Retirement village residents fuming at delays to 'urgent' law changes

A group representing residents of retirement villages is furious about delays to changes to a 20-year-old Retirement Villages Act.

Associate Housing Minister Tama Potaka has confirmed a long-awaited review of the law will progress but says any amendment Bill won't be introduced until the next parliamentary term currently set for 2026.

The review began under the previous government with consultation last year attracting more than 11,000 submissions.

The Retirement Villages Association, which represents operators, welcomed the ministers' announcement saying the review focuses on the right things and "balances the rights and responsibilities of operators and residents, and ensuring the ongoing viability of the sector."

Di Sinclair, the vice president of the Retirement Village Residents Association, said the current law gives residents a raw deal and while they are grateful they have been given a timeframe, it is just not soon enough.

"Every week 130 New Zealanders move into retirement villages… that means 3777 per year who will die or move out per year," said Sinclair.

Pre-election, Christopher Luxon supported a review of the legislation.

"We understand resources are stretched, by the coalition has shown itself to be one of action," Sinclair said.

Other projects have been delivered within the government's 100 Day Action Plan, and, as retirees, they "don't have the joys of lots of time left."

"We just don't want this new tranche of people coming into the villages signing what could possibly be … contracts riddled with unfair clauses.

"Time is of the essence for us … we're talking about people in their 70s, 80s and 90s."

A range of issues had been raised in an earlier White Paper by the Retirement Commission in 2020, with the current government identifying three priority areas; repairs and maintenance of chattels, complaints and disputes and repayment.

Under current law, residents had to pay for repairs and maintenance of chattels that they did not own.

"Last year, the Commerce Commission investigated 12 operators and expressed serious concerns that residents were having to pay for repairs to water cylinders and carpets et cetera," said Sinclair.

And, unlike other sectors like retail, rental or banking, residents don't have an ombudsman or external power to resolve complaints.

"It's just an elderly person making a complaint about an operator in a position of power, and sometimes to that very same owner," she said.

"In some cases, it results in bullying of the resident, and that is just not on."

Lastly, under the current law, there is no mandated time frame to return the capital sum originally paid to owners when the resident moved in.

"In some cases, this can take up to two years, because the operator will not pay out until the unit has been relicensed."

Associate Housing Minister Tama Potaka said he understood these concerns "but there are a lot of complex issues that we have to work through."

He said there has been broad support for village operators for many changes including easier-to-read disclosure statements, improvements to the contractual arrangements and code of practice, and stopping fees when a resident vacates.

However, changes to the current legislation were a complex matter.

"[We're] working through what are not insignificant and not simple issues to a really durable solution."

Capital repayments were one example. Often retirees would pass away while they are in the village, and then, usually, an operator will need to sell the unit to generate the funds necessary to pay back the residents or next of kin.

"There's been quite a bit of contention and debate over the capital repayment terms, how fast that should happen, whether or not it should happen, if the unit has been sold or not...

"That's not a simple set of issues that can be worked through.

If the terms are too harsh, Potaka said, it may become unsustainable for some operators.

"[Some] don't have the liquidity to pay residents back after they move out."

Retirement Village Association executive director Michelle Palmer said around 75 percent of operators have already made improvements under recent sector reforms.

Palmer said updating the law should bring all businesses up to standard, but the devil would be in the details.

When interest was paid on capital repayments, it would have to be worked out carefully so it was a fair process for both operators and residents, she said.