California establishes sequencing and disclosure rules for repayable continuing-care contracts
Oct 4, 2026 edition · GC-2026-0113 · Published 2026-10-04 · Version 2 · Final
AB 1983 distinguishes repayable continuing-care contracts based on unit resale from contracts paid in termination order. It establishes a dedicated sequential repayment account, queue disclosures and different payment triggers, with specified interest rules for later sequential contracts.
What happened
California enacted AB 1983 on September 18, revising Health and Safety Code sections 1771, 1788 and 1788.4 under the ordinary January 1, 2027 effective-date rule. The statute separates repayable contracts conditioned on resale or reoccupancy from repayable-in-sequential-order contracts. A provider offering the latter assigns each terminated contract a repayment number and funds a separate repayment account from the specified later entrance-fee proceeds. The account exists exclusively for those repayments, is separately accounted for and protected from the provider’s other liabilities; it is not the statutory refund reserve.
Contract disclosures differ by repayment model. Resale-conditioned contracts describe historical resale timing, while sequential contracts disclose termination-to-payment experience, relevant account and repayment information, and dependence on queue position and available funds. Resale or reoccupancy generally triggers payment within 14 calendar days for the resale-conditioned model. Sequential payment is due within 14 calendar days after sufficient funds exist for the assigned number, with specified exceptions and interest provisions. For sequential contracts entered on or after January 1, 2027, the amended interest framework does not move a contract ahead in the queue; the account must support both principal and accrued interest before payment.
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
Entrance-fee repayment is not governed by one universal resale date or one unrestricted reserve account. Contract classification, queue position, account funding and disclosures affect residents and estates as well as the provider’s accounting controls.
Recommended action
Before January 1, 2027, have Legal and Finance classify repayable contracts and map the correct account, queue, disclosure and payment rules. Review principal and interest treatment and protect records linking each payment number to its funds. Avoid promising a repayment date based solely on another unit’s resale.
Sources
- AB 1983, chaptered bill text and historyOfficial · California Legislature · 2026-09-18 · Source review 2026-09-20
- AB1983 chaptered text, retained official rendered documentOfficial · California Legislature · 2026-09-18 · Source review 2026-10-15
- Official Assembly 2023-24 Constitution, Article IV section 8Official · California Legislature · Source review 2026-10-14
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