A disturbing and perhaps dangerous trend has developed and is growing in threat. It is forced arbitration in senior – elder residential agreements. These used to be limited to nursing homes, but now they are being found in admission agreements for what would ordinarily be routine rental agreements in independent living senior apartments and “assisted living” facilities.
What’s going on? Large chains are buying up smaller residential facilities and their lawyers have replaced a simple rental agreement with one that is designed to protect the owners of the property at the expense of the residents. What does that mean? Let’s give the subject some context.
The focus of this post is compulsory not voluntary arbitration. Let’s be clear. There are times a person would choose arbitration over a jury trial. The claim may be relatively small or a matter of simple objective facts, such as how much is owed on a loan. Business companies often choose to put arbitration in a contract with other businesses because they have mutual experience in a field. They find that arbitrators familiar with the technicalities of the field can render a speedy decision without a big investment of time. Consumers do not have the same level of experience that businesses have, especially when it comes to moving in a senior living communities. Why then don’t businesses offer the resident-consumer to arbitrate after a dispute arises? A consumer could consult with an attorney to see if they “had a case” to take to court. If the attorney advised that it would cost too much to go to court the consumer would rationally choose arbitration.
Let’s look at the consumer context. In Michigan and many other parts of the country, most folks do not live in apartments but live in their own homes. When elders move it is because they cannot take care of the home anymore. It may be physical reasons such as reduced mobility makes getting up and down stairs difficult and dangerous. And, what about snow and ice in the winter! The reason for the move may be cognitive decline such that taking care of a house is just too much business and bother to take care of. In an independent living apartment meals are served, no need to go outside in the winter and there are no stairs. And, “all you have to do is write one check a month.” What all of this means is that the elder is in a declining state of health and will continue to decline after the move. Families expect the facility to provide a safe place to live and take care of their parent. That does not always prove to be true. What may be safe for the average adult may not be safe for the elder.
A story may make the point clear. Suppose Grace is in her mid-80’s. She had to move out of her home because she could not handle the steps in her house anymore. She uses a cane because of arthritis in her hips and knees, and has difficulty walking beyond a few steps. She has received a new prescription and forgot if she took it after dinner, so she took it again. Now she is feeling very confused and wants to go “up front” to get help. She goes out of her apartment and turns the wrong way. She thinks she finds the “door to the office” so she goes through it. It locks behind her. She is outside. It is January and freezing cold. What will happen to her? Will she get back in? Will she be able to raise anybody’s attention? If she does not get back inside in a few minutes she will die. These kinds of things can and do happen.
If Grace should suffer serious injury – say she tries to walk to the front door and falls on ice, ends up in a nursing home or dies from her injuries- the family will want to sue. That is when they will run into the compulsory arbitration agreement. If there were no arbitration agreement the senior living company would likely turn the matter over to their insurance company and a settlement would be worked out after the facts are known to both sides. There would be no trial. However, when there is compulsory arbitration then the incentive to settle a case is less.
Again, in theory arbitration is good. The reader can search for articles praising the benefits of arbitration. But, arbitration is good if it is fairly chosen by both sides to a dispute, not arbitrarily imposed by one side. One would think that if a facility truly believed that it was offering the consumer-resident-to-be a benefit the arbitration agreement would:
- be optional and not a condition of move- in
- allow the resident, prospective resident, or responsible party the right to opt out of the arbitration agreement within 30 days of formation
- be presented as a stand-alone document or clearly highlighted portion of a residency agreement
- not limit the residents’ rights or remedies available under state and federal law
- support the right of judges to continue to invalidate unlawful arbitration agreements.
What’s the “take away”? If you find an arbitration agreement in a rental agreement, do not immediately sign it. What can you do? Here are some tips.
- Ask the admission person if you can take the entire package home and review it. If you can then have it reviewed by a lawyer. Remember, arbitration agreements are legally binding and aggressively enforced by company lawyers.
- If you cannot take it for review first, then see if it has a time period, such as 30 days, to change your mind. You might then sign and take your copy to your lawyer for review. If after review you decide you do not want the company’s version of arbitration, you can cancel your acceptance.
- See if you can decline to sign that part of the agreement, make changes by crossing out or writing by your signature that you decline arbitration.
- If you can make no changes, then look for another place.
- What if this place is the “only option” for Mom and you either “take it or leave it.” In that case have Mom sign. Her diminished mental capacity may work as a defense to the company lawyers claiming her choice of arbitration was “knowingly made.”
