Patricia Lund says she has been waiting for her money for eight years.
Tired of waiting, the 79-year-old woman is heading to court.
Her battle is against a Continuing Care Retirement Community, or CCRC, and it harkens back to one of the most outrageous cases to ever cross Bamboozled’s desk.
Before we get into the details of Lund’s case, let’s start with the background.
CCRCs include independent living communities, assisted living facilities and long-term care units. These are attractive to some seniors because they wouldn’t have to move if they need increased health care.
Some 10,000 New Jerseyans live in 25 CCRCs in the state, according to the Organization of Resident Associations of New Jersey (ORANJ), a group that supports CCRC residents.
Seniors who move into a CCRC typically pay a large entrance fee that can cost several hundred thousand dollars. One big selling point is that a percentage of the entrance fee will be returned to the resident if they move — or to their estate if they die — but not until the unit is reoccupied by a new resident.
And that’s where it gets ugly.
Earlier this year, we brought you the story of Ed Nagle, a Whitehouse Station man whose mother lived in a CCRC. For five long years after his mother died, Nagle waited for the refund for his mother’s unit. He said the CCRC did nothing but delay. It didn’t actively try to re-sell her unit, Nagle said, and when he tried to help, he was turned away.
Nearly $250,000 was in limbo.
Nagle finally accepted refund worth 63 percent of the value rather than the 90 percent promised in the contract.
Making matters worse, Nagle had previously filed his mother’s estate tax return, paying more than $14,000 based on the anticipated full refund from the CCRC. But because he accepted the lower refund, his mother’s estate no longer owed the taxes.
He filed for a refund.
“Surprise — a catch-22. There is a three-year statute of limitations on refunding paid estate taxes,” Nagle said at the time. “So our family got ripped by the CCRC and then ripped by the state of New Jersey.”
In all, the Nagle family was out $88,481.
Nagle went on a mission, trying to pass legislation to require a time limit on CCRC refunds, calling it a “common sense cure.”
He found a supporter in Sen. Christopher “Kip” Bateman (R-Somerset), who introduced a bill that would require CCRCs to give refunds within a year of vacancy.
When Assemblywoman Nancy Munoz (R-Union) heard about the bill, she introduced companion legislation in the Assembly.
Lobbyists representing the CCRCs fought against the bills.
Nagle became worried the lobbyists would win the fight, so he urged Bateman to introduce a second bill. This one would remove the statute of limitations to file an amended tax return in cases where refunds from CCRCs are delayed. The Assembly had a similar bill.
Those haven’t passed yet, either.
Which brings us to a new, shameful CCRC case.
Patricia Lund moved into The Fountains at Cedar Parke in Atco, Waterford Township, in March 2007.
She paid an entrance fee of $177,870, and the contract said if she moved out, she would get back 90 percent of the fee 30 days after the unit was reoccupied.
There was no time limit on giving the refund.
“The 90 percent refund was a big selling point that they repeated many times,” Lund said. “I think they tried to give me a false sense of security that I would get most of my money back if I ever decided to move out.”
After living there two years, Lund decided to move in with her son, daughter-in-law and grandson. She planned to use some of the refund money from The Fountains to convert a portion of the Cherry Hill home as private living space for her use.
Lund gave written notice to the facility that she’d be out on June 30, 2009.
“I never expected that eight years after I moved out I would still not have received my money back,” Lund said.
That’s right. The Fountains still has her $160,083 — the 90 percent refund, she alleges.
In a lawsuit filed last week in Superior Court in Camden County, Lund alleges not only that the facility still has her money, but it is “utilizing apartment B-202 as a model to show to prospective new residents before steering prospective new residents to purchase other units…” the lawsuit says.
If her old place is used as a model, how is it ever going to be sold?
The suit claims violations of the Consumer Fraud Act, breach of contract and negligent misrepresentation.
Lund’s attorney, Donald Browne, Jr. of Bernetich, Hatzell & Pascu in Cherry Hill, said The Fountains is not living up to its end of the bargain and it has no incentive to return Lund’s money.
“This is unfair to the residents because The Fountains control the sales process,” Browne said. “If The Fountains steer a new resident to a different unit, they get to continue to keep Patricia’s money interest free.”
We reached out to The Fountains for comment.
Murphy Vandervelde, the owner, said he couldn’t comment because of the litigation.
Lund’s case once again spotlights this practice, and it clearly demonstrates the need for specific consumer protections.
When we wrote about Nagle’s case, we asked Sen. Joseph Vitale (D-Middlesex), chair of the Health, Human Services and Senior Citizens committee, why there were delays to hear the CCRC refund bill in committee.
Vitale promised the bill would be heard.
After more delays because lobbyists for the CCRCs wanted to meet with legislators, it was finally heard on May 15. (You can listen to the hearing here.)
Nagle testified, as did industry representatives.
To date, nothing more has happened.
Bateman didn’t return our requests for comment, but Nagle said Bateman’s office told him last month that the estate tax legislation — S3144 — would probably have to be reintroduced in the next session.
Nagle continues to fight for the legislation even though it won’t help his family, and he said “Bravo!” to Lund.
“Seems to me the CRCC bad faith and bad actions are quite clearly demonstrated,” Nagle said of Lund’s suit. “This CRCC bad action is bold and unimaginable.”
Browne, Lund’s attorney, said he doesn’t understand how legislators wouldn’t be in favor of a law that would require timely refunds.
“It continues to disgust me when I see advertising for senior communities that paint such a rosy picture, when I know that behind the scenes the industry uses lobbyists and political donations to keep the deck stacked in their favor,” Browne said.
So, dear readers, that’s the story. If you believe this bill is worth fighting for, contact your legislators and show your support. You can find their contact information here.
Any new legislation will be too late for Lund, but it could help thousands of seniors in the years to come.
“The Fountains have my money and have no incentive to sell my unit and pay me what I am owed,” Lund said, noting she has been trying to settle this for years without involving the courts. “I feel completely ignored. I feel like they took advantage of me.”
We’ll keep you posted on the case.