Do you want to open an assisted living facility? If YES, here are the licenses and requirements needed to own an assisted living facility business in USA.

An assisted living facility is a residence designed for older adults who are still mobile but need help with one or more necessary activities (bathing, eating, and so on). This facility is more or less the midpoint between an independent living community (where healthy, youngish seniors live) and a nursing home (which exists for the frailest of seniors who require 24/7 care).

Unlike nursing homes, assisted living homes function largely free of federal regulation. Compliance and paperwork are state-specific; generally speaking, permits are easy to get. Note that semantics vary by states as well.

Assisted living facilities make money by charging residents a fee for staying in the facility. This cost is applied on a per-month or per-year basis. In general, assisted living facilities can charge between $2,000 and $4,000 per resident per month.

But note that the exact cost depends on the location and the quality of the facility. Possible profit level in this business depends on the size of the facility as well as its amenities. If you have a large facility with top-notch amenities and maintain full capacity, profits have the potential to reach the six-figure mark or higher.

However, certain state permits and licenses may be needed to operate an assisted living home. Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

Legal Requirements for Owning an Assisted Living Facility

Assisted living facilities face a distinct set of legal issues similar to other healthcare or residential care facilities like nursing homes and hospitals. However, as a relatively modern concept, the body of law governing assisted living facilities is considerably less developed than traditional concepts like nursing homes.

The legal concerns in this business stem majorly from state laws licensing and regulating assisted living facilities, although there are various statutory and common law tort issues that arise in relation to caring for individuals with impairments.

To properly understand the role states play in regulating assisted living facilities, it is pertinent to first know that assisted living is not defined in any meaningful way by federal law. Additionally, the federal government plays a very limited role in setting standards that govern assisted living facilities; the process is majorly controlled by the states.

Although the federal government does little to regulate these entities, it does affect assisted living through funding. The federal government helps to pay for assisted living through Medicaid’s Home and Community – Based Services. All states affirmatively regulate assisted living facilities in some capacity. License and regulation can generally be grouped into three basic categories:

  1. States that regulate assisted living facility licensure
  2. States that regulate assisted living facility standards of care, and
  3. States that create a cause of action against assisted living facilities.

Almost all licenses, permits and regulations needed to own an assisted living facility is handled at the state and local levels. First you will have to file an application on behalf of your business, and then receive a certificate of authority to do business. Not only will your health care providers need to be licensed, but your facility will have to be up to state standards, as well.

Most states put all the information you will need on their website. You will need to get a license before you can accept the first patient into your facility, but first you will need to make sure you have set up your environment to state specifications.

You will also need to determine how you will pay for modifications, as well as the daily costs associated with running a senior care facility, including payroll. Generally, it is difficult to classify the legal requirements needed to own assisted living facilities.

This is because regulation and legal requirements concerning assisted living facilities are completely fragmented, existing almost exclusively on a state-by-state basis. It is clear that individual state regulations bear serious examination, especially with respect to regulations defining assisted living facilities standards of care, as well as applicable licenses and permits.

It is clear that federal policy makers have not yet decided to subject assisted living facilities to similar level of regulatory scrutiny as more traditional healthcare facilities. But as the population of elderly people rise, and more families begin to explore options for long-term care for their elderly loved ones, federal regulation may have to provide a solution to fill regulatory gaps caused by the otherwise balkanized legal regime.


Although legal requirements needed to own and run an assisted living facility vary according to states, you can expect an initial visit from every state regulator, along with periodic follow-ups. If you accept Medicare or Medicaid, you may face oversight from federal regulators, as well. State law generally governs how often these inspections take place.

Note that these inspectors are especially interested in the quality of care and quality of life at your facility. If there are complaints, regulators are required to follow up on those. Deficiencies will be ranked in order of scope and severity, with the most severe potentially resulting in your facility being shut down.