Colonel Achal Sridharan, VSM
While real estate industry has been in existence from times immemorial, senior living or retirement communities came into vogue in India around year 2000. This came about to fulfill the requirement of services and care of the middle class people of India who were educated and whose children had migrated to countries abroad or went looking for greener pastures and, working far away from home. With the break up of joint family system and families becoming nuclear services and care to this segment of the population became a necessity. Consequently, a number of retirement communities sprang up across many parts of the country in various cities. These are not old age homes, which were meant for the destitute and run by charitable institutions. These offered a lifestyle that the class of people who patronized it desired including quality services and care for which they were willing to pay reasonable amount.
Over the past 15 years or so, this segment of the population has further aged and, also increased in numbers. Thanks to access to better health care, awareness to wellness and a happy community living in these retirement communities, longevity and its effect on elderly population is a fact, which cannot be ignored. Today, people are living beyond 90 years of age that means that people live one-third (30 years) of their life span after retirement at 60 years as senior citizens. However, the cost of care increases with age and the requirements of senior citizens are no longer confined to dwellings and basic facilities and services offered by retirement communities. Today these have to be Senior Care Centers, which also provide roof over their head and services. But the emphasis shifts to care with advancing age and hence we should name Retirement Communities as Senior Care Centres.
Real Estate industries are involved in construction of dwellings as individual houses or apartments and sell it as a product with infrastructure and amenities for day-to-day normal life. It is more a sale than service in strict sense. Its service concept restricts itself to the construction of the dwellings and providing basic infrastructure.
The maintenance of infrastructure and the amenities provided for day-to-day management rests with the Resident Association. These functions are very general in nature, not requiring highly specialised professional service. Trade technicians like electrician, plumber, etc can do the maintenance management. They can be out sourced
The builder’s responsibility is only for the quality guarantee up to the specified guarantee period, once the product is sold like any other after sales service oriented products. He detaches himself from the consumer after that period, as there is no compulsion for him to continue to be associated with his customers.
Retirement Communities nee’ Senior Care Centres:
This is a specialised professionally run service segment, where service provided to senior citizens is far more pronounced and predominant than the end product, i.e.: dwellings. These services can be termed as value additions that will span through the entire lifetime of the residents and in some cases to the next generation. Services here can be provided only by an organization specialised in these activities.
In fact, the service will start only after the products (read dwellings) are sold and these services include inter alia:
A. Major List of Services to the Elderly:
2. NUTRITIONAL AND MEDICATION:
3. AUXCILLARY SERVICES
4. SPECIFIC HIGHLIGHT OF PWD CARE:
If the parents who are Senior Citizens have a child with disabilities or deficiencies – physical or intellectual deficiencies, PWD Care offers a unique life style for the parents who are senior citizens and the PWD until their demise. This lifestyle offered gives a guaranteed care of the PWD until his or her lifetime after the parents are no more alive.
Such a concept of care is nowhere available in the world and this is not part of real estate. The details of PWD Care, the concept of care with systems and processes that are transparent as well as high ethical standards have been evolved and implemented as an extension of senior care. We have also created a Master Document for Person with Disabilities (MDP) giving details of the model, which is in public domain as well as in our website at www.covaicare.com/pwd-care .
So How is Senior Care Centre different than a Real Estate Project?
What are given above are broad outlines to indicate that Senior Care Centres cannot be called as REAL ESTATE DEVELOPMENT business. Real Estate business is a product sale. But in Senior Care Centre, the Product vs Service Ratio Component could be almost 10:90 respectively, unlike in the Real Estate segment where it is vice-versa.
With the average life span increasing substantially, it is critical that the support system to take care of all such senior citizens of our country is in place and this will be possible only by dedicated and specialised organisations that are expected to carry out the responsibilities with passion and compassion.
Combining the Retirement Communities, which are de-facto Senior Care Centres with Real Estate and apply rules exiting rules of RERA for real estate development would kill this segment bringing untold miseries to large number of elderly citizens, many of whom require support systems, services and quality care. This can be ensured only by exempting this segment from RERA Regulations that focuses only on consumer protection of the property buyers. If for the dwellings that are required to be provided for the senior citizens to live are to be brought under the purview of RERA, then such rules for this segment must be spelt out, separating it from the rules of RERA for Real Estate because of the diverse services and care that are required to be provided to the seniors for which the common amenities are large and different in nature and these common amenities are essential to provide the required services and care and the ownership of the same has to be different.
Surely Real estate developers do not offer such specialized care and services requirements to their customers. Then why is it that this segment of elderly, who number over 100 million today and are expected to increase to 140 million by 2040 continue to suffer with rules and regulations which are totally unsuitable be thrust on the players who have volunteered to care for the senior population of the Middle Class segment? The seniors who are in this segment cannot be thrust with even rules promulgated for Old Age Homes run by NGOs and charitable institutions.
There must be governance with rules and regulations in place for this segment. But these should be formed after understanding the need of the ageing population including the Middle Class and enforce proper safety mechanisms for the elderly so that no fly by night takes advantage of the ageing seniors.
We also need to look at GST, which is now 18% for maintenance services and 5 or 12% for catering (% varies depending upon the turn over of the Company providing catering services). This percentage of GST linked to the Turnover of the Company providing catering services is ridiculous. What is the fault of the seniors if the company that looks after them has higher turn over – more than Rs 75 lakhs per annum? How dies it affect their catering standards or bill?
It must be noted that elderly population in our country is an ignored lot. Senior Care Centres provide them with a sense of belonging, lifestyle and dignity as well as freedom. Senior citizens need that as well as save for their late age to meet the cost of care. They should not be taxed like any ordinary citizen. The Government must understand that about 10% of the elderly population does not burden the Exchequer as the Middle Class elderly are paying for their survival. They have all contributed throughout their lives by paying taxes and continue to pay Income Tax with marginal subsidy. It is now pay back time to look at this segment holistically instead of applying rules, which will hurt them and, also prevent companies from providing care and services for them.
1. Detach Elderly Care or Retirement Communities from existing RERA Rules
2. Name the Retirement Communities (not old age homes) as Senior Care Centre by bringing a separate class for this segment as against grouping them under real estate
3. Frame separate rules for the Senior Care Centres in consultation with Stakeholders so that the elderly are protected
4. Please do not kill this segment with the current RERA rules, since many of the committed players in this field will not undertake new projects and consequently the senior community of Middle and Upper Middle class will suffer immensely.
5. Remove GST for maintenance completely for this segment and not burden them with additional expenditure which they can save for their care – Assisted, Memory or Palliative Care with advancing age and longevity.
6. Recognize these players who are running Senior Care Centres and offer them some concessions for the work that they are doing for the elderly community
7. Offer concessions to the Elderly community for their dwellings in Senior Care Centre by reducing Stamp Duty and registration cost.
8. The govt. is introducing the benefit of 8 per cent interest on the fixed deposits made by the senior citizens as a relief against inflation. This is a sort of protection against the fall in the purchasing power. In the same spirit the senior citizens must be taken care of in their silver years in health care and day-to-day management of their lives, which would become more and more dependent, sliding from independent to interdependent to dependent in the twilight of their lives. This is the one tribute we owe to our own senior citizens as a democratic welfare state. This can be done by encouraging Senior Care Centres in their initiatives by delinking them from RERA regulations, which has a narrow focus only on consumer protection and interests or create rules under RERA after understanding the concept of senior living and care.