Claim that stronger rules for retirement villages put small operators at risk
Thursday, 4 December 2025
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The Government plans to strengthen the rights of retirement village residents and their families through a set of rule changes for when a resident leaves.
Associate Housing Minister Tama Potaka said the the reforms would make legal documents easier to understand, require operators to be upfront about what they offered, and set clear responsibilities for the chattels they own.
A new independent disputes scheme would also be established.
Key improvements in the bill include a process for former residents to apply for early access to funds in situations of specific need, interest being paid after six months if a unit remained unlicensed, repayment of funds no later than 12 months after a unit is vacated, and weekly fees and deductions stop immediately when a resident vacates.
“These are practical, balanced reforms that reflect the feedback of residents and operators,” Potaka said.
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Retirement villages played a significant role in the housing system and the new rules were fair, transparent and built to last, he said.
“People deserve clarity, fairness, and straight-up information when they move into a retirement village.
“For too long, residents have faced uncertainty, especially when moving out and waiting for their money to be repaid. These changes put people first by setting clear expectations and making the whole system more transparent,” Potaka said.
Retirement Village Residents Association president Brian Peat said he was pleased that the Government had moved some way to correcting the imbalance and has moved towards a repayment time frame of 12 months.
However, that's not what residents want to hear. The association’s position had always been to have no more than three or four months for repayment. “That is the real issue that we have to have addressed,” Peat said.
“All the other things, repairs, maintenance, complaint system that's happening anyway.”
“However, the situation still remains that existing residents will have no better rights than what they've had in the past.”
The deal only applied to new residents, which is the real concern that there's a two tier system, Peat said.
There were three foreseeable consequences of the law changes, he said.
People would delay moving into a village until the new laws applied; operators would be incentivised to relicense units covered by the new law first - leaving long-waiting former residents and estates at the back of the queue; and those who had already left and were waiting for their money could be left waiting even longer “while watching newer residents enjoy protections that they themselves fought hard to achieve.”
Potaka said for some, not all changes would have a direct impact. “However, advocacy has shaped reforms that will deliver fairness and certainty for thousands of older Kiwis in the future.”
Carol Shepherd, a spokesperson for the Retirement Villages’ Residents’ Council which is funded by village operators but represents village residents,said the reforms would better protect residents and their families who had sometimes waited too long to be paid out for vacated and unsold village units.
“These changes are a welcome step in the right direction. They strike a better balance, being fairer for residents and village operators alike,” she said.
The reforms meant residents would be provided with a more consistent approach to how their interests were managed by village operators, Carol said.
Retirement Villages Association executive director Michelle Palmer said the Government’s proposed changes to the act were flawed and would heap significant financial pressure onto small-to-medium-sized operators, while putting the brakes on new villages and care beds.
“Introducing both interest after six months and a 12-month mandatory buy-back period for village operators will create a double financial hit and have a chilling effect on the development of retirement villages and care beds,” Palmer said.
The proposals risked derailing the Government’s plans to build more homes and care beds. “They will slow development when we urgently need to accelerate it,” she said.
The mandatory repayment period would, for some operators, push up costs for residents, slow down new development and the delivery of new care beds, and may force the closure of smaller regional and charitable villages, Palmer said.
“Forcing operators to repay residents or their estates before new funds come in will make the model more expensive and less sustainable, with many operators required to seek new lines of credit or funding from their banks.”
Seniors Minister Casey Costello said the majority of retirement village residents were happy with the lifestyle and amenities offered by villages.
“The changes we are making will address concerns around fairness and provide certainty to residents and their families, Costello said.
“At the same time, the changes recognise the important role that retirement villages play in providing housing options for older New Zealanders and that around two-thirds of them provide aged care facilities.”
Potaka said said a key focus was on reducing the stress families face when a loved one left a village,
The new steps would provide certainty and strengthen the rights of residents, while supporting the sector to grow and innovate for the future.
The bill is expected to be introduced to Parliament mid-next year.
Correction: the story has been amended to show that the Retirement Villages’ Residents’ Council does not represent operators. It represents residents, but is funded by operators and is a rival group to the Retirement Village Residents Association.