Retirement Villages Annual Investigation Report 2021-22: Occupation Right Agreement
This report investigates the feasibility of introducing a standardised Occupation Right Agreement (ORA) following feedback that the Commission received from the White Paper issued in December 2020 and a recommendation in the White Paper Summary Report and Recommendations to “review introducing a standard-form, plain English ORA for sector-wide use”. A secondary area of investigation relates to the Disclosure Statement in particular: the degree of duplication between the information contained in a disclosure statement and the terms of an ORA; and the legal enforceability of disclosure statements and what remedies currently exist if statements made in a disclosure statement about a village do not materialise.
The report concludes that it is legally feasible to standardise an ORA (with customisation for unique terms), however there are other alternatives such as legislating a document like the RVA’s “Key Terms Summary”; reviewing the legislative framework to simplify what prescribed information needs to be included in the ORA; preparing a Guide to assist operators to draft good ORAs; and continuing education of lawyers. The report highlights that standardising the ORA that all operators must use will be a significant piece of legislative work. It should be done in conjunction with a full review of the legislation and in particular the prescribed terms of an ORA.
Retirement villages legislative framework: Assessment and options for change, 2020-21
In June 2021 Te Ara Ahunga Ora Retirement Commission released a report and recommendations following public consultation on a white paper studying the effects of the complex legal framework governing the retirement village sector.
We received nearly 3300 submissions. While most were from individuals and the Retirement Village Residents’ Association, others came from operators and other stakeholders including lawyers, supervisors, and consumer advocates.
The report concluded that retirement village legislation was at risk of becoming outdated and unfit for purpose, requiring urgent review to eliminate unfair terms in contracts and better protect the rights of consumers.
Operator financial assistance to residents, 2019-20
This report studies loans made to residents by retirement village operators, generally to cover shortfalls in entry payments to those wishing to buy into or transfer within a village, or to existing residents to cover accrued weekly fees. It found that, overall, the incidence of lending was low relative to the number of residents in villages and the terms were not onerous.
However, it did reinforce the need for intending residents to carefully assess the financial implications of doing so. The report also identified some areas worthy of more consideration, including greater consistency in terminology and documentation across operators, and the potential need for more access to, and promotion of independent financial advice for residents.
Interface Between Retirement Villages and Aged Care in Retirement Villages, 2018–2019
This report describes how retirement village operators are providing aged care beds, using occupational right agreements for care similar to how those agreements are used for independent living in villages, and raises implications of current trends for aged care within and beyond the retirement villages sector.
A small number of important changes to disclosure, operator guidance and legal education are suggested. Te Ara Ahunga Ora Retirement Commission is taking steps relating to operator guidance and continuing legal education already, and may make recommendations to HUD shortly regarding disclosure and other matters.
Effectiveness of Statutory Supervision, 2017–2018
Te Ara Ahunga Ora Retirement Commission undertook research to assess the current level of effectiveness of statutory supervision of retirement villages given almost nine years since the previous supervisor project. The general view expressed was that people have confidence in New Zealand’s system and that statutory supervision is being conducted effectively. A small number of amendments were suggested.
Effectiveness of Legal Advice, 2016–2017
The Retirement Villages Act requires lawyers to provide advice to intending residents on the general effect of the agreement and its implications. This monitoring project determined the level of effectiveness of independent legal advice for intending residents making a decision to move into a village or not.
The report found high satisfaction with the current requirements for legal advice among intending residents, and that the framework and advice practices of lawyers are effective and appropriate.
There was no demand among intending residents for financial investment advice, although tools to assist them think about budgeting under different scenarios were encouraged.
Many lawyers recognise the retirement village sector is dynamic and welcome information about the sector, ongoing networking and training opportunities and access to websites and resources to which they can refer clients, such as Te Ara Ahunga Ora's.
Dispute Resolution Practice, 2015
This monitoring project assessed the level of effectiveness of formal dispute resolution structures and processes under the Retirement Villages Act 2003. Te Ara Ahunga Ora Retirement Commission engaged with a wide range of stakeholders and also compared our system to overseas jurisdictions.
The project did not review the substance of matters disputed or outcomes of the dispute, or efficacy of any policies, practices or contracts that may have led to a dispute.
Some key issues that emerged included:
The formal dispute resolution process is not user-friendly for all residents
A lack of alternative dispute resolution options, both as an alternative to using the dispute panel, and within the panel process
A need for greater advice and support for residents in dispute resolution, and better information about the dispute process and agencies, with roles and responsibilities relating to retirement villages and dispute resolution
There was strong consensual interest across the industry for promoting mediation or other dispute resolution options.
As a next step, we conducted a stakeholder forum to determine ways to integrate solutions, such as mediation and alternative dispute resolution, into the current framework, and potentially implement those by a Variation to the Code of Practice process. Read more about the forum.
Residents’ Perspectives, 2011
In 2011 the monitoring project looked at the Act, the regulations and the Code from the perspective of residents.
It found that residents move to retirement villages to ensure that their future is secured. Although most would not change their decision to take up residence in a retirement village, there was considerable variation in the degree of satisfaction.
Many residents’ confidence and comfort was compromised by concerns about the future of their village and their situation in it. The monitoring report identified areas requiring consideration and made several recommendations.
Operator Compliance, 2010
The objectives of the 2010 monitoring project were to determine to what extent and how retirement village operators were complying with their statutory requirements and with general provisions of the Retirement Villages Act, and what, if any, issues were arising.
The project found the majority of operators were complying with the regulations and provisions set out in the Act, its regulations and the Code of Practice. Although many operators considered compliance costs to be a significant concern, half of the sector was planning to grow in the next three years.
Statutory Supervisors, 2009
The statutory supervisors monitoring project reported on five specific functions and key issues:
Distribution of villages between statutory supervisors
Trust account maintenance/stakeholder facility
Level of involvement with residents
Benchmark survey, 2006
A survey was conducted to provide a benchmark measure before the Retirement Villages Act 2003 (the Act) and associated regulations and Code of Practice came into force.