How do licensing requirements affect an assisted living acquisition?
Direct answer
Licensing shapes the whole deal. When the operator changes, the new operator must be licensed through the state's change-of-ownership process before it can run the community. Licenses generally do not transfer, and the process commonly takes 90 to 180 days.
What to know
Because the license follows the operator, a purchase agreement is not enough to take over. The buyer applies to the state licensing agency, and the timeline affects closing. In California, which licenses assisted living as Residential Care Facilities for the Elderly through the Department of Social Services, change of ownership can take 3 to 12 months.
Requirements differ by state and by product. California RCFE administrators must complete an 80-hour certification program and pass a state exam. Pennsylvania licenses personal care homes under 55 Pa. Code Chapter 2600 and assisted living residences under Chapter 2800. Skilled nursing adds a Medicare and Medicaid CHOW and requires a state-licensed nursing home administrator.
In diligence, review the community's licenses, three years of state surveys and plans of correction, since problems there can slow or block the new license.
How Haven helps
Haven sequences licensing into every transaction timeline so buyers and sellers plan around realistic dates. Read our change-of-ownership licensing guide.
Related questions
- How do I manage licensing and compliance review across multiple states?
- Can an assisted living license transfer to a new owner?
- What is a change of ownership (CHOW) in assisted living?
- How long does a change of ownership take for assisted living?
- Does assisted living real estate qualify for a 1031 exchange?