NOTICE: Retirement Commissioner Jane Wrightson recently called for a major overhaul of the Retirement Villages Act 2003 and the Retirement Villages Code of Practice 2008 (which sets out the minimum requirements operators must meet to meet their legal obligations under the law).
While primarily conceived as a consumer rights issue, it is also an occupancy model that runs counter to individual ownership, and the review may have implications for others. forms of collective occupation, such as cohabitation and papakāinga.
The report released by the Te Ara Ahunga Ora Pension Commission found that there were a number of loopholes in current legislation, including resale and buy-back processes, maintenance of weekly fees after leaving a unit, inadequate complaints processes and, overall, a regime that strongly favored operators over tenant rights.
* Minister Poto Williams says a full review of how the retirement village legislation works is warranted and may take time
* Residents of retirement villages have less protection than tenants – pension commissioner calls for urgent reform of the law
* Which retirement option costs the most: Retirement Village, Lifestyle Village or Townhouse?
* “You would not believe how beautiful it is for us”: the retreat in a kāinga kaumātua
So how does it work now?
Retirement Villages in New Zealand use a range of occupancy options – owner-occupiers under a variation of the unit title system, rental from operators, and occupancy authorization.
The most common form of tenure (which, according to the Retirement Village Association, constitutes 95 percent of all right of occupancy agreements), is an occupancy license agreement whereby the resident purchases the right to occupy unity, but not outright unity, all part in the collective facilities or the underlying terrain.
What are the implications?
Occupants of retirement villages usually pay a lump sum in cash up front, but without receiving any participation in the unit, common facilities or the land on which it is located. The operator also retains 20 to 30% of the deposit when the occupant leaves the accommodation (usually on death), without receiving any share of the added value of the unit (i.e. any surplus value on the property is realized by the operator).
If the resident has to leave the retirement village for any reason (other than death) – this may include travel to be closer to family or other supports, or if the retirement village is damaged or destroyed and not may no longer be occupied – they may be unable to access other accommodation or afford alternative accommodation.
After the Canterbury earthquakes in 2010 and 2011, for example, many villages were damaged or destroyed and unable to be occupied. Residents were not legally entitled to any financial compensation and were entirely dependent on the goodwill of the operator.
This was then partially – but not fully – corrected by changes to article 47 of the code (a 2017 report recommended that the law be amended to include the right to recovery).
How do Maori perspectives inform legislative review?
This is an interesting question for many iwi and mataawaka organizations who may be looking to own and operate retirement villages.
Notably, the white paper does not specifically refer to kaumātua housing or include any specific Maori provisions, and no submissions have been received from iwi, hapū or Maori organizations.
As one individual author put it: “For those Maori whanau who are not substantively mentioned in this article at all (aptly named the white paper!), It is difficult to assess whether the ‘issues’ actually addressed Indeed, not all of the issues that may be relevant to Maori given that so few are able to access quality residential retirement care anyway … It is most certainly necessary that the issues of equity, cultural sensitivity, Maori tikanga be incorporated into any future project (sic).
Although widespread abroad, the collective housing sector in New Zealand is currently in its infancy. Collective housing is generally offered under the Unit Titles Act 2010. New Zealand does not currently have cooperative housing legislation, but this form of tenure may be possible under the Co-operative Companies Act 1996.
On whenua Māori under Te Ture Whenua Māori Law, occupancy rights may be granted through an occupancy license agreement or occupancy order. Kaumātua dwellings on marae reserves (which may be Māori whenua or general land) operate slightly differently, with occupancy granted for a shorter period, up to a maximum of 14 years.
Te Pou Matakana published a research report in 2018 on the needs and issues of kaumātua living in the North Island. The report found that retirement villages were seen as financially out of reach (due to the initial purchase cost as well as ongoing costs) and also socially isolated, with kaumātua cut off from whānau and the community.
Retreating to the lands of whānau and caring for whānau was considered preferable but not necessarily feasible.
The proposed revision of the retirement village legislation raises questions and possibilities for collective housing more generally, both on general title and on Maori freehold lands.
A broader review of collective housing legislation could provide the legal framework for people to age in place, by providing housing for the elderly integrated with housing for people of various ages and household configurations, and by supporting diverse and stable communities.
– Jade Kake is an architectural designer, writer and housing advocate based in Whangārei. Of Maori and Dutch origin, his tribal affiliations are Ngāpuhi, Te Whakatōhea and Te Arawa.