The Assisted Living Due Diligence Checklist for Buyers
Buying an assisted living community means buying its licenses, its staff, its residents' trust, and its building all at once. This checklist covers what to review before you close.
Haven Senior Investments · May 2026 · 11 min read
1. How due diligence works in a senior housing deal
Due diligence usually begins after a letter of intent is signed and runs for a set period defined in the purchase agreement. During that window the buyer verifies everything the seller has represented and decides whether to proceed, renegotiate, or walk away. Because the period is limited, buyers who arrive with a checklist and a team (attorney, CPA, lender, and an experienced operator) move faster and catch more.
2. Financial review
Trailing-12-month and prior two years of monthly P&Ls, tied to bank statements and tax returns.
Current rent roll, census history, move-ins and move-outs, and average length of stay.
Payer mix and any Medicaid waiver or VA contracts, including rates and payment timing.
Accounts receivable aging and bad-debt history.
Payroll registers, overtime, and agency staffing spend.
Property tax bills, insurance policies, and loss runs.
Compare these records with the normalized NOI used in the offer. Our guide on how to value an assisted living facility explains the adjustments buyers typically make.
3. Licensing, surveys, and compliance
Current state license(s), licensed capacity, and any memory care or special-care endorsements.
The last several state inspection surveys, plans of correction, and any complaint investigations.
Fire marshal, health department, and life-safety inspection reports.
Your state's change-of-ownership (CHOW) requirements and approval timeline.
Organizational chart, key staff tenure, and whether the administrator and director of nursing (or wellness) plan to stay.
Wage rates compared with the local market, benefits, and any union agreements.
Training records, background checks, and required certifications.
Policies and procedures, resident assessments, and care plans (reviewed with privacy protections).
Vendor contracts: pharmacy, food service, therapy, software, and maintenance.
5. Physical plant and real estate
A property condition assessment covering roof, HVAC, plumbing, call systems, and fire sprinklers.
An environmental report (typically a Phase I) as most lenders require.
Title, survey, zoning confirmation, and certificates of occupancy.
ADA and accessibility review, and the age and condition of furniture, fixtures, and equipment.
A capital expenditure plan for the next several years.
6. Legal and resident considerations
Pending or past litigation and insurance claims.
Resident agreements, deposit and refund obligations, and any entrance-fee terms.
Leases for any land, equipment, or vehicles that transfer with the business.
A transition plan for communicating the sale to residents, families, and staff.
Haven perspective: The issues that sink deals are rarely hidden in the building. They are usually in staffing, survey history, or financials that do not tie out. Prioritize those early in the diligence period.
This article is general information from Haven Senior Investments. It is not legal, tax, or investment advice. Rules and market conditions vary by state and change over time; confirm specifics with your attorney, CPA, and lender.
