Arbitration agreements have been a hot topic in recent years. Last year, WealthCounsel posted a blog on the benefits and disadvantages of mandatory arbitration agreements. One of the major disadvantages is that mandatory arbitration provisions in contracts limits the choice to pursue other legal remedies should a legal dispute arise. Last year, CMS issued a new rule repealing the prohibition of the use of predispute arbitration agreements by long-term care facilities. But is there state law that could possibly protect residents in other types of care facilities? Let’s take a look at some recent case law that addressed this issue.

In Harris v. University Village Thousand Oaks (UTVO), a California Court of Appeals applied the state law that prohibits arbitration agreements in residential rental agreements to continuing care retirement community contracts. Any such agreement is void on the basis of public policy due to Cal. Civ. Code, § 1953, subd. (a)(4).

Recently, many have begun planning for the possibility that they may fall ill and may not be able to conduct business as usual. The most commonly thought of planning device for such situations is the power of attorney (POA). A POA is a document whereby a “principal,” the person signing the document, gives certain powers to an “agent,” the person designated to act on behalf of the principal. A POA allows an individual to name another person to act on their behalf during times of incapacity, for a particular purpose, for a specified duration of time, or even to simply execute everyday dealings for the individual. It all depends upon the type of POA established and the objectives sought.

Selecting the right POA document for the situation is critical for effective execution of the principal’s wishes. Some POAs give agents the power to make healthcare decisions during the principal’s incapacity. Others allow the agent to sign legal documents or financial paperwork for an unavailable principal. Some last until incapacity, others last until the principal’s death. The general actions an agent is permitted to take depends solely on what the POA has dictated. There have been many occasions where the bounds of the four corners of a POA were tested.

A landlord of residential property is restricted on what fees can be charged to a lessee, but are these restrictions the same for assisted living facilities (ALFs)?  ALF/resident relations differ from traditional landlord/tenant relations. (For the purposes of this blog, ALF residents will be referred to as residents and landlord lessees as tenants.) While the two relationships share many similarities, ALF residents are provided with additional healthcare monitoring and services that a landlord would not be expected to provide.

The Massachusetts Supreme Judicial Court was recently presented with the opportunity to distinguish between the permissible charges landlords and ALFs may charge their tenants/residents. Landlord-tenant law falls under the restrictions of Massachusetts Security Deposit Statute, where ALFs are bound by the state’s ALF statutes – both laws being very similar in nature. (ALFs are called assisted living residences (ALRs) in Massachusetts.  For purposes of this writing, the more common ALF will be used.) Courts in the state were split on the issue of the extent that the security deposit statute might apply to ALF residents; and, if so, whether ALF statutes permitted additional charges beyond those listed in the security deposit statute.