• Minimum time for operators to repay capital of 9-12 months
• Independent dispute resolution service funded by operators
• Standardised Occupation Rights Agreements for all operators

A newly formed advocacy group for residents of retirement villages is calling for stronger consumer protections in its submission on the Government’s review of the Retirement Villages Act.

"Investing in a retirement village is one of the most important decisions many make in their later years and residents should be able to enjoy life there safe in the knowledge their rights are well protected," said Carol Shepherd of the Retirement Villages’ Residents’ Council (Council).

"The review of the Act is a welcome opportunity to get the balance right between the needs of operators to continue providing an essential service in a sustainable way and the rights of residents to be fairly treated and enjoy the quality of life they expect and are paying for."

https://www.residentscouncil.org.nz/council-submits-on-the-review-of-the-retirement-villages-act

The Council’s members are all retirement village residents from across New Zealand, plus an independent chair (Deborah Hart). Members have extensive governance experience, many being on village residents’ committees and include former senior public servants and people who have worked across local government, health and education. It is funded by the Retirement Villages Association but is independent of that body. (see background below).

Minimum time for operators to repay capital of 9-12 months

"There are many different types of operators servicing some 50,000 New Zealanders from large listed profitable companies, through to small, charity and family run villages which do not have the same resources. As our population grows and ages, it’s even more important that the regulatory framework continues to ensure residents have choice, their assets are protected, and the industry can continue to provide affordable options.

"That’s why we are recommending changes to capital repayment requirements to provide certainty for both residents and operators. We believe a 9-to-12-month minimum repayment of capital strikes the right balance unless a resale has been achieved, in which case the payout should be made at that time. Research shows around 90% of units are resold within nine months.

"Capital should be repaid on fair terms, without imposing financial hardship on smaller operators who, in turn, are likely to end up having to charge residents more to cover the risks of repaying on a shorter term. We also believe interest should be paid on residents’ capital after 3 or 6 months as it provides an additional incentive for operators to sell units as quickly as possible.

Independent dispute resolution service funded by operators

"It’s critical with an investment this large and the need for residents to enjoy a peaceful, quality life, that any disputes can be resolved easily and at a low cost. An independent disputes resolution service would help ensure there is an easy and fair avenue to resolve issues for residents, and their families who often have to get involved, as well as operators This is especially important as residents cannot simply sell up and move.

"There are plenty of excellent dispute resolution models that can support consumers through a low-cost avenue. We believe any dispute resolution service for retirement village residents should be largely funded by operators with no legal representation allowed for either side.

Standardised Occupation Rights Agreements for all operators

"Many residents have invested in villages where there are no other villages nearby so there is no competitive pressure on the village operator to offer fair terms in contracts. The Commerce Commission is currently reviewing Occupation Rights Agreements (ORA) suggesting some failures to protect residents.

"We therefore recommend a standard ORA be provided by all operators. This would greatly help residents compare options and make the right choice for themselves and their families. But we believe it would be unfair to make changes to the ORA retrospective.

"We hope our submission goes some way to improving protections for residents and ensuring the industry continues to support our growing retired population. As residents ourselves we are proud to work on behalf of other residents to ensure their voice is heard and look forward to building our advocacy in the future," said Carol Shepherd.

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