Residents sue Palo Alto retirement community for ‘up-streaming’ $190 million
By Jason Green, Palo Alto Daily News, Calif. | |
McClatchy-Tribune Information Services |
According to the 34-page complaint,
But the fees were to be returned to the residents when they moved out or to their families when they died, the suit states.
CC-
"These senior citizens were promised financial security," said
The complaint, which is believed to be the first of its kind challenging a continuing care retirement center's financial practices, also accuses CC-Palo Alto of inflating monthly fees through bogus charges.
For instance, the entity allegedly passed on additional taxes the
The suit also claims residents are footing the full premium for earthquake insurance. The contracts they signed, however, only require them to pay for "furniture, fixtures and equipment," not exterior damage, according to the complaint. And since 2006, residents have allegedly paid millions of dollars for national marketing costs that were not spelled out in their agreements.
"Dr. Richter was never informed that CC-Palo Alto intended to transfer his entrance fees upstream to (
"Nor was he informed that CC-Palo Alto did not intend to maintain cash reserves to cover its entrance fee obligations. Dr. Richter expected CC-Palo Alto would maintain sufficient reserves."
The suit says
Vi at
"We will vigorously defend against these inflammatory allegations and we strongly believe we will prevail in court," he said in an email Thursday.
The center has always honored its obligations to repay entrance fees when due, Singer added.
"Vi at
Singer said the center knows it is "doing the right thing" based on a 2012 survey that found a nearly 95 percent satisfaction level among residents.
Formerly known as Classic Residence by Hyatt, Vi at
Email
; follow him at twitter.com/jgreendailynews.
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