# REIT monitoring evaluation checklist — senior housing & care

As of October 9, 2026 · last updated 2026-10-15

Source page: https://seniorcre.com/reit-compliance-monitoring/evaluation-criteria

## Tax-rule scope — counsel review pending

No more than 25% of the value of total REIT assets may consist of securities of one or more TRSs under IRC §856(c)(4)(B)(ii) for taxable years beginning after December 31, 2025 (Public Law 119-21 §70439). The amendment replaces 20% with 25%; earlier tax years require the applicable historical rule. This is a quarter-end securities asset-value limit, not a TRS gross-income cap. The annual 95% and 75% gross-income tests are separate; §856(l) defines TRS status and election. Tax counsel must confirm entity-specific application, valuation and relief.

Statutory source checked: 2026-10-15; not a professional review or sign-off.

## How to score

- **Not confirmed — scope under evaluation** — Not an approved product commitment. Product-owner scope and tax-counsel review are required before any build or reliance claim.
- **Designed — not built** — Specified approach, not implemented in any community. Synthetic examples do not establish working governance or operator validation.
- **Roadmap — approved scope, not built** — Committed on the build queue and not yet built. Require approved scope and acceptance gates; do not assume a delivery date.
- **Demonstrable — built, synthetic or historical data only** — Shipped in the product and demonstrable on request against synthetic or historical data.
- **Production-verified** — Running in an operator production environment with a measured outcome an auditor could inspect. SeniorCRE claims no row at this status as of October 9, 2026.

## Criteria

### 1. IRC §856 75% asset test: quarter-end evidence and between-close warnings

- Category: REIT qualification
- Ask: Can the platform preserve statutory quarter-end asset-test evidence for each REIT taxpayer, recompute provisional warnings between closes, and show the source values behind the numerator and denominator?
- Why it matters: Qualification follows the REIT taxpayer, not a blended portfolio average. Asset tests apply at statutory quarter-end; provisional monitoring does not change that measurement date. Counsel determines entity scope, valuation and any relief.
- Evidence to request: A recomputation for one entity and one prior period you select, with the source rows behind both sides of the ratio.
- SeniorCRE status: Not confirmed — scope under evaluation
- Vendor score: ______________________

### 2. 95% and 75% gross income tests with RIDEA/SHOP treatment

- Category: REIT qualification
- Ask: How are the annual 95% and 75% gross income tests distinguished from provisional year-to-date views, and how are REIT income lines mapped through a RIDEA/SHOP structure with counsel-approved classifications?
- Why it matters: Changes in operating revenue can require a classification review; legal structure, contracts and applicable tax rules determine treatment, not acuity alone.
- Evidence to request: The classification rule set, the line-level mapping for one RIDEA entity, and the change history on both.
- SeniorCRE status: Not confirmed — scope under evaluation
- Vendor score: ______________________

### 3. §856(c)(4)(B)(ii) 25% TRS securities asset limit for applicable 2026 tax years

- Category: REIT qualification
- Ask: Does the platform track TRS securities against the 25% asset limit for tax years beginning after December 31, 2025, distinguish earlier-year rules, preserve quarter-end values, and name who is alerted to provisional drift?
- Why it matters: The cap is discovered late when it is assembled at close. Drift that is visible in week six is a decision; the same drift at close is an exception report.
- Evidence to request: Quarter-end TRS securities values and total REIT asset values, the taxpayer’s tax-year start and applicable rule version, plus provisional alert thresholds, recipients and fired-alert history.
- SeniorCRE status: Not confirmed — scope under evaluation
- Vendor score: ______________________

### 4. 90% distribution requirement rollforward for the current tax year

- Category: REIT qualification
- Ask: Can the platform show the annual 90% distribution rollforward against REIT taxable income computed without the dividends-paid deduction and excluding net capital gain, with counsel-approved assumptions and separate treatment of other distribution or excise-tax considerations?
- Why it matters: The distribution decision depends on an estimate that changes through the year. A static report dated at close is not a monitoring capability.
- Evidence to request: A rollforward view with the estimate basis, the version history, and the approver.
- SeniorCRE status: Not confirmed — scope under evaluation
- Vendor score: ______________________

### 5. §856(d) rents-from-real-property classification at clause level

- Category: REIT qualification
- Ask: Is rent classification evaluated per lease clause, or set once at the lease header?
- Why it matters: Senior housing rent is service-bundled. A lease-header classification hides the impermissible-service question that a clause-level reading surfaces.
- Evidence to request: A clause-level classification for one service-bundled lease, and the reviewer who approved it.
- SeniorCRE status: Not confirmed — scope under evaluation
- Vendor score: ______________________

### 6. Coverage and covenant evidence computed per property

- Category: Portfolio controls
- Ask: Are LCR, DSCR, and coverage covenants computed from property-level operating rows, and can one published figure be reconstructed from source in one hop?
- Why it matters: A covenant certificate you cannot reconstruct is a certificate you are asserting on trust. Lenders and auditors test the reconstruction, not the dashboard.
- Evidence to request: A one-hop trace from one covenant figure to the operator rows that produced it, with the definition version attached.
- SeniorCRE status: Designed — not built
- Vendor score: ______________________

### 7. NOI variance with lineage to the operating event

- Category: Portfolio controls
- Ask: When portfolio NOI moves against budget, does the platform attribute the variance to the operating event — census, acuity, agency labor, ancillary revenue — or only to the ledger account?
- Why it matters: An account-level variance tells you the amount. An event-level variance tells you what to do about it, which is the entire reason a REIT monitors an operator.
- Evidence to request: One variance walk from portfolio NOI to a named operating driver at a named community.
- SeniorCRE status: Designed — not built
- Vendor score: ______________________

### 8. Occupancy quality, not just occupancy percentage

- Category: Portfolio controls
- Ask: Can the platform report payer mix, level of care, length of stay, and move-out velocity beside the occupancy percentage, on the same definitions the operator approved?
- Why it matters: Two portfolios at the same occupancy carry different revenue durability. Percentage alone cannot price that difference.
- Evidence to request: The metric definitions, who owns each definition, and the last time each was changed.
- SeniorCRE status: Designed — not built
- Vendor score: ______________________

### 9. Entity and operator isolation enforced below the application layer

- Category: Portfolio controls
- Ask: Where is tenant isolation enforced — in application code, or at the database row level — and what is the control description you can give our security reviewer?
- Why it matters: Operator confidentiality requires tested isolation across ordinary and privileged access paths; a row-level design alone is not proof of effective control.
- Evidence to request: The written control description, the test that proves it, and the contract clause on derived-data ownership.
- SeniorCRE status: Designed — not built
- Vendor score: ______________________

### 10. Named definition authority for every published metric

- Category: Operator data and governance
- Ask: For each metric the REIT publishes, who holds the definition — the REIT, the operator, or the vendor — and how is a definition change approved and versioned?
- Why it matters: Most portfolio disputes are definitional, not arithmetic. Until definition authority is named, every operator can be right and the numbers can still disagree.
- Evidence to request: The definition register with owner, version, effective date, and the approval record for one recent change.
- SeniorCRE status: Designed — not built
- Vendor score: ______________________

### 11. Reconciliation performed once, under governed rules

- Category: Operator data and governance
- Ask: When the operator’s number and the REIT’s number differ, where is the difference resolved, and does the resolution persist downstream or get re-argued in every report?
- Why it matters: Reconciling in each report is how a portfolio ends up with several defensible versions of one figure. Reconcile once under governed rules and stop re-reconciling downstream.
- Evidence to request: One contested figure, the reconciliation rule applied, the approver, and the downstream reports that inherited it.
- SeniorCRE status: Designed — not built
- Vendor score: ______________________

### 12. Per-source freshness and stale-feed behavior stated in writing

- Category: Operator data and governance
- Ask: What is the expected latency for each source, and what does the monitoring view show when an operator feed is late, partial, or fails?
- Why it matters: “Real time” is not one number across a multi-operator portfolio. Event-driven, hourly, and nightly feeds coexist, and a view that hides which is which invites a decision on stale data.
- Evidence to request: A latency table by source, plus a screenshot of the view while a feed is deliberately stale.
- SeniorCRE status: Designed — not built
- Vendor score: ______________________

### 13. Documented integration paths, scored honestly

- Category: Workflow and audit evidence
- Ask: For each named incumbent system — accounting, property, clinical — is the interface specified, built, or roadmap, and is any of it live in a customer production environment today?
- Why it matters: Integration is where evaluation timelines break. A named logo on a slide is not an interface, and an interface exercised against an export file is not a live connection.
- Evidence to request: A source-by-source matrix with method, direction, owner, latency, and a named reference environment for each claim.
- SeniorCRE status: Roadmap — approved scope, not built
- Vendor score: ______________________

### 14. Append-only history, period locking, and reproducible prior reports

- Category: Workflow and audit evidence
- Ask: Can the platform reproduce a prior period’s published report exactly as signed, including the definitions, approvals, and overrides in force at the time?
- Why it matters: Attestation depends on reproducibility. If the prior report cannot be reconstructed, the audit trail is a description rather than evidence.
- Evidence to request: A reproduction of one prior period report, its approval identities, its override history, and the retention and export terms in the contract.
- SeniorCRE status: Designed — not built
- Vendor score: ______________________

### 15. §1031 identification and earlier-of completion deadline monitoring

- Category: Workflow and audit evidence
- Ask: Are 45-day identification and completion by the earlier of 180 days or the tax-return due date including extensions tracked in the platform, with qualified-intermediary evidence attached to the disposition?
- Why it matters: Exchange deadlines are calendar facts with tax consequences. Tracked in a side calendar, they leave no evidence trail beside the transaction.
- Evidence to request: One disposition with both timers, the alert schedule, and the evidence attached to the entity record.
- SeniorCRE status: Designed — not built
- Vendor score: ______________________

### 16. Production references and honest maturity disclosure

- Category: Workflow and audit evidence
- Ask: Which capabilities are running in a customer production environment today, and will the vendor state in writing which are not?
- Why it matters: A vendor who will not separate built from production-proven in writing will not separate them at implementation either. Ask for the distinction and keep the answer.
- Evidence to request: A dated capability register naming what is built, what is demonstrated, what is roadmap, and what is production-proven.
- SeniorCRE status: Designed — not built
- Vendor score: ______________________

## Evaluation workflow

1. **Scope the evaluation by entity, not by portfolio** — List every entity, fund, and operator in scope, and name which qualification tests, covenants, and exchange workflows apply to each. A portfolio-average scope cannot test what qualification tests at entity grain.
2. **Put the same sixteen questions to every vendor** — Ask each criterion verbatim and record the answer in the vendor’s own words. Do not accept a feature list in place of an answer to the question asked.
3. **Score each row not confirmed, designed, roadmap, demonstrable, or production-verified** — Score from evidence rather than description, and require the vendor to state which rows are not running in a customer production environment today.
4. **Test one entity and one period you choose** — Have the vendor recompute the qualification tests and reconstruct one published figure from source rows, for an entity and a prior period they did not select.
5. **Verify isolation, definition authority, and export rights in contract language** — Obtain the isolation control description, the definition-authority register, the derived-data ownership clause, and the termination export terms from the agreement rather than the deck.
6. **Restate roadmap scope as approved acceptance gates** — Total the scorecard, then require approved scope, dependencies and acceptance tests before treating a roadmap row as a commitment. Anything left unstated will be assumed present and discovered absent.

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Not tax, legal, or investment advice. Confirm every Internal Revenue Code position with your tax counsel. Named trademarks are used for identification only; no new competitor-product review is claimed by this update. Reference comparison materials retain their own evidence dates. Content updated 2026-10-15. Capability evidence cut-off remains October 9, 2026. Statements about SeniorCRE reflect status as of the same date: §856 qualification under evaluation (not confirmed, not built), other rows design intent or roadmap, not implemented in any community and not operator production.