It is fair to say that legislation for Integrated Retirement Communities (IRC) needs reforming. With legal confusion around the difference between IRC, traditional retirement living and care homes, it is little wonder that consumers are not clear. Confusion creates uncertainty, deterring investors, consumers and wider stakeholders alike.
By taking a fresh look at tenure in IRCs there is a strong argument that legal reform will lead to more choice, better protection and ultimately lower costs for residents whilst still accessing the care and support that they need.
The current leasehold model does not fit the innovative IRC approach. There’s an argument that it doesn’t fit legacy leasehold either – some of the legislation is over 300 years old. There are a number of current issues (as highlighted above) which all stem from a lack of reform since the IRC market has developed. IRCs are an innovative solution for residents seeking age-appropriate housing who want to maintain independence by not moving into a care home. With the IRC approach, residents can enjoy independent living with the support of a peer community and long-term care service providers. It is a relatively new approach to retirement living and as such legislation hasn’t caught up.
As with anything, legislative change will not happen overnight. At the moment the legislation isn’t fit for purpose but this is not because it’s been poorly designed, it’s that the market has rapidly moved on. By creating a single regulatory system for the sector (with the necessary power to enforce standards), clarity would be restored. With this additional clarity it is likely that additional funding would follow, increasing the prevalence of IRC projects which further enhances credibility. Alongside this, a single regulatory system consumer rights law needs to be examined. This would protect consumers, developers and operators, ensuring that all parties have clear expected standards. Whilst things take time, there is evidence of this working well in New Zealand with its Retirement Villages Act (2003) leading to 20 years of growth.
Reforming the current IRC set up can only be a good thing. More clarity will lead to protection for residents, lower costs and a more attractive proposition for developers. With an aging population and a rightful focus on the care home industry, IRC has to be a focus for the property market.
To find out more about this, book your ticket to attend our Care Homes & Retirement Living conference on the 23rd November here.