activities and transportation. Care services are added to the base rent.
Unfortunately, the lease agreements that are offered to prospective clients occasionally contain unconscionable contract provisions.
In a recent case, my client had signed a lease that required her to give thirty days written notice before vacating her apartment. She was 87 years old and severely demented. On March 20th, she fell while in the care of the community and severely broke her hip. She was transported to the hospital and, after hip surgery, moved to Skilled Nursing for a month before transitioning to hospice and ultimately passing away about 7 weeks after her accident.
To my disappointment, the Assisted Living Facility sent a bill for April’s rent because the woman did not provide thirty (30) days written notice. When I contacted the Executive Director, she justified the bill by stating that it was a very common provision and contained in all standard leases. Of course, the same lease allowed the Community to terminate the lease immediately for a variety of reasons to the detriment of the resident without thirty (30) days written notice.
When disputing a contract, Courts may set aside an agreement if the contract is “unconscionable”. A contract is “unconscionable” if one party is left with no meaningful choice, especially if there is a significant difference in bargaining power.
Courts will often hold that a contract is unconscionable if it finds that (1) the contract was technical and primarily “boiler plate”; 2) the contract was “take it or leave it” with no real opportunity to negotiate; 3) one party was severely disadvantaged, suffering from duress or undue influence and (4) is inherently unfair.
In this case, the thirty days notice provision was unconscionable. The resident suffered from dementia and was essentially in a crisis when she selected the community. She had been discharged from a hospital and was not able to return home. The ALF had one standard contract and, being corporate owned, likely would not have negotiated the provision of the Lease.
More importantly, the Resident was not able to perform. While in the care of the ALF, she suffered a serious and ultimately life ending injury. In the context of long term care, many residents will not be able to provide notice if they suddenly suffer a medical emergency. She was unable to negotiate this complicated “standard lease” due to its complexity and her own limited capacity.
I encourage all families to scrutinize the lease agreements before choosing any care community and ensure that there is an exception to the thirty (30) day notice requirement in the event of a medical emergency or a need to transition to a higher level of care. Make sure that the Lease clearly defines these circumstances and do not allow the ALF to decide the appropriate level of care. In all cases, care placement should be determined by an independent, licensed geriatric professional such as a registered nurse or physician.