Jude Holland, of Christchurch has complained, about the transfer fee at her retirement village.
A Christchurch retirement village resident has complained about a $285,000 charge to move between serviced apartments.
But village owner Metlifecare says the outgoing resident must be paid for their apartment and the woman moving will be refunded around $200k once the serviced apartment she lives in is sold.
Jude Holland, 78, of The Village Palms in Shirley, said she must move because her lactose intolerance demands she is nearer a laundry to wash clothes and linen but she can only afford to pay up to $100,000 upfront.
Holland paid $330,00 in 2021 for the licence to occupy the serviced apartment. Retirement village operators typically take a percentage of the value of any unit when a person sells and moves out.
“The request for a further upfront amount of $285,000 is totally unfair and makes it impossible for me to transfer,” she said.
“I think the fee is exorbitant and I don’t think it’s right. If I can’t move, it makes my life very difficult. They offered to provide me with a container for my soiled clothes,” she said.
For her, it’s the distance from her apartment to the laundry, often at night-time.
“It can take five or 10 minutes, then I might have to wait for one of the two washing machines and driers to be available.”
There is no laundry in her serviced apartment but all independent living apartments in that village have laundries.
The Metlifecare spokeswoman said a housekeeper had been doing Holland’s laundry for free during the past four weeks. Her existing apartment was only 80m to 100m from the laundry, while the potential new one was 20m to 30m, so not a substantial difference.
The spokeswoman said any resident-requested transfer within a village would be accommodated.
“But this would need to comply with the terms and conditions of the resident’s transfer for their preference policy. The $285,000 payment is to fund the outgoing resident. If the resident doesn’t fund that, then Metlifecare would have to, which isn’t fair,” the company spokeswoman said.
Although Holland would be charged an initial $285,000 to move, about $200,000 would be refunded to her once a licence to occupy the serviced apartment she lives in was then sold, the spokeswoman said.
“It’s a choice that is not without payment but equally it’s not without coordination and cost on our part. Yes, this resident will need to pay the $285,000 plus any shortfall plus the transfer fee, then she would get approximately $200,000 back once her original serviced apartment resells,” the Metlifecare spokeswoman said.
Those who could not afford the full amount upfront could also access an interest-free loan, the spokeswoman added.
Holland said she originally put in a request to move to the previous owner before Metlifecare bought the village but she never heard back about going from her ground-floor unit to one nearer to the laundry.
A subsequent request was then made to Metlifecare in February this year and she engaged a lawyer, Ross Keenan, of Mount Pleasant Law, to assist her.
Jon Duffy, Consumer NZ chief executive, says fees like those proposed for Holland at Metlifecare are unfair. He wants them outlawed, and has submitted to the Ministry of Housing and Urban Development on a possible updating of the law.
“This causes substantial hardship for residents and means some simply cannot afford to transfer units at all,” he said.
When someone enters a retirement village, they sign an occupation rights agreement, which gives them the right to a particular place, he said.
“If a resident wants to transfer to a different unit for any reason, those agreements usually require them to pay another lump sum for the new unit, enter into a new agreement and wait until the old unit is sold before they get any of their money back,” Duffy said.
They are likely to have to pay exit fees, usually around 30 per cent of their initial price to the operator on both the old unit and the new unit. They may also have to continue paying weekly fees on their old unit until it is sold.
Tristan Fluerty, a retirement village specialist at Te Ara Ahunga Ora the Retirement Commission, said: “In terms of transfer fees and additional fixed deduction fees, we support the proposal made in the discussion paper on the review of the Retirement Village Act that disclosure statements and occupational rights agreements need to provide intending residents with clearer and more comprehensive information on the transfer processes, options available and the financial implications of moves within the village. We are pleased the review of the act remains a focus of the new Government.”
This is just Holland’s latest problem.
Her original prompt to move wasn’t so much her health as noise and nuisance before Metlifecare bought the village.
“I took up residency here two years ago but after being here a month or so the residents upstairs started creating issues: throwing down food items and tissues covered in blood right by my entrance so I collected these and took them up to the hospital nursing station four times,” she said.
A resident directly above her, using a motorised or electric wheelchair, also created noise, she complained.
After midnight once in 2021, furniture above was shifted, stopping her from sleeping so she had complained to the previous owner about this.
The Metlifecare spokeswoman said residents like Holland wanting transfers had many options.
“The presumption is that with a transfer for preference, the transferring resident will fund the capital sum for the new unit, in total. However, if the transferring resident cannot afford this, we support the transfer by allowing the resident to use their existing equity to fund the new unit by way of an interest-free loan until the original unit is sold, subject to them meeting the following three charges.”
Where there is an outgoing resident - namely the resident who was residing in the unit that the transferring resident wishes to move into - the outgoing resident has the right to be refunded the amount they are owed in full, as per their occupation rights agreement. The transferring resident will therefore need to pay the refund to the outgoing resident.
The transferring resident also needed to fund the shortfall if they were moving to a more expensive unit, a bigger one, place with a better outlook or aspect. Again, this was standard practice across the retirement village industry.
“The final cost will be borne by the transferring resident. [It] is a modest 2 per cent transfer fee to cover Metlifecare’s costs associated,” the company spokeswoman said.
Asked why Holland hadn’t taken up Metlifecare’s financial package, Nigel Matthews, of the Retirement Village Residents Association, said Holland hadn’t been offered that “and she shouldn’t need it. She’s already paid.”
Anne Gibson has been the Herald’s property editor for 23 years, has won many awards, written books and covered property extensively here and overseas.
How many people had paid deposits was not stated but pre-sales said to be 'strong'.