Common Legal Matters in Contracts in Residential Care Admission and Transfer

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There are several legal matters that applicants and people who are helping them should be especially aware of in regards to contract clauses in admission agreements and contracts.

Payment Default and Guarantees[edit]

Some operators make efforts to require someone else (e.g., a family member, attorney, representative, substitute decisionmaker) to pay, if the resident defaults in payment or if the resident’s income falls short of the minimum accommodation rate. If the resident’s income is insufficient to pay for basic accommodation in a subsidized facility, the resident may apply for a rate reduction. While the Operator does not have access to the resident’s income information, the Operator should assist the resident (or whomever the resident has chosen to help, including substitute decision-maker) to know how to apply or re-apply for a subsidy.

No one else should be required to make up the difference between the resident’s income and the accommodation rate. Residents are not required by law to provide a guarantor or designate a representative. Even if the resident supplies the name of a family member or friend as a contact person, that person will not be legally obligated to make payments from their own funds unless that person has signed the admission contract under conditions where it is clear they are assuming that legal responsibility.(1)

Signing as a Substitute Decision-Maker (SDM)[edit]


If the resident is not mentally capable of signing an admission agreement, then a substitute decision-maker may sign on behalf of the resident. The Ministry of Health policy requires the agreement to be in writing.(2) However the law does not require a substitute to sign the written agreement in these circumstances. In some instances, the substitute decision-maker may not want to if there are specific clauses in the agreement that cause concern.

If substitute decision-makers choose to sign they are not personally liable for payments- again, as long as they make it clear that they are only signing as a substitute. For example, they are liable if they have identified that they are signing as a representative for finances under a representation agreement, as an attorney under an enduring Power of Attorney or as a court-appointed committee. In these circumstances, the SDM will be liable to make payments from the resident’s own funds where the resident cannot look after his or her finances. However, the SDM is not obligated to pay from the SDM’s own funds.

This is a common legal issue in residential care in British Columbia and other Canadian jurisdictions. The Advocacy Centre for the Elderly, for example, notes:

“A facility has no legal basis whatever for refusing admission to an applicant who does not provide a guarantor or co-signer to sign an admission contract. While it may be useful to a facility to obtain the signature of a guarantor, it is of no particular use to the applicant and the applicant cannot in any way be penalized for failure to provide one.”(3)

Other Areas[edit]

There are a number of other provisions that frequently come up in the written agreements that need careful attention. Prospective residents may be asked on admission if they have care planning documents in place that the Operator should be aware of (such as an advance directive, power of attorney, representation agreement). This information can be helpful for the Operator to know and document. However, operators cannot require or give people the impression that they must have planning documents as a term of admission or as a term of the contract. (4)A substitute decision-maker also cannot give “blanket consent” to future health care decisions, including medications or restraints.(5) See Chapter Six (“Capacity & Consent”) and Chapter Seven (“Substitute Decision-Making”).

One worrisome trend is to tell prospective residents who do not already have a Representation Agreement or other appropriate legal document at the time of admission that they need to “nominate (choose) someone to act on your behalf in case you are unable to make decisions for yourself”.(6) These “nominations” are wrong for many reasons. The instructions make it sound as if the resident must do it, and do it at the time of admission. The nominations would have no legal basis unless they met the statutory requirements for the actual legal documents of representation agreement, enduring power of attorney, etc. Plus, they can give Operators a false sense of security, believing that they can legally turn to someone else if the resident becomes unable to make decisions for him or herself.

Recent Ministry of Health Home and Community policy focuses on having written agreements so that the costs, terms, expectations and responsibilities are clear. That is very valuable information for the applicant and family or substitutes. However the issues of informed consent, having a written contract and signing the agreement are substantially different legal matters.

Problems can arise even when some form of written consent exists. For example, an Operator may erroneously try to rely on forms from another facility as proof of a person’s consent to admission to this facility. An Operator may erroneously try to rely on a term in an admissions agreement as proof that a person had authorized future medical treatment.(7)

The Ministry of Health has been working to develop a template for a standard agreement form which will be recommended for Operators to use. However, if a standard agreement or template document comes into practice, any advocate should look at the agreement very carefully. Some of the clauses in the standard agreement may be problematic and may not be legal.


  1. Advocacy Centre for Elderly. Long-Term Care Facilities in Ontario: The Advocate's Manual. Chapter 3. Entering a long-term care facility [“ACE LTC Manual”]
  2. HCC Policy Manual. Chapter: 6 Residential Care Services Number: 6.A Section: A General Description and Definitions. Effective: January 1, 2013. [“HCC, c. 6”]
  3. ACE LTC Manual. Chapter 3. Entering a long-term care facility 3.29.
  4. Representation Agreement Act, s. 3.1; Health Care Consent and Care Facility Admission Act [RSBC 1996] c. 181 s. 19.91
  5. Romano, L & Meadus. J. (August 5, 2009). Congregate living and the law as it affects older adults . Research Paper for the Law Commission of Ontario: Advocacy Centre for the Elderly. [Page 23]. Online: (Last accessed January 9, 2016).
  6. This is language being used by some Operators. This is not the same as nominating a committee.
  7. Ombuds, Best of Care. [pg. 242].

This information applies to British Columbia, Canada. Last reviewed for legal accuracy by BC Centre for Elder Advocacy and Support, June 2014.