The “gut-wrenching” update to the Retirement Villages Act review

Joanne’s* mum Audrey* moved to a unit in a retirement village nearly 5 years ago. It was too difficult to continue taking care of her large property, and the unit was a nice place. Joanne said that her mum felt part of a community there.

Audrey had to pay hundreds of thousands of dollars for an Occupation Rights Agreement (ORA), her licence to occupy the unit. Buying an ORA isn’t like buying a house; Audrey had no ownership rights. Instead, the ORA set out a range of terms and conditions that governed Audrey’s relationship with the village and explained what would happen if she left her unit.

The village changed ownership while Audrey lived there and is now owned by one of the largest retirement village operators in Aotearoa.

Sadly, Audrey died in July 2024. The village took over her unit to refurbish it and advertise it for sale.

Audrey’s ORA required the village to consult with her family about the marketing of her unit. “In particular, we will consult with you about when your home goes on the market and the general nature of the marketing plan for your home. We will continue to keep you informed on a monthly basis about progress with marketing.”

But Joanne was never consulted.

“They were supposed to report back to us after 3 months. I hadn’t heard anything so emailed to see how things were going,” Joanne said.

The village responded, stating the market was slow, with any prospective buyers “more interested [in] north facing units” rather than Audrey’s unit. It went on to explain that market conditions had led it to consider refurbishing an entire block of units, and it didn’t answer any of Joanne’s questions about whether her mother’s unit had been marketed or refurbished at all.

“We weren’t told a single thing about what was happening, if the unit had been listed or if it would even be sold.”

Six months down the track, and Audrey’s unit still hadn’t been sold. Meanwhile, Joanne and her family worry that they may continue to pay weekly fees on the property.

The review

Situations like Audrey and Joanne’s, where residents and their families are at the mercy of an operator’s actions, were the reason advocates called for a review of the legislation overseeing retirement villages.

The Retirement Villages Act is the main piece of legislation that deals with how residents and retirement village operators interact. It came into force in 2003 – over 20 years ago. A range of codes and regulations have been made under the act. In recent years, the legislation’s age has become a focus for advocates because it has failed to keep up with the reality of retirement living and heavily favours operators.

Though industry guidelines suggest these fees should cease on termination, current regulations allow village operators to continue to charge fees after a resident has vacated a unit until its sale. We think this incentivises operators against selling units in a timely fashion, as the longer it takes, the more money operators stand to gain for little to no effort.

For many years now, Consumer NZ has been receiving regular complaints from retirement village residents and their families about village operators, and as the sector has developed, the complaints have become more frequent. In September 2022, we went public with one of our most shocking yet; a widow had been left in financial limbo by a village, paying fees for a unit she had vacated a year ago.

Shortly after, a broad and comprehensive review of the decades-old legislation was finally announced by the Ministry of Housing and Urban Development (MHUD). Advocates celebrated, and Consumer prepared a submission on the issues that mattered most to the residents who had been in touch with us.

Submissions closed at the end of 2023, and after a lengthy period of consideration, MHUD announced that the scope of the review was changing and the Government would take a “more focused approach”.

In a media release in October 2024, MHUD said “A more focused approach means that some topics in the 2023 discussion paper with a lower impact on residents or [that] are too complex to progress are now out of scope. These include introducing minimum building standards and additional monitoring and compliance requirements by government agencies.”

The priorities that remain part of the simplified review include:

• maintenance and repairs of operator-owned chattels and fixtures

• complaints and disputes

• options for incentivising or requiring earlier capital repayments when residents move out of a village.

MHUD signalled that “any amendment bill will likely be introduced in the next parliamentary term.”

This timeline has been updated as of March 2025. The update on MHUD’s website reads:

Operators want certainty

The Retirement Villages Association (RVA), an industry body representing village operators, said at the time of the October announcement that the slimmed review was a step in the right direction.

“We’re pleased the Government has stated it is committed to balancing the rights and responsibilities of operators and residents and ensuring the ongoing viability of the sector,” said Michelle Palmer, executive director of the RVA, in a media release.

“The key priorities the Government has identified align with the sector’s commitment to improving the way the retirement village model works for both operators and residents … Ultimately, village operators want certainty and clarity so they can continue to meet the needs of the 53,000 older New Zealanders living in retirement villages and the 130 people choosing to move into village communities every week.”

Proposed timeline was “gut-wrenching”

The Retirement Village Residents’ Association (RVR) said that the new scope, while not the review it had requested, did cover most items that impact residents.

Nigel Matthews, RVR chief executive, said, “RVR acknowledges [items out of scope] would likely slow the review even further if included.”

Though the review has been slimmed in what it covers, its timeframe looked as if it had ballooned to the next parliamentary term.

Matthews said the review had been in discussion since before 2019 and that, in early 2024, the organisation had expected updated legislation could be as little as 18 months away.

“To now have to potentially wait another 5 years for a reduced ‘moderate approach’ to be introduced is gut-wrenching for our members.”

Matthews said many residents thought this timeframe was ridiculous. Some had even pointed out they probably wouldn’t be around by the time any changes came into effect, with RVR president Brian Peat estimating around 30,000 current residents will have died in 5 years’ time.

Since we spoke to Matthews the timeframe has been shortened to this parliamentary term which may bring some relief. Yet, it’s not set in stone and there is no guarantee we’ll see an amendment bill in July 2026.

“I’ve heard it said that this is the ‘invisible generation’. It’s now time we stopped pretending we can’t see them,” said Matthews.

We think residents deserve better

Our retirement laws are no longer fit for purpose, and while the review is a step in the right direction, thousands of residents remain at risk of falling victim to unfair and exploitative retirement village practices.

Consumer’s Advocate Aneleise Gawn is disappointed in the change.

“Consumer NZ strongly supported a comprehensive review of the retirement villages’ regime in New Zealand. The Retirement Villages Act, relevant regulations and the code of practice have failed their purpose of providing adequate protection for residents, and a thorough review of the legislative framework is long overdue. We’re disappointed and consider this to be a missed opportunity to ensure residents get the protections they deserve. It's going to be too little, too late for many.”

Joanne is still chasing the village, trying to get information on the progress of selling her mum’s unit. She’s worried it could be a year before anything happens. In the meantime, we’ll keep advocating for fairer terms for and treatment of retirement village residents in the hope that no retiree or their family ever has to deal with a situation like Joanne’s.

Update June 2025: Labour MP Ingrid Leary has submitted a members’ bill to the biscuit tin. The Retirement Villages (Fairer Repayments) Amendment Bill, if passed, will require capital sums are repaid to exiting residents within a fair and reasonable time upon leaving the village.

*Names changed to protect privacy.

Note: this article was written for our Autumn magazine, which was published in March 2025. At publication, the likely period for introducing any amendment bill was indicated to be the next parliamentary term, 2027-2030. References to this period have been updated to reflect the new timeline.