Associate Minister of Housing Poto Williams says a full review of retirement village legislation is warranted after Retirement Commissioner Jane Wrightson recommended an urgent review.
However, Williams did not comment directly on whether a review is urgent, although asked.
The Retirement Villages Act 2003 is administered by the Ministry of Housing and Urban Development, with the Associate Minister for Housing (Public Housing) responsible for administration of the act.
“I want to take time to get advice on the recommendations. It has been some time since the Retirement Villages Act was introduced, and I agree that a review of how the legislation is working is warranted,” Williams said in a written response to questions from Stuff.
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“However this is an important piece of work, and we want to take time to get it right. It is important that the regulatory regime strikes the right balance for residents and operators, and is based on a sustainable model for the sector.”
Wrightson said on Wednesday residents had fewer consumer rights than tenants, the law governing the retirement village industry was almost 20 years old and the industry only lightly regulated.
Contracts contained unfair terms, they should be standardised across the industry like real estate sale and purchase agreements were, they should be in plain English and a simple and well-organised complaints system should be set up.
Many of the issues residents and families complained about where when residents died or left their units or apartments for higher levels of care.
Minimum standards should be set for key “exit” matters like how long weekly fees were allowed to continue after the death of a resident and how long operators had before they had to buy back the licences to occupy a unit and repay residents or their estates.
Residents were neither owners, nor tenants, so their rights needed to be made clear, Wrightson said.
“I agree with the Commission that the issues identified are best addressed as part of a full legislative review that looks at the system as a whole, rather than piecemeal changes which may not address the core challenges for the sector,” Williams said.
“I welcome the fact that the industry has agreed to make some changes themselves, including working with the Commission for Financial Capability to develop best practice guidance about contractual terms around responsibility for maintaining and repairing chattels.”
Wrightson said the issues raised in her report were essentially about the consumer rights and protections of residents which were much less than those of tenants and more suitable for a commerce and consumer affairs agency.
“In terms of whether this should fall under the Commerce and Consumer Affairs portfolio, that would ultimately be a matter for the Prime Minister,” Williams said.
Wrightson said if reviews involved statutory change that could take years, anything from two to five was her guess.
Wrightson has been vigorously lobbied by the Retirement Village Residents’ Association representing residents and to a lesser extent by the Retirement Village Association representing operators since she took up the job in February 2020.