Minister wants ‘full legislative review’ of multi billion dollar retirement village sector
The minister responsible for retirement villages has backed the Retirement Commissioner’s call for a full legislative review of the system, saying a “full legislative review” is needed.
Poto Williams, Associate Housing Minister (Public Housing), responded to Retirement Commissioner Jane Wrightson’s report this month calling for an “urgent” review of law governing the sector.
“I agree with the commission that the issues identified are best addressed as part of a full legislative review that looks at the system as a whole, rather than piecemeal changes which may not address the core challenges for the sector,” Williams said.
Last Wednesday, Wrightson said an urgent review was needed for fairness to about 45,000 older New Zealanders living in the fast-expanding high-profit sector who are neither owners nor tenants of their homes and denied a strong consumer voice.
Operators taking ages to resell the property after a death, no shared capital gains and weekly fees continuing after death or hospital admission were the most widely discussed issues, Wrightson said. Wrightson, Consumer NZ, the Retirement Village Residents Association, the Law Society and many others are making louder calls for a review of the Retirement Villages Act 2003.
Williams said she agreed but indicated nothing would happen fast.
“I want to take time to get advice on the recommendations. It has been some time since the Retirement Villages Act was introduced, and I agree that a review of how the legislation is working is warranted. However, this is an important piece of work, and we want to take time to get it right. It is important that the regulatory regime strikes the right balance for residents and operators, and is based on a sustainable model for the sector,” Williams said.
The Retirement Villages Association is examining some reform, but of a far more minor nature than Wrightson has recommended.
Williams backed the association’s moves.
“I welcome the fact that the industry has agreed to make some changes themselves, including working the Commission for Financial Capability (CFFC) to develop best practice guidance about contractual terms around responsibility for maintaining and repairing chattels,” Williams said.
Graham Wilkinson, Retirement Village Association president, indicated opposition to reform.
“You would think operators place elder New Zealanders in thumbscrews to get them to sign contracts.No one has to move to a village and all those that do understand the issues. Hopefully, this will die down for a while as it is actually quite demeaning and condescending for our residents. They are not silly,” Wilkinson said.
Troy Churton, a consultant to the sector, backs a review and was pleased to hear Williams acknowledge issues with the current law.
“To me, if the minister acknowledges a full review is better than a piecemeal review, then it’s just a matter of allocating a time and resource to do the review work,” Churton said.
Submissions on the review backed by Wrightson said occupation rights agreements were non-negotiable, contracts were confusing, facilities were promised but failed to materialise. Agreements should be standardised, like residential tenancy or property sale agreements.
Agents selling retirement village agreements aren’t forced to adhere to real estate agent standards. Who pays for repairs and maintenance and the loss of 20 to 30 per cent of the purchase price were other concerns.
“Almost everyone supports an examination of the system, including statutory supervisors and the Law Society,” Wrightson said.
Late last year, the Commission for Financial Capability released a paper raising alarm about the resale process, weekly fees charged after a resident dies or is moved, flaws in an overly complicated complaints system, confusing documentation, and the tricky interface between village and care facilities.
“These issues are important because it is difficult to leave a village once contracts are signed,” Wrightson said.
Almost all individual submitters supported a full review of the regulatory framework, Wrightson said.
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