Washington Adult Family Home Change of Ownership

Start with the provider and control map

List the current licensee, owners, property owner and people who direct the operation. Then show what each role would look like after the deal. Include management agreements and related entities. A shared trade name can hide a change in who makes staffing, service or financial decisions.

WAC 388-76-10105 defines control through the power to direct management, operations or policies. A change in the provider or its control can trigger change of ownership, often called CHOW. The rule includes organizational changes and transfers of business operations. It also lists events that do not, by themselves, trigger CHOW. (Source: WAC 388-76-10105)

Give counsel and DSHS the full facts. Do not choose an asset, equity or management label to imply that review is unnecessary. Keep the supported conclusion with the transaction diagram. The deal-structure guide explains the commercial distinction without deciding the licensing result.

Confirm authority before the operating handoff

The CHOW rule requires both a new application and a new license. The buyer must obtain the license before ownership transfer and must not begin operating before it is granted. The rule permits an exceptional provisional pathway only when that license has actually been requested and granted under the cited statute.

A submitted form, accepted offer or management agreement is not the same as a granted license. If the parties propose an interim arrangement, identify the precise authority that supports it. Record any conditions and who is responsible for meeting them. Keep the property transaction and the operating handoff aligned with that review.

Ask what document will confirm the buyer's status and who will check it before the handoff. A vague task marked “application handled” can hide a missing decision. Use specific statuses such as submitted, additional information requested or license granted. Preserve the underlying correspondence in the private closing file.

Plan the ownership notice as a resident communication

WAC 388-76-10106 requires the current owner to provide written notice 60 calendar days before the proposed ownership change. Recipients are the department and residents or applicable resident representatives. Required contents include ownership identities, the home's details, notice date, resident choice and changes that could affect continued residence. (Source: WAC 388-76-10106)

Prepare the notice with the appropriate advisers. Explain verified operational changes in language residents and representatives can understand. The rule specifically addresses residents' choice to stay or move. Do not treat delivery as a marketing announcement that the team can postpone solely to preserve secrecy.

The resident agreement assignment review separates receipt of a sale notice from acceptance of changed terms. Its file inventory connects each resident with the reviewed agreement. Use that history to confirm who may act and which opening charges are supported.

Keep a recipient and delivery record, and plan how questions will reach the responsible operator. The confidential-sale guide helps organize staged disclosure. A private buyer process can coexist with required notices, but it cannot cancel them or justify misleading answers.

Keep relocation on a separate line

A change in location or address falls under WAC 388-76-10110. It requires a new application and license, prohibits operation at the new location before the license is granted, and requires at least 30 days' written notice to residents or representatives. These duties address a different event from CHOW. (Source: WAC 388-76-10110)

If a purchase also includes relocation, review both sets of requirements. Do not replace the 60-calendar-day ownership notice with the shorter location notice. The actual plan may involve property work, new approvals and changes for residents. Assign those dependencies before setting the move or handoff date.

Verify the buyer's capacity qualifications

An applicant for CHOW of a seven- or eight-resident home must be a currently licensed AFH provider with at least 24 months of that licensing history. WAC 388-76-10032 also requires six-or-more-resident capacity in the applicant's current home for at least the 12 months immediately before application. (Source: WAC 388-76-10032)

The rule requires at least two full inspections before application. Its no-enforcement period starts with the older of the two most recent inspections and ends when the capacity increase is approved. Review the complete record with DSHS. Do not reduce these conditions to a statement that the buyer has general care experience.

For a fictional example, a buyer may have funds to purchase an eight-resident home yet lack the required AFH history. The purchase budget does not resolve that qualification. Before using all historical revenue in the forecast, determine what operation the buyer can lawfully run. No automatic substitute capacity is assumed here.

A package exercise in the care-home buyer guide compares two fictional licensed homes with a third pending application. Current seller records cover fourteen places; twenty includes proposed places. Use that distinction before testing the buyer’s own qualifications. These figures do not show the buyer’s approved places. They also do not count current residents.

Examine limits, exemptions and open deficiencies

DSHS advises buyers to check the home's history and current status. Its locator can show limits and enforcement from the prior three years, while the seller's records help identify current limits, exemptions and outstanding actions. Use both sources and resolve any difference. A public summary may not contain the whole current file. (Source: DSHS buying-an-AFH guide)

The CHOW rule requires the new owner to correct deficiencies that exist at the change. Identify the work, responsible person and estimated cost. Check whether a condition affects the residents served, the premises or care delivery. A strong profit statement does not establish that those obligations have been resolved.

Ask the relevant professional to document what closes each finding. A contractor quote, planned training or application for an exemption remains a step in progress. Keep actual acceptance or other required evidence with the issue. Separate necessary corrective work from optional improvements the buyer hopes to make later.

Test whether specialty revenue can continue

DSHS names Meaningful Day Activities, Expanded Community Services and Specialized Behavior Support as examples of specialty contracts that do not transfer on CHOW. The incoming owner needs the required qualifications and a fully executed specialty contract before providing those services. Corresponding payment also requires the appropriate contract.

Create a schedule of the target's actual specialty services, contract holder, payment basis and buyer requirements. Flag unconfirmed continuation in the forecast. Retaining a staff member or a general operating license does not prove that a separate specialty contract is in place. Ask the responsible program for the relevant confirmation.

Compare two plans if a specialty approval remains uncertain: the supported operating plan and the proposed plan if approval is obtained. Label the latter as conditional. Do not present its revenue as already secured. The working-capital guide helps connect that timing with available cash.

Reconcile resident funds and record access

WAC 388-76-10105 requires resident-account funds to remain in an equivalent account at CHOW. If the funds move, the new owner must promptly give residents or representatives written information about the new depository. The new owner must also provide DSHS a copy of the ownership notice given to residents or representatives.

Prepare a supported reconciliation that separates resident money, deposits, advance payments and business cash. Determine the duties attached to each category. A bank balance alone does not show what is available to spend. Identify who controls the accounts and handles questions after closing, including when the seller is unavailable.

The resident-deposit FAQ compares fictional ledgers whose totals agree even though two individual balances are wrong. No activity occurs between the schedules in this exercise. The handoff team can practice finding the mapping errors. Proof of the transfer and required notices remain separate review tasks.

Use the records-custody guide for lawful access and usable historical records. Keep resident information in the approved process. Test a needed lookup and a request-handling task with authorized staff before ending the old access arrangement.

Fund and test the first operating week

Connect the license plan with property rights, staffing, supplies, payroll and emergency responsibility. If the seller provides daily care or management, specify who will perform those duties. The owner-replacement-cost explanation distinguishes work that continues from compensation the departing owner stops receiving.

The owner-operator purchase guide turns the incoming owner's role into a duty and relief schedule. Its fictional routine-hour gap is separate from regulated service coverage. Use the schedule to locate missing work and costs while qualified reviewers assess the people, actual resident needs and required authority.

For the personal side of the handoff, the care-home seller guide compares a fictional inventory with a proposed room arrangement. A private desk will leave, while the seller hopes to remain onsite. Use the example to separate property access and household needs from the work and authority still requiring review.

List the evidence required for the handoff, the reviewer and any remaining conditions. Recheck the schedule when the buyer, planned capacity, address or service mix changes. A previous review may no longer fit the new facts. Do not treat notice compliance as a substitute for the other approvals or financing.

The residential care home diligence checklist connects this Washington framework with the wider sale. Jason Taken can help organize the commercial tasks. DSHS, counsel, the operator and other advisers must resolve the actual permissions and care duties. This guide does not complete Washington tax, brokerage, market or Medicaid-program research.

Use the adult family home definition to separate current capacity from an expansion request. Its fictional occupancy example shows how an unapproved denominator can change a percentage without changing the resident count.