Tackling fishhooks of retirement village life
A lobby group wants to do for retirement village dwellers what Grey Power does for all over65s, reports Eloise Gibson.
Alobby group for people living in retirement villages plans to challenge the industry to bring about fairer deals for residents. But its founders face what one leader calls ‘‘polite indifference’’ among residents with little desire for conflict so late in life.
The Retirement Village Residents Association of New Zealand wants to start its new life as an incorporated society by sparking a review of the Retirement Villages Act, with the longer term aim of making radical changes to laws protecting residents.
Residents in retirement villages have usually bought occupation right agreements (ORAs) giving them the right to live in retirement units, but not the ownership of them.
These require them to make weekly payments and sacrifice a large chunk of their capital when they vacate, but the association believes many do not fully understand the fishhooks the ORAs contain despite the fact villages require that they get legal advice before parting with their capital, partly because they feel they don’t have any choice.
Concerted action could force changes to ORAs, the association believes, but Frank Lowry, head of the Taranaki Association of Residents of Retirement Villages and a founding representative of the new national lobby group, says retirees often don’t join forces to combat issues because they cannot be bothered with any more committees.
Issues raising concerns include the wide variability of ORAs, whether maintenance funds are sufficient, and the ‘‘injustice’’ of operators being able to charge marketing fees to find a new resident for a unit when a resident vacates.
There is also anger that while an operator is able to profit if a new ORA is able to be sold for more than the previous one, if it sells for less, the vacating person, or their estate, is required to pay the difference.
There are roughly 30,000
Retirees often don’t join forces to combat issues because they cannot be bothered with any more committees, says Frank Lowry, a founding representative of the new national lobby group. people living in retirement villages paying between $200,000 and $800,000 for their ORAs, who each face a bill of tens to hundreds of thousands in ‘‘deferred management fees’’ when they vacate their unit.
With the ageing population, the size of the potential industry is huge, but Lowry thinks residents deserve a fairer deal. ‘‘If it wasn’t for us putting our life savings into villages there would not be an industry,’’ he says.
‘‘People retire and that’s the end, they’ve done all their committee work and they don’t want a bar of committees any more,’’ he says, but there are a few fighters among them.
‘‘The people I’m working with are quite the opposite – we believe we should have a voice when it comes to legislation and the code of practice which details about how villages are run.’’
Lowry and his wife were alerted to the pitfalls when they moved from a retirement village in Canterbury, which was administered by a body corporate, to a more typically run retirement village in Taranaki that uses the licence-to-occupy model. Like many older couples they wanted the security of access to a care home if they needed it and to be closer to family.
But while the body corporate structure in Rangiora left them free to own and sell the property, the roughly $250,000 they paid for their Taranaki villa did not give them ownership rights.
Like most retirement village residents they pay a weekly management fee and ‘‘we found out that when our life here is finished and our estate is wound up there will be a deferred payment to the operator of between 25 and 30 per cent of the original price.’’
‘‘One thing we want to take issue with is just how they set the fees. In one village it might be 21 per cent. In my village we came in eight years ago and our contract might be different to our neighbour who came in two years ago. Talking to my neighbour their [fee] is set at 28 per cent. That’s quite a chunk and that’s on our original price of 10 years ago. Most villages don’t offer capital gain.’’
Lowry says high profile ‘‘debacles’’ in Christchurch and Taranaki showed how vulnerable residents could be unprotected when a development was damaged or went belly-up.
The system of oversight by a statutory supervisor did not always help residents as it should, said Lowry.
He admits there is more work to do to motivate more residents to join. ‘‘Many of them would agree we should have a voice but don’t want to be bothered by it. Even here in Taranaki people say, ‘Frank you’re doing a great job! Now don’t bother me any more about it’. It is polite indifference that I’m facing.’’
Until now there has been no single organisation protecting residents, and the national association hopes becoming incorporated will give them the credibility to lobby with one national voice.
The 15 founding members from different regions have met and formed an interim executive members group, and the first annual meeting is planned for June 2015.
In the meantime there is a new website to launch, to appeal to the growing ranks of computer-savvy retirees. ‘‘Like Grey Power lobbies for over-65s, we will lobby for retirement village residents,’’ says Lowry.
John Collyns, executive director of the Retirement Villages Association, which represents village operators, welcomes the emergence of a national body for residents.
‘‘We have long felt the need for a residents’ association to get together with a mandate to represent the residents as a whole,’’ he said.