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Retirement Villages - the full impact of the Act

NZ $50.00
Michelle Burke John Greenwood
Michelle Burke
Burke Melrose
John Greenwood
Greenwood Roche Chisnall

This book is only available in PDF format 
Published: 12 March, 2007
Pages: 137


This is the third seminar by NZLS in the last decade on retirement villages.

One would have thought that an easy pathway now exists in explaining and understanding the impact of the Retirement Villages Act 2003 (the Act) and the Retirement Villages (General) Regulations 2006 (the General Regulations). Fox hunting in the United Kingdom however may prove a more profitable task. We will however endeavour to focus on the practical issues especially confronting practitioners, when dealing with operators and with intending residents and residents of retirement villages.

There are many interpretation issues, important omissions and confusing timing issues, which make our task difficult. We have endeavoured to find answers, not just from the legislation, but from the agencies involved in promoting and administering the legislation.

We have little doubt that there is a strong belief from a few stakeholders in the industry that the legislation can be seen as over-zealous, over-prescriptive and maybe even anti-competitive.

The victims on another view are more likely to be – at least in the initial stages – the smaller village operators and unfortunately residents who in most cases will end up paying for the compliance costs, and perhaps in some cases even the operators’ costs involved where residents initiate a dispute notice.

Whilst the above may sound negative, there are many excellent features in the proposals, which ultimately see created national standards that should promote improved service delivery to residents. If the compliance costs can be reduced and if the industry adopts relatively standard template documentation over time (that is, disclosure statements, occupation right agreements and deeds of supervision) then progress will indeed have been made.

Operators will need to be aware of the fact that the legislation will undergo a further review in 2008 by the Department of Building and Housing. That review could see even further reforms adopted, such as those recently adopted in Australia. These include more stringent requirements from agencies having the right to carry out inspections of villages and compliance costs, such as those relating to disputes and litigation, being solely for the account of the operator.

If one stands aside for a brief moment in time and looks at what should occur in the retirement village industry, then common-sense would dictate that operators and residents need to establish a good working relationship assisted by the establishing of effective resident committees which will see delivered transparency in outcomes. This should not ignore the reality that an operator needs to show a profit in order to sustain the quality of the services and facilities available. Striking the balance through excellent management will ultimately deliver the best results, rather than the operator being overwhelmed with legislative prescription.

Lawyers working in this area will need to quickly upskill on the specifics of the legislation and the manner in which they deal with older and infirm clients. When advising residents, lawyers will be well placed if they have a robust checklist of what is required and what needs to be explained to intending residents and their family members. For lawyers advising operators, this is an area of law which at present has many uncertainties and inconsistencies. We anticipate that there will be amendments in the not distant future to both the Code and the legislation. We also expect that the industry, Registrar of Retirement Villages and Department of Building and Housing in consultation with the Retirement Commissioner will also informally agree how issues arising under the legislation are best dealt with on a practical level, pending clarification or correction of the legislation.


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