N.Y. Public Health Law § 4657: Initial disclosure statement

* § 4657. Initial disclosure statement. Prior to the execution of a

contract, or before the transfer of any money, other than a refundable

priority reservation fee or non-refundable priority reservation

agreement application fee, to an operator by or on behalf of a

prospective resident, whichever occurs first, the operator shall deliver

to the person with whom the contract is to be entered into, or the

person's legal representative, the most recent annual statement as

required by section forty-six hundred fifty-eight of this article, and

an initial disclosure statement which contains the following:

1. The information contained in the contract, unless a copy of such

contract is attached to and made a part of the initial disclosure

statement, together with full disclosure of the use of any fees and

charges in connection with the contract, including entrance fees;

2. The information required in paragraph h and subparagraphs (ii),

(iii) and (iv) of paragraph i of subdivision two of section forty-six

hundred fifty-five of this article;

3. The name and business address of the provider and a statement of

whether the provider is an individual, partnership, corporation, or

other legal entity;

4. The name and address of any person whose name is required to be

provided pursuant to subdivisions two and three of this section and any

professional service, firm, association, foundation, trust, partnership,

corporation, or any other business or legal entity in which such person

has, or which has in such person, a ten percent or greater interest and

which it is presently intended will or may provide goods, leases, or

services to the provider of a value of five hundred dollars or more,

within any year, including a description of the goods, leases or

services and the probable or anticipated cost thereof to the provider;

5. If the facility is to be operated by a manager:

a. the identities of any other facilities managed by said individual

or entity and a copy of the agreement currently in effect or to be

entered into between the provider and the manager for the operation of

the facility;

b. if the manager is incorporated or established and operated on a

for-profit basis, the identity of all individuals or entities holding

any ownership or beneficial interest in the manager, and fees or any

other compensation anticipated to be paid by the provider to the manager

for the operation of the facility; and

c. the method by which the manager was chosen to manage the facility

and, if the manager was chosen because of a condition in a mortgage

commitment to the provider, the identity of the mortgagee requiring the

condition in the commitment;

6. A description of the proposed or existing facility, including the

location, size and anticipated completion date, if not completed;

7. A statement as to whether the applicant was or is affiliated, or

has a contractual relationship, with a religious, charitable, or other

nonprofit organization, the extent of any such affiliation or

contractual relationship, and the extent to which the nonprofit

organization will be responsible for the financial and contractual

obligations of the applicant;

8. If the facility is already in operation or if the applicant

operates one or more similar facilities within or outside of this state,

a statement of the changes in the scope of or the rates for care or

services provided, including tables showing the frequency and average

dollar amount of each increase in periodic rates at each such facility

for the previous five years or such shorter period as the facility may

have been operated by the provider;

9. If the applicant is the subsidiary corporation or the affiliate of

another corporation, a statement identifying the parent corporation or

the other affiliate corporation, the primary activities of such parent,

or other affiliate corporation, the interest in the applicant held by

such parent or other affiliate corporation, and the extent to which the

parent corporation will be responsible for the financial and contractual

obligations of the subsidiary;

10. The most recent financial statement of the provider prepared in

accordance with generally accepted accounting principles applied on a

consistent basis and certified by an independent certified or public

accountant, including a balance sheet as of the end of the provider's

last fiscal year and income statements for the last two fiscal years, or

such shorter period of time as the provider has been in operation;

11. If construction, lease, rental, or purchase of the facility has

not yet been completed, a statement of the anticipated source and

application of the funds to be used in such purchase, lease, rental, or

construction, including but not limited to:

a. an estimate of the cost of purchasing, leasing, renting,

constructing and equipping the facility, including, but not limited to,

such related costs as financing expenses, legal expenses, land costs,

occupancy development costs, and all other similar costs that the

provider expects to incur or become obligated for prior to the

commencement of occupancy;

b. an estimate of the total entrance fees to be received from

residents upon completion of occupancy;

c. a description of any mortgage loan or the other long-term financing

intended to be used for the financing of the facility, including the

anticipated terms and costs of such financing;

d. an estimate of any funds which are anticipated to be necessary to

fund start-up losses and to assure full performance of the obligations

of the operator pursuant to fee-for-service continuing care contracts

including, but not limited to, any reserves required pursuant to section

forty-six hundred sixty-four of this article;

e. a projection of estimated income from fees and charges other than

entrance fees, a description of individual rates anticipated to be

charged, and the assumptions used for calculating the estimated

occupancy rate of the facility;

f. a projection of estimated operating expenses of the facility,

including a description of the assumptions used in calculating the

expenses and separate allowances, if any, the replacement of equipment

and furnishings and any anticipated major structural repairs or

additions;

g. identification of assets pledged as collateral for any purpose; and

h. an estimate of assets pledged as collateral for any purpose;

12. A statement indicating community residents who are enrolled in a

health maintenance organization may have nursing facility benefits under

both the health maintenance organization subscriber contract and the

fee-for-service continuing care contract. Such statement shall also

indicate that if the health maintenance organization and the community

cannot reach an agreement on appropriate financial arrangements, then

the resident may have to be admitted to a facility approved by the

health maintenance organization in order to receive their Medicare

benefit for nursing facility services under the health maintenance

organization subscriber contract;

13. The initial disclosure statement and marketing materials of a

community must clearly include a description of the services offered as

part of its contract, and must clearly differentiate among the various

types of contracts which it offers;

14. In accordance with regulations promulgated by the commissioner,

the operator shall prepare a standard information sheet for each

approved fee-for-service continuing care retirement community, which

must be approved by the department, distributed with the community's

marketing materials and attached to the initial disclosure statement

prepared in accordance with this section. The standard information sheet

shall be prepared in plain language and in twelve point type and shall

include, but shall not be limited to the following information:

a. a brief description of the community, including its name and

location and amenities and services available;

b. the name, address, and telephone number of the operator and a

contact person employed by the operator;

c. the number and types of independent living units, adult care

facility units and nursing home beds and whether such beds are on-site

or off-site;

d. the types of contracts available;

e. a listing of all fees, charges, and refund options and the services

covered by such fees and charges;

f. any insurance coverage required of residents; and

g. any other information which the council determines will assist a

consumer in comparing the benefits and costs of different continuing

care retirement communities and fee-for-service continuing care

retirement communities; and

15. Any other information as may be required by regulations

promulgated by the commissioner.

* NB There are 2 § 4657's