Documents that Are Included in the Transaction
There are a handful of documents that are essential for the successful closing of a seniors housing transaction. The documents require experienced legal counsel to prepare them, as they are incredibly industry-specific.
Buying skilled nursing facilities or assisted living properties for sale are very complicated transactions. It is the sale of an operating business and issuance of a new license that must abide by state regulations.
States with high transaction volumes usually take six to twelve months for a new license to be issued. Transactions with skilled nursing facilities for sale also require new provider numbers for Medicare and Medicaid in addition to the new license.
Licensing regulations in most states usually do not want to close transactions until a new license is issued. Because of these delays in obtaining new licenses, it is difficult to expect buyers and sellers to wait and continue maintaining the same financial performance level. Consequently, transactions are closed before new licenses are issued using specific operations transfer agreements prepared by legal counsel.
Introduction to a Typical Transaction Documents
To protect your best interests in the transaction process of buying healthcare properties, there are some documents you can use with the aid of legal counsel:
- Purchase and Sale Agreement
- This document work for both business and real estate. Depending on your preference (or your attorney), this agreement may provide one for the business and one for the real estate or combine them.
- Operations Transfer Agreement (OTA)
- This agreement allows the buyer to operate with the seller’s license until a new license is obtained after the close of escrow. This document also explains warranties, liabilities, and how accounts payable and receivable are managed.
- Lease or Sublease Agreement
- This agreement allows the seller’s license to be preserved for the transition period. This permits the facility to stay open and in operation under a legal license until the transaction for the care home for sale is finished and new licenses are issued.
- This agreement may only be necessary if you’re acquiring the facility and plan to lease it from the landlord. If you have multiple leases, you might receive a Master Lease Agreement which includes all leased assets under one agreement.
- Loan Documents
- Whether you are buying assisted living facilities or healthcare properties in general, you will have complicated loan documents that may go beyond what your average attorney can handle. This is where The Stahler Group comes in to help guide you toward a productive purchase.
Selecting the Right Attorney Through The Stahler Group
You need to hire an experienced council for your transaction to buy healthcare properties to succeed as smoothly as possible. The Stahler Group recommends that you consult with several specialized attorneys to discover which is the best for you and your transaction. When selecting an attorney, consider these points:
- Type of asset: single or portfolio
- The state where the transaction is taking place
- Complexity of the transaction
- Opposing counsel
- Your personal relationship with the attorney
The Stahler Group can help guide you toward the right attorney for you so you can make the right choices during the transaction process. As one of California’s top skilled nursing brokerages, our experienced team has the resources needed to make your seniors housing purchase or sale a huge success.