Retirement village residents celebrate Govt proposals for greater 'fairness'

Wednesday, 2 August 2023

Concerned residents of retirement villages organised, and pushed for change, with the Retirement Village Residents Association holding meetings throughout the country.

Retirement villages residents are celebrating the Government’s proposals to beef up consumer protection in the retirement village sector.

The Ministry of Housing and Urban Development Te Tūāpapa Kura Kāinga has released a discussion document setting out options for law change to bring greater fairness to retirement villages practices.

It includes proposals act on issues the Retirement Village Residents Association has been lobbying to get changed, including at a Parliamentary select committee hearing last year.

These include ending the practice of retirement villages continuing to charge former residents (or their estates) fees on vacated units, and introducing a mandatory timeframe for repaying a resident’s capital when they move out.

If ex-residents’ capital is not repaid quickly, retirement village owners would be required to pay interest on it.

Nigel Matthews, chief executive of the residents association, said: “If it hadn’t been for the over 11,000 members and supporters of the Retirement Village Residents Association, and their being willing to put their hands up, and be heard, I don’t think this would have ever got off the ground.”

Nigel Matthews, chief executive of the Retirement Village Residents Association, tells MPs why the law needs changing to protect people moving into retirement villages. First published in August 2022.

Retirement village owners also claimed the proposals were a victory for them, including moves to standardise the contracts offered by retirement villages.

“We are pleased the discussion paper has picked up most of the substantial reforms the sector is already voluntarily rolling out in retirement villages across the country,” said John Collyns, executive director of the Retirement Villages Association (RVA).

“These include amending occupation rights agreements (the contract between an operator and resident) to eliminate any unfair clauses, making it clear the maintenance and replacement of operator-owned chattels should be the operator’s responsibility, and introducing the compulsory disclosure of information and financial implications when residents transfer to care facilities.”

When the residents association petitioned Parliament for change in 2021, the RVA said a mandatory 28-day capital return scheme would damage the commercial viability of many of its members.

The RVA estimated that any mandatory capital return scheme, not necessarily 28 days, would require the industry as a whole to hold $2.5 billion in reserve cash.

The RVA considered that holding significant reserve cash would be unsustainable for many of its members, some of which are charitable organisations that currently operate at a loss.

“For these reasons, the RVA opposes any mandatory capital return timeframe,” said the final report of the Social Services and Community Committee on the residents’ petition.

Other concerns from residents on which change is proposed include replacing the current dispute resolution scheme, which is not independent of retirement village owners, so residents have confidence their complaints will be dealt with fairly.

It wasn’t only residents pushing for change.

Retirement Commissioner Jane Wrightson said: “The proposed changes tabled in the discussion document address many of the issues we have raised, along with important others.”

“The sector provides important and valued housing options for some older New Zealanders and is by no means broken,” she said.

But the law governing retirement villages had not been reviewed in two decades.

“It’s important for residents, their families and operators that sector-wide best practice is clearly set out in legislation,” she said.

Associate Housing Minister Barbara Edmonds says: ‘Moving into a retirement village is a big decision and a significant event in a person’s life. It’s essential we make sure the rules guiding the Act work as well as they should.’

Research carried out by Te Ara Ahunga Ora The Retirement Commission found that the experience of retirement village residents could be quite varied, with some residents feeling informed and supported, while others feeling rushed and taken advantage of.

Associate Housing Minister Barbara Edmonds said: “As a Government, we’re committed to ensuring safe, secure and affordable housing for older New Zealanders. And as our population ages, it’s vital we make sure the sector continues to best serve Kiwis.

“The sector has grown substantially over the 20 years since the current legislation came into force. Over 450 retirement villages currently house 48,000 people, with numbers expected to reach over 81,000 by 2033.

“As a Government, we’re committed to ensuring safe, secure and affordable housing for older New Zealanders. And as our population ages, it’s vital we make sure the sector continues to best serve Kiwis.”

The public is being asked to make comments on the proposals. People have until November 20 to make their submissions on the plans.