Life Estates & Assisted Living Residential Relocation Dianna Nausley WSDOT, Real Estate Services Relocation Assistance, Program Support, and Local Agency Program Manager June 11, 2012

What relocation rights does an occupant have if they do not have fee interest in the property? Hum……………???? June 11, 2012

Type of Displacement 90 Day or Less Occupant Someone who occupies the real property at least 90 days prior to the initiation of negotiations Someone who occupies the real property prior to its acquisition, but who does not meet the length of occupancy requirements Life Estate Occupant Someone who occupies real property where their interest in the real property is for the remainder of their life and is reserved in a conveyance document. June 11, 2012

Differences in Entitlements 90 Day or Less Occupant Considered a tenant Replacement Housing Payment – Rent Supplement – Down Payment Assistance Life Estate Occupant Considered an owner Replacement Housing Payment – Price Differential Payment – Incidental Expenses – Rent Supplement June 11, 2012

Life Estate Options Purchase a replacement dwelling – WSDOT policy allows an owner occupant to purchase a life estate in a retirement home or contracts for extended residence in a limited care or full care facility that provides medical and residential services to persons unable to live independently and provide their own care Rent a replacement dwelling June 11, 2012

How does the acquiring agency handle the following life estate situation: I have a life estate, I no longer own the property but I do occupy the property? My son who owns the property also occupies it. Who gets the RHP? June 11, 2012

Who is entitled to what? Life Estate – Owner Occupant Replacement Housing Payment (RHP) – Price Differential Payment – Incidental Expenses Partial ownership – Must spend entire proportionate share of acquisition payment plus full amount of calculated price differential Son - Owner Occupant Replacement Housing Payment (RHP) – Price Differential Payment – Incidental Expenses Partial ownership – Must spend entire proportionate share of acquisition payment plus full amount of calculated price differential June 11, 2012

Example Acquisition = $200,000 Price Differential (PD) Computation = $20,000 Share 50/50 occupant status Each entitled to $10,000 of the price differential Each must spend $120,000 on a replacement dwelling to receive maximum PD – ½ of acquisition payment which is $100,000 plus – Full amount of PD $20,000 June 11, 2012

Assisted Living Treated as if the displaced owner is purchasing a “life estate” considering it is their intent to live out the rest of their life in a retirement or extended care facility. – A retirement home or extended residence in a limited care or full care facility that provides medical and residential services to persons unable to live independently and provide their own care Must sign an agreement with the facility for the replacement living situation June 11, 2012

Why use it? Eliminates the requirement of an elderly displaced person to purchase a single family replacement dwelling when they may not have the ability to take care of the home and will have to turn around and sell it to move into an assisted living situation Less stress for the elderly person & supporting family June 11, 2012

Can anyone use it? Intended for use by elderly displaced persons June 11, 2012

Disbursement Policy Payment based on signed resident agreement and copy of monthly charges w/supporting documentation – Direct payment to displaced owner – Payment to care facility on behalf of displaced owner and warrant made payable to both parties Initial payment made when signed documents are obtained Final payment paid in the 6 th month June 11, 2012

Computation Base figure = monthly charge for the facility minus amounts attributable for food Initial payment = Multiply base figure x 6 months. Add the amount of any non-refundable entrance fee to the calculated initial payment Final payment = Price differential – initial payment – Will not be made if displaced person dies prior to final payment June 11, 2012

Example RHP calculation is $24,000 Extended care facility monthly fee is $2,000, which includes $500 a month for food One time fee non-refundable entrance fee is $200 The displaced owner signs a resident agreement and supplies you with the above information. The displaced owner is entitled to the full RHP in the amount of $24,000. Compute the initial and final payments. June 11, 2012

Answer Base figure – $2,000 monthly fee - $500 for food = $1,500 Initial payment – $1,500 base figure x 6 months = $9,000 + $200 entrance fee = $9,200 Final payment in 6 months – $24,000 RHP - $9,200 initial = $14,800 Verify living status of displaced person before sending final payment June 11, 2012