Memory Care Business Due Diligence Checklist

Define the licensed setting and purchase scope

Start with the license itself. Check whether the service sits within assisted living, a residential home, a nursing facility or another approved setting. List who runs the business, who owns the property and which sites and services are for sale. A website name or dedicated wing does not settle which rules apply.

State whether the purchase includes an entire community or part of a larger campus. Ask how shared dining, staff, systems and management costs are handled. The buyer needs a complete operating budget after the sale, including support currently supplied by an entity outside the target.

Use the memory-care overview for the business model and the assisted-living checklist when that setting applies. Document the buyer's planned services and changes. Review new capacity or a different resident mix separately from the continuation of today's operation.

Build an authority checklist for the actual state

Request facility and specialty licenses, relevant staff credentials, conditions, inspection records and agency letters. Ask counsel which ownership, management, name, capacity or use changes require action. A person qualified to manage the facility does not necessarily hold the right to operate it as the new owner.

Florida section 429.076 sets out memory-care licensing pathways tied to rule effective dates and facility facts. (Source: Florida statute) The Florida transition guide preserves the separate conditions. Do not infer a universal deadline or exemption from an abbreviated summary.

AHCA's material reviewed September 6, 2026 did not establish a final effective date. (Source: AHCA rulemaking) Confirm the rule status before working out a deadline. For a California RCFE, use the separate ownership guide. Check notices, the new application and the exact conditions for any interim right to operate.

Reconcile resident accounts, fees and cash

Once access is authorized, request monthly census and fee records. Read the contracts, credits, refunds, deposits and receipts. Match totals to the ledger and bank records. Explain changed fees and when services took place. Forecast current residents' fees from their actual terms, not an advertised rate for new residents.

Separate base charges, additional services and refundable deposits. Identify which fees are earned, which remain unpaid and which cash carries a resident obligation. Review collection evidence rather than assuming every balance is available for debt service. Agree on retained accounts and refund responsibility in the purchase terms.

Ask the accountant to trace material differences through a consistent cutoff date. Late cash can relate to an earlier service period, while a billed fee can remain disputed. Use the working-capital guide to show the effect on funds needed to run the business after closing.

Test the occupancy report and expansion scenario

Define the measure using the occupancy explanation. Identify licensed and usable capacity, shared rooms, absences and offline space. State whether the report measures a single date or activity over a period. Compare both the numerator and denominator when reviewing trends.

Reconcile resident counts with accounts and room records using appropriate privacy safeguards. A strong percentage based on fewer usable rooms may conceal a staffing or property constraint. Ask what changed before attributing the result to better demand or management.

For any proposed expansion, require a costed plan for authority, property work, qualified staffing and demand. Identify cash needed before new fees can be collected. Keep that plan separate from current earnings until its assumptions are supported; available floor space is not itself evidence of approved care capacity.

Review staffing and owner dependence across the week

Obtain schedules, payroll, agency invoices, vacancy records, training evidence and role descriptions. Examine nights, weekends and backup arrangements. Identify work done by the owner that may be missing from a formal job list. Necessary replacement duties belong in the buyer's recurring costs.

Verify which key people expect to remain and what supports that expectation. Include recruiting, pay, benefits, orientation and supervision in replacement scenarios. A conversation about retention is not an agreed commitment. Ask how the plan changes if a manager leaves before closing.

In California, an RCFE manager's certificate is separate from the facility license. (Source: CDSS Administrator Certification) Check both the qualified people and the right to operate in this setting. Ask care reviewers to compare staff cover with resident needs and the rules. A planned labor percentage does not show that enough care will be available.

Ask care reviewers to assess practice and continuity

The Alzheimer's Association guidance puts the person first. It covers staff, the care setting and changes between services. Use it to frame questions for care reviewers. It does not prove that this facility meets a legal or clinical standard. (Source: Dementia Care Practice Recommendations)

Arrange lawful access for qualified care reviewers. Ask them to compare policies and training with what staff do. How do staff spot changed needs, raise concerns and pass on key knowledge? A reliable training list can show who attended. It cannot show how the team applies those skills at work.

Translate supported findings into tasks, responsible people and costs. If further training or oversight is needed, define the plan and funding. The financial team should not make clinical assumptions to protect a desired price. Record unresolved questions and the evidence needed for the qualified reviewer to reach a conclusion.

Match advertising promises with agreements and services

Read the admission package, brochures, resident contracts and service descriptions. Ask for evidence behind key promises about programs, staff skills, care and property features. The brochure shows what was promised. It does not prove that the service is allowed or that staff deliver it.

Use the program disclosure and transfer guide to track those promises across the ownership change. Its fictional register counts supported and unresolved claims without treating a completed folder or a high percentage as permission to operate.

The memory-care seller exercise compares a calendar, one family’s comment and one worker’s course record with broader claims. The documents support narrower facts. Use the comparison to identify statements needing stronger evidence or revision. It does not prove a care outcome, full-team credential or breach of advertising rules.

Consider a fictional facility whose brochure promises a dedicated program leader, while the role is actually performed by the departing owner. The buyer should verify the work, replacement qualifications and cost. Repeating the promise without funding the role would leave the operating plan incomplete, even if reported revenue stays the same.

If a fee difference is tied to that program, check its continuing costs. The memory-care fee guide deducts defined program costs from an annual fee increment. Its fictional result answers a narrow financial question without establishing a care outcome, approved staff plan or market premium for the business.

Have counsel assess contract changes, required notices and any rules affecting advertising terms. Florida's framework includes rulemaking on terminology, so dates and implementation matter. Avoid assuring residents that all services or staff will remain unchanged unless the incoming team has a supported basis for that statement.

Connect property findings to cost and usable capacity

Read the lease or title records, approved uses, condition reports and repair history. Ask qualified property and care reviewers to assess the space and define needed work. A secured door or dedicated wing is not proof that the setting is suitable. Check the systems and how staff use them.

The memory-care buyer exercise follows a fictional art-room conflict, daytime garden-locking plan and narrowed corridor. Each feature needs a different review within the stated Oregon context. Use those questions to test the daily setting before accepting the amenity list. The example approves no restriction, layout or building work.

Distinguish immediate repairs, recurring maintenance and future capital needs. Record who pays, what approvals are needed and whether work takes space offline. Include the effects on staffing, resident routines and collections in the financial scenario. A repair quote by itself is not a full operating budget.

Keep the OpCo/PropCo assumptions consistent with valuation. HUD's residential-care mortgage framework involves property and operator review; it is not a financing promise. (Source: HUD ORCF) Confirm actual lender conditions and the cash left for operations after required work is funded.

Set disclosure, records and communication responsibilities

Exclude financials and identifying owner, facility, resident, staff, vendor and referral details from pre-NDA outreach. Later commercial diligence should use authorized, controlled access. Small aggregates and coded records can still reveal identities when combined with other facts. An anonymous label does not guarantee anonymity.

Define the lawful purpose and safeguards for sensitive records. HHS guidance addresses applicable disclosure limits and de-identification methods. (Source: HHS minimum necessary; Source: HHS de-identification) Use the records-custody guide for access, retention and withdrawal planning.

Keep resident stories and photos out of blind marketing and public website tools. Ask counsel who must receive notices and when. Include the proper resident representatives and agencies. Privacy and secrecy must fit resident rights and legal duties. Name the person who will answer questions, and make only promises the buyer can support.

Turn findings into conditions and a funded handoff

Separate missing records from known costs and problems that need to be fixed. Flag any issue that could prevent the buyer from operating. A lower price may help with a cost, but it cannot supply a license or a care team. Keep a short decision log with each item's current status.

Reconcile price, financing, property work and operating cash before final terms. Keep resident obligations and dispute reserves separate from funds for payroll and vendors. Refresh the recommendation if material facts change, rather than relying on an earlier clean-looking summary.

Use the first 90 days guide to assign staff, records, billing, vendor and communication duties. Confirm responsible people, backups and access before closing. The transition should carry the verified service commitments forward with the resources required to honor them.

Use the memory-care endorsement evidence table when a file mixes training records, an application and a facility license. Each answers a different question; record the current approval separately from the supporting materials.