Retirement village owners promise to address long waits for refunds and review occupation rights agreements
Wednesday, 26 May 2021
Owners of retirement villages are making some concessions on issues upsetting residents and their families but not on the big one of sharing “capital gains”.
The Retirement Villages Association, representing village owners, is promising to tackle long waits for refunds when residents leave villages and the licences to occupy units and apartments are resold.
The owners’ association has also committed to reviewing occupation right agreements to ensure they are clear on the terms and conditions and the responsibilities between owners and residents, particularly for maintenance, repair and replacement of operator-owned chattels.
The association issued a “blueprint” at its annual conference on Tuesdayaddressing some of these issues, which were identified by the Retirement Commissioner Jane Wrightson in a discussion paper released last December.
**READ MORE:
* Retirement village residents call for quick changes to give them slice of capital gains
* Corporate retirement villages dish out $200m dividends, keep capital gains
**
But the association makes no mention of sharing resale or “capital gains” on the reselling of licences to occupy units and apartments when residents die or go into care.
The association said it had agreed to survey all members annually to examine emerging trends and work with owners, residents and the retirement commissioner to design a best practice approach to re-licensing to ensure residents’ estates did not wait an unreasonable period of time for a refund.
Wrightson is proposing a review of the retirement legislation and codes. The owners’ association view some of her suggestions as an attack on the retirement village industry business model.
Some 3000 submissions were received by the Commission For Financial Capability , which is the office of the Retirement Commissioner, on the discussion paper. Wrightson’s report for the Government is expected to be released in July.
Residents and their families have complained that refunds from the re-licensing of units and apartments can take months and sometimes more than a year. Others also want their estates to share gains on the resale of licences to occupy units and apartments.
Another issue that residents consider unfair is that operators may continue to charge fees until the licence to occupy the unit is resold.
Retirement Village Residents Association president Peter Carr said the Retirement Village Association was “starting to come to the party”. The owners were looking at change, but the parameters were not defined, he said.
He had spoken at the Retirement Village Association annual conference but did not tackle the issue of sharing capital gains in his address.
The owners’ view, which was understandable, he said, was that the residents did not own the units which remained the property of the village owners therefore residents were not entitled to capital gain on the resale of the licences to occupy.
Wrightson’s discussion paper said options for improvement included introducing a guaranteed timeframe for buy-backs, interest being payable during vacant periods and allocation of any capital gain on sale between the resident (or their estate) and the operator. Other options were to restrict the charging of weekly fees after a resident vacated a unit.
As part of the blueprint, the Retirement Village Association said it had committed to reviewing occupation rights agreements to address any perceived unfair terms or confusing clauses and to ensure clarity about what residents and operators were responsible for, especially on maintenance, repairs and replacement of operator-owned chattels.
The association would work with Commission For Financial Capability to establish what was best practice so that residents were not responsible for usual maintenance and replacement of operator-owned chattels.
Association president Graham Wilkinson said the blueprint would also introduce a range of improvements including providing residents with a stronger voice and strengthening the complaints process.
The association would also explore establishing an ombudsman to hear and resolve complaints and invite an independent member of the public to sit on its executive to represent residents’ interests.