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Valley senior fights to get back refundable housing fee

Money generic
Posted at 5:00 AM, Jan 05, 2021
and last updated 2021-01-05 08:52:19-05

PEORIA, AZ — If you're a senior moving to a retirement community, you may be asked to pay a large upfront fee. It's called an "entrance" fee, and in some cases, a large chunk of it is supposed to be refunded after you move out.

But one Valley senior says she still couldn't get her refund, years after she moved.

Janet and her husband moved to Sierra Winds retirement community in Peoria.

During their time at Sierra Winds, Janet says they paid a monthly rent of around $3,000. And they paid an "entrance" fee of $215,000. Janet says her understanding was that 90% of that entrance fee would be refunded if there was a death and a move-out.

Unfortunately, in 2017, her husband died, and Janet did move. She says she followed the rules and gave notice as instructed in order to get that refund, but says despite numerous attempts to get the money, it didn't come.

It's money Janet says she counted on to live and found herself pinching pennies during a time she had hoped to travel and spend time with friends and family.

"People would ask, 'let's go to lunch' and I'd say, 'Oh I already ate,' but really, I was afraid to spend any money. I've had to live a very frugal life," she says.

Janet came to the Let Joe Know team for help and volunteer Jim took on the case.

We interviewed Janet in February of 2020, just before COVID hit. It was nearly three years after she moved out. While she says she did get an offer from Sierra Winds to pay her over a five-year period, she turned it down. She said she would be too old to really enjoy the money.

Janet doesn't think it's fair to wait, but, it is legal! It's written right in the Sierra Winds contract she signed.

Janet says as she re-read the contract, it states that the 90% must be paid back "upon re-occupancy of your residence by a new resident."

In other words, Sierra Winds has a right to keep that entrance fee until they rent the unit to someone else, and Sierra Winds says that had not happened.

Janet says that gives communities too much control and it appears to be a "never-ending" contract with no interest when the money is paid.

We found "entrance" fees are common at similar retirement communities across the country. And while we couldn't find Arizona laws limiting refund time limits, other states do.

New Jersey passed a law with a legislative statement saying in part, "absent a maximum refunding period, there is little incentive for the facility management to aggressively market any particular unit."

Sierra Winds says that is not what happened with Janet. They say they have tried to rent her unit consistently. They say, "based on supply and demand, the time it takes to resell an apartment home will vary by residence."

Well, finally, almost three years after Janet moved out, the time finally arrived, she got her money back, all $193,000 of it!

And she says it taught her to take a close look and understand exactly what any contract means before signing. "Old people are trusting. This old person isn't quite as trusting anymore," she says.

In a statement to ABC15, Sierra Winds says:

"Sierra Winds has a successful history of fulfilling contractual obligations with former residents and/or their family members. The contract states "the refund amount shall be paid within thirty (30) days following occupancy of your residence by a new resident." In this instance, the former resident received their refund payment July 7, 2020 which was within the contractual timeframe. As we communicated regularly with this former resident, based on supply and demand the time it takes to resell an apartment home will vary by residence."