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Title: Section 1001.4 - Operating Certificates and Additional Certifications; Authority Limited to Operator

Effective Date


1001.4 Operating Certificates and Additional Certifications; Authority Limited to Operator.

(a) An operator of an assisted living residence must comply with the following standards in addition to the applicable standards contained in section 485.5 of Title 18 of the NYCRR.

(b) Only the following may be issued an operating certificate by the Department for the purpose of operating an assisted living residence:

(1) a natural person;

(2) a partnership composed only of natural persons;

(3) a public corporation as defined in section 66 of the General Construction Law;

(4) a business corporation other than a corporation whose shares are traded on a national securities exchange or are regularly quoted on a national over-the-counter market or a subsidiary of such corporation or a corporation any of the stock of which is owned by another corporation;

(5) a not-for-profit corporation;

(6) a limited liability company provided that if a limited liability company has a member that is a corporation, a limited liability company or a partnership, the shareholders of the member corporation, the members of the member limited liability company, or the partners of the membership must be natural persons;

(7) a social services district; or

(8) other governmental agency.

(c) In order to operate an assisted living residence, an operator must be issued an operating certificate in accordance with the requirements of this Part.

(d) An operating certificate for an assisted living residence shall:

(1) Specify the name and location of the residence, the name of the operator, the type of residence to be provided, the capacity of the residence, any conditions or limitations and the duration of the certificate;

(2) be nontransferable;

(3) remain the property of the Department, and

(4) be used only by the licensed operator for the designated site of operation.

(e) An operating certificate shall be issued for a period of two years.

(f) No residence shall be operated other than in accord with the terms and conditions of the operating certificate and the regulations of this Part pertaining to the specified type of residence.

(g) No operator shall, for purposes of advertisement, represent the residence by any designation or terminology that misrepresents the licensure or certification status of the residence.

(h) No operator shall change or modify the services originally approved and stipulated by the operating certificate, or make changes to the existing floor plan or to the fire safety systems, without the prior written approval of the Department.

(i) An operator shall not, without the prior written approval of the Department:

(1) transfer responsibility for operation of the residence to another person or entity; or

(2) change the composition of the entity which is the operator, including but not limited to, a change in sole proprietor, partner, director, stockholder, member or membership interest of the operator, except in accordance with subparagraph (o) of this Part; or

(3) enter into or significantly amend, a management agreement relating to the management of the residence in accordance with section 1001.16 of this Part.

(j) In the event that an operator elects to close a residence and to surrender an operating certificate and/or certification as an enhanced or special needs ALR, the following provisions shall apply.

(1) The operator shall notify the appropriate regional office of the Department in writing at least 90 days prior to the anticipated date of closure of the assisted living residence and, if applicable, the adult care facility, and/or the decertification of the residence.

(2) Such written notice shall include a proposed plan for closure and/or decertification. The plan shall be subject to Department approval in accordance with Department protocols, and shall include timetables and shall describe the procedures and actions the operator will take to:

(i) notify residents of the closure, and/or decertification, including provisions for termination of admission agreements and involuntary discharge;

(ii) assess the needs and preferences of individual residents;

(iii) assist residents in locating and transferring to appropriate alternative settings; and

(iv) maintain compliance with these regulations until all residents have relocated.

(3) The operator shall take no action to close the residence prior to Department approval of the plan for closure and/or decertification.

(4) The operator shall implement the approved plan to insure that arrangements for continued care which meets each resident's social, emotional and health needs are effectuated prior to closure and/or decertification.

(5) Failure to notify the Department of intent to cease operations, failure to submit an approvable plan, to execute the approved plan, closure or decertification before all residents have been appropriately relocated, may result in the imposition of civil penalties.

(k) In the event of the death of an operator of an assisted living residence who is a sole proprietor, or a sole director, shareholder or member, or a natural person partnership, the Department may give approval to a plan submitted by the remaining partner(s), the operator’s spouse or executor for the continued operation of the residence, on a temporary basis, under the outstanding operating certificate. Such plan shall be submitted within 30 days of the death of the operator and shall include notice of intent from the remaining partners, spouse or another applicant to file an application for a new operating certificate and a proposed timetable for application or a plan for closing the residence. The proposed timetable for application shall not exceed 90 days unless the applicant can demonstrate that extension is necessary. Approval under this subdivision to operate the residence shall continue only while the residence is in compliance with regulations.

(l) The operating certificate of any residence may be revoked, suspended, limited or an application for renewal denied upon a determination by the Department that the operator has failed to comply with these regulations or the requirements of State or local laws or regulations applicable to the operation of the residence. Section 1001.15 of this Part shall apply to such enforcement actions.

(m) Any operating certificate issued by the Commissioner to the operator of an assisted living residence shall remain the property of the Department and upon voluntary or involuntary closure shall be surrendered to the Department by personal delivery to a designated representative or by certified or registered mail.

(n) Enhanced assisted living certification.

(1) Nothing in this Part shall require a residence to obtain an enhanced assisted living certificate unless such residence elects to provide aging in place by retaining residents described in subdivision 1001.2 of this Part.

(2) No assisted living residence shall be certified as enhanced assisted living unless and until the applicant submits an application to the Department for such certification and obtains the written approval of the Department in accordance with the provisions of this Part. Such application must include, among other things, a plan setting forth how the additional needs of the residents shall be met, in accordance with the provisions of section 1001.5 of this Part.

(3) An enhanced assisted living certificate shall not be required of an adult care facility, or part thereof, which has obtained approval by the Department to operate an assisted living program pursuant to section 461-d of the Social Services Law, provided, however, such exemption shall only apply to those beds at the facility which are subject to the assisted living program.

(o) (1) Any transfer, assignment or other disposition of ten percent or more of an interest or voting rights in a partnership, business corporation or limited liability company which is the operator of a residence to a new partner, shareholder or member must have the prior written approval of the Department.

(2) With respect to a transfer, assignment or disposition involving less than ten percent of an interest or voting rights in such partnership, business corporation, or limited liability company to a new partner, shareholder or member, no prior approval of the Department shall be required. However, no such transaction shall be effective unless at least ninety days prior to the intended effective date thereof, the partnership, business corporation or limited liability company fully completes and files with the Department notice on a form, to be developed by the Department, which shall disclose such information as may reasonably be necessary for the Department to determine whether it should bar the transaction. Within ninety days from the date of receipt of such notice, the Department may bar any such transaction under this subparagraph if it finds (1) there are reasonable grounds to believe the proposed transaction does not satisfy the good standing or character and competence review, as may be appropriate, as set forth in section 1001.5(e) and (f) of this Part; or (2) if the transaction, together with all other such transactions, during any five year period, would in the aggregate, involve twenty-five percent or more of the interest in the entity that constitutes the operator. The Department shall state specific reasons for barring any transaction under this subparagraph and shall so notify each party to the proposed transaction.

(3) An operator which is a not-for-profit corporation must annually provide to the Department in writing the names and addresses of its current directors and officers.

(p) Special needs assisted living certification.

(1) Any residence that advertises or markets itself as serving individuals with special needs, including, but not limited to, individuals with dementia or cognitive impairments, must submit an application to the Department for certification as a special needs assisted living residence. Such application must include, among other things, a special needs plan in accordance with the provisions of section 1001.5 of this Part. No residence shall market itself as providing specialized services to persons with special needs unless and until the Department has approved such applicant for a special needs assisted living certificate.

(q) Authority Limited to Operator.

(1) Only an operator approved by the Department and issued an operating certificate to operate an assisted living residence can exercise independent decision-making authority over any of the following:

(i) appointment or dismissal of residence management-level employees;

(ii) approval of residence operating and capital budgets;

(iii) adoption or approval of residence operating policies and procedures;

(iv) approval of certificate of need applications filed by or on behalf of the residence;

(v) the disposition of assets and the authority to incur liabilities on behalf of the residence;

(vi) approval of residence contracts for management or, where appropriate, for clinical services;

(vii) approval of settlements of administrative proceedings or litigation to which the residence is party, and

(viii) control of the records of the residence.

(2) Nothing in subdivision (q)(1) of this section shall require the establishment of any member of a not-for-profit corporation, which operates an assisted living residence, based solely upon such member’s reservation and exercise of the power to require that the residence operate in conformance with the mission and philosophy of the residence member.

(3) The established operator shall be legally responsible for the quality of resident care services, for the conduct and obligations of the residence and for ensuring compliance with all applicable Federal, State and local laws.
(4) An individual or entity which has not received Department approval as an operator may not participate in the total gross income or net revenue of an assisted living residence.

(5) Any operating account of an assisted living residence shall be in the name of, and for the benefit of, the operator only.


VOLUME E (Title 10)