Retirement village changes a blow to current residents

The new rules include:

• repayment of funds being made no later than 12 months after a unit has been vacated

• interest being paid after 6 months if a unit remains unlicensed

• weekly fees and deductions stopping immediately when a resident vacates

• a process for residents to apply for early access to funds in specific need situations.

But the thousands of residents already living in retirement villages won’t benefit from these changes. The new repayment rules would only apply to agreements signed 1 year after the law has been changed. The Bill isn’t expected to be introduced to parliament until July 2026 and is unlikely to be passed in this parliamentary term.

While we think the changes will be an improvement, we’re gutted for current residents who have been campaigning so hard for some fairness.

Consumer NZ chief executive Jon Duffy said the changes were doubly unfair for current residents.

“Existing retirement village residents have led the fight for fairness. But they won't get to benefit from all the changes and will be materially disadvantaged compared with residents entering facilities after the amendments come into force,” Jon said.

“It will create this two-tiered system where those who signed agreements before the law change don’t receive the same protection as those who sign up after. It’s unfair and will probably create confusion."

Retirement village operators will also now be responsible for maintaining the chattels they own in residents’ homes.

“Some operators made residents liable for the cost of repairing things like ovens or garage doors even though the residents don’t own those things. We’ve always said this is at odds with residents’ rights under the Consumer Guarantees Act.”

Consumer has been pushing for retirement village residents to get a fairer deal for years.

“We’d like to thank all those who donated and helped us take on this fight to give New Zealanders dignity in their golden years,” Jon said.

Jon said the retirement village overhaul highlights how bad the status quo has been. It also shows up a gap in the Fair Trading Act.

“At the moment, there is only one way a resident can challenge a manifestly unfair contract term under the Fair Trading Act. They must get the Commerce Commission to agree to take on a case, and it hasn’t taken on many,” Jon said.

“We think individuals should be able to take their complaint about an unfair contract term to the Disputes Tribunal. Unfortunately, in the Fair Trading Act reforms announced recently, it seems the business lobby convinced the politicians to remove that option. We think it needs to come back, and we’re certainly going to be arguing for it.”