Assisted living residences in Colorado are licensed by the Colorado Department of Public Health and Environment (“CDPHE”). When someone is looking to buy an existing ALR business that already has a license, a common question arises as to how to get the existing license from the seller to the buyer. There are two ways to do this:

1. Apply for a new license, or

2. Ask CDPHE to transfer the existing license. This process is called a change of ownership (“CHOW”).

Which of these paths the new buyer chooses depends on many factors, such as the amount of property rehabilitation involved, the history of deficiencies of the existing operations, change of function (going from regular assisted living to memory care), etc.

Regardless of whether it’s a new license application or an application for a CHOW, the new buyer needs to submit two documents:

1. Letter of Intent, and

2. Completed application.[1]

This article addresses the Letter of Intent, because this point seems to be causing some confusion. After reading this blog, however, you will have no problem successfully completing this step.

First, it’s important to understand who must submit the Letter of Intent, because it depends on the application path that you choose. If the application is for a new license, the Letter of Intent is submitted by the applicant.

The applicant shall provide the Department with a complete application including all information and attachments specified in the application form and any additional information requested by the Department.

6 CCR 1011-1, Chap. 2, Sec. 2.3.1

But, if the application is for a Change of Ownership, the Letter of Intent is submitted by current licensee. The reason for this is that the current licensee is responsible for the license up until the point the CHOW is approved.

When a currently licensed facility or agency anticipates a change of ownership, the current licensee shall submit a letter of intent to the Department within the specified time frame, and the prospective new licensee shall submit an application and supporting documentation for change of ownership along with the requisite fees within the same time frame.

6 CCR 1011-1, Chapter 2. Section 2.6.1

On top of this, some find the Department’s website to be confusing.

Buyers and sellers of assisted living homes can find the letter of intent instructions on the Department’s Health Facilities web page, shown below.

Clicking the “Getting licensed and certified” link will take you to the following page:

Clicking the “Submit a Letter of Intent” takes you to a Google form, which is used to start the initial license application process. Unfortunately, it not clear to purchasers of existing assisted living homes where they are to submit their letter of intent.

It is at this point in the process the Department begins to distinguish between initial license applications and change of ownership applications for existing facilities. The form provides the instruction for existing facilities to go to the Department’s Colorado Health Facilities Information system (“COHFI” or “Portal”), an online management system that the department uses to track all important information associated with licensees. (See text circled in red in the image above.) Applications, occurrences, deficiencies, plans of correction, and other information are contained in the Portal.

The Department does not provide a link or web address to the COHFI system on the page above, but you can find the login page at this link.

After the licensee (seller) submits the Letter of Intent through COFHI, they have to give their log in credentials to the buyer, because the CHOW application – which is submitted by the buyer – can only be done through the COFHI system.

We hope this article helps buyers and sellers start the license transition process so they can move forward with a successful transaction.

The information herein is intended to be educational and an introduction to the subject matter presented. It is NOT specific legal advice to be relied upon for specific individual circumstances. Contact your own legal professional or reach out to our firm if you would like specific advice on this topic. We welcome topic suggestions! Write to brian@pinkowskilaw.com to recommend a particular subject for us to explore

[1] These requirements are found in Colorado’s licensing regulation. 6 CCR 1011-1, Chapter 2, Section 2.3.1, and Section 2.6.1(A). This is commonly known as “Chapter 2.”

Change of Ownership License Applications – The Letter of Intent