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Consumer New Zealand has thrown its weight behind a campaign to urgently review the Retirement Villages Act after numerous stories of residents being treated unfairly.
Chief executive Jon Duffy told MPs at a select committee today many residents were not being treated fairly, saying agreements were often one sided and littered with terms that potentially breached the Fair Trading Act.
It follows a petition launched by the Retirement Village Residents' Association to address an imbalance between operators and residents.
Association president Brian Peat said there needed to be a lot more fairness in the way residents were treated and the Retirement Villages Act was now outdated.
He told Checkpoint contentious issues included the payback period - after either a resident's death or a resident moving out of the village for another reason.
He said it should be reduced to 28 days, while the Retirement Villages Association has suggested nine months with a little bit of interest added on to the funds being repaid.
At present it could take months or even years for some residents to be repaid money they were owed after they moved out, Peat said.
The residents were like tenants in any other situation except that when they moved out they had to keep paying their rents until the unit was re-licensed.
"And that's just not fair."
Consumer NZ's Duffy told the select committee about 80-year-old Mary who had to keep paying for nine months after moving out.
"There are numerous examples of Mary's situation which is very sad," Peat said.
Feedback he had received showed there was overwhelming support among the elderly for a limit of 28 days.
Another sore point was the language used in the contracts between residents and the village operators which were confusing, even for legal specialists, he said.
As well, about 40 percent of the villages have repairs and maintenance costs included in their agreements.
"We don't own the houses, we don't own the land, so why are residents required to pay for repairs and maintenance?"