A Plymouth family paid $5,675 to secure a room at a facility in Golden Valley for their 87-year-old mother, who died before she moved in, but the facility refused to refund the money. A family of an 83-year-old woman who had dementia paid $750 to hold an apartment at an assisted-living facility in Mankato, but they later questioned the fee after learning it may have violated state landlord-tenant law.

Move-in fees, pre-lease fees and other charges at assisted-living facilities will be getting closer scrutiny this summer as part of a state review of a growing industry that serves thousands of elderly and disabled Minnesotans. Some consumers have complained that the fees, which can run in the thousands of dollars, are confusing, unfair or even illegal.

Such fees were highlighted in an initial review of the industry, mandated by the Legislature, that was released in March. Now the state’s Office of Ombudsman for Long-Term Care plans to convene a group this summer to continue looking at fees and other consumer issues across Minnesota’s assisted-living system.

“I think there are fees that are questionable,” said ombudsman Deb Holtz, who recently had her staff of consumer advocates attend a training session on fees. “We see inconsistency across the state. There’s different fees being charged in different places and they may or may not be called the same thing. So that’s confusing for consumers.”

As a wave of baby boomers hits retirement age — the number of Minnesotans over age 65 is expected to double between 2010 and 2030 — the assisted-living industry will play an increasingly significant role for tens of thousands of Minnesotans.

The state has 970 assisted-care facilities with a total of 51,175 units. Yet the thicket of rules on how they operate can be challenging for tenants to understand. The facilities — part housing, part support and health-related services — operate under a web of laws governing both sides of the business.

$750 to move in

As Alzheimer’s and Lewy body dementia stole her independence in the fall of 2011, Lorene Heaberlin’s family turned to an assisted-living facility in Mankato for help.

The advancing diseases made Heaberlin’s case urgent, and her family didn’t think much about paying a $750 nonrefundable “move-in” fee charged by the assisted-living company, Ecumen, to secure the apartment. It was described to the family as something similar to a security deposit, according to Heaberlin’s daughter, Sandi Lubrant.

After Heaberlin’s death last year, the family learned from a state consumer advocate there were questions about the legality of some upfront fees under state landlord-tenant laws.

The company eventually refunded the fee and paid a penalty that was called for under state law, Lubrant said, but she was troubled that other families were paying these fees without knowing their legal rights.

“Nothing sat right with me on this,” Lubrant said. “Even though we got a refund, I was concerned about the corporate practice.”

A spokesman for Ecumen, a nonprofit that is one of the largest assisted-living companies in Minnesota with 29 facilities, says the company does not believe it was breaking the law by charging a move-in fee.

But after receiving the complaint from Lubrant and another family with similar concerns, the spokesman said, the company changed its policy on fees, starting May 1.

Ecumen has discontinued the move-in fee, which ranged from $300 to $800, depending on the facility, and instituted a standardized set of start-up fees across all of its assisted-­living facilities. The fees include a $200 screening fee and a $100 moving fee.

Ecumen says it takes customer feedback seriously. Its new fee structure is meant to better communicate the services covered by the charges.

“It wasn’t clear and we have made an effort to more clearly define what the fees pay for,” said Eric Schubert, a spokesman with the company.

Lubrant said she thinks consumers need more input in policy groups such as the one that will meet this summer.

She and the other family that lodged complaints with Ecumen said the move-in fees were described as more like a security deposit, not a screening fee. They think Ecumen should issue refunds to families who paid the move-in fee before the policy change.

“As I’ve told almost everyone, if we’re not due this, I don’t want it,” said Rich Davis, whose mother paid a $500 move-in fee at an Ecumen facility in Brooklyn Center. “If we are due it, I don’t want them to have it. It’s not the money. It’s the principle. We’re just one of how many people involved in this?”

Varied by location

Patti Cullen, president of Care Providers of Minnesota, a trade group that represents hundreds of assisted-living facilities, said she is not aware of any illegal fees that have been charged to consumers. She said that fees vary by location and that they are intended to cover costs of serving and caring for residents.

The industry, which was represented on the panel that reviewed the fees and other consumer issues, recognizes the need to communicate better with those they serve, she said.

Her organization recently has circled back to members to make sure they communicate fees to consumers — not only before a resident moves in, but after the person gets settled — to ensure that there’s an understanding of finances.

“Our responsibility is to make sure when someone moves in that there is full disclosure of those fees,” Cullen said. “They may tell them once. You may have to tell them again.”

When someone dies

Judy Truitt’s family paid $5,675 to an assisted-living facility in Golden Valley to secure a room and pay the first month’s charges for her mother in 2010.

When her mother died before ever moving into Country Villa, the facility fought the family about refunding the money. The company said its contract had a $2,000 nonrefundable fee and a 30-day notice to terminate the lease.

After the case appeared in a Star Tribune article two years ago, the company refunded $735 to the family.

Holtz, the ombudsman, said deposits that are not refunded if someone dies before they move in are definitely among charges that her office questions. Holtz said she hopes this summer’s panel will help clarify these issues for Minnesota consumers.

“This is one area that our office and quite a few of stakeholders felt it was time to review this,” Holtz said. “It can be confusing for consumers. It can be overwhelming.”