Retirement ‘villageopoly’ highlights costly fishhooks

Villageopoly, a game designed to illustrate the costly fishhooks in retirement village contracts, in a campaign for better consumer protection for residents, has helped pave the way for change.

lifetime but without taking ownership of the property itself.

to departing residents to cover care costs until their capital is returned.

Steph Gifford, Senior Associate

Retirement village living is becoming increasingly popular with over 50,000 Kiwis living in retirement villages, and around 100 Kiwis moving into one every week.

With numbers like this, it seems timely that the residential village industry gets an overhaul. A package of reforms is currently on the table to combat the ‘unfair contract terms’ in some occupation right agreements, proving costly for many residents.

An occupation right agreement is the formal document you sign to ‘buy’ your unit at a retirement village and gives you a right to occupy a unit. That means you’re purchasing the right to live in a unit during your

The purchase price is repaid to you after you leave the unit or die, less a management fee which is automatically deducted each year from the purchase price. There are also additional weekly fees and care costs.

Each village can set its own rules and include these in its occupation right agreements. If you’re looking to sign up to a residential village, you’re required by law to get independent legal advice before you sign any agreement.

The key reforms include:

• ‘Unfair’ clauses to be removed from occupation right agreements.

• Interest to be paid to former residents for capital held if their unit does not sell within nine months.

• Weekly fees cannot be charged if a contract is terminated or the resident leaves.

• Better support for residents moving into another facility. This includes the villages lending money

• Clarification about who is responsible for the maintenance of chattels.

• Management fees cannot be deducted once you’ve left the unit.

The Residential Villages Association representing 95 percent of all Kiwi villages has voluntarily adopted the reforms to trial over a 12 month period, so watch this space.