Photo: Unsplash / Blake Wheeler
There have been calls for a radical overhaul of what is being described as an unfair law governing retirement villages.
"Unite for Seniors," is a new nationwide campaign, backed by the Retirement Village Residents Members Association, who believes the law favours village operators.
Residents who do not own their units and only have rights to reside, must cover maintenance costs, and lose out when licences to occupy are resold when they leave.
For example, one woman whose parents have to shift out of their retirement unit as they need a higher level of care, Bonny, says it is costing them.
"Mum and Dad have been in their retirement village for 10 years. During those 10 years, they got no capital gain and as we all know, the housing market has increased so much over that time, no capital gain. Mum and Dad bought their villa for just over $600,000," she said.
"They were going to be getting it once it was relicensed, just over $400,000 back, yet the retirement village is selling that villa for $1.2 million. That situation needs to change."
Di Sinclair, who looks after complaints for the Retirement Village Residents Members Association, told Checkpoint the problem is just as bad as Bonny described, and sometimes even worse.
"It's one of the inequities of the system. I mean, where else in the world would you be able to get your hands on a nine-month, $600,000 interest free loan with no mandatory payback period? It's as simple as that," she said.
"You can't get your money back until they relicense your unit, and that may take up to two years."
Sinclair said people who are unable to pay for their next place, such as a centre with a higher level of care, can not afford it, or have to take out loans, because they are still waiting for their money to be returned.
"We have someone at present whose daughter has had to take out a $450,000 loan to get her mother into village B from village A, as she was very unhappy," she said.
"13 months later, the daughter still paying interest on that money because they haven't relicensed her unit."
There is no legal requirement under the existing legislation for village operators to pay residents within a certain timeframe, she said.
"They will say, nobody's waited longer than six months or whatever and that's quite true in some cases, but in a lot of other cases, that there's no requirement at all, they don't have to pay out until they re-licence it, that's their right," she said.
"But just because it's legal, it doesn't make it right. It doesn't make it fair, does it? It's wrong from so many different angles."
Depending on the village operator, some residents who are in units don't own them, they have licences to occupy them.
"Some cover all maintenance and repairs of their chattels, which is perfect, but a lot of them do not. They refuse to pay for the maintenance and repairs of their own chattels, and they put that onto the resident," she said.
Many residents have to pay to get things fixed, she said.
"You can just imagine the landlord saying to a residential tenant, 'Sorry, the washing machine's broken down and your unit is broken down. But you'll have to pay to get it fixed and fix it yourself."
Sinclair said the Commerce Commission has brought up the issue recently.
"They say it is totally inappropriate and it is not right for operators to charge residents for the repairs and maintenance of things they do not own."
Pre-election, Christopher Luxon supported a review of the legislation, Sinclair said the government has agreed to carry on with the review through the Ministry of Housing and Urban Development.
"They're going through the 11,500 submissions that the resident's association members sent in, and we are hoping that by the end of August or early September, there will be a report to ministers with advice on how to do these things and how many changes we can make and for the legislation to go through."
However, Sinclair said she is worried about tinkering.
"The Retirement Village Association, that's the association of the operators. They want to just tinker around the edges of what we call the code of practise, which is also a legally binding document that goes along with the with the Act," she said.
"But that's not going to change things. We need to have the legislation changed. The legislation must be changed in order to bring fairness, consumer protections and consistency to the whole scene."
She said she currently deals with 10 to 20 complaints per week, from residents who are unhappy with their villages.
"It's just there's so many and we have to look into these ones. Some of them can't be solved at this stage. The complaint system is unfit for purpose, and we need a new complaint system. At present, the complaints are taking up to three years to be solved."
She said an Ombudsman-type person for retirement villages would improve complaints system.
"A sort of a Commissioner Type Ombudsman person who would hear the story from both sides and make a binding decision in three weeks, that would be perfect."
