Complaint·November 13, 2023

During the Course of the investigation into this allegation, the following was determined: The Transfer Fee is clearly outlined in the Continuing Care Contract and CC&Rs. Residents executed these contracts thereby agreeing to pay a transfer fee upon the sale of their unit. In addition, the department does not interpret the “transfer fee” to be a brokerage fee. The continuing care contract statutes recognize the purchase price of a condominium unit to be an entrance fee and the fees charged upon the sale of the condominium unit to be a resale fee. (See HSC section 1771 subdivisions (e)(3) and (r)(4).) Resale fees or “transfer fees” based on a set fee and appreciation of the unit are not unique to Sunrise. Similar arrangements exist in other equity projects. (See Health and Safety Code (HSC) section 1771(e)(6) [defining “equity project”].) Further, analogous forms of compensation from the sale of a refundable or repayable CCRC unit are standard in the industry. Therefore, the department does not recognize such fees to be brokerage fees. (Cont.....)