Retirement village legislation under review
A long-awaited review of the muchcomplained-about Retirement Villages Act is under way, potentially improving the lives of more than 40,000 residents, overhauling the financial model and demanding places meet healthy homes standards.
Te Tūāpapa Kura Kāinga, the Ministry of Housing and Urban Development announced the law probe this week into the multi-billion dollar sector following widespread calls for change from Consumer NZ, the Retirement Commissioner, the Retirement Village Residents Association,
Owner/operators keeping 20 to 30 per cent of retirees’ capital via deferred management fees will be one area under the spotlight.
Potentially changing the law on contentious issues like who repairs, replaces and maintains operatorowned chattels like stoves, heat pumps, etc is also up for discussion.
Retirement buildings might have to meet healthy homes standards just like rental properties, as governed by the Residential Tenancies Act 1986.
How long weekly fees are charged once people die or leave their retirement village places and rules around resales and returning capital will also be examined.
“Minimum standards for specific financial exit matters concerning termination of weekly fees once the unit is vacated; resale and return of residents’ capital after exiting including whether exit repayments to residents should go through the statutory
supervisor; and treatment of deferred management fees and capital gains and losses,” was how the ministry worded its review of these aspects.
Residents have complained about losing 20 to 30 per cent of their capital, fees being charged months after they leave and having to pay for repairs to chattels when they don’t own items such as appliances which have to be left behind when they leave.
“Adequate consumer protection”
will be at the heart of the review, the ministry said.
Two years ago, Retirement Commissioner Jane Wrightson issued a discussion paper on a law change, noting a lack of significant reform in 17 years. Guaranteed retirement unit buyback periods when residents move or die, limits to how long weekly fees are charged when people leave and a consumer protection probe are mooted.
The commission got 3000 submissions when it said many aspects of villages should change to make it fairer for residents and beneficiaries of family estates.
Villages can keep charging weekly fees for months after residents die. They are not forced to repay a family estate or beneficiaries the money paid for a unit or bed once their relative has died. The ministry said it was working towards releasing a discussion document by September next year.