[ad_1]
Consumer NZ wants an overhaul of retirement village regulations to protect residents from unfair conditions.
Consumer NZ CEO Jon Duffy said his review of the retired village contracts found terms that unfairly favor the village and risk putting residents out of pocket.
His call follows the publication of a white paper by the Financial Capacity Commission calling for a comprehensive review of the sector. The commission has sent it to the Minister of Housing, Poto Williams. The commission provides education and financial information to New Zealanders and advises the government on income policy for retirement.
“Retirement towns promise the good life in their golden years. However, the agreements that consumers must sign before moving to a village can be in serious financial trouble. Some are also at risk of violating consumer law, ”Duffy said.
READ MORE:
* Retirement: Are you considering a retirement village? Try our checklist
* Proposal for retirement villages to share capital gains with residents.
One of the main concerns was the terms that held residents responsible for the costs of maintaining and repairing items in their unit, even though they did not own them, he said.
Most retirement villages offered a “license to occupy”, which gave the resident the right to live in their unit but not ownership rights to the property. Despite this, some contracts held the resident responsible for repairing the operator’s personal property.
Consumer NZ’s review of retirement village contracts looked at the contracts offered by six major retirement village operators: Arvida, Bupa, Metlifecare, Oceania Healthcare, Ryman Healthcare and Summerset.
123rf
Withholding of a unit’s capital gains by retirement villages is a concern for residents, according to a Consumer NZ resident survey.
Consumer NZ research director Jessica Wilson said Metlifecare had a wide-ranging clause in its contract, giving residents just one month after the deal began informing the company of any needed repairs.
After that time, the resident was required to cover costs, including payment for repairs to the unit’s stove, garage doors, plumbing, and electrical fixtures.
“In our opinion, these terms conflict with the rights of residents under the Consumer Guarantees Act to expect goods and services of a reasonable standard. If their unit’s furnace fails, the village should pay the repair cost. “
In the consumer review report, Metlifecare responded that it was common in the industry for residents to be responsible for the maintenance of the interior of their unit. However, Metlifecare was “open to review” the one-month period in which residents must notify you of defects.
Wilson said many residents also faced significant financial losses when their unit was sold because they did not receive any capital gains, despite having paid for the property’s upkeep.
The retention of capital gains by the towns was one of the main causes of complaint. In a Consumer NZ survey of 1,680 residents, 63 percent were unhappy that the deal didn’t allow them to make any capital gains when their unit was sold.
The consumer’s review of the village’s contracts also found terms that gave the village wide discretion to decide what residents could and could not do.
Several contracts restricted the rights of residents to raise objections to the village developments. The Metlifecare and Summerset contracts included terms stating that residents could not object to dust, noise or other nuisance caused by the development.
Wilson said these types of clauses ignored the rights of residents to raise legitimate concerns.
Consumer NZ will provide the results of its review to Retirement Commissioner Jane Wrightson, who is responsible for monitoring the sector.
Cherie Sivignon / Things
Retiree Village Association executive director John Collyns says his research shows that 87 percent of residents were satisfied or very satisfied with their decision to move to a retirement village.
However, the executive director of the Retiree Villages Association, John Collyns, said that the retirement village operators were very careful about their obligations under the Consumer Guarantees Act.
Collyns said the association disagreed with Consumer’s view that some retiree village settlements are at risk of violating consumer law.
Collyns said most of the appliances were under warranty and new when a resident moved into a unit because most operators brought the unit to “like new” standard when it was sold.
Basically, there were two broad options. The first was that the operators provided the appliances and the resident covered the cost of the consumables like light bulbs or the residents supplied the appliances and covered the cost of the consumables.
The first option was “certainly much cheaper” than the second option, he said.
The association told its members that contracts signed by residents must be very explicit about what the resident paid and what the operator paid, and if that was not clear, the operator should cover the cost.
Each resident before moving in had to receive independent legal advice from an attorney who reviewed the contract and explained what the parties were responsible for. If the attorneys weren’t happy with the contract, they could negotiate a better deal on behalf of their clients, Collyns said.
Residents moved to a village because they were warm, safe, comfortable and companionable and there was a way to receive additional care later.
Collyns said that recent UMR research on the association had shown that 87 percent of residents were satisfied or very satisfied with their decision to move to a village.
