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2 February 2021

Media release: Consumer NZ calls out unfair terms in retirement village contracts

Consumer NZ wants an overhaul of retirement village regulations to protect residents from unfair terms.

Consumer NZ chief executive Jon Duffy said its review of retirement village contracts found terms that unfairly favour the village and risk leaving residents out of pocket.

“Retirement villages promise the good life in your golden years. However, the agreements consumers must sign before they move into a village can have a nasty financial sting. Some also risk breaching consumer law,” Duffy said.

A major concern was terms that made residents responsible for the costs of maintaining and repairing items in their unit, even though they didn’t own them, he said.

Most retirement villages offer a “licence to occupy”, which gives the resident the right to live in their unit but no ownership rights to the property. Despite this, some contracts made the resident liable for repairing the operator’s chattels.

Consumer NZ head of research Jessica Wilson said Metlifecare had a wide-ranging clause in its contract, which gave residents just one month after the agreement begins to advise the company of any repairs needed.

After that time, the resident was required to meet any costs, including paying for repairs to the unit’s stove, garage doors, plumbing and electrical fittings.

“In our view, these terms conflict with residents’ rights under the Consumer Guarantees Act to expect goods and services of a reasonable standard. If the oven in your unit fails, the village should wear the repair cost.”

Wilson said many residents also faced significant financial losses when their unit was sold because they didn’t receive any capital gains, despite paying towards the property’s upkeep.

Villages’ retention of the capital gain was a major cause of complaint. In a Consumer NZ survey of 1680 residents, 63 percent were unhappy their agreement didn’t allow them to get any capital gain when their unit was sold.

Consumer NZ’s review of village contracts also found terms that gave the village wide discretion to decide what residents could and couldn’t do.

Several contracts restricted residents’ rights to raise objections about village developments. Metlifecare and Summerset contracts included terms stating residents weren’t allowed to object to any dust, noise or other nuisance caused by the development.

Wilson said these kinds of clauses ignored residents’ rights to raise legitimate concerns.

Consumer NZ will be providing the findings of its review to the Retirement Commissioner Jane Wrightson, who’s responsible for monitoring the sector.

Consumer NZ’s review of retirement village contracts was supported by a grant from The New Zealand Law Foundation.

The review looked at contracts offered by six major retirement village operators: Arvida, Bupa, Metlifecare, Oceania Healthcare, Ryman Healthcare and Summerset.

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Consumer NZ’s report on retirement village contracts is available free at and will be in the February/March issue of Consumer magazine.

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