Regulation of Retirement Homes under Consideration

Oct 16,2017

Regulation of Retirement Homes under Consideration
Sucheta Dalal 16 October 2017 

Hardeep Singh Puri, minister of state for housing and urban development, has agreed to examine Moneylife Foundation’s study on retirement homes with a view to formulating appropriate regulations and guidelines to protect middle-class and affluent elders who move to such homes in the expectation of hassle-free silver years. I met Mr Puri and presented a copy of the study to him on 
 
29th September at New Delhi and briefed him on the key findings as well as the need for formal regulations and disclosure norms to protect those who chose to move into retirement homes/townships which are a booming new sector that meets the changing requirements of society. 
 
The regulations should include prescribing minimum standards of infrastructure, service, contracts and protection (in the form of supervision, swift grievance redress and empowerment of residents) in line with what has been done by developed nations such as Canada, Singapore, New Zealand, Australia and others. The minister also discussed how financial products such as reverse mortgage could be encouraged among this set of residents to give them access to cash if they begin to run out of savings. 
 
Mr Puri readily agreed to have his officials consider how best to ensure the orderly development of such townships for the benefit of all stakeholders and enhance confidence in this sector. Simultaneously, at the initiative of Praveen Singh Pardeshi, additional chief secretary to the chief minister (CM) of Maharashtra, a working group is being set up to examine what needs to be done to encourage the growth of retirement homes, which cater to a growing market segment, and to put in place regulations that will protect their residents. The working group, which will include all stakeholders, is being led by Dinesh Waghmare, secretary, department of social justice & special assistance and includes BN Makhija (ex-secretary, GoI), Priya Khan (OSD, CM’s office) and representatives from ministry of urban development and department of social justice & special assistance. Moneylife Foundation is also a part of the group. Maharashtra wants to prescribe standards, ensure grievance redress, while avoiding needless red-tape and inspector raj, as also to ensure an independent rating of retirement homes to guide investors.
 
The key findings of Moneylife Foundation’s study were as follows. Retirement homes are a new market segment with huge potential because a growing number of affluent middle-class Indians are looking to spend their retirement in a secure environment, with like-minded people of similar interests and without the burden of running a home. However, the sector needs effective regulation to ensure security and grievance redress. The need for regulation was underlined by a court case in the Tamil Nadu High Court that highlighted the travails of the senior citizens living in a retirement home in Coimbatore.
 
The study recommends that retirement homes must come under Central regulation, although housing is a state subject. The government must put in place regulations to ensure that every retirement home, and its management agency, is required to file details of its agreements, amenities, terms and conditions of service, licences, sanctions, and permissions; these should also be  uploaded on a statutory searchable website. The promoter/developer of a retirement home must sign an agreement 
 
with the residents to ensure that services, like nutritious meals, 24x7 security, well-equipped medical centre, comprehensive insurance, record maintenance, employee screening and policy for transfer of the asset, are provided by them.