Sector Specific Regulation and Leasehold Reform

The Public Policy Problem

Unlike other countries, there is currently no sector-specific legislation or regulation for the housing-with-care sector. This means that:

• There is no definition of housing-with-care in law. This means that government, consumers and other stakeholders are not always clear what housing-with-care is and it can be confused with traditional retirement housing or care home provision.
• Leasehold ownership was not designed with the housing-with-care model in mind and makes it harder to achieve what consumers want.
• The broader leasehold reform agenda may not take account of the specific needs of housing-with-care and its residents.
• Housing-with-care operators do not have a single regulator and set of legal obligations to consumers and residents. Instead, there are several regulators regulating parts, or all of the sector, in a complex and confusing system.
• There are gaps in the law which leads to uncertainty for consumers about how well their rights are protected.
• Investors can be deterred by the lack of legal certainty, which inhibits the growth of the sector and the supply of housing-with-care. 
• Uncertainty leads to higher funding costs which means that prices for consumers are higher

The Public Policy Solution

Tackling the regulatory and tenure challenges will require innovative thinking, inspired by the best of what other countries have to offer, coupled with proven approaches from the UK:

• Establish dedicated smart legislation such as the Retirement Villages Act 2003 in New Zealand, so that operators and consumers are clear about their rights and obligations.
• A new model of home ownership for housing-with-care, designed for the sector and its consumers, meaning consumers will not have to bear the burden of re-sale of the property.
• End reliance on leasehold so that broader leasehold reforms can proceed without adversely affecting the supply of housing-with-care.
• Fill the gaps in consumer rights law – increasing certainty for consumers, operators and investors.
• Legal certainty and a new model of tenure will allow more competitive pricing.
• A single regulatory system for the sector with a clear set of expectations and powers to enforce high standards.
• Increased certainty allowing investment to flow into the sector and the supply of housing-with-care to grow to meet demand.