What is a California Residential Care Facility Bond?
According to the Health and Safety Code sections 1560, 1568.021, and 1569.60, a residential care facility that wishes to operate in California must secure a license and file with the State Department of Social Services a surety bond.
This bond is called a California Residential Care Facility Bond. It ensures that residential care facilities abide by the statutory bonding requirements of the California Health and Safety Code. Residential care facility owners, operators, employees, and staff must ethically handle the cash resources provided to them for their services by their clients and in-house residents.
Residential care facility owners, operators, employees, and staff must ethically handle the cash resources provided to them for their services by their clients and in-house residents.
Who Needs a California Residential Care Facility Bond?
A residential care facility administers care to vulnerable adults who are dependent on assistance or direction from nurses or caregivers.
Residential care facilities mean:
- Community Care Facilities (CCF)
- Residential Care Facilities for the Elderly (RCFE)
- Residential Care Facilities for the Chronically Ill (RCF-CI)
Like most surety bonds, a Residential Care Facility Bond involves three parties:
- Principal: It is the residential care facility;
- Obligee: It is the state of California that requires the surety bond to protect the public;
- Surety: It is the bonding company that provides a guarantee to the Obligee that the Principal will comply with the provisions of the state.
The California Department of Social Services requires residential care facilities to post a surety bond to maintain quality safeguards and accurate records of all cash resources entrusted to these establishments.
Why Do I Need a Residential Care Facility Bond?
If the residential care facility mismanages client money, the bond protects the clients from financial loss up to the full penal sum of the surety bond. In turn, the principal will recompense the surety company for all the damages paid out.
This type of surety bond not only protects clients and covers financial losses, but also adds trustworthiness and credibility to a residential care facility. Posting a residential care facility bond means it is a committed, reputable institution that can provide quality care to its clients.
How Much Does a Residential Care Facility Bond Cost?
The California Health and Safety Code Chapter 3, Article 6, Section 1560, requires that residential care facilities that handle or will handle the financial resources of CCFs must be bonded for no less than $1,000.00.
This provision does not apply if the CCF meets both of the following:
- operates a CCF which is licensed to care for children (including foster family homes, foster family agencies, small family homes, etc.);
- handles or will handle money in the amount less than $50 per person and less than $500 for all individuals per month.
Similar to CCF, the California Health and Safety Code Chapter 3.1 Article 6, Section 1568.021 and Chapter 3.2, Article 6, Section 1569.60 requires that RCFE and RCF-CI that handle or will handle the money of clients must get a bond for not less than $1,000 unless these facilities handle less than $50 per person and less than $500 per month for all clients/residents.
A Residential Care Facility Bond remains in effect as long as the license is valid. The Surety Company may cancel the bond by the Code of Civil Procedure section 996.320.
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If you are looking to provide a residential care facility in your area, be sure that your facility is currently licensed by the state and bonded!