Change of Ownership of Adult Family Homes

Many Adult Family Homes [“AFH”] are owned and operated as entity providers, where the AFH provider is an LLC or Corporation.Any change in the percentage of ownership for a corporate or entity provider must apply for a new AFH license with notice proposing the change in ownership, even if the name remains the same, it technically requires a Change of Ownership [“CHOW”].

See WAC 388-76-10105:

 Change of ownership of an AFH occurs when there is a change in the control of a provider and requires both a new license application and new license. “Control of the provider” means the direct or indirect possession of power to direct the management, operation and/or policies of AFH, whether through ownership, voting control, by agreement, by contract or otherwise.

If the AFH is a corporation and it transfers fifty percent or more of shares to new, former, or present shareholders with less than five percent (5%) prior, this requires a CHOW.

This brings up an interesting question in Washington about whether a marriage or divorce of an AFH entity owner affects the “control” of the provider—in a community property state, there is no reason to think otherwise and certainly the State would want to err on the side of caution.