Vermont residential care home license: Level III or Level IV, from three residents up

One license from three beds up

Vermont law defines a residential care home as “a place, however named, excluding a licensed foster home, that provides, for profit or otherwise, room, board, and personal care to three or more residents unrelated to the home operator.”⁠³ No one may operate one without first obtaining a license.⁠⁴ Many states give a separate, lighter license to homes of four to six beds. Vermont does not. Its rules carry no bed ceiling and no small-home exceptions, so a family home with three boarders follows the same Residential Care Home and Assisted Living Residence Licensing Regulations, effective April 1, 2025, as a large purpose-built residence.⁠¹

The count turns on who is related to the licensee. The rules treat as related only the licensee’s spouse (including a civil union partner), mother, father, grandparent, child, grandchild, uncle, aunt, nephew, niece or sibling, or any of those relationships acquired through marriage.⁠¹ Cousins, friends and former clients count toward the three. If you care for one or two unrelated adults, you fall below the definition. Licensed foster homes are carved out of the definition entirely.⁠³

“Personal care” is defined broadly. It covers help with meals, dressing, movement, bathing, grooming or other personal needs, or general supervision of physical or mental well-being.⁠³ Even a room-and-board arrangement where you remind residents to eat and keep an eye on them can cross the line. The words “residential care home,” “assisted living” and similar terms may not appear in a facility’s name, brochure, admission agreement or marketing unless it holds the matching license.⁠¹

Unlicensed operation is a crime. A knowing violation carries a fine of up to $500, up to six months in prison, or both.⁠⁷ The rules also bar physicians, nurses, social workers, hospital administrators and other listed professionals from referring anyone to an unlicensed home. Those who are Vermont-licensed or work for the state or a town must report one.⁠¹

Neighboring licenses

• Assisted living residence. This license sits on top of Level III. Every unit must be a private apartment with its own bath, kitchen capacity and lockable door. See Vermont assisted living residence license.
• Home health agency. A home health agency can send skilled services into your home, but it cannot run the home; the limits by level are in the table below. Agencies themselves need state designation, which is a separate process from this license.
• Adult day care. A licensed home may also run an adult day program or a senior meal site. It needs DAIL’s advance approval and must meet DAIL’s adult day standards.⁠¹

Level IV or Level III: the decision that shapes everything else

Statute splits residential care homes into two groups by level of care.⁠³ The rules restate the split: “Both levels must provide room and board, assistance with personal care, general supervision and/or medication management. Level III homes also must provide the additional service of nursing overview.”⁠¹ The application form asks you to check one box, Level III or Level IV, and to give the number of beds.⁠²

Nursing overview has a defined meaning. It is “a process in which a nurse assures that the health and psychosocial needs of the resident are met,” including observation, assessment, goal setting, staff education, and a written individualized treatment plan.⁠¹ If you plan to serve people on Medicaid, the table settles the question: only Level III homes can join the state’s two residential care Medicaid options.

Who you may admit

Before anyone moves in, you must evaluate their functional, cognitive, mental and physical health status. The point is to confirm they are eligible for Level III or IV care and that the home has the services they need.⁠¹ You may not admit anyone under 18 without DLP’s permission. You may not admit or keep anyone with a serious acute illness that requires hospital-level care.⁠¹

The main limit is nursing home level of care. A home may not accept or keep anyone who meets nursing home level-of-care eligibility, or whose needs exceed what the home can safely provide, without a variance from DLP.⁠¹ Each variance request needs three things:⁠¹

• a current assessment on DLP’s level-of-care variance form, showing how the home will meet the person’s needs
• a signed statement from the resident or legal representative confirming an informed choice to stay and acknowledging the resident must leave if the variance ends
• a statement from the resident’s licensed health care provider giving a prognosis and recommending admission or retention

Some short-term nursing needs do not require a variance. Nursing services are allowed without one when they are given fewer than three times a week, or up to seven days a week for no more than 30 days while the resident improves, or by a Medicare-certified hospice. In each case the home must also have an RN on staff or a written agreement with an RN or home health agency, among other conditions.⁠¹

Some services are banned outright without a variance: intravenous therapy, ventilators, daily catheter irrigation, feeding tubes, care of stage III or IV pressure ulcers, and suctioning. Sterile dressings are allowed, but only when an RN or LPN does them.⁠¹

The building

Fire Safety before anything else

DLP’s new-facility packet is direct about the order. Send floor plans or blueprints to the regional office of the Division of Fire Safety before construction begins, whether you are building new or converting an existing structure.⁠² Once Fire Safety approves the plans, send a copy of the approved floor plan to DLP. It must show every resident bedroom with its beds and in-room facilities, the kitchens, the common rooms, the nurse and manager offices, the medication storage, exits and stairs or elevators, the laundry, and other resident areas.⁠² DLP “will NOT inspect buildings that have not first been inspected and unconditionally approved for occupancy by the Division of Fire Safety.”⁠² You must also show compliance with Department of Environmental Conservation rules for water and sewage.⁠¹

Room and bath standards

The 100 and 80 square-foot standards may be waived for beds licensed before the 1987 rules.⁠¹ That helps someone buying an existing licensed home, not someone converting a house today.

Residents who are blind or have a mobility disability may not live above the first floor unless the home meets all Fire Safety requirements for that.⁠¹ Smoking is banned inside, except in the manager’s own quarters if the manager lives on site.⁠¹ A door security system that keeps residents from readily leaving needs DLP’s written approval first.⁠¹ Your written disaster plan must cover fire, flood, and loss of heat or power. A home within 10 miles of a nuclear power plant must add measures for a nuclear emergency.⁠¹

Zoning

DLP requires written evidence that you comply with local zoning, or a statement from the city, town or village clerk that the community has no zoning code.⁠¹ State zoning law helps small homes. A residential care home “to be operated under State licensing” and serving no more than eight people who have a disability, as defined in 9 V.S.A. § 4501, must be treated by right as a permitted single-family residential use.⁠⁸ Towns need not allow more such homes on a lot than the number of single-family dwellings the lot allows.⁠⁸ The protection depends on residents meeting that disability definition. A home of more than eight goes through ordinary local review.

The licensee and the manager

DLP looks at the licensee, meaning the person or entity that will hold the license, and at the owners. With the application you supply:⁠¹⁠²

• three references from unrelated people who can speak to the licensee’s experience in residential care, assisted living or health care management, and to their character. DLP’s checklist says these are for the licensee or operating entity, not the manager.
• the names of owners and building owners, an organizational chart, and parent-company information
• a financial stability statement
• the building owner’s agreement to keep the building safe, habitable and code-compliant

The application form asks whether anyone with 5% or more ownership or controlling interest has a criminal conviction or a substantiated finding of abuse, neglect or exploitation.⁠² It also asks whether the business is registered with the Vermont Secretary of State.⁠² The applicant must be in good standing with the Vermont Department of Taxes under 32 V.S.A. § 3113. If not, the license is denied or revoked.⁠¹

DLP may deny a license for any of these reasons:⁠¹

• a conviction showing unfitness, or one related to bodily injury, theft or misuse of funds
• a substantiated abuse complaint
• “financial incapacity, including capitalization”
• a proposal that does not fit the license type requested

Incomplete or untruthful information is grounds for automatic denial.⁠¹

Manager. Every home needs one qualified manager in charge of daily management.⁠¹ The manager must be in the home an average of 32 or more hours a week. When leaving the premises, the manager must hand authority to a competent staff member aged at least 18.⁠¹ A manager hired under the 2025 rules needs a high school diploma or equivalent, a state-approved certification course, and one of the following:⁠¹

• an associate degree in human services plus two years of administrative experience in adult residential care
• four years of residential care experience, two of them in management or supervision
• a current Vermont nurse or nursing home administrator license
• other healthcare qualifications DLP specifically approves, such as social work licensure

The rule requires completion of a “State approved certification course” but does not name it, and the DLP pages and packet reviewed on 2026-10-12 do not identify a course or provider. Ask DLP, before you hire or appoint a manager, which course it approves and whether a manager already in place qualifies.

Staffing, training and background checks

The rules set no fixed staff-to-resident ratio for an ordinary home. They do set these floors:⁠¹

• at least one staff member on duty and in charge at all times
• an awake staff member at all times in homes with more than 15 residents
• at least one awake caregiver at all times if any resident is at nursing home level of care
• two caregivers per shift once six or more residents are at nursing home level of care (the second overnight caregiver may sleep)

DLP may order specific staffing levels for a home.⁠¹ Homes with nursing-home-level residents under a variance face more:⁠¹

• a licensed nurse on site or on call 24 hours a day, seven days a week
• RN time on site of at least one hour per week per such resident
• enough direct-care staff for at least two hours of personal care per day per such resident

Training. Each direct-care worker gets at least 12 hours of training on hire and every year. Topics include:⁠¹

• resident rights and fire evacuation
• emergency response and first aid
• abuse reporting and infection control
• dementia and challenging behaviors
• cultural sensitivity, including gender identity and sexual orientation
• trauma-informed care

Staff who only assist with medications, short of administering them, must first be trained by a licensed nurse.⁠¹ Unlicensed staff may administer medications only under RN delegation, and “delegation must be resident-specific for each medication.”⁠¹ A dementia or memory care unit is a special care unit and needs DLP approval before it opens.⁠¹ Its staff need at least eight hours of dementia training before working alone with residents, plus two hours a year.⁠¹⁠²

Background checks. You may not employ anyone, the manager included, who has a substantiated abuse, neglect or exploitation finding against a child or adult. The same bar applies to convictions for bodily injury, theft, misuse of funds or other crimes against public welfare.⁠¹ Checks run through DLP, the Department for Children and Families, and the Vermont Criminal Information Center or a national vendor. You must re-check Vermont criminal and abuse registries every year.⁠¹ If you hire someone despite a qualifying offense, a written decision explaining why must be kept on file.⁠¹

What goes in the application

DLP’s packet, posted March 27, 2025, lists what a complete application contains. “Complete” means all final permits are included.⁠²

1. Signed application form

   Check Level III or Level IV, the bed count, any special care unit and any floating license.⁠²

2. Tax certification

   showing good standing.⁠²

3. Workers’ compensation and insurance proof

   ⁠²

4. Fire Safety-approved floor plans

   and the certificate of occupancy from Fire Safety.⁠²

5. Zoning evidence

   and DEC water and wastewater evidence.⁠²

6. Emergency plan

   covering evacuation and sheltering in place.⁠²

7. Three reference letters

   for the licensee or operating entity.⁠²

8. Manager resume and qualifications

   ⁠²

9. Admission agreement and uniform consumer disclosure

   The disclosure must be on DLP’s form. It states the services you will provide, the public programs you accept, and the policies that affect whether a resident can stay.⁠¹⁠²

10. Policies and procedures

    Cover discharges, medications, grievances, the nursing overview process, assessment and care planning, level of care, and staff training. If you manage medications, also cover self-administration screening, RN delegation, controlled drugs, psychoactive drug monitoring and PRN use.⁠²

Several of your written policies must meet rule requirements:⁠¹

• Transportation. You must provide up to 20 miles round trip, four round trips a month, free for medical and local community trips.
• Meals. Three meals a day, with snacks available at all times.
• Rate changes. Generally 90 days’ written notice. Annual Medicaid room-and-board changes need 30 days.
• Involuntary discharge. Allowed only on the grounds the rules list, with 30 days’ written notice, or 72 hours for a move to another room in the home.

Send the application by email to [email protected], or mail it to DLP at HC 2 South, 280 State Drive, Waterbury, VT 05671-2060. Questions go to (802) 241-0480.⁠²

Fees: no license fee appears in 33 V.S.A. §§ 7103-7105, in the April 1, 2025 rules, or on the DLP application form as published on 2026-10-12. Ask DLP, before you submit, whether it charges any application or licensing fee.

The opening sequence

1. Choose the level and capacity

   These drive the floor plan, the policies, the RN arrangements and the Medicaid options.

2. Fire Safety plan review

   Send plans to the regional Fire Safety office before construction, then send the approved plan to DLP.⁠²

3. Zoning and DEC

   Get the town zoning evidence and water and wastewater approval.⁠¹

4. Request final inspections at least 90 days before your projected opening

   Make the request to every agency that reviewed your plans, and make any modifications they require.⁠¹

5. Get Fire Safety’s unconditional occupancy approval

   DLP will not do its walkthrough before then.⁠²

6. DLP inspection

   The building must be “move-in ready” with all construction and installations complete.⁠²

7. License issued

   It covers one year, the named persons and the named premises.⁠⁶

The rules and statute set no deadline for DLP to act on a first application. DLP warns that “there are many variables that frequently push back projected dates.” It expects you not to promise any resident a move-in date until all inspections are approved.⁠² DLP may also issue a temporary license, for up to a year at a time and no more than 36 months in total.⁠¹⁠⁶

Certificate of need

Vermont’s certificate-of-need law covers “health care facilities.” The definition lists nursing homes and home health agencies among others, but it does not name residential care homes, and it reaches only persons offering diagnosis, treatment, inpatient or ambulatory care.⁠¹¹ Neither the licensing statute, the rules nor DLP’s packet lists a certificate of need as an application step. If your project involves a large capital expenditure or services beyond personal care and nursing overview, ask the Green Mountain Care Board whether the law applies before you build.

Medicaid: ACCS and Enhanced Residential Care

Two Medicaid paths pay residential care homes in Vermont, and both require Level III.

Assistive Community Care Services (ACCS) is a Vermont Medicaid benefit. The home bills Medicaid for services, and the resident pays room and board directly to the home and keeps a personal needs allowance.⁠⁹ Residents qualify if they are Vermont residents aged 65 or older, or 18 or older with a disability, and meet the income and resource rules.⁠⁹ To join, a home must be licensed Level III, in compliance with the rules, and enrolled as a Medicaid provider.⁠¹ It sends DLP a letter covering:⁠¹

• the proposed start date
• any eligible residents already living there
• an amended admission agreement and policies
• a certification that all ACCS services will be provided

DLP answers in writing within 14 days.⁠¹ After approval, residents get 30 days’ notice of the rate and agreement changes.⁠¹ The ACCS admission agreement must list the services, the room-and-board rate and the personal needs allowance. It must also include the home’s agreement to accept room and board plus Medicaid as full payment.⁠² Participation is renewed each year with the license application. Withdrawing requires 90 days’ notice.⁠¹

Enhanced Residential Care (ERC) is the Choices for Care option for people who meet nursing home level of care. It provides 24-hour care and supervision in approved Level III homes and assisted living residences, and the resident pays room and board.⁠⁹ In a residential care home, ERC is tied to the DLP variance. Under DAIL’s November 2025 process, the ERC start date “cannot be prior to” the date of the home’s DLP level-of-care variance for that resident.⁠¹⁰ Request the variance as soon as a Choices for Care assessment is scheduled.

Keeping the license

• Renewal. The statute requires a license application every year.⁠⁵ The full reapplication is due at least 45 days before expiration. If DLP has not acted on a complete renewal, the current license stays in effect.⁠¹ The reapplication form asks how many residents have level-of-care variances and how many receive the ERC benefit.⁠²
• Inspections. DLP inspects every home annually and may inspect at any other time.⁠¹
• Penalties. Uncorrected violations draw administrative penalties per day. The cap ranges from $5 per resident (minimum $50) for administrative rules up to $10 per resident (minimum $100) for health and safety rules.⁠¹
• Changes. Capacity changes need a written request.⁠¹ A change of ownership, licensee or location needs a new application at least 90 days ahead, because licenses cannot be transferred.⁠¹⁠⁶ Each home needs its own license.⁠¹
• Closing. Closing, or any change that forces residents to move, requires 90 days’ notice to DLP, the Long-Term Care Ombudsman and the residents.⁠¹
• Appeals. DLP decisions can be appealed first to a Commissioner’s hearing and then to the Human Services Board.⁠¹

Sources

1. 1
   Vermont Department of Disabilities, Aging and Independent Living, Residential Care Home and Assisted Living Residence Licensing Regulations (effective April 1, 2025) Checked 12 Oct 2026 · Back to text ↑
2. 2
   Vermont DAIL, Division of Licensing and Protection, Licensing Residential Care Home and Assisted Living Residence: New Facility Licensure Packet and License Application (posted March 27, 2025) Checked 12 Oct 2026 · Back to text ↑
3. 3
   Vermont General Assembly, 33 V.S.A. § 7102: Definitions Checked 12 Oct 2026 · Back to text ↑
4. 4
   Vermont General Assembly, 33 V.S.A. § 7103: License Checked 12 Oct 2026 · Back to text ↑
5. 5
   Vermont General Assembly, 33 V.S.A. § 7104: Application Checked 12 Oct 2026 · Back to text ↑
6. 6
   Vermont General Assembly, 33 V.S.A. § 7105: License requirements Checked 12 Oct 2026 · Back to text ↑
7. 7
   Vermont General Assembly, 33 V.S.A. § 7116: Criminal penalty Checked 12 Oct 2026 · Back to text ↑
8. 8
   Vermont General Assembly, 24 V.S.A. § 4412: Required provisions and prohibited effects (zoning) Checked 12 Oct 2026 · Back to text ↑
9. 9
   Vermont DAIL, Adult Services Division, Residential Care and Assisted Living Frequently Asked Questions Checked 12 Oct 2026 · Back to text ↑
10. 10
    Vermont DAIL, Adult Services Division, Choices for Care Enhanced Residential Care (ERC) Start Date Process (updated November 2025) Checked 12 Oct 2026 · Back to text ↑
11. 11
    Vermont General Assembly, 18 V.S.A. § 9432: Definitions (certificate of need) Checked 12 Oct 2026 · Back to text ↑

Was this information accurate? Report an errorPrint or save as PDF