He was supposed to get back 90% of his mother’s $400K retirement home ‘entrance fee’ — then the home went bankrupt, leaving families out $150M

Scales wasn’t the only one to lose the refund. Turns out, this was the second time in four years that The Buckingham had filed for bankruptcy, which allowed the organization to avoid paying refunds to the tune of nearly $150 million.

“This type of operation, where they can use the system to declare bankruptcy and get out of having to pay money back, in my mind is absolutely ridiculous,” Scales told NBC News.

Even after The Buckingham was purchased for $130 million by Focus Healthcare Partners, a private equity firm, heirs shouldn’t expect a refund. Under the terms of the acquisition, Focus isn’t required to pay back families what they’re owed, and The Buckingham is being changed into a rental community.

How CCRCs work

A continuing care retirement community (CCRC) is a planned community that offers independent living with onsite medical care. There are an estimated 1,900 CCRCs across the U.S., serving about 909,000 residents, according to the National Investment Center for Seniors Housing & Care.

All CCRCs are a bit different, but entrance fees are commonplace. In most cases, you don’t own the real estate, such as a condo, apartment or single-family home. But you pay an entrance fee that guarantees you future access to higher levels of memory care, along with regular monthly maintenance payments.

And therein lies the appeal: CCRCs offer independent living along with health services you might need in the future, such as assisted living, memory care and skilled nursing.

If you’re no longer able to live independently, you then move into assisted living or nursing care facilities on the same campus, providing continuity of care. Top-tier CCRCs also offer meals, housekeeping and social activities, among other amenities.

But these amenities don’t come cheap. Entrance fees vary from $100,000 to $400,000, though they can be even higher for premium communities, according to SeniorLiving.org’s 2026 guide to CCRCs. Monthly charges range from $3,000 to $7,000.

However, not all CCRCs require entrance fees and, of those that do, not all entrance fees are refundable.

In instances where entrance fees are refundable, even that isn’t straightforward. Sometimes entrance fees are fully refundable if the resident passes away or the contract is terminated. In other cases, the entrance fee may be partially refundable within a certain timeframe or refundable on a declining basis (meaning the refund decreases over time).

But entrance fees are typically used to cover current operating costs (as well as previous refunds), so residents risk financial loss in the event of a bankruptcy.

While this isn’t the norm, what happened at The Buckingham isn’t an anomaly either.

How to protect your investment

From 2028 through 2025, 23 CCRCs in nine states filed for bankruptcy, according to credit analysis platform Octus, as per NBC News. Of those, Texas had the highest number of bankruptcies — and losses at The Buckingham were among the worst.

CCRCs aren’t regulated by the federal government. And, while they’re regulated in most states, there’s no uniformity among those regulations. And the Bankruptcy Code doesn’t provide payment protections for CCRC residents who paid an entrance fee or buy-in fee.

Refunds could be voided in bankruptcy court, “as CCRC residents are almost never classified as secured creditors, so they stand in line behind all the secured creditors,” wrote Evan H. Farr, CELA, CAP, an elder law attorney with the Farr Law Firm, in a recent article.

If you’re considering moving into a CCRC in your golden years — or you’re considering moving an elderly parent into one, funding the entrance fee with the sale of their home — then you’ll want to do your homework.

Contracts are complex, and there are different types: all-inclusive contracts, modified contracts (where you pay additional fees for assisted living and skilled nursing care) and fee-for-service contracts (where you pay for different levels of care, as needed).

Since there’s no guarantee that a CCRC won’t go bankrupt, you’ll want to do your due diligence to mitigate the risk.