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Introduction:
In early 2000, old age homes were run by charitable institutions or NGOs or by the government and, these were meant for destitute and abandoned poor people who were aged or with disabilities. Senior living and care communities/Retirement Community as you see today were non-existent. In 2004, the first retirement community project of 48 independent villas with common amenities like a club house, common dining and kitchen, medical centre with ambulance, security etc., was launched in Coimbatore and it commenced operations in 2006 with full complements of common amenities for use by the residents including club house, kitchen, dining facilities, indoor games, library, reading room, open air theatre and a medical centre with ambulance.
Since 2004, many senior living communities and specialized care facilities for the elderly have come up in multiple locations in India. While Coimbatore is the “Retirement Capital of India,” South India offers many senior living and care communities. From independent senior living we have graduated to providing care in its various manifestations like assisted, memory, geriatric, nursing, palliative, home care etc. Two decades ago, senior living communities offered only independent active life for the residents with basic medical care as well as emergency care. With longevity, specialized senior care communities became a necessity. Today, it is “senior care inclusive of living” communities.
Extension of Real Estate:
Senior living communities are still seen as an extension of real estate. These communities face several practical challenges. These difficulties stem from regulatory, operational, and societal factors that influence the development and management of such facilities. 20 years ago, such senior living facilities had the stigma of old age home, but that attitude has changed with the passage of time. Children went abroad to study and settled down in foreign countries. Parents sent their children abroad and were proud of them. Parents meanwhile aged. Thanks to awareness to wellness and improvement in health care, the life expectancy has increased significantly. However, joint families slowly became extinct leading to nuclear families. Total Fertility Rate (TFR) is falling, marriages are getting postponed, living with partners is accepted by the society and, from “Hum do, Hamare do, it is “Hum do, Hamara ek or zero” today! India’s demographic dividend will last for about 25 more years. The problems of elders will get more acute thereafter.
Regulatory Challenges
- Ambiguous Legal Framework: India’s real estate sector is governed by a complex web of regulations for creation of dwellings by a real estate developer. Getting permission for a real estate project is not easy with several rules, regulations and multiple authorities. The file moves from table to table, office to office and each movement costs money! The rules and regulations vary from State to State. Getting approval from the authorities for creating senior living facilities often fall into a grey area, since senior living is considered as an extension of real estate or an old age home.
- The Ministry of Housing and Urban Development has issued Model Guidelines for Development and Regulation of Retirement Homes in 2019. However, these are to be passed in State Legislatures and then only can be adopted in that State. These regulations do not cater to the affordable senior living communities. Only a few States have adopted these Guidelines. We also have Regulations for Real Estate Regulatory Authority (RERA) and the project must be complaint under the rules of RERA. There are no building codes for senior dwellings. The elderly segment comes under the Ministry of Social Justice and Empowerment but for development of senior living communities, it comes under Ministry of Housing and Urban Development. The lack of specific laws for senior living communities’ results in ambiguity and confusion, complicating the approval and compliance processes for developers cum services and care providers. No licenses are required for running senior living communities. Standards of services and care for the residents are vague and there is no accountability and uniformity. We have the second largest elder population in the world after China but we do not have a Ministry for Elder Population. Most of the government employees from Panchayat to Central Government are not aware of the senior living and care segment and consider it as old age homes.
- Senior Living and Care Models: Most of the dwelling in this segment are on sale model. Sale model follows typical ownership rights as well as legal heirship. Most of the senior living communities have laid down the minimum age of the residents to be 55 years. This age restriction is not for ownership of the dwelling – it is only for living in that senior living community.On the demise of the senior citizen, the property passes on as per legal heirship and the Will. There are no legal restrictions preventing successors under 55 years of age from occupying the property, as there are no specific regulations for senior living dwellings.
- 3. Developer Vs Services and Care Providers: Only a few real estate developers get into creating retirement community projects. A developer completes a project, forms a Resident Welfare Association (RWA), hands over the common areas and amenities to the RWA and thereafter, moves to another project. Providing services and care to senior citizens is a specialised subject and those companies providing such services and care are not many. It is not easy to provide services and care to the elderly. Services standards vary and to maintain quality services and care, we need passion and compassion to care for the elders. One may have the passion to create senior living and care communities, but compassion should be at the services and care delivery end. This is not easy with changing values in the society, improved literacy rate, labour issues and unwillingness to dirty hands. We may not get people to take care of the elderly a few years down the line.
- 4. Medical Insurance: Geriatric care centres or assisted or memory or palliative care centres or home care are not covered by medical insurance. Medical insurance covers hospital admissions. Hospital do not provide long term care since the hospitals earn more revenue from diagnosis, labs, surgery and long-term treatment for which the patient need not stay in the hospital. In the era of longevity, medical care of elders is not only expensive but leaves many questions unanswered. Notably, one of the effects of increasing medical treatment costs in India is the rise in health insurance premiums. This rise applies to all types of policies and policyholders, regardless of the risk profile.
Resident Welfare Association (RWA):
a. In typical real estate communities, a RWA is formed under the Society Act and various Bylaws are created and registered with the authority. The day-to-day management of the residential complex is through an elected Executive Committee (EC). The EC manages security, maintenance of common areas and assets as well as utilities in that complex. The residents pay Monthly Maintenance Charges (MMC), which is charged either equally or as per area of their dwelling by all residents in that complex. Senior living facilities are still considered as an extension of real estate, but those who choose such communities actually come for getting the services and care they need with ageing. Managing the RWA is not easy by the aged people.
b. The RWA is mandatory as per RERA but the EC is incapable of managing services and care in the senior living community. It needs specialised organisation to provide services and care and defacto take care of everything from gate to grave. The staff strength is much more than in a residential real estate community. The staff management to provide quality services and care is not easy. With the residents who are aged and who may have health issues, the duties of members of the EC as spelt out in the registered society of the owners cannot be fulfilled. Most of the RWAs has issues among the EC members and other residents. A senior citizen chooses a senior living community to lead a peaceful life by getting quality services and care, for which they are willing to pay. Many RWAs have issues among its members. Some have cases in the courts.
c. But the mindset is that of a real estate community. Since the RWA is necessitated by law, the services and care providers, who may also be the developer of the senior living and care communities have a tough task. The Sale and construction Agreement is signed with the Developer and the Services Agreement is signed by the individual owner(s) by the Services and Care Provider. In senior living communities, the property may be owned by the children but parents live in them. Normally, there is no services and care agreement between the RWA and the Services and care provider. This is because the EC of the RWA work as honorary members. The problems of senior living communities are far more than in a normal residential complex. Mostly, it is the developer who provides services and care to the seniors, though of late one finds a few companies getting involved only in providing services and care, especially home care.
d. The Services and Care Agreement is elaborate and makes it mandatory for the Services and Care provider to fulfil his obligations to the senior residents. There are provisions for dispute resolution. There are strict clauses that guarantees the usage of the services and care facilities only by the owners/residents of that retirement community. The SCF cannot be sold or mortgaged or leased to a third party. When the ownership of the dwelling changes hands, the new owner gets the guarantees for the use of the SCF and the deposit, if charged to them for use of the SCF, is returned and the new owner pays for the same. If the company changes hands, the new company will have to abide by the services and care agreement signed with the previous company.
e. Property is an emotional issue in India. We fight over property and even commit murder. Families get separated due to property inheritance. We go to court to settle property dispute and cases linger for generations. Retirement communities also witness such property dispute, especially if the owner dies without leaving a Will (interstate). In some cases, the owners file court case against the services and care providers, which is a dampener for new companies getting into the segment. Given the time that is taken for the litigation to end in Indian courts, even the senior citizen may not live to see the dispute getting resolved. After his or her death, the children may not be interested in pursuing the case since the children may not have good relationship with each other.
f. Senior citizens become tight fisted as they age. The mindset of real estate makes them forget the reason for which they chose to settle in a senior care community. The services and care provided are chargeable. But “we do not to take a Vada if charged but take five if it is free!” However hard one tries, providing satisfaction to all is well neigh impossible. The RWA mindset makes it difficult for the services and care provider to concentrate on the work. Many of the residents of the senior community have all the time in the world to find fault. More so, because they feel that they are paying for the services and hence can demand even if it is unjustified. None should expect gratitude for any help or services and care offered. A simple “Thank You” is not in our dictionary.
g. It is also correct that many of the services and care providers do not provide the services and care promised. For example, senior living communities arrange for caregivers from an agency. If a senior citizen in that community’s health is affected and necessitates a caregiver to take care of him or her, the caregiver may be arranged but the management of the caregiver is left to the care receiver. Finding caregivers who are trained is very difficult. If the services and care provider leaves the management of the caregiver to the care receiver, the sufferer is the care receiver. If there are no mechanism for any dispute resolution, problems to the senior citizen increases. And senior citizens are helpless.
Emotion and Decision Making
The same children who were groomed by the parents and listened to them, take control of their parents as they age. The elders surrender their freedom to decide to their children. When you are 60 years old, you are considered as a senior citizen. Until 59 years and 364 days one is “young.” That one day is the difference between young and old! But is it really? Awareness to wellness and the necessity to maintain good health with diet and exercise as well as the social changes that we are witnessing in the society around us, makes elders to lead a happy independent life much beyond 60 years. The aspirational age is 90 years today.
When children live far away from the parents, decision making so far as health emergencies are that of the management of senior living communities or the elders themselves. For a super senior citizen (above 90 years), getting admitted in hospital repeatedly is not the solution. Health care is expensive and so is health care inflation in India. Multiple research reports confirm that medical inflation is rising in India. Leaving it to nature to handle one’s last breath is very difficult. Living Will is not the solution for seniors to decide the end his or her own life. Our laws do not permit euthanasia.
Changing India:
India has not only advanced economically and but also educationally. Traditionally, a carpenter’s son became a carpenter, a goldsmith’s son became a goldsmith, a plumber’s son became a plumber, a barber’s son became a barber, a house-help’s daughter took up her mother’s profession. This is not true any longer. Today, a housekeeping staff’s son is an engineer, a carpenter’s daughter is a doctor, a cook’s son or daughter is a PhD or a soldier in the army with opportunity to be commissioned as an officer or an IAS officer. Passing matriculation was enough to join the National Defence Academy (NDA) in the late sixties, provided one passed the entrance examination, cleared the Services Selection Board and made it in all India merit. The minimum educational standard to join the army now as a Jawan is class 12 or higher secondary. A cadet from NDA gets a BSc or BA degree on graduating from the NDA. He starts earning on entering Indian Military Academy for one more year’s training. In the olden days, a jawan was uneducated. Salary scales have gone up manifold now. In 1969, a 2nd Lieutenant got Rs 470/- per month and had to pay for his meals in the Officers’ Mess. Today, a soldier gets over Rs 30,000/- per month when he is selected as a Jawan, besides food, shelter, uniform, medical, free travel, insurance etc. Even the rank of 2 Lieutenant has been abolished, and an officer gets paid much more, besides getting other facilities and “entitled rations.” Pension scales have gone up. A Colonel gets a pension of over Rs 1,50,000/- per month! Today a Jawan gets married to a software engineer! We are seeing an aspirational India and so are we going to witness aspirational senior citizens.
Land Acquisition Issues
Obtaining land for senior living projects can be problematic due to zoning laws and land use regulations. Any rule that is applicable for a real estate project is applicable to a senior living project. Additionally, high land prices in urban areas make it financially challenging to acquire suitable sites for developing senior-friendly environments. Besides, the services and care facilities are much more than in a typical real estate project.
Operational Challenges
- Meeting the Expectations:
a. There is no limit to expectations, when you pay. Even, sky is not the limit. The challenge is to ensure that the cost incurred translates into tangible benefits and services that meet the residents’ high expectations. Addressing the unique needs of the elderly, from services to health care to recreational activities, requires careful planning and cost consciousness. This balance between offering premium services and managing costs efficiently becomes even more critical as residents look for value in every Rupee spent.
b. Balancing cost-effectiveness with high-quality services is a delicate act. Senior living projects must cater to various health needs and lifestyle preferences, demanding a personalized approach to care significantly increases operational costs. Furthermore, maintaining a high standard of living while managing expenses is essential to retain residents’ trust and satisfaction.
2. Infrastructure and Amenities:
Senior living facilities require specialized infrastructure and amenities, such as medical care, common lounge, dining, activity centre, indoor games, multi-purpose hall, medical centre, staff quarters for kitchen staff, nurses and Manager, and accessibility features. Designing and maintaining these facilities to meet the needs of elderly residents can be more complex and costly compared to conventional real estate projects.
Besides, the integration of advanced technology, such as emergency response systems, remote health monitoring, and smart home features, further increases the complexity and cost of senior living projects. These technological advancements are essential for enhancing the safety and well-being of residents, providing peace of mind to both residents and their families. However, they also require specialized knowledge and ongoing maintenance, adding another layer of expense. The combined effect of these infrastructural, staffing, and technological needs makes the management of senior living facilities a multifaceted and challenging endeavor.
3. Staff and Training
Providing quality services and care to senior citizens necessitates a well-trained and dedicated workforce. Recruiting and retaining qualified personnel, including caregivers and medical staff, is a significant operational challenge. Ongoing training and development programs are essential to ensure staff are equipped to handle the nuances of elder care.
Staff training costs money. Today, we should be prepared for frequent staff replacements, especially in the category of kitchen staff, caregivers, nurses, utility personnel like plumber, electrician etc. Getting trained staff is going to be more difficult in the coming years with the changing demography. Robots for sweeping and swabbing are available, but expensive. Indian climatic conditions and the nature of our construction of dwellings demands daily sweeping and swabbing than in the western countries.
4. Social Challenges
The concept of senior living facilities is still in its infancy though over two decades ago senior living as a concept came to India. Societal acceptance is no longer a problem. But longevity makes many families preferring traditional caregiving within the home, leading to a lower demand for institutionalised senior care. Caregivers are available even though they may not be trained. So long one of the spouses is alive and able to manage, living in the same dwelling with known people around you is not difficult. We have also advanced technologically. Mobile phone accessibility in the affordable class is not a problem. The couple has two mobile phones. Apps are available which assist you to measure and monitor vitals. Moderation of one’s health is also possible. Organisations like Newschecker help in seniors in fact checking, call-taxis like Uber and Ola help in travels, ability to buy bus, rail and sir tickets from home, and Swiggy/ Zomato help in home delivery of food. There are many apps which helps senior citizens today. While senior living and care communities cannot be done away with, yet the growth has not been significant. If one can get monitored and moderated quality care at home, home care would be the preferred option.
Affordability
Senior living facilities often come with high costs, making them inaccessible to a significant portion of the elderly population. Ensuring affordability while maintaining quality standards is a critical challenge for developers and operators.
GST
For all services that you get in a senior living and care community, you have to pay GST since it is considered as services taken from an organised service provider. The GST payable is 18% for security, housekeeping, kitchen staff, plumber, electrician, supervisors etc. MMC is of two types – one is fixed and the other is variable. Fixed MMC are for those services which are common to all and variable are those that are individualistic. For example, housekeeping rates will depend upon the plinth are of the dwelling and the rest of the cost of labour is shared equally. If the plumber or electrician repairs or replaces certain items in your dwelling, the cost is paid by you only. Common areas and common amenities repairs are shared by all owners. For major capital work interest from the corpus can be utilised and any shortfall is shared by all owners. Interest out of corpus is not normally used for routine monthly maintenance expenses as the dwellings will need repainting (exterior) once in five years. Normally all interior expenses are that of the owner.
Catering attracts 5% GST. Thus, for maintenance and food, senior citizens living in a senior living community have to incur additional expenses. If the MMC (fixed +variable) is Rs 10,000 per month, you will be charged Rs 18000 additional as GST and paid to the Government. If catering charges are Rs 8000/- month, you will be charged Rs 400 as GST, Thus the additional amount payable to the Government is Rs 8400 per month or Rs1,00,800. You would not have paid this additional amount had you lived in an independent dwelling.
The issue of GST has been taken up with the Central Government but because the seniors are getting services organised by a service provider, he or she has to pay the GST. The non availability of medical insurance for senior care like assisted, palliative, home and memory care, combined with the huge GST that a senior citizen has to pay for services and catering is a big drain for the elderly. When you take longevity into consideration, the additional amount to be saved for retirement corpus increases significantly.
The Government should also consider the fact that a large number of labour working for the elders come into the organised sector and get PF, ESI, Bonus, uniform and dignity of labour. As an incentive, the Government should consider waiving GST to the elders living in senior living and care communities.
CONCLUSION
The practical difficulties of managing senior living facilities as extensions of real estate in India are multifaceted, encompassing regulatory, operational, and societal aspects. Addressing these challenges requires a concerted effort from policymakers, developers, and community leaders to create supportive environments that cater to the needs of the aging population. By doing so, India can ensure that its elderly citizens live with dignity, comfort, and security in their twilight years.
Another crucial aspect is the need for adequate healthcare services within senior living facilities. Access to medical care is a fundamental necessity for the elderly, and providing comprehensive healthcare within these communities can greatly enhance their quality of life. This includes regular health check-ups, availability of emergency medical services, and specialized care for chronic conditions. The integration of healthcare services should be done in a manner that ensures affordability and accessibility for all residents.
Furthermore, the design and infrastructure of senior living facilities must be tailored to the specific needs of the elderly. This entails creating spaces that are safe, comfortable, and conducive to their physical and emotional well-being. Features such as wheelchair-accessible buildings, non-slip flooring, adequate lighting, and easy-to-navigate layouts can significantly improve the living experience for seniors. Incorporating green spaces, recreational areas, and social hubs can also foster a sense of community and belonging among residents. In summary, while the challenges associated with senior living facilities are complex, they are not insurmountable. By focusing on affordability, healthcare, and infrastructure, stakeholders can develop solutions that address the needs of the aging population. A collaborative approach involving the government, developers, and community leaders is essential to create environments where senior citizens can thrive and live with dignity. With the right policies and practices, India can pave the way for a future where the elderly are cared for, respected, and valued members of society.
By
Col Achal Sridharan
MD and Founder
CovaiCare Retirement Communities