People like French paid a few hundred thousand dollars upfront to live in the community, then taxes, utilities, and a maintenance fee every month. In recent years, that maintenance fee has risen above $1,300.
…
What was coming was $6,150 a month, a more than 300% increase from new property owner, Jaybird Senior Living.
… Rental amounts are “based off fair market rates,” Jaybird said in a statement. The new fee includes taxes, gas, and electric
…and rent.
French couldn’t stomach the new rent. Neither could other socialites. Many moved.
The article neglects to explain that the management changed the entire business model of this community, and the new way of doing things is to charge people rent instead of requiring people to fork over a giant chunk of cash as a “buy-in.”
The townhome units at River Glen of St. Charles recently went from a non-rental to a rental structure. The decision to transition the townhome housing model was guided by the increasing demand for rental structures versus buy-in. As the baby boomer generation ages, there has been a noticeable shift toward communities that cater to specific lifestyle preferences while remaining financially accessible, mirroring an industry-wide transition away from the outdated buy-in model.
By shifting away from the buy-in model, we are following trends set forth by other senior living providers within this market.
The article makes it sound like someone bought the place and jacked up the monthly maintenance fee by $5000 just because “fuck you.”
The article makes it sound like someone bought the place and jacked up the monthly maintenance fee by $5000 just because “fuck you.”
Well, given that they bought in under the lump-sum + maintenance model and have somehow been “upgraded” to the rental model, that’s exactly what happened. It would be like buying a home and then the old owner coming back and saying, “you know what, I could get more money renting this place - you have to pay rent now.” These people likely sold their house and used that money to buy into the community - essentially paying for the right to use the building until they die. It’s common in CCRC facilities (continuing care retirement community). You essentially pay for the plant and then pay maintenance, and they guarantee that they will have a spot for you in their care facility as you need more assistance (Independent living -> Assisted Living -> Nursing and/or Memory Care - Hospice). It’s much like a reverse mortgage in that you “buy” your “home” and get to live in it until you die, at which point the deed is turned over with your heirs getting nothing. Except that in this case you don’t get a monthly payment; instead you pay a fee for the facility services which is free of a rent cost. As you move up in care, the fee gets larger to cover the additional services (additional meals, personal assistance, and ultimately nursing care), but it’s just for utilities and services - your payment covers the physical buildings. As you move up, people behind you buy in and that money is used for (CEO bonuses) maintenance and updates to the buildings. Many of these are “non-profits” so the extra money technically isn’t for profit, but there are lots of corporate mouths to feed in CCRCs and they find ways to distribute the money.
Well, given that they bought in under the lump-sum + maintenance model and have somehow been “upgraded” to the rental model, that’s exactly what happened.
It doesn’t sound like it:
The townhome residents were part of an agreement that allowed for this restructuring. Those who chose not to transition to the monthly rental structure did so in accordance with the terms of their contracts. We accommodated all residents. All were afforded the opportunity to stay in their townhome under their existing contracts until those contracts expired. Those who chose to leave did so through a negotiated buyout process, as permitted by their contracts.
These people likely sold their house and used that money to buy into the community - essentially paying for the right to use the building until they die.
Company says:
All were afforded the opportunity to stay in their townhome under their existing contracts until those contracts expired.
From the article it sound like there was no maintenance escalation clause limitation - they bought in for, say, $750,000 with a payment of $1000/month in fees, per their contract. Each year the contract maintenance increases (since costs increase) and it had gone up to ~$1300…then, all of a sudden, the owner decided that they weren’t getting enough people with $750k to drop up front and added a $6.5k/month option with little or no buy in. When these residents rolled to their annual renewal, instead of the normal 3-6% increase, they were “upgraded” to the new rental-based prices - $6.5k.mo. Their contract is still valid, and they can still stay there, but based on the lawyers these people have gone to about the increase, it’s all 100% legal because there is no limit in the contract on how much the fee can increase.
Thank you for taking the time to try to explain this.
When these residents rolled to their annual renewal, instead of the normal 3-6% increase, they were “upgraded” to the new rental-based prices - $6.5k.mo.
I did not think it was set up for annual renewal like that.
The article makes it sound like someone bought the place and jacked up the monthly maintenance fee by $5000 just because “fuck you.”
That’s exactly what they did though. It’s like buying a lifetime app purchase and then a few months later the app goes subscription based and demand you pay more, except this is people’s shelter.
…and rent.
The article neglects to explain that the management changed the entire business model of this community, and the new way of doing things is to charge people rent instead of requiring people to fork over a giant chunk of cash as a “buy-in.”
The article makes it sound like someone bought the place and jacked up the monthly maintenance fee by $5000 just because “fuck you.”
Well, given that they bought in under the lump-sum + maintenance model and have somehow been “upgraded” to the rental model, that’s exactly what happened. It would be like buying a home and then the old owner coming back and saying, “you know what, I could get more money renting this place - you have to pay rent now.” These people likely sold their house and used that money to buy into the community - essentially paying for the right to use the building until they die. It’s common in CCRC facilities (continuing care retirement community). You essentially pay for the plant and then pay maintenance, and they guarantee that they will have a spot for you in their care facility as you need more assistance (Independent living -> Assisted Living -> Nursing and/or Memory Care - Hospice). It’s much like a reverse mortgage in that you “buy” your “home” and get to live in it until you die, at which point the deed is turned over with your heirs getting nothing. Except that in this case you don’t get a monthly payment; instead you pay a fee for the facility services which is free of a rent cost. As you move up in care, the fee gets larger to cover the additional services (additional meals, personal assistance, and ultimately nursing care), but it’s just for utilities and services - your payment covers the physical buildings. As you move up, people behind you buy in and that money is used for (CEO bonuses) maintenance and updates to the buildings. Many of these are “non-profits” so the extra money technically isn’t for profit, but there are lots of corporate mouths to feed in CCRCs and they find ways to distribute the money.
It doesn’t sound like it:
Uhh… that’s EXACTLY what it sounds like? Or are you one of those morons that cannot read between the lines of corpo speak?
You said:
Company says:
What am I missing?
From the article it sound like there was no maintenance escalation clause limitation - they bought in for, say, $750,000 with a payment of $1000/month in fees, per their contract. Each year the contract maintenance increases (since costs increase) and it had gone up to ~$1300…then, all of a sudden, the owner decided that they weren’t getting enough people with $750k to drop up front and added a $6.5k/month option with little or no buy in. When these residents rolled to their annual renewal, instead of the normal 3-6% increase, they were “upgraded” to the new rental-based prices - $6.5k.mo. Their contract is still valid, and they can still stay there, but based on the lawyers these people have gone to about the increase, it’s all 100% legal because there is no limit in the contract on how much the fee can increase.
Thank you for taking the time to try to explain this.
I did not think it was set up for annual renewal like that.
That’s exactly what they did though. It’s like buying a lifetime app purchase and then a few months later the app goes subscription based and demand you pay more, except this is people’s shelter.
Yes. I was wrong.