CA Statute Prohibiting Arbitration Clauses in Rental Agreements Applies to CCRC Tenancy Provisions

April 30, 2021 | Aging Services Risk Management


​Five independent-living residents of a continuing care retirement community (CCRC) sued the CCRC for making false representations about the amount of future increases in monthly fees, whether monthly fees included costs of charging electric vehicles, and facility security. The Court of Appeal of California, Second Appellate District, has held that a state statute prohibiting arbitration clauses in rental agreements applies to the tenancy provisions of CCRC contracts. Because all the provisions at issue pertained to tenancy, the court reversed an arbitration award for the CCRC and remanded the case for trial.

The residents' contracts were for services including transportation to medical appointments and shopping areas, help in accessing supportive services, and healthcare services "for as long as they live in their Unit." The contracts stated that the residents' fees were "deemed payment for their residence, care and services" and included "a right to live in" a specific unit. The residents paid a monthly fee based on the type of residential unit. The contracts also included a clause stating that the residents agreed to resolve "any and all claims and...

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