Not everyone is happy when retirement village weekly fees rise. Photo / Supplied
The lobby group for some of New Zealand’s nearly 50,000 retirement village residents has listed 10 unfair practices used by villages against those who live there, just as the sector is under government review.
Under a headline “information for residents new to retirement villages”, the Retirement Village Residents Association said it was worried about the practices, which were not illegal but discriminated against or disadvantaged residents.
“We are currently concerned with the unfairness of the Retirement Villages Act 2003, regulations and codes of practice which never contained a clause for review and no longer protects the consumer rights of residents, given the changes in the economy, the care sector and expectations of residents,” said the association, which has 9200 members.
But the group representing owner-operators said most of those 10 practices are not used by larger businesses and nor are they widespread.
Graham Wilkinson, president of the Retirement Villages Association business lobby group, said if any of the 10 were practised, it was only by a few smaller operators or was disclosed upfront so people know before buying.
Residents and those considering buying into villages are attending meetings where the 10 practices are listed, with information being handed out in flyers. One of those was passed on to the Herald.
The association said these were just a few examples and it acknowledges not all villages practiced such unfair things.
“But we are very conscious that the RV Act allows them to do so which means that residents have very little consumer protections under the current act.”
A government ministry is also examining changing retirement village law. Te Tūāpapa Kura Kāinga The Ministry of Housing and Urban Development announced an investigation in December after widespread calls for change from Consumer NZ, the Retirement Commissioner, the association and residents.
A ministry discussion document is due out in September and that could recommend banning some of these 10 unfair practices.
The ministry is examining many of those 10 now.
Brian Peat, Retirement Village Residents Association president, said around 40 per cent of all villages forced residents to pay for repairs and maintenance costs “even though we don’t own the property”. The list of 10 practices had gone to the Commerce Commission as a complaint “and we haven’t heard anything back. But the unfair clauses might not comply with the Fair Trading Act”.
Peat acknowledged some operators were trialing changes by eliminating some of the 10 unfair practices but some weren’t.
Wilkinson said most villages don’t do those 10 things and if they did, it’s disclosed in writing upfront.
“We’ve always been aware of a small minority of villages which had practices which are not followed by the vast majority. I’ve always called them the wrinkles in the system. Doing things like charging fees after you leave shouldn’t happen.”
The association analysed offer documents from all 400 NZ villages, he said.
But he said the bad practices were only used by a minority of villages.
Wilkinson’s own Generus Group didn’t practise any of the 10, although he acknowledged chattels including hot water cylinders could be a grey area. Most bigger operators had taken responsibility for things like internal wiring and hot water cylinders, he said.
On residents suffering capital loss, around 45 villages had such clauses in agreements exposing people to that financial hardship, Wilkinson said. Around 20 were RVA members and most had removed that clause from their documents.
Wilkinson said it was generally untrue that there were no medical services via call buttons , although that might be the case sometimes.
Generally, he said it was wrong to say examples used in the 10 practices were representative of the industry.
Ryman Healthcare
Spokesman David King said it was ranked the industry’s most trusted brand eight times.
“We stop fees. We pay out within six months. We do not charge for a capital loss. Our staff are trained. We have more care than any other retirement village operator: 4000 or so beds and about 10 per cent of all aged care in NZ. We deal with complaints.”
The 20 per cent DMF is one of NZ’s lowest. Weekly fees are fixed on entry and hot water cylinders rarely failed.
Arvida Group
Jeremy Nicoll, chief executive, said weekly fees cease on vacant possession. The ORA is repaid on settlement of the resale. If not repaid after six months, the company pays interest out.
DMF accrual ceases on vacant possession.
“We wear any capital loss, not the resident. We show our development intentions within the disclosure statement. We pay for repairs and maintenance on items that we provide as part of the unit. We charge a transfer fee for a resident to move to another villa or serviced apartment, but no additional DMF. We appoint appropriately qualified staff for their roles. We provide call buttons at all sites and medical services at most sites. We respond to complaints as quickly as possible,” Nicoll said.
Summerset Group
Weekly fees stop when ORA is cancelled and keys are returned. “Sometimes there is a delay in finalising settlement but if a new ORA has not been settled in six months, we pay interest owed until settlement”, a spokesperson said.
Sometimes, money is paid before a new ORA is struck. No capital loss charged.
“Any changes of provision of service would only take place transparently, after consultation and discussion with residents, and in a timely manner”.
The weekly fee covers all maintenance. Transfer fees are charged if a person chooses to shift, no fees if they have to move for health. Qualified staff, call bell monitoring, first aid-trained response given. Complaints are handled in a timely manner.
Oceania
Weekly fees cease on vacation, a spokesperson said. Capital sum is repaid when a new resident moves into a villa or apartment. DMF doesn’t continue to accrue after the resident leaves. Where the resident does not share in capital gain, there is no capital loss clause. Call bell and medical services for each village are in disclosure statements.
A codified and robust complaints policy in place and meets or, in most cases, betters the timeframes required by the code of practice.
Metlifecare
Weekly fees stop as soon as the outgoing resident vacates and all possessions go. “As per standard practice in the retirement village industry, we do not generally pay out the exit payment until the incoming resident settles on their purchase.”
No capital loss is charged. Residents are generally responsible for interior repairs and maintenance “but unlike some other operators, we will consider covering the cost of replacement of operator chattels when they are no longer fit for purpose”.
Transfer fees are charged if someone chooses to move but not in other cases. Staff are trained and competent with a 94 per cent satisfaction rate in villages. Call buttons responded to. All complaints are responded to under the law and code of practice.
How many people had paid deposits was not stated but pre-sales said to be 'strong'.