California establishes sequencing and disclosure rules for repayable continuing-care contracts
Oct 11, 2026 edition · GC-2026-0113 · Published 2026-10-11 · Version 3 · Final
AB 1983 distinguishes continuing-care repayments conditioned on resale from repayments made in sequence as contracts terminate. The September 18 law addresses dedicated repayment accounts, disclosure, payment triggers, and interest, with express January 2027 contract-cohort rules for specified sequential-payment provisions.
What happened
California enacted AB 1983 on September 18 as Chapter 281, defining separate resale-conditioned and sequential-order repayable continuing-care contracts. Resale-conditioned amounts, including accrued interest, are due within 14 calendar days after resale or reoccupancy of the unit. Sequential-order amounts are due within 14 calendar days after enough money exists in the required dedicated repayment account to satisfy the contract's assigned sequence number. The account is exclusively for those repayments, and the statutory framework orders payment by terminated-contract sequence rather than treating every repayment as dependent on resale of that resident's unit.
For sequential contracts entered into on or after January 1, 2027, interest begins accruing 180 days after termination even if the account lacks sufficient funds. Accrual does not change the assigned number or payment priority, and principal and interest are paid through the sequence method when the contract reaches its turn. The provider must fund both before issuing repayment. Contract disclosures must explain the funding contingency, possible interest, and unchanged repayment priority; the law also requires the specified historical timing disclosures for the relevant contract type. Interest accrual does not itself make principal repayment due 180 days after termination.
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
Continuing care providers that use repayable entrance-fee contracts need contract, accounting, disclosure, and repayment controls that follow the new sequence and account rules.
Recommended action
Have legal and finance map each repayable contract to the enacted sequence, account, disclosure, and payment requirements, then revise templates and controls before January 1, 2027.
Sources
- AB 1983, chaptered bill text and historyOfficial · California Legislature · 2026-09-18 · Source review 2026-09-20
- AB1983 current official textOfficial · California Legislature · 2026-09-18 · Source review 2026-10-11
- California Constitution, Article IV section 8(c), official Assembly 2023–24 editionOfficial · California State Assembly · Source review 2026-10-14
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