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13 | During the course of the investigation into this allegation, the following was determined:
• In a CCRC, the residents are not a party to the management agreement, even in equity projects.
• The provider, as the licensee, is fully responsible for selecting and paying management. In the context of the Stratford, Sunrise’s right act as a provider and to select managers appears to derive from its ownership of certain easements.
• The Department understands these easements to be sufficient to establish Sunrise’s control over the community such that it can be licensed and granted a certificate of authority.
• The Department is responsible for approving and licensing any management company hired to manage a continuing care retirement community.
• It cannot approve of the HOA selecting managers of a licensed community when the HOA does not hold the license. That responsibility lies solely with the licensee, Sunrise. Note that HOAs are prohibited from holding CCRC Certificates of Authority (Health and Safety Code section 1771(p)(10)).
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