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14/12/2018

We need to move beyond the feudal leasehold system

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Fuedalism iStock

The current leasehold reform agenda is developing at pace – with new proposals on right to manage, enfranchisement, ground rents and leasehold houses being developed by the Ministry of Housing and the Law Commission.

I am struck by the tension between those interested in retaining the old leasehold system, which has its origins in feudal times, and those arguing  for a move to other forms of tenure, such as commonhold.

But the current approaches to reforming the leasehold system make almost no reference to the services provided in retirement communities, nor do they consider the needs of an ageing demographic.

To be clear, I am not talking about the traditional retirement or sheltered housing sector, but about schemes (also known as extra care housing or retirement villages) that deliver a 24-hour staff presence, offer meals in restaurants and provide facilities such as gyms and craft rooms.

Most importantly, they also incorporate care and support services on site, but unlike in care homes, these are optional, and residents might move into their apartment without using care services at the outset.

We know that customers are in search of a safety net that will enable them to be independent for as long as possible. Research shows that residents of retirement community offering care and support are less likely to need to access NHS services.

"The leasehold system was created to govern a relationship between farmers and (feudal) landowners"

The quality of services and staffing has by far the largest impact on whether customers will recommend a scheme to a friend, so services are key. But the leasehold system was created to govern a relationship between farmers and (feudal) landowners.  

This has resulted in gaps in what leasehold law can address. For example, it has little to say about mental capacity and dementia, or the protection of vulnerable residents from services being withdrawn by a majority decision taken by (more able-bodied) residents. And leases are inflexible as they go unchanged for decades – when the needs of the residents or the community might change considerably over time.

Therefore, we should seize the opportunity of the current leasehold reforms to move beyond both leasehold and commonhold, and follow other nations in developing sector-specific tenure models for retirement communities. Backed up by laws (such as the Retirement Villages Act 2003 in New Zealand), these would provide for a more suitable basis for our sector than a system dating back to the Middle Ages.

Michael Voges is executive director of ARCO (Associated Retirement Community Operators)

Photo | iStock

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