55+ Community vs Independent Living: Key Differences

The main difference in a 55+ community vs independent living is what you are buying. In a 55+ active adult community you usually own your home and pay HOA fees for amenities. Independent living is a housing and services package from an operator. Assisted living is a state-licensed care setting.

People often use these terms as if they meant the same thing, and that can lead a family to tour the wrong places. I am a REALTOR, so I work on the home-buying side. This post explains each option in plain words so you know what you are comparing.

Owning a home in a 55+ active adult community

In most Greater Phoenix active adult communities, you buy a home the same way you would anywhere else: purchase contract, inspections, title, escrow and closing. You own the home, pay property taxes and insurance, and pay the HOA or recreation fees that community charges. You can sell it later on the open market.

The age rules come from the community's own documents and federal law. Under the Fair Housing Act's Housing for Older Persons exemption, a community can operate as "55 or older" housing if at least 80 percent of occupied units have at least one person 55 or older, it publishes and follows policies that show it intends to be 55+ housing, and it follows HUD's age verification rules. A second version of the exemption covers housing that is meant for and occupied only by people 62 or older. You can read the details on HUD's Housing for Older Persons page. Each community's CC&Rs spell out its own rules on residents under 55, guests and rentals, so I always have buyers read them before they commit.

What the fees cover: things like pools, fitness centers, clubs, golf or pickleball, depending on the community. These are amenities, not personal care. Meals, housekeeping and help with daily tasks are generally not part of HOA living.

If you are starting to look, the 55+ community finder lets you sort communities by amenities.

Independent living in general terms

"Independent living" is a broad marketing term, not a single legal category. It usually means an apartment, cottage or villa run by one operator, with services built into the arrangement. Depending on the property, those services may include some meals, housekeeping, scheduled transportation, activities and staff on site. Residents are generally expected to manage their own daily needs.

Ownership: many independent living residences are rentals with a monthly fee. Some retirement communities use a different model called a life care contract. In Arizona law, a life care contract promises nursing services for life or for more than a year, usually in exchange for an entrance fee, and a provider needs a state permit to offer one (see A.R.S. 20-1801). Either way, you are signing an agreement with an operator, which is very different from receiving a deed to a house.

What to do: ask each community for its full agreement and list of services, and have an Arizona attorney or financial advisor review it before you sign. I help with real estate purchases and sales, not care or service contracts.

Assisted living in general terms

Assisted living is a care setting first. In Arizona, the Department of Health Services licenses assisted living facilities as residential care institutions that provide supervisory, personal or directed care on a continuous basis. ADHS uses these license types:

• Assisted living home: ten or fewer residents
• Assisted living center: eleven or more residents
• Adult foster care home: a small, home-based setting for one to four adults

The service levels range from general oversight and help with taking medications, to hands-on help with daily activities, to directed care for people who need more support. You can see the state's descriptions on the ADHS assisted living provider types page. Which level fits a person is a question for licensed care professionals, not a real estate agent.

Ownership: you are paying for housing plus care under a residency agreement. It is not a home you buy and later list for sale.

How costs work, without the dollar amounts

• 55+ home ownership: purchase price or mortgage, closing costs, property taxes, homeowners insurance, HOA or recreation fees, utilities and your own maintenance. You also own any equity.
• Independent living: usually a monthly fee that bundles rent and services. Life care models add an entrance fee. Read what the agreement says about refunds and fee changes.
• Assisted living: usually a monthly fee for housing plus a charge tied to the level of care. Costs can change if care needs change.

One point families often miss: Medicare says it does not cover long-term care or custodial care unless medical care is needed, and you pay all costs for services it does not cover. Medicare lists assisted living as one place people get this kind of non-medical care. See Medicare's long-term care page, and talk with a tax or financial professional about how you will pay.

Comparing the three side by side

• What you get: a 55+ home gives you a deed and a full house. Independent living gives you a unit and a service agreement. Assisted living gives you a room or apartment with licensed care.
• Who handles upkeep: in a 55+ home, mostly you, with some exterior items covered in certain HOAs. In independent and assisted living, the operator handles it.
• Daily services: 55+ communities offer recreation. Independent living adds hospitality services. Assisted living adds personal care.
• Leaving: you sell a 55+ home. You end an independent or assisted living agreement under its own terms.

If you are helping a parent sort out options, the Area Agency on Aging, Region One runs a 24-hour Senior HELP LINE and a Long-Term Care Ombudsman program. Their contact details are at aaaphx.org. I also keep starter lists of senior services in the West Valley and the East Valley.

Questions buyers ask

Is a 55+ community the same as independent living?
No. In a typical Arizona 55+ community you own a home and pay HOA fees for amenities. Independent living is an operator-run residence with services included under an agreement.

Does a 55+ community provide care?
Generally no. HOA fees pay for amenities and common areas. Any in-home help is arranged separately by the homeowner.

Do I need to be 55 to live in a 55+ community?
Federal rules require at least 80 percent of occupied units to have at least one resident 55 or older. Each community's CC&Rs set its own rules for younger residents, so read them before you buy.

Is assisted living licensed in Arizona?
Yes. The Arizona Department of Health Services licenses assisted living homes, assisted living centers and adult foster care homes.

Does Medicare pay for independent or assisted living?
Medicare says it does not cover long-term or custodial care unless medical care is needed. Ask a benefits counselor or financial professional about your own situation.

Can you help sell a home if a family member moves to assisted living?
Yes. Selling the home is real estate, and that is my job. The care decision itself is for your family and licensed care professionals.