Transfer and Sale

101167

(a) A license is not transferable.

(1) If the sale of a licensed child care center will result in the issuance of a new license, the requirements of Health and Safety Code Section 1597.14 apply.

Health and Safety Code Section 1597.14 reads in pertinent part:

(a) Notwithstanding Section 1596.858, in the event of a sale of a licensed child day care center where the sale will result in a new license being issued, the sale and transfer of property and business shall be subject to both of the following:

(1) The licensee shall provide written notice to the department and to the child's parent or his or her legal guardian of the licensee's intent to sell the child day center at least 30 days prior to the transfer of the property or business, or at the time that a bona fide offer is made, whichever period is longer.

(2) The licensee shall, prior to entering into an admission agreement, inform the child's parent or his or her legal guardian, admitted to the facility after notification to the department, of the licensee's intent to sell the property or business.

(b) Except as provided in subdivision (e), the property and business shall not be transferred until the buyer qualifies for a license or provisional license pursuant to this chapter.

(1) The seller shall notify, in writing, a prospective buyer of the necessity to obtain a license, as required by this chapter, if the buyer's intent is to continue operating the facility as a child day care center. The seller shall send a copy of this written notice to the licensing agency.

(2) The prospective buyer shall submit an application for a license, as specified in Section 1596.95, within five days of the acceptance of the offer by the seller.

(c) No transfer of the facility shall be permitted until 30 days have elapsed from the date when notice has been provided to the department pursuant to paragraph (1) of subdivision (a)

(d) The department shall give priority to applications for licensure that are submitted pursuant to this section in order to ensure timely transfer of the property and business. The department shall make a decision within 60 days after a complete application is submitted on whether to issue a license pursuant to Section 1596.95.

(e) If the parties involved in the transfer of the property and business fully comply with this section, then the transfer may be completed and the buyer shall not be considered to be operating an unlicensed facility while the department makes a final determination on the application for licensure.

(2) In the event of the sale and transfer of property and business, the applicant (buyer) shall be issued an Emergency Approval to Operate (EAO) (LIC 9117 [4/93]) if the applicant (buyer) complies with Health and Safety Code Section 1597.14.

(3) The applicant (buyer) who is issued an EAO (LIC 9117 [4/93]) shall perform all the duties, functions and responsibilities required of a licensee.

(4) Failure to comply with licensing laws and regulations under this section, as determined by the Department, shall result in the denial of the application for a license. This denial shall also constitute termination of the EAO (LIC 9117 [4/93]).

(5) The Department shall provide to the applicant (buyer) written notification of the denial. This notice shall be effective immediately upon receipt.

(b) "A bona fide offer," as specified in Health and Safety Code Section 1597.14(a)(1), means a proposal by the buyer to purchase the child care center with definite terms in writing communicated to the seller and accompanied by a cash deposit.

NOTE: Authority cited: Section 1596.81, Health and Safety Code. Reference: Sections 1596.72, 1596.73, 1596.81 and 1597.14, Health and Safety Code.