Day two of the ARCO Conference delivered a standout session from Kyle Holling and Doug Rhodes of Trowers & Hamlins, who tackled one of the biggest questions facing the Integrated Retirement Community (IRC) sector:
What happens when leases are no longer the default?
Kyle introduced the ‘ROC’ or “Retirement Occupancy Contract”, as a conceptual alternative to the traditional leasehold model. It’s not a sale of property, but a contractual arrangement that could redefine how residents engage with IRCs, from their financial obligations to their security of tenure.
Key takeaways:
- From lease to licence: The ROC model would involve a license-based right to occupy, bringing with it a different legal framework, one that doesn’t neatly fit within current conveyancing or property law.
- Legal innovation required: Implementing the ROC model at scale means tackling a web of legal complexities, from dispute resolution and succession, to consumer protection and inheritance tax treatment.
- Security vs flexibility: With no “asset” to own, the ROC model requires new forms of consumer protection. Options being explored include charges over units, collective charges, or surety arrangements, all of which Kyle walked through with clarity (and caution).
- Advisor readiness: One of the biggest challenges? Ensuring the high street solicitors advising customers aren’t left baffled by a model that doesn’t fit existing templates.
Doug then explored the rapidly approaching Renters Reform Bill, now in its final stages before becoming law. The Bill will:
- Abolish ‘no-fault’ Section 21 evictions.
- Remove fixed-term assured shorthold tenancies.
- Limit rent increases to one per year via statutory notice, with a right for tenants to challenge increases through the tribunal system.
This creates both risk and opportunity: while smaller landlords may exit the market, professional operators, including those in the retirement living sector, have a chance to step forward with purpose-built, service-led offerings.
As both Kyle and Doug emphasised: regulation, legal structure, and customer confidence must evolve together. The ROC model is ambitious, and may soon become essential, but success depends on collaboration across operators, advisors, and policymakers.
It’s clear that the sector must act now to stay ahead of the curve.
