Residents of continuing care retirement communities (CCRCs) often pay large upfront entrance fees for the promise of lifelong housing, services and a partial refund to heirs. That promise can disappear when a community fails, with steep financial, practical and emotional consequences.
Ten years ago Joyce and Norman Cooper paid $946,000 to move into Harborside Retirement Community in Port Washington, New York, attracted by independent living, assisted care and nursing on one campus. They expected their savings to provide security and that heirs would recoup a large share of the entrance fee after their deaths. Harborside filed for bankruptcy in 2023. It was one of at least 15 CCRCs to enter bankruptcy over the past six years.
The bankruptcy forced residents to leave and wiped out promised refunds. Barbara Cooper had been told about an 80% refund arrangement; that payout evaporated after the facility collapsed. Other families experienced similar losses. Ninety-four-year-old Arline Cohen had to move; her daughter Bev found a replacement facility charging about $10,000 more per month. The Cohens’ $710,000 entrance fee disappeared. Bev and several other heirs retained lawyers and hope to recover a portion, perhaps roughly 30%, but any recovery is uncertain and can take years.
The effects go beyond money. Harborside residents were moved into different buildings and separate facilities as levels of care and availability changed. Joyce and Norman Cooper, who moved to the community together, were separated because of differing medical needs; their daughter says the separation contributed to both parents’ declines — her mother died, and her father died three weeks later.
How many CCRCs work and why failures happen
Many CCRCs use a model that charges a large one-time entrance fee plus monthly service charges. In return, the community promises housing, services, and escalating levels of care as residents age. Contracts often state that a substantial portion of the entrance fee will be refunded to heirs when a resident dies or leaves. But operators commonly use entrance fees as working capital to pay operations, leverage debt, or fund expansion. If operating revenue falls, occupancy drops, or debt burdens grow, facilities can become insolvent and enter bankruptcy, eliminating or reducing refunds and forcing relocations.
Bankruptcy trends and resident risks
Recent bankruptcies show this is not an isolated risk. When a CCRC fails, residents — especially those in assisted living or memory care — face disruptive moves, higher costs at new communities, loss of promised refunds and lengthy legal fights. Recoveries for heirs vary by case and jurisdiction; some families may eventually receive part of lost entrance fees, but outcomes are unpredictable.
Practical questions and steps for seniors and families
– Ask, in plain language, how much of the entrance fee is refundable, under what conditions, and when refunds are paid.
– Find out how refunds are protected: does the community hold funds in escrow, maintain a refund reserve, use letters of credit, or have surety bonds?
– Request recent audited financial statements, occupancy rates, debt levels and information about reserve funds and contingency plans.
– Learn how the contract defines levels of care and transfer policies if the provider closes or you need higher care.
– Have a lawyer experienced with CCRC agreements and state regulations review the contract before signing.
– Check state oversight and whether any consumer protection laws or guaranty funds apply in your state.
– Plan financially for the possibility of moving to a more expensive facility and for the timeframe and costs of legal action if refunds disappear.
Bottom line
CCRCs can offer convenience and continuity of care, but they also involve significant financial risk tied to an operator’s long-term viability. Families should treat entrance fees as large financial commitments: review contracts closely, verify how refunds are secured, and evaluate the provider’s financial health before making a decision. The experiences of the Coopers, Cohens and other Harborside residents show how quickly a promise of security can turn into relocations, legal disputes and financial loss.