Life Care Institutions

C.R.S. tit. 11, art. 49
in effect

C.R.S. § 11-49-101 Definitions

11-49-101. Definitions. As used in this article 49, unless the context otherwise requires: (1) "Aged person" means any person sixty-two years of age or older. (2) "Board" means the financial services board created in section 11-44-101.6. (3) "Commissioner" means the state commissioner of financial services, serving in accordance with section 11-44-102. (4) "Entrance fee" means the total of any initial or deferred transfer to or for the benefit of a provider, which transfer: (a) Is made or promised to be made as full or partial consideration for the acceptance or maintenance of a specified individual as a resident in a facility; and (b) Is in the form of: (I) Property; or (II) A sum of money in an amount that is greater than four times the amount of a regular periodic charge under a life care contract at the facility. (5) "Facility" means the place in which a provider undertakes to provide life care to a resident. (6) "Life care" means care provided, pursuant to a life care contract, for the life of an aged person, including but not limited to services such as occupancy of a living unit, health care, nutrition assistance, medical services, and nursing services within a living unit. (7) "Life care contract" means a written contract to provide life care to a person for the duration of the person's life conditioned upon the transfer of an entrance fee to the provider of the services in addition to or in lieu of the payment of regular periodic charges for the care and services involved. A life care contract under which the entrance fee is payable to or for the provider in four or more installments is subject to the provisions of the "Uniform Consumer Credit Code", articles 1 to 9 of title 5. (8) "Living unit" means a room, apartment, or other area that is within a facility and set aside for the use of one or more identified residents and within which life care is provided by the provider. A resident's living unit may change based on the appropriate care needs of the resident. (9) "Person" means all corporations, associations, partnerships, or individuals, including fraternal or benevolent orders or societies. (10) (a) "Provider" means a person who undertakes to provide services in a facility pursuant to a life care contract. (b) "Provider" does not include a unit owners' association, as defined in section 38-33.3-103 (3). (11) "Resident" means any person entitled pursuant to a life care contract to receive life care in a facility. (12) "Third-party service providers" means any person, other than a provider, who is the holder of a management contract with a provider or who contracts with a provider to provide life care services to residents.

C.R.S. § 11-49-102 Escrow account for entrance fees

11-49-102. Escrow account for entrance fees. (1) Each provider shall establish an escrow account that provides that all of any entrance fee received by the provider prior to the date the resident is permitted to occupy the resident's living unit in the facility be placed in escrow with a bank, trust company, or other licensed corporate escrow agent located in Colorado and approved by the commissioner, subject to the condition that the money may be released only as follows: (a) If the entrance fee applies to a living unit that has been previously occupied in the facility, the entrance fee shall be released to the provider at such time as the living unit becomes available for occupancy by the new resident and is in compliance with local government regulations applicable to living units, as certified by the provider. (b) If the entrance fee applies to a living unit that has not previously been occupied by any resident, the entrance fee shall be released to the provider at such time as the commissioner is satisfied that all of the following conditions exist: (I) Construction or purchase of the facility has been substantially completed, and an occupancy permit covering the living unit has been issued by the local government having authority to issue the permits; (II) A commitment has been received by the provider for any permanent mortgage loan or other long-term financing described in the statement of anticipated source and application of funds submitted by the provider and any conditions of the commitment prior to disbursement of funds thereunder have been substantially satisfied; (III) Aggregate entrance fees received or receivable by the provider pursuant to binding life care contracts, plus the anticipated proceeds of any first mortgage loan or other long-term financing commitment, are equal to not less than ninety percent of the aggregate cost of constructing, equipping, and furnishing, or purchasing the facility and not less than ninety percent of the funds estimated in the statement of anticipated source and application of funds submitted by the provider to be necessary to fund start-up losses and assure full performance of the obligations of the provider pursuant to life care contracts. (2) If the funds in an escrow account required to be established under subsection (1) of this section are not released within such time as provided by rules issued by the commissioner, then the funds shall be returned by the escrow agent to the persons who had made payment to the provider. (3) An entrance fee held in escrow may be returned by the escrow agent to the person or persons who had made payment to the provider at any time upon receipt by the escrow agent of notice from the provider that the person is entitled to a refund of the entrance fee. (4) Nothing in this section shall be interpreted as requiring the escrow of any nonrefundable application fee designated as such in the life care contract received by the provider from a prospective resident.

C.R.S. § 11-49-103 Withdrawal or dismissal of person - refund

11-49-103. Withdrawal or dismissal of person - refund. (1) If an agreement permits withdrawal or dismissal of a resident from a life care institution prior to the expiration of the agreement, with or without cause, an amount equal to the difference between the amount paid in and the amount used for the care of the resident during the time the resident remained in the institution, based upon the per capita cost to the institution as determined in a manner acceptable to the commissioner, shall be refunded to the resident; but in cases where a consideration greater than the minimum charge has been paid for accommodations above standard, a sum equal to the difference between the amount paid in and the ratio of the amount paid to the minimum consideration for standard accommodations times the current per capita cost to the institution applied to the period the resident remained in the institution shall be refunded to the resident. If the per capita cost to the institution during the period cannot be established otherwise, the cost during the period is deemed to be the cost at the time of the withdrawal or dismissal. As used in this section, for refund purposes, "cost" includes a reasonable profit to the provider. (2) If the provider is an organization described in section 501 (c)(3) of the federal "Internal Revenue Code of 1986", as amended, and exempt from income taxation under section 501 (a) of the federal "Internal Revenue Code of 1986", as amended, it shall be entitled to make a refund according to a schedule provided in its agreement with the resident so long as the schedule provides for amortization of the amount paid by the resident over a period of not less than sixty months or over the life expectancy of the resident if the expectancy is less than sixty months. In such case, the refund may be delayed for a reasonable period thereafter until the securing by the provider of a substitute fee from another resident or prospective resident. The provider may also deduct from any such refund amounts due it from the resident for damage done or for any other legitimate offsetting item.

C.R.S. § 11-49-104 Recording of lien by commissioner

11-49-104. Recording of lien by commissioner. (1) The commissioner shall record with the county clerk and recorder of any county a notice of lien on behalf of all residents who enter into life care contracts with a provider to secure performance of the provider's obligations to residents pursuant to life care contracts. All reasonable costs of recording the lien shall be paid by the provider. (2) From the time of the recording, there exists a lien for an amount equal to the reasonable value of services to be performed under a life care contract in favor of each resident on the land and improvements owned by the provider, not exempt from execution, that are listed in the notice of lien filed pursuant to subsection (3) of this section and that are located in the county in which the notice of lien is recorded. (3) The lien shall be perfected by the commissioner by executing by affidavit the notice and claim of lien, which shall contain: (a) The legal description of the lands and improvements to be charged with a lien; (b) The name of the owner of the property affected; (c) A statement providing that the lien has been filed by the commissioner pursuant to this section. (4) The lien may be foreclosed by civil action. (5) Any number of persons claiming liens against the same property pursuant to this section may join in the same action. If separate actions are commenced, the court may consolidate the actions. The court shall, as part of the costs, allow reasonable attorney fees for each claimant who is a party to the action. (6) In a civil action filed pursuant to this section, the judgment shall be given in favor of each resident having a lien who has joined in the foreclosure action for the amount equal to the reasonable value of services to be performed under a life care contract in favor of each resident. The court shall order the sheriff to sell any property subject to the lien at the time judgment is given, in the same manner as real and personal property is sold on execution. The lien for the reasonable value of services to be performed under a life care contract shall be on equal footing with claims of other residents. If a sale is ordered and the property sold and the proceeds of the sale are not sufficient to discharge all liens of residents against the property, the proceeds shall be prorated among the respective residents. (7) The liens provided for in this section are preferred to all liens, mortgages, or other encumbrances upon the property attaching subsequently to the time the lien is recorded and are preferred to all unrecorded liens, mortgages, and other encumbrances. The amount secured by any lien having priority to the lien filed pursuant to this section may not be increased without prior approval of the commissioner. (8) The commissioner shall file a release of the lien upon proof of complete performance of all obligations to residents pursuant to life care contracts. (9) The commissioner may subordinate any lien filed pursuant to this section to the lien of a first mortgage or other long-term financing obtained by the provider, regardless of the time at which the subsequent lien attaches.

C.R.S. § 11-49-105 Reserve requirements

11-49-105. Reserve requirements. (1) Any provider shall maintain reserves covering obligations under all life care agreements. The reserves shall be equivalent to the sum of the following: (a) (I) For those debt obligations that are collateralized by the provider's facility and that require a balloon payment, the amount of interest due and payable or accrued in the next eighteen months. (II) For purposes of this subsection (1)(a), any amounts held in reserve or escrow to fulfill debt agreements shall be considered eligible to meet the requirements of this subsection (1)(a). (b) (I) For all other debt obligations that are collateralized by the provider's facility, an amount equal to the next twelve months' principal and interest. (II) For purposes of this subsection (1)(b), any amounts held in reserve or escrow to fulfill debt agreements shall be considered eligible to meet the requirements of this subsection (1)(b). (c) (I) An amount not less than twenty percent of the facility's operating expenses for the immediately preceding year. (II) For purposes of this subsection (1)(c), "operating expenses": (A) Includes all expenses of the facility, except interest included in subsections (1)(a) and (1)(b) of this section and depreciation or amortization expenses; and (B) Means budgeted expenses pursuant to a budget approved by the governing board of the provider, for providers in operation less than twelve months. (2) The reserves must consist of one or more of the following: (a) Savings accounts or certificates of deposit in state or national banks located in this state that are members of the federal deposit insurance corporation or any successor agency thereto; (b) Savings accounts or savings certificates in state or federal savings or loan associations located in this state that are members of the federal deposit insurance corporation or any successor agency thereto; (c) Notes receivable from residents to the extent of the portion due and payable within twelve months; (d) Bonds and stocks selected from an approved list, as determined by the commissioner. If stocks, bonds, and securities that are not on the approved list are part of the reserves, and if they are to be retained as part of the reserves, it shall not be necessary that the unapproved stocks, bonds, and securities be disposed of immediately, but they shall be disposed of in accordance with rules promulgated pursuant to this article 49, which disposal shall be accomplished in a gradual manner so as to avoid loss to providers. Securities that, although not on the approved list, should be retained in the reserve for reasons acceptable to the commissioner may be retained with the specific approval of the commissioner. Investments in stocks and bonds will be valued at their fair market value. (e) (I) Except as provided in subsection (2)(e)(II) of this section, accounts receivable with respect to life care contracts that are: (A) Not considered past due by the provider if owed to the provider by a natural person; (B) Due from the United States or any agency thereof, any state in the United States or any agency thereof, or any institution, pension fund, or trust fund from which collection is reasonably assured. (II) Accounts receivable that are eligible under this subsection (2)(e) may be used to fulfill no more than fifty percent of the provider's total reserve requirement. provider by a natural person; (B) Due from the United States or any agency thereof, any state in the United States or any agency thereof, or any institution, pension fund, or trust fund from which collection is reasonably assured. (II) Accounts receivable that are eligible under this subsection (2)(e) may be used to fulfill no more than fifty percent of the provider's total reserve requirement. (f) Investment certificates or shares in open-end investment trusts whose management has been managing a mutual fund registered under the federal "Investment Company Act of 1940", 15 U.S.C. secs. 80a-1 to 80a-64, or whose management has been registered as an investment adviser under the federal "Investment Advisers Act of 1940", 15 U.S.C. secs. 80b-1 to 80b-21, and in either case currently has at least one hundred million dollars under its supervision, is qualified for sale in Colorado, has at least forty percent of its directors or trustees not affiliated with the fund's management company or principal underwriter or any of their affiliates, is registered under the federal "Investment Company Act of 1940", and is a fund listed as qualifying under rules maintained by the secretary of state in cooperation with the division of insurance; (g) A surety bond in a form acceptable to the commissioner. (3) Any person or organization that entered into life care contracts prior to January 1, 1974, but that was not required prior to that date to obtain a license is not required to maintain reserves covering obligations assumed under any such contract entered into prior to January 1, 1974.

C.R.S. § 11-49-106 Annual report by providers - fee

11-49-106. Annual report by providers - fee. (1) Each provider shall file an annual report with the commissioner within ninety days after the end of its fiscal year that contains the certified financial statements for each facility and such other information as may be required by the commissioner. The annual report shall be made in a form prescribed by the commissioner. (2) A provider shall amend its annual report on file with the commissioner if an amendment is necessary to prevent the report from containing a material misstatement of fact or omission of a material fact. (3) A provider shall make its annual report available to residents upon request. (4) The failure to file an annual report within the time prescribed in subsection (1) of this section shall constitute a violation of this article 49.

C.R.S. § 11-49-107 Examination - fees

11-49-107. Examination - fees. The commissioner may conduct an examination of the affairs of any provider as often as the commissioner deems it necessary for the protection of the interests of the people of this state. Providers shall maintain copies of their books and records in Colorado to provide access for the purposes of this article 49. The commissioner shall assess each provider at least semiannually, to cover the annual direct and indirect costs of examinations, supervision, and administration conducted pursuant to the provisions of this section. The assessments shall be calculated in terms of cents per thousand dollars of total escrowed entrance fees and reserves maintained. The assessment calculation, or ratio of the assessment charged to total escrowed entrance fees and reserves maintained, shall be alike in all cases. On or before the dates specified by the commissioner, each association shall pay its assessment. If deemed necessary, the commissioner may estimate a per diem rate to be charged for examinations and charge a provider for the actual cost of any examination documented by the commissioner.

C.R.S. § 11-49-108 Rules

11-49-108. Rules. The board may promulgate reasonable rules in accordance with article 4 of title 24 for effectuating any provision of this article 49.

C.R.S. § 11-49-109 Violation

11-49-109. Violation. Any person acting in the capacity of a provider who enters into a life care contract, or extends the term of an existing life care contract, without acting in compliance with the provisions of this article 49 commits a class 2 misdemeanor.

C.R.S. § 11-49-110 Article does not apply to facilities licensed by department of public health and environment

11-49-110. Article does not apply to facilities licensed by department of public health and environment. The provisions of this article 49 shall not apply to any hospital or other facility that the department of public health and environment is authorized to license pursuant to part 1 of article 1.5 and part 1 of article 3 of title 25; except that nursing care facilities and assisted living residences that are part of the facility of a provider as defined in section 11-49-101 shall be subject to the provisions of this article 49.

C.R.S. § 11-49-111 Life care contract - content

11-49-111. Life care contract - content. (1) Each life care contract shall be written in a clear and coherent manner using words with common and everyday meanings and shall: (a) Show the value of all property transferred, including but not limited to donations, subscriptions, fees, and any other amounts initially paid or payable by or on behalf of the prospective resident; (b) Show all the services that are to be provided by the provider to the prospective resident, including, in detail, all items that the prospective resident will receive, such as board, room, clothing, incidentals, medical care, transportation, and burial, and whether the items will be provided for a designated time period or for life and the monthly charge for the services; (c) Be accompanied by a financial statement showing in reasonable detail the financial condition of the provider, including a statement of earnings for the previous twenty-four-month period, or such shorter period if the facility has been in operation for a lesser period, that shall be furnished to the prospective resident; (d) Specify the monthly service fee and whether the fee is subject to adjustment; (e) Explicitly state what rights, if any, a resident will have to participate either individually or as part of a group of residents in management and financial decisions affecting the facility.

C.R.S. § 11-49-112 Register

11-49-112. Register. (1) Every provider shall maintain a register setting forth the following facts concerning each person residing in the life care institution: (a) Name; (b) Last previous address; (c) Age; (d) Nearest of kin, if any; (e) Mother's maiden name; (f) The person responsible for each resident's care and maintenance; (g) Such other data as the commissioner may reasonably require.

C.R.S. § 11-49-113 Advertisements and solicitations of life care contracts - requirements

11-49-113. Advertisements and solicitations of life care contracts - requirements. Any report, circular, public announcement, certificate, or financial statement, or any other printed matter or advertising material that is designed for or used to solicit or induce persons to enter into any life care contract, and that lists or refers to the name of any individual or organization as being interested in or connected with the person, association, or corporation to perform the contract, shall clearly state the extent of financial responsibility assumed by that individual or organization for the person, association, or corporation and the fulfillment of its contracts.

C.R.S. § 11-49-114 Injunction against violations - prosecution

11-49-114. Injunction against violations - prosecution. (1) The commissioner may bring an action, through the attorney general, to enjoin the threatened violation or continued violation of the provisions of this article 49 or of any of the rules promulgated pursuant to this article 49, in the district court for the county in which the violation occurred or is about to occur. Any proceeding under the provisions of this section shall be subject to the Colorado rules of civil procedure; except that the commissioner shall not be required to allege facts necessary to show or tending to show the lack of an adequate remedy at law or to show or tending to show irreparable damage or loss. The court may award the attorney general all costs incurred in bringing any action under this section. (2) Upon application by the commissioner, the attorney general or the district attorney of any judicial district in this state shall institute and prosecute an action for the criminal violation of any provision of this article 49.

C.R.S. § 11-49-115 Local regulations

11-49-115. Local regulations. The provisions of this article 49 shall not prevent local authorities of any county, city, town, or city and county, within the reasonable exercise of the police power, from adopting rules, by ordinance or resolution, prescribing standards of sanitation, health, and hygiene for facilities that are not in conflict with the provisions of this article 49 or the rules adopted by the commissioner pursuant thereto, and requiring a local health permit for the maintenance or conduct of any such facility within the county, city, town, or city and county.
Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://leg.colorado.gov/sites/default/files/images/olls/crs2024-title-11.docxFetched: 10/6/2026

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