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Considerations and Risks of Buying or Selling a Health Care Facility

March 7, 2022
Est read time: 3 minutes

How do you buy a health care facility? How do you sell a health care facility? These are two great questions buyers and sellers ask that require a strong awareness of the rules and regulations surrounding a buy-sell agreement for a health care facility like assisted living facilities.

The Factors Involved in Buying or Selling a Health Care Facility

Often when a company or person is buying and selling a building, they are aware of the health care business that is operating in the building.

If you currently own a health care facility regulated by the Agency for Health Care Administration (AHCA) and want to sell it, you need to be aware of certain laws.  If you intend to buy a facility, such as an assisted living facility or nursing home, then you also should be aware of these rules and regulations.    The value of the health care business is often considered in the price.  Often, these businesses can be quite lucrative.  It is important as both a seller and a buyer that you protect your investment. 

Another factor driving these types of investments is that Florida has a growing population of elderly citizens that need health care. As a result, the change of owners of nursing homes, assisted living facilities, adult daycares, and other health care facilities is on the rise. It is important to obtain legal assistance on the concurrent administrative issues that are present on all buy and sell deals concerning health care facilities.

The Basics of Health Care Facility Buy-Sell Agreements

Whenever someone is buying or selling a building that has a health care business attached to it, there will be regulatory issues with AHCA. The mindset for such a sale is that you are selling or buying property but also investing or divesting in a health care business. 

Read more about the Regulatory Laws Health Care Investors Must Know.

If you are the seller, there are regulatory steps you must go through otherwise you will continue to be responsible for the health care facility even after the sale. 

If you are the buyer, you must take certain steps to ensure that you can operate the business right after the sale. 

Further, if there were surveys or inspections prior to the buy/sell agreement, you need to know your legal responsibilities for these surveys. AHCA requires a change of ownership (CHOW) for such a transaction.  This firm is experienced in helping conduct a CHOW so that there are minimal or no complications. 

The Complications of Health Care Facility Buy-Sell Agreements

Often a buy-sell agreement is conducted without checking with a lawyer on the administrative part of the transaction.  The seller and the buyer each have their own lawyers for the transfer of the property.  The seller’s attorney may even draft an “As Is” agreement for the sale.  An inventive seller’s attorney may also add a “hold harmless” provision to the agreement.  Unfortunately, these types of provisions do not release the seller from its obligations to AHCA. The seller may have some remedy in a civil action but that just entails more litigation and lawyer’s fees. The better way to handle these agreements is to contact an experienced administrative law attorney for assistance with the buy-sell agreement. 

The buyer should also beware. If the buyer has not completed certain steps during or before the agreement and closing, there will be problems. The buyer may own the building, but the buyer may have little or no control over the health care operation without complying with certain regulatory requirements. A buyer also wants to be guided through the CHOW process and, if possible, avoid the initial licensure process with AHCA. The attorneys at Howell, Buchan, & Strong have the experience to make sure your buy-sell agreement does not create a nightmare for you. 

Learn more about how our firm represents investors in Health Care Facility Buy-Sell Transactions.

Contact the law offices of Howell, Buchan & Strong, Attorneys at Law for your free consultation at any one of our locations:

Orlando (407) 717-1773 | Tallahassee (850) 877-7776 | Tampa (813) 833-6726 | Sarasota (941) 779-4348

Florida Health Care License Attorneys
We represent healthcare businesses statewide.

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