California establishes sequencing and disclosure rules for repayable continuing-care contracts
Sep 27, 2026 edition · GC-2026-0113 · Published 2026-09-27 · Version 2 · Final
AB 1983 distinguishes resale-conditioned and sequential-order continuing-care repayments, with different funding, disclosure and payment triggers.
What happened
California enacted AB 1983 on September 18 to distinguish two repayable continuing-care contract models. A resale-conditioned contract links repayment to resale or reoccupancy of the former resident’s unit; a sequential-order contract links payment to the chronological order in which repayable contracts terminate. A provider offering or maintaining sequential-order contracts must establish an exclusive repayment account and make repayments in the prescribed sequence from the specified entrance-fee proceeds. The enacted framework takes effect January 1, 2027, with provisions that expressly distinguish contract cohorts.
The full lump sum, including applicable interest, is due within 14 calendar days after resale or reoccupancy for the resale model, or after sufficient account funds exist to satisfy the assigned repayment number for the sequential model. Disclosures for sequential contracts explain funding dependency, termination order, five-year repayment timing and contract counts. The interest provisions preserve their stated applicability limits: for sequential contracts entered on or after January 1, 2027, accrual begins 180 days after termination regardless of account sufficiency and does not change payment priority. A post-termination repayable lump sum cannot be advertised as a refund; the separate cancellation and refund rules remain distinct.
Scope and timing
- Authority status
- Final
- Applicability
- Directly applicable
- Audience
- Health systems, Provider networks
- Jurisdiction
- California
- Recorded date
- 2027-01-01
- Date type
- effective
Why it matters
Repayment promises, cash controls and resident disclosures must follow the actual contract type; a unit sale and an account’s available balance are different payment triggers.
Recommended action
Before January 1, 2027, classify contract forms and cohorts with Legal and Finance, map funding and sequential-number controls, and test disclosures, payment triggers and applicable interest without promising a fixed repayment date unsupported by the contract.
Sources
- AB 1983, chaptered bill text and historyOfficial · California Legislature · 2026-09-18 · Source review 2026-09-20
- Official retained source documentOfficial · Official issuing agency · Source review 2026-10-16
- Official retained source documentOfficial · Official issuing agency · Source review 2026-10-16
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