What should I check before buying a group home?
Check the placement agreements and whether they continue after a change of owner, the resident files and incident records, the staff and their turnover, the condition and suitability of the house, and the owner’s relationships with placing workers. Ask a lawyer separately whether the new operator needs approval.
A group home is a business, but it is also someone’s home. Your review has to cover both. You are buying contracts, people and a building, and the people include residents who did not choose a new owner. Plan a careful, respectful review and expect the seller to share some records only late in the process, once you have signed a confidentiality agreement.
Placement agreements and referrals
Ask to read every agreement under which residents are placed. Look at who the agency is, how long each agreement runs and whether it names the current owner personally. Then ask whether the agreement continues after a sale or must be renewed. A lawyer can answer that for you. Also ask how the owner keeps in touch with placing workers.
Residents, records and incidents
Ask how the home tracks resident files, care plans and incident reports, and who can see them. Review how incidents were handled and what changed afterward. A home that keeps clear, current records and learns from problems is easier to take over. Do not expect to read personal details before closing. Ask how the seller can show you the quality of records without breaching anyone’s privacy.
Staff, house and approvals
Meet the manager and the key staff if the seller allows it. Ask about turnover, training and how the schedule is covered. Walk the house with an eye to repairs, safety and whether it suits the residents. Finally, ask your lawyer whether the home’s approval to operate carries over to you, and what you must do before closing.
- Placement agreements and what happens to them on a sale
- Resident files and incident records, handled with care for privacy
- Staff qualifications, turnover and the key people who might leave
- The house: repairs, safety and suitability for residents
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Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 02Business Development Bank of CanadaGovernmentHow to reduce employee turnover
- 03Business Development Bank of CanadaGovernmentMajor pitfalls to avoid when negotiating a purchase agreement
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