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Retirement Villages Act Review

Retirement Villages Act 2003 Review Starts in 2023

Nothing has highlighted the inequities caused by the loss of capital gain in retirement villages as much as the dramatic property price increases of the past few years so it is timely that the Retirement Villages Act 2003 review is being started in 2023.

The following story provides a good example of how the loss of capital gain can trap residents in a village. A Tauranga couple sold their lovely, large family home 10 years ago and bought into a local retirement village. The price they paid was in the $400,000’s and they were told that there would be care facilities available in the future. The care facilities never eventuated and 10 years later when they needed support, they found that they were unable to afford to move as their original purchase price less a 30% deferred management fee left them well short of current housing costs. They were not ready to be assessed as requiring residential care. As luck would have it, a large village group bought their village and they were able to transfer to another village (within the same group) that can meet their current and future needs.

This raises the question of what would have happened if one of them needed greater care in a village that has no care services. Firstly, a needs assessment would allow for government-assisted home help provided that the asset requirements are met otherwise it is up to the individuals to foot the bill. If additional care was required at the residential care or hospital level, then the couple faces separation. Transitioning from a retirement village to care is often not seamless with availability dictating that move. For those retirement villages with a continuum of care, the expectations of future availability and options need to be transparent and clearly explained.

After assisting a client to find a facility that could provide hospital-level care for one spouse while also providing accommodation (in the same apartment) for an able spouse, I found that this option is as rare as hen’s teeth. There are some care suites available for couples however the waiting lists can be long. My experience is that the process of purchasing in a village and transferring within a village or to another village can be extremely difficult to understand with regard to transfer fees.

The main purpose of the Retirement Villages Act 2003 is to protect the interest of current and future residents and to enable retirement villages to develop legal frameworks that are easy to understand. The Act provides a regulatory and monitoring regime and gives powers and duties to the Registrar of Retirement Villages and the Retirement Commissioner. 

The Act and related regulations and codes have not been reviewed since they were introduced 20 years ago. Over that time there has been an increasing number of retirees seeking the relative safety and companionship gained from retirement villages and this increased demand has resulted in the construction of many new villages in Tauranga and the expansion of others.

This demand has kept village prices up and villages are often only accessible to those that have a house to sell. With an increasing number of people renting into older age, there is a significant gap in the market for rental accommodation for retirees.

An emerging option for a transition from independent living to full rest home care is serviced apartments and care suites. These often include a small kitchen to allow some independence however also have options for the supply of meals, cleaning, and other services as required. Currently, there are small numbers of care suites available but this model may gain popularity with village operators if demand continues.

Addressing issues and striking a balance between the rights and responsibilities of residents and operators of retirement villages is the primary aim of the review while also assessing whether the current Act and its parts are fit for purpose.

There are some elements of the review that will examine some of the points outlined above. These include:

Disclosure requirements on entry to the village, including:

·        what is contained in disclosure statements, for example, information about and support for transferring to higher levels of care

The need for:

·        an independent body to oversee the complaints and disputes process to ensure

transparency and accountability

Minimum standards for specific financial exit matters concerning:

·        termination of weekly fees once the unit is vacated,

·        resale and return of residents’ capital after exiting

·        treatment of deferred management fees and capital gains and losses


The full scope of the review can be found at  A discussion document is expected to be released by the Ministry of Housing and Urban Development in September 2023.

Vanessa Charman-Moore is a Tauranga-based Seniors Real Estate Specialist and a member of the Grey Power National Advisory Group for housing.