Retirement village framework policy review proposed

A recent CFFC (Commission for Financial Capability) White Paper has proposed a complete policy review of the retirement villages framework which has not taken place since the Retirement Villages Act 2003 legislation was enacted nearly 20 years ago.

The White Paper highlights flaws in the complaints system, confusing documentation and feedback will be sought.

The CFFC has received over 3000 responses to the White Paper from individuals and other parties in the industry. Most individuals and residents as well as the Retirement Village Residents Association (RVRANZ) and the Law Society support a full review. Operators and the Retirement Villages Association (RVA) are not in favour of a full review but agree on a few key areas for improvement; namely improving disclosures for entering into village accommodation, transferring into care, and the review of the resale and buy-back process.

Specific recommendations have been made with regard to three important areas:

1. Moving into village accommodation
   • Review what needs to be disclosed on entry and consider consequences for misleading information.
   • Review and introduce a standard form of plain English occupational right agreement; and
   • Review minimum standards to ensure they do not contain unfair terms.
2. Living in village accommodation:
   • Review and simplify the complaints process.
   • Review repair and maintenance responsibilities; and
   • Consider how best to include resident advocacy within the legislative framework
3. Moving on from the village:
   • Review of the resale and buy-back process should be reviewed to introduce minimum standards for specific financial exit matters linked to weekly fees and the resale and buyback process.
   • Review on how to improve and standardise information about transferring into higher levels of care.

The nearly two-decade-old legislation’s initial intention of the legislation was to provide a framework for retirement living options where there was a capital sum paid. It is currently a relatively light-handed regulatory environment. However, the industry has grown in scope and complexity and apart from a small number of revisions to the code no legislative review has been conducted. We will watch with interest as to whether the legislation will be changed to enact these proposals.

If you have any questions or concerns, please do not hesitate to contact one of the team at Sharp Tudhope.