Photo: 123RF
The body representing retirement villages has unveiled voluntary reforms, amid calls from consumer and resident groups for a review the 20-year-old legislation governing the sector.
The Retirement Villages Association (RVA), which represents 95 percent of all units in New Zealand, will now require operators to pay interest on the money owed to a former resident if their unit was not resold within nine months.
Other key changes include asking operators to stop charging weekly fees once a unit contract is terminated or the resident leaves, providing better support to residents wanting to move into another facility, removing "unfair" clauses from occupation rights agreements and clarifying how chattels were expected to be maintained.
The measures would be trialled for 12 months as part of the RVA's best practice guidelines before being voted on at the organisation's general meeting next year.
If passed, the changes would become a [https://www.rnz.co.nz/news/national/444307/retirement-village-sector-legal-framework-risks-being-unfit-for-purpose-commissioner
best-practice requirement] that its members would be audited against.
Village operators who were not responsible for the sale of residential units or independent villages with fewer than 50 units would be exempt from the changes if they meant the business would be at risk of failing.
RVA president Graham Wilkinson said in a statement the sector had always accepted the need for improvements to the industry's consumer protections regime "where they are feasible and make sense".
The group has said previously it was open to working with the government around improving outcomes for consumers but had expressed reservations about over regulation because it could lead to unintended consequences.
"Developing and enforcing industry best practice is a more effective and fairer way to resolve these issues rather than legislative upheaval for the sake of it," Wilkinson said.
He said the organisation had appointed former National MP Jo Goodhew to its executive committee as an independent member to ensure older peoples' views are represented.
"We're prepared to explore other changes, but want to see a more evidenced-based approach before making decisions," Wilkinson said.
He warned against imposing changes to the sector's commercial model because villages were long-term investments and any regulatory uncertainty could make them think twice about future investment.
Consumer advocates respond
Consumer NZ chief executive Jon Duffy told RNZ the changes were a step in the right direction but did not go far enough.
For example, he said the requirement to pay former residents' interest on owed capital after nine months was too long and it should probably be closer to three months.
The fact the industry was prepared to make concessions was telling, he said.
"It flies in the face of what they've been arguing for many years which is: 'there's nothing to see here, there might be some rogue operators at the margins but actually, generally speaking, the industry is absolutely brilliant'," Duffy said.
"That's clearly not the case and they wouldn't be conceding what they're conceding if they did not realise there was a problem."
Consumer NZ joined the Retirement Village Residents Association and the Retirement Commissioner in calling for a review of the laws that govern the sector.
A balance needed to be struck so retirement village operators could continue to be profitable and invest in new villages but also treat their clients fairly, Duffy said.
That balance needed to be struck through government regulation, not through voluntary reforms, he said.
Residents' families say enough is enough
Families of retirement village residents have echoed calls for the government to intervene.
Northlander Fred Rood said the sector has had its chance to do better without legislation, and it failed.
Rood's mum lived in an independent retirement village in Kerikeri.
She passed away in October last year, and her contract stated fortnightly payments would continue for up to six months until they found another person to live in her unit.
The village followed that to the letter - six months to the day his mother died, a new resident moved in.
"We just found that surprising, because at a time with housing shortages, waiting lists in retirement villages, growing numbers of the elderly, all that sort of stuff, it took them six months," Rood said.
"I remember at the time I thought that's just so cynical, they didn't even make it a day early.
"I think morally that's wrong, and my dear old mother would turn in her grave if she knew she had to part with all that cash, it's just not fair."
Monique Cornish said even if unfair contract terms did change under the voluntary changes, those unaware of their rights could still be taken for a ride.
Cornish and her 82-year-old mum were left in the lurch after her mum had a series of falls and temporarily left her village for a short stay in hospital.
Her mum was receiving hospital level care at the village, and those needs remained after her falls.
But when it was time to return, they were told she could not come back.
"This is a facility where we had a property agreement, a right to occupy, and they denied us that right because they felt like they couldn't take care of her," Cornish said.
"So she was effectively homeless for several weeks in the hospital with nowhere to go until I could find her an alternative."
It is standard practice for villages to charge an exit fee when a resident dies or leaves a village.
But Cornish's mum was refused re-entry, rather than leaving by choice - and the village tried to charge her an exit fee anyway.
It was only after the threat of legal action that the village backed down, and Cornish said she worried for people who could not 'lawyer-up'.
