Consumer NZ is calling for a law change so residents who leave a retirement village get their money back sooner.
Its newly launched petition asks people to back a call for residents to be repaid within 3 months of their retirement village agreement ending.
“Retirement village residents or their families can be left in financial dire straits when they have to wait too long to get their own money back – it’s not fair, and it needs to be fixed,” says Jon Duffy, Consumer NZ chief executive.
“Residents pay big money to live in a village. When they leave, they get their money back minus a management fee of up to 30%. But the village isn’t usually under any obligation to repay that money until the unit is relicensed so people can be left waiting years,” says Duffy.
Consumer spoke to Barbara who decided to leave her retirement village after a devastating cancer diagnosis and a series of debilitating falls. She thought her money would be returned straight away, but it wasn’t. She faced significant struggles as she navigated a move closer to whānau and piling medical bills. While she worried about making ends meet, the retirement village held on to her money – it took more than 2 years to get her own money back.
At present, there are no laws that say how quickly villages must pay back residents or their estates. The government has proposed a 12-month deadline for repayment, but Consumer says this is too long to wait.
The government has also said the new repayment timeframe will only apply to future residents, not the 55,000 residents already residing in villages. Consumer says that’s not good enough.
New Zealanders want fast and fair repayment for all village residents
Recent research by Consumer found that 84% of New Zealanders support the introduction of rules requiring residents to be repaid within a fixed timeframe – and 83% of people believe residents should get their money back within 3 months or less.
“It’s crucial that the law is changed and that the change applies to all residents. Otherwise, we risk a two-tier system where current residents are disadvantaged by the status quo that can see them unfairly out of pocket while a village holds on to their money for unacceptably long periods of time,” says Duffy.
Eight in ten New Zealanders agree new repayment rules should apply to current and future residents.
Consumer’s fight for fair
Consumer wants new laws requiring:
full repayment of residents’ money within 3 months of the occupation right agreement ending
an interim repayment of 10% or $50,000 (whichever is higher) within 5 working days of an agreement ending
interest on late repayments
public disclosure of repayment timeframes, so residents know what to expect before they move into a village.
The new rules should apply to all residents. Villages that face genuine financial constraints could apply for extensions. Villages that share at least half of any capital gains with residents would be exempt from the repayment rules. The petition will be open until late May and is available on Consumer’s website https://campaigns.consumer.org.nz/retirement-villages
