A Tennessee continuing care retirement community is attracting some unwanted attention over an entrance fee policy that is not unheard of in the industry.

A former resident of the Heritage of Brentwood, co-owned and managed by Life Care Services, in a lawsuit is accusing the community of violating the Tennessee Consumer Protection Act, intentional misrepresentation, fraud and unjust enrichment, reports NewsChannel 5 in Nashville, TN.

The former resident, Gary Farber, told the media outlet that when he paid almost $700,000, he thought he was purchasing an apartment at the CCRC. What he was paying, however, was an entrance fee.

“The language in the email that was sent to my client reasonably led him to reasonably conclude that he had engaged in a real estate transaction in which he was then the owner of property,” Davis Griffin, Farber’s attorney, told the TV station.

In a statement to the McKnight’s Business Daily, LCS said in part: “As a company, we pride ourselves in transparency and dealing with all prospective and current residents in a fair and honest manner.” (Read the full statement below.)

When Farber decided to move out of the senior living community, he said, he asked for his money back, but the Heritage of Brentwood did not immediately return it because, according to the document he signed, the CCRC said it “considered the money ‘a loan’ and could keep it after Farber moved out or died, for up to two years, interest-free.”

“I thought I was taken advantage of,” he told the media outlet. 

According to the TV station, Farber’s money was returned to him after he sued. The judge expressed “serious concerns” about the document Farber signed, according to court records.

NewsChannel5 noted that, according to the AARP, most CCRCs have entrance fees that can cost hundreds of thousands of dollars and simply give residents the right to move in. Seventy-five percent of the 151 not-for-profit organizations responding to the 2022 LeadingAge Ziegler LZ 200 that have CCRCs said that all of their CCRCs were entrance-fee communities, whereas 25% of organizations said that they had some rental CCRCs.

The full statement from LCS: “As a company, we pride ourselves in transparency and dealing with all prospective and current residents in a fair and honest manner. Although the story focused on one former resident’s singular interpretation of our standard Residency Agreement, it is important to understand this agreement is part of the typical sales process with any prospective resident in our life plan communities. In short, the Residency Agreement outlines a standard structure that guarantees long-term care and peace of mind for those seeking a quality senior living community; and prospective residents are encouraged — and advised — to review the agreement with any of their chosen legal or financial experts before committing to a community. As it relates to this former resident, we have fulfilled all of our obligations contained within the Residency Agreement. We are extremely grateful for all the positive relationships and trust we have built with our many valued residents over the years, and we look forward to continuing to serve seniors for many years to come.”

Updated Feb. 8 with statement from LCS.