Retirement Villages Association says it is "puzzled" and "baffled" by the complaint to the Commerce Commission. (file photo) Photo: 123RF
The Retirement Village Residents Association is calling on the Commerce Commission to review "unfair" clauses in contracts with villages.
In a complaint to the regulator, the association (RVR) called for five clauses within Occupational Rights Agreements (ORA) to be reviewed because it claimed they might breach the Fair Trading Act.
It also put forward a further 11 clauses for review.
"We need the Commerce Commission to review terms specifically related to exit payment dates, weekly fees continuing indefinitely, responsibility of interior repairs and maintenance; accrual of deferred management fees; and village outgoings as well as additional terms (detailed in the attached document) where the regulatory framework is not providing sufficient protection to prohibit them," RVRA president Brian Peat said.
There were more than 37,000 ORA agreements in New Zealand, Peat said.
Residents sign an ORA before moving into a village, giving them the licence to occupy a unit but no ownership or rental rights to the property.
The RVRA, Consumer NZ, and the Retirement Commissioner have long complained the current legislation governing the industry did not work for residents and was in need of a shake up.
"Right now, retirees across the country are getting a raw deal," Peat said.
"Intervention by the Commerce Commission and indeed government would be unnecessary - if all operators would properly address the issues."
Retirement Villages Association president Graham Wilkinson said he was "puzzled" and "baffled" by RVR's complaint to the Commerce Commission.
"We've sat down with [the] Residents Association and agreed to what clauses in ORAs could be changed - so that's already happened," Wilkinson said.
"Further, the minister has already stated that a review will be held of the Act and that's underway and she's instructed officials," he said.
"Further to that, recently the Commerce Commission rejected the consumer institute's complaint about unfair clauses."
It feels like a bit of a re-run of issues which had already been addressed, Wilkinson said.
The RVA would be prepared to make a submission to the regulator if called upon, he said.
Last month, they also unveiled a number of [https://www.rnz.co.nz/news/business/474157/retirement-village-sector-unveils-voluntary-reforms
voluntary reforms] to eliminate any perceived unfair clauses in ORAs.
These included requiring operators to pay interest on capital owed to a former resident if their unit was not resold within nine months.
This measure, as well as others, were criticised by consumer and retirement groups for not going far enough.
When a resident leaves a unit or dies, the capital they paid for the ORA is returned to them, minus management fees, after a new occupant has been found.
The RVR and Consumer NZ have called for the capital to be returned within 28 days, saying in some cases residents could wait years to be repaid.
The advocacy groups said there was overwhelming support for changes.
"The issue of repayment of money really does baffle us," Wilkinson said.
It was not like residents were unaware of the terms of the contract when they purchased their ORA, he said.
Every person who moved to a village had the terms and conditions explained to them by a lawyer before they signed the contract, he said.
The majority of residents were repaid within four months, 75 percent within six months, and 90 percent within nine months, he said.
