Retirementlife.co.nz

We don’t think a mandatory repayment time-frame is a good idea because it will affect the financial viability of many operators, including smaller regional retirement villages and slow the development of much-needed new villages, many with hospital-level aged care. Requiring operators to hold cash or a line of credit to be able to pay residents out within any specific time frame would increase costs for residents and increase risk to operators and financial institutions. In some cases, it may result in insolvency for some smaller village operators.

Most repayments to estates or residents that leave villages occur within a reasonable time-frame – 75% of units are relicensed within six months, and fewer than 10% take more than nine months.

We think that rather than penalising the efficient as well as the tardy by imposing a statutory deadline for refunding the outgoing residents’ capital, we support MHUD’s proposal that operators pay interest on the outstanding amount after nine months.

The RVA supports ending charging weekly fees and accruing of deferred management on vacated properties – on the basis that mandatory payments are not introduced and any such changes are not retrospective, as operators will need to adjust their business model for new terms.

We are advocating for improved transparency and disclosure, focusing on your understanding of agreements rather than imposing specific commercial models on operators.

We believe changing existing contracts retroactively is a poor way of making policy. It is also unreasonable to unilaterally alter 50,000 contracts that have been signed in good faith and after residents have sought independent legal advice, as is required under the law.

Retirement villages are already governed by various legislation, and we see no need for duplication. ORAs are covered by the Fair Trading Act and the Retirement Village Registrar already has sufficient powers to act regarding misleading or deceptive arguments.

The current legislative regime allows flexibility and a variety of terms, ensuring residents can choose what suits them. We want to maintain this diversity.

We oppose regulating and homogenising commercial terms, as it limits choice and can result in a one-size-fits-all approach, which won’t work for residents or operators.

One of the great benefits of the current legislation is that it enables flexibility and competition between operators, so that they can develop business models that meet current and future residents’ needs.

We propose making key changes through amendments to the Retirement Villages Code of Practice. This includes stopping weekly fees and fixed deductions upon unit termination, aligning with our Blueprint released in 2021.