The afternoon phone call jolted Laird Jackson: Her 82-year-old father had just been evicted from the Huntington Beach board-and-care home where he had lived for several years.
"I couldn't believe it," she said. "There was no notice until a marshal showed up at the door with a foreclosure notice."
Jackson's experience in January, unfortunately, is becoming commonplace in California, with incidents reported at board-and-care homes in Los Angeles, Orange, Riverside, Contra Costa, Alameda, San Mateo, Napa, Yolo and Placer counties.
"California's foreclosure crisis has severely impacted some of the most vulnerable tenants in our state — seniors who live in residential-care facilities," says state Sen. Mark Leno (D-San Francisco). "These residents had no warning that they were about to lose their homes, and their families and caretakers were left in a panic to find immediate emergency housing."
The situation is all the worse because of the health issues faced by many of those evicted. "Being uprooted like that is a horrifying situation for older adults, many of whom are frail and confused," says Shelley Woolery, who has been involved in two cases in her role as ombudsman program coordinator with the Council on Aging in Orange County.
Bankruptcies, foreclosures and other financial difficulties are inflicting new worries on residents and their families who thought they had secured their futures in a retirement community or other form of senior housing, ranging from "55+" developments to nursing homes.
The problems confront older Americans at every income level.
One of the first red flags in the crisis emerged from the top end of the spectrum in 2009: bankruptcies at continuing-care retirement communities, known as CCRCs. These pricey communities, which require entrance fees averaging $250,000 (some are close to $1 million), offer upscale dining, activities, entertainment and long-term care.
Facilities range from independent-living apartments to skilled nursing facilities, allowing residents to "age in place." People typically move in when they are in good health and active; the promise, and the appeal, is that they won't need to move elsewhere if their health declines.
In addition to the steep buy-in, residents pay monthly maintenance fees. The entrance fee is usually said to be refundable to residents or their heirs if they move or die. But that can change if a facility goes out of business.
When a few facilities declared bankruptcy in recent years, the U.S. Senate Special Committee on Aging got involved and requested a study by the Government Accountability Office. Last summer, the GAO issued a report saying that investing in a continuing-care community involves "considerable risk" and urging state regulators to "be vigilant in their efforts to ensure adequate consumer protections for residents."
The ailing economy has a lot to do with the problems, according to the report: "The CCRC model is particularly vulnerable during economic downturns as stagnant real-estate markets drive down occupancy levels in independent living units, which serve as CCRCs' primary source of profit."
In addition to placing a consumer's investment at risk, the current financial squeeze could cause a resident's monthly dues to spiral upward, the report said.
Another problem with continuing-care retirement communities: Some consumers have found it difficult to retrieve buy-ins after leaving. Elder-law specialists blame the economy: Seniors can't sell their homes, so they don't have the funds to move into the developments; that in turn limits the money the facilities have on hand to pay back those who are moving out.
Thirteen years ago, when Morris and Yetta Weisz bought into Collington Episcopal Life Care Community in Mitchellville, Md., they trusted that their nearly $100,000 entrance fee would be returned if they left.
The couple, retired from U.S. foreign service, enjoyed living at the facility for several years. But then Yetta Weisz died, and shortly thereafter Morris Weisz moved to an assisted-living facility near family in Bethesda, Md.
"We've been trying to get the deposit back for three years," son David Weisz said. "They didn't read the small print, which said their money would be returned when their unit was rented again."
Weisz is now 97 and in danger of outliving his investments, daughter-in-law Diane said. "We've asked repeatedly for the money and had our attorney press for it, but we don't think they're in any hurry to re-rent that unit and repay the money."
Olivia Pugh, Collingwood's interim director, said the facility "is abiding by the laws of the state of Maryland" and referred inquiries to the facility's attorney.
Even without the pressures of a bankruptcy or the economic downturn, big deposits sometimes can be hard to recover.