Texas Assisted Living Change of Ownership: The License Doesn't Transfer
Texas does not allow an assisted living license to transfer with a sale, so a buyer has to obtain its own license from the Health and Human Services Commission before taking over the facility. The process runs in two steps, a temporary change of ownership license followed by an initial three-year license, and the timeline of each step shapes when you can close and when the license becomes fully yours. NCAL's state profile, based on 2020 data, counts about 2,000 assisted living communities in the state, with roughly 83,000 beds, so the process is routine for the agency even when it is new to the buyer.
The application has to be submitted through HHSC's online portal at least 30 days before the anticipated change of ownership date, along with the license fee and a Change of Ownership Transfer Affidavit, signed and notarized by both the buyer and the current license holder. The agency can waive the 30-day requirement only when circumstances prevented timely filing and refusing the waiver would threaten residents' health and safety, so a buyer should plan around the full 30 days rather than count on an exception.
The temporary license is effective on the date the buyer requests, which cannot be earlier than the date HHSC received the application, and its issuance serves as the agency's written approval of the change. It lasts until the earlier of 90 days after its effective date or the date the three-year license is issued, and HHSC can extend it in 90-day increments for extenuating circumstances at its own discretion.
Between the sale and the issuance of the temporary license, the current license holder remains responsible for the facility, and the buyer may operate it on the seller's behalf. That arrangement leaves the seller answerable for anything that happens in the gap, so the purchase agreement should spell out who controls staffing, admissions and spending until the temporary license is in hand, and what each side owes the other if something goes wrong.
After the temporary license is issued, HHSC generally conducts an on-site health inspection, and passing it is a condition for the three-year license. The agency can substitute a desk review when less than 50 percent of the ownership interest changes hands, or when every new owner with a disclosable interest already held one in the former license holder, and it may also conduct a Life Safety Code inspection at its discretion.
The state licenses assisted living facilities as Type A or Type B, depending on whether residents can evacuate on their own and how much help they need at night, and facilities serving residents with Alzheimer's disease or related conditions can hold a separate certification, but that certification does not survive the sale. Under the current rule, HHSC cancels a facility's Alzheimer's certification when the facility changes ownership, and the canceled certificate has to come out of its advertising. HHSC proposed in September 2026 to end the automatic cancellation, so check whether that change has been adopted before you close. The license you apply for has to match the residents already living in the building, because a mismatch found at the change of ownership inspection becomes the new owner's problem on the first day.
Residents whose care is paid through the STAR+PLUS Medicaid program bring a second transition with them, because the managed care plans contract with the operator rather than the building. The new owner needs its own contracts and credentialing with each plan its residents use, and payments can pause while that process catches up.
Ownership changes that stop short of a sale still carry notice requirements, since a license holder that adds an owner with a disclosable interest must notify HHSC within 30 days. A license holder that only changes its legal name must notify the agency and submit documentation of the change, after which HHSC reissues the license in the new name.
Before you sign a purchase agreement, confirm the license type, capacity and any Alzheimer's certification on the seller's current license, and review the facility's recent inspection history. Set closing at least 30 days after the date your application will be complete, and spell out in the contract how the facility will be run during the gap before your temporary license issues. Then start the managed care contracting early enough that revenue does not stop while your license and your plan contracts catch up.
The gap between closing and your own plan contracts is also a cash flow problem, because payroll keeps running while managed care payments catch up to the new owner. I help assisted living buyers build projections that carry the facility through that gap, size the working capital it requires and put together the deal review and financing package for the purchase. If you are under contract or close to it on a facility, send the financials to amer@awadcapitaladvisors.com, and I can help you see how much cash the transition will take.