Proposed retirement village changes ‘flawed’, says New Zealand’s industry body

The Retirement Villages Association (RVA) Executive Director Michelle Palmer said the proposed changes to the Retirement Villages Act 2003 were “flawed and will heap significant financial pressure onto small-to-medium-sized operators, while putting the brakes on new villages and care beds”.

The proposed changes – announced by Associate Housing Minister Tama Potaka and Seniors Minister Casey Costello – follow a lengthy review process with the reforms set to impact both operators and residents, with some changes applying to existing occupation right agreements (ORAs). 

Key changes include:

• The introduction of a mandatory 12-month timeframe to pay outgoing residents their repayment sums;
• In addition to the above, a requirement to pay residents interest on their repayment sums starting from six months following termination;
• Provision for former residents to have early access to their repayment sum in certain circumstances;
• Changes (broadly as expected) around fees, operator chattels and management of complaints and disputes; and
• New regulations for disclosure statements and ORAs intended to simplify the documents and increase consumer protections around misleading statements and unfair terms.

The reforms would make legal documents easier to understand, require operators to be upfront about what they offer, and set clear responsibilities for the chattels they own. A new independent disputes scheme would also give residents a simple, accessible way to resolve issues.

Potaka said these were “practical, balanced reforms that reflect the feedback of residents and operators”.

“The Government is taking the next step to strengthen protections and give residents and their whānau greater confidence, which is part of our wider focus on fixing the basics and building the future,” he said.

The Retirement Village Association of New Zealand disagrees

RVA Executive Director Michelle Palmer says the combined impact of interest at six months and mandatory repayment at 12 months creates a double financial hit that could undermine the Government’s ambition to grow housing and care options for older New Zealanders.

Despite these concerns, Michelle makes it clear, “We support a review of the Act. Reform should protect what works and improve what doesn’t – in a practical, evidence-based and balanced way. We’re ready to work with the Government on a sustainable outcome that works for both operators and residents.”