Troubled Senior Community Facing Lawsuits Over Inability to Refund Entrance Fees

An independent living community that’s part of a continuing care retirement community (CCRC) in Kansas is getting sued for its inability to refund some entrance fees, reports the Kansas City Star

The Villas at Grace Gardens, an upscale retirement center in Leawood, Kans., is sponsored by Baptist Senior Ministries, Inc., a subsidiary of nonprofit organization the Baptist Foundation of Kansas City, and managed by Superior Senior Living. 

So far, three suits have been filed following resident deaths occurring in 2009, 2010, and 2011, with the amount to be refunded ranging between about $240,000 to nearly $280,000. The community’s refund policy promises a 90% entrance fee refund to residents upon vacating the unit, which becomes due if another tenant moves in—presumably replacing that entrance fee—or by one year following the move-out, regardless of whether anyone else has moved in.

Advertisement

The families of the now-deceased former residents have sued the community in attempts to retrieve more than $770,000 in entrance fees, says the KC Star article, after the community failed to make the 90% refund for more than a year. 

“Current and unforeseen financial circumstances have impacted Baptist Senior Ministries’ ability to repay,” said the organization in a court filing for one case, acknowledging that it does indeed owe refunds. 

While Baptist Senior Ministries’ executive director did say the company was working with the suing families to resolve the lawsuits, according to the article, no details were given to avoid “jeopardizing the outcome” of those discussions.

Advertisement

Development for The Villas at Grace Gardens began in 2002. By the end of 2003 Baptist Senior Ministries had collected more $2 million in refundable deposits from residents, and $2 million more for each of the next three years up to 2006. By the end of 2007, according to financial reports, those fees totaled $9.36 million.

However, Baptist Senior Ministries has failed to generate enough revenue to cover its expenses for the last 10 years, according to financial reports cited by the KC Star. As of the end of 2011—the most recent date for which information is available—the organization’s liabilities exceeded the value of its assets by $4.7 million, the article says. 

One of the families that sued The Villas for their $278,055 refund has already won their case, according to the article.

Recommended SHN+ Exclusives

The Villas at Grace Gardens had not responded to SHN’s request for comment as of press time.

Read more at the Kansas City Star

Written by Alyssa Gerace