Investment in nursing homes for the elderly through
acquiring real estate or the shares of companies managing such
homes is increasing in Japan. Generally, investors should be
aware of the relevant regulations in order to consider risks;
however, the structure of Japanese laws and regulations on
these homes is complicated because there are historically two
authorities involved, each having established different
regulations. The following is a brief introduction from the
latest legal perspective for potential investors.
The first authority involved is the Ministry of Health,
Labour and Welfare (MHLW). The MHLW supervises nursing homes
based on the Act on Social Welfare for the Elderly. Under this
act, there is a concept of 'a fee-based home for the elderly'
(Nursing Home), basically meaning a facility that provides
services for taking in elderly persons and providing them with
nursing care services. The MHLW published guidelines for
prefectural governors on the method of administrative guidance
for Nursing Homes and the desirable conditions involved, such
as staffing, management, internal rules and services.
The second authority involved is the Ministry of Land,
Infrastructure, Transport and Tourism (MLIT), which supervises
nursing homes under the Act on the Securement of a Stable
Supply of Elderly Persons' Housing. This act has another
definition for such facilities: 'a residence with health and
welfare services for the elderly' (Service Residence), which is
rental housing for the aged which provides residents with
safety-check services and life-advisory services. The MLIT
requires Service Residences to satisfy certain conditions that
are generally looser than those of Nursing Homes.
As the descriptions above show, most Service Residences also
fall under the definition for a Nursing Home. These Service
Residences, therefore, must comply with both the MLIT
requirements and the MHLW guidelines. However, in practice, due
to the differences between jurisdictions, many of them seem to
comply with only the MLIT requirements as Service Residences.
Even though, in 2015, the MHLW amended its guidelines and
clarified that they applied also to Service Residences that
fell under the Nursing Homes definition, the authorities do not
as yet appear to be enforcing this policy perfectly. The local
authorities directly supervising Nursing Homes tend to overlook
non-compliance by Service Residences by applying provisions in
the guidelines that use the wording 'in accordance with the
type of service provided' and thus allow some flexibility.
However, since it is expected that administrative guidance on
Service Residences will become stricter to unify the
regulations, investors should carefully monitor future
activities of the authorities.