Information for residents

The Retirement Villages Act 2003 introduced new rights and protections for residents, and intending residents, of retirement villages.  It also introduced new responsibilities for operators of retirement villages so that residents have a clear understanding of the financial and other obligations of being a resident, and to ensure that residents receive what they were promised or are entitled to.

• What is a retirement village?
• What will the Retirement Villages Act 2003 mean for residents?
• What happens if a village does not comply with the Act?

What is a retirement village?

The term 'retirement village' is defined in section 6 of the Retirement Villages Act 2003 and covers a wide range of villages, regardless of what it is they are actually called.  It is irrelevant what particular legal form (such as a licence to occupy, unit title, or lifetime lease or tenancy) is used when a resident purchases a right to live in a unit - regardless of the form, the residents will be protected by the Retirement Villages Act 2003.

A retirement village is any place that has all of the following features:

• Multiple units - The place has two or more residential units.  A residential unit might be a villa, an apartment, a studio unit, a kaumatua flat, or any other place that was built or is now mainly used as a unit of accommodation.

• Accommodation and services/facilities - The place provides residential accommodation, together with services or shared facilities, or both.

• For retirement - The place is mainly for people in their retirement (including their spouses or partners).

• Capital sum - The residents pay a capital sum in return for their right to live in the place.  As well as a lump sum, a 'capital sum' can also mean periodical payments, if the payments are substantially more than would be paid to cover rent and such services or facilities for the relevant period.

We recommend that you seek independent legal advice if you are unsure whether your premises fall within the definition of a retirement village.

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What will the Retirement Villages Act 2003 mean for residents?

Before intending residents agree to enter into any agreement to occupy a unit in a retirement village, the person making the offer will need to provide the intending resident with an Occupation Right Agreement setting out the terms of occupation.  The form and content of the Occupation Right Agreement must have been registered by the Registrar of Retirement Villages before any offer has been made.  The intending resident will also need to be given a copy of the Disclosure Statement and the residents’ Code of Rights and the Code of Practice.

Cooling off period

The Occupation Right Agreement must include a cooling-off clause, which allows a resident who has signed the agreement to cancel it (without any reason being given) within 15 working days after the agreement was signed.  However, if the agreement relates to a residential unit to be built or completed at a later date, and the unit is not completed within six months after the proposed completion date, notice cancelling the agreement may be given at any time after the expiry of that six month period.

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What happens if a village does not comply with the Act?

A retirement village’s registration can be suspended if it does not:

• Comply with the Retirement Villages Act 2003, or

• If its financial statements or other registered documents are likely to be misleading or deceptive.

In these situations the village will not be able to advertise or take in new residents.

A resident may also be able to end an Occupation Agreement if certain important requirements were not complied with before they signed it.  This means that the agreement is at an end and the operator must refund all capital sums paid and other payments and costs.

Residents can also make a complaint or take a dispute where there have been breaches of their rights.

The Act provides a range of penalties where the provisions of the Act are not complied with.  Fines can be up to NZ$30,000 for individuals and up to NZ$100,000 for companies and other bodies.