§2175. Initial disclosure statement

A. After entering an order registering the provider and prior to the provider's acceptance on behalf of the home of part or all of any application fee or the entrance fee or the execution of the continuing care agreement by the resident, whichever first occurs, the provider shall notify the prospective resident of his right to review the initial disclosure statement. The initial disclosure statement shall be made available to a prospective resident until the first annual disclosure statement is filed pursuant to R.S. 51:2176. The text of the initial disclosure statement shall contain the following information:

(1) The name and business address of the provider and a statement of whether the provider is an individual, partnership, corporation, or other legal entity.

(2) The name or names of the individual or individuals who constitute the provider or, if the provider is a partnership, corporation, or other legal entity, whether for profit or not for profit, the names of the officers, directors, trustees, or managing or general partners of the provider, and a description of each individual's duties on behalf of the provider.

(3) For a provider who is not incorporated or established and operated on a not for profit basis, the name and business addresses of any individual having any ownership or any beneficial interest in the provider and a description of such individual's duties on behalf of the provider.

(4) For any person named in response to Subparagraphs (1) through (3) of this Subsection and to any proposed manager:

(a) A description of the business experience of the person, if any, in the operation or management of the home or other homes.

(b) The identity of any business or professional service entity in which the person has a ten percent or greater ownership or beneficial interest and which the provider will employ to provide goods, services, or any other item of value in excess of five hundred dollars within any year and a description of the goods, services, or other items of value and the anticipated costs thereof to the provider or a statement that the costs cannot presently be estimated.

(c) A statement as to whether any such person has been convicted of a crime or been a party to any civil action claiming fraud, embezzlement, fraudulent conversion, or misappropriation of property which resulted in a judgment against the person for damages or enjoining any such activity and whether any person has had any state or federal licenses or permits suspended or revoked in connection with any business activities related thereto.

(5) If the home is operated by a manager, the following information shall be supplied in the disclosure statement:

(a) The name and business address or addresses of any such manager, the professional training and experience of the manager, the identities of any other homes managed by the individual or entity, and a copy of the agreement currently in effect or to be entered into between the provider and the manager to operate the home.

(b) If the manager is incorporated or established and operated on a for profit basis, the identity of all individuals or entities holding any ownership or beneficial interest in the manager and the fees or any other compensation anticipated to be paid by the provider to the manager for the operation of the home.

(c) The method by which the manager was chosen to manage the home and, if the manager was chosen because of a condition in a mortgage commitment to the provider, the identity of the mortgage requiring the condition in the commitment.

(6) A statement of the experience of the provider in establishing and operating homes providing continuing care.

(7) A statement as to whether or not the provider is, or is affiliated with, a religious, charitable, or other nonprofit organization and the extent of the affiliation, if any, under which the provider or any of the provider's affiliates are exempt from the payment of federal income taxes.

(8) The location and description of the properties of the provider, both existing and proposed, and to the extent possible, the estimated completion date or dates, a statement as to whether or not construction has begun, and any contingencies subject to which construction may be deferred.

(9) A description of all services furnished or proposed to be furnished by the provider under its continuing care agreements with residents including, without limitation, the extent to which medical care is furnished, the present or proposed cost of all such services, and a description of any services made available by the home as part of the contract or at an extra charge over and above the entrance fee and periodic charges provided for in the continuing care agreement.

(10) A description of all fees required of residents, including the entrance fee and any periodic charges. The description shall include:

(a) The circumstances under which the resident will be permitted to remain in the home in the event the resident is unable to pay periodic or other charges.

(b) The terms and conditions under which the continuing care agreement may be cancelled by the provider or by the resident and the conditions, if any, under which any or all of the entrance fee will be refunded in the event of cancellation by either the provider or the resident or in the event of the death of the resident prior to or following occupancy of the living unit.

(c) The conditions under which a living unit occupied by a resident may be made available by the provider to another resident other than on the death of the resident executing the continuing care agreement.

(d) The manner by which the provider may adjust periodic charges or other recurring fees. If the home is already in operation or if the provider or manager operates one or more similar homes within this state, the statement shall include tables showing the frequency and average dollar amount of each increase in periodic rates at each such home for the previous five years or for such shorter period as the home has been operated if operated for less than five years.

(e) The method of calculation for the fees that will be charged if the resident marries while at the designated facility, the terms concerning the entry of a spouse to the facility, and the consequences if the spouse does not meet the requirements for entry.

(11) A description of the health and financial conditions required for an individual to be accepted as a resident and to continue as a resident once accepted, including the effect of any change in the health or financial condition of a person between the date the individual executes the continuing care agreement and the date of initial occupancy of a living unit.

(12) Income statements for the three most recent fiscal years of the provider or such shorter period of time as the provider shall have been in existence, and certified financial statements of the provider including a balance sheet and income statement as of the end of the provider's most recent fiscal year. If the provider's fiscal year ended more than ninety days prior to the date the application is filed, interim uncertified financial statements shall be included as of a date not more than ninety days prior to the filing. All such financial statements shall be prepared by a certified public accountant in accordance with generally accepted accounting principles.

(13) If the operation of the home has not begun, a statement of the anticipated source and application of funds used or to be used in the purchase or construction of the home including:

(a) An estimate of the cost of purchasing or constructing and equipping the home, including related costs such as financing expenses, legal expenses, land costs, occupancy development costs, and all other similar costs which the provider expects to incur or become obligated for prior to the commencement of the operation of the home.

(b) A description of any mortgage loan or other long term financing intended to be used for the financing of the home, including the terms and conditions and costs of the financing.

(c) An estimate of the total entrance fees to be received from the residents at or prior to the commencement of operation of the home.

(d) An estimate of the funds, if any, which are anticipated to be necessary to pay for start up losses.

(14) Such other material information concerning the home as the provider wishes to include.

(15) A copy of the form or forms of agreement for continuing care used or to be used by the provider.

(16) A statement on the cover in a prominent location and type face that registration of the home does not constitute approval, recommendation, or endorsement of the home by the department, nor does such registration evidence the accuracy or completeness of the information set forth in the disclosure statement.

Acts 1987, No. 483, §1.