Statutory supervisors

The operator of a retirement village must appoint a statutory supervisor, unless they are granted an exemption by the Registrar.  Statutory supervisors are appointed under a deed of supervision.  The role of a statutory supervisor is to provide an important safeguard for the residents of a village.

• View the list of statutory supervisors

FAQs

• What are the duties of a statutory supervisor?
• Who can be a statutory supervisor?
• How do I make an application for approval?
• What are the criteria for approval as a statutory supervisor?
• How do I apply for an exemption from appointing a statutory supervisor?

What are the duties of a statutory supervisor?

The statutory supervisor has a number of duties under the Retirement Villages Act 2003, including:

• Acting as an independent stakeholder for deposits and progress payments by residents to operators
• Monitoring the financial position of the village
• Reporting annually to the Registrar and residents on the performance of their duties
• Carrying out any other functions specified in the Retirement Villages Act or the deed of supervision with the village.

Where the financial position of the village, security of residents or management of the village is inadequate, the statutory supervisor may direct the operator to:

• Provide information to residents
• Direct the operator to operate the village in a specified manner, or
• Apply to the Court for orders to address any concerns or mitigate further risk to residents or intending residents.

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Who can be a statutory supervisor?

A person must not be appointed as statutory supervisor to a village unless approved for that purpose by the Registrar.

All persons approved by the Securities Commission to act as a statutory supervisor of retirement village schemes as at 1 February 2004 were automatically approved under the Retirement Villages Act 2003, though the Registrar can amend or revoke any such approval.

How do I make an application for approval?

An application can be made for general approval, or approval to act as a statutory supervisor in respect of a particular village or class of villages.  In order to be given a general approval the applicant will need to demonstrate the ability, capacity and expertise to handle any or all appointments.

There is no application fee and no prescribed form for an application, but the application should be in the form of a report and contain such information to assist the Registrar.  The Registrar will normally need the following information in order to be able to consider and determine an application for approval:

• The curriculum vitae of the applicant, or where the applicant is a company, the curriculum vitae of each director and key management staff
• Background of the business activity and history of the applicant, including previous experience in prudential supervision or with retirement villages and understanding of matters pertaining to the duties of a statutory supervisor of retirement villages
• The procedures that the applicant will follow in carrying out its functions
• The standards the applicant will adhere to in carrying out its functions
• The financial resources of the applicant to discharge its functions, including payment of professional advisors, in the event of failure of village operator to meet fees
• A description of the level of resources and its staff, including experience and skills of those staff; and
• Whether any functions will be delegated to an external body, the reason for any delegation and the controls to be put in place to ensure proper performance of those duties.

The Registrar may request further information from the applicant to aid consideration of the application.

Applicants should normally allow 20 working days for consideration and determination of any application.

An application for approval as a statutory supervisor should be made to:

Registrar of Retirement Villages
PO Box 5771
Wellesley Street
Auckland 1141

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What are the criteria for approval as a statutory supervisor?

In considering any application, the Registrar will have strong regard to the Securities Commission policy for the approval of trustees and statutory supervisors under the Securities Act 1978.  This is available for viewing at the Securities Commission website.

These criteria have been modified to have regard to the particular requirements of the Retirement Villages Act 2003 as follows:

1. Competence and financial capacity - The applicant must be able to demonstrate competence to fulfil the duties and functions required of a statutory supervisor under the Retirement Villages Act, the Retirement Villages Regulations, any applicable Code of Practice and any other applicable law ("the duties").  This will include consideration of any existing experience in prudential supervision held by applicant, including as an existing statutory supervisor, as well as any general knowledge about the regulation of retirement villages.

2. Character - The applicant (including any directors where the applicant is a company) must not have been convicted of a serious offence, have been bankrupt at any time, be disqualified from acting as a company director or otherwise barred from being a member of a relevant professional association.

3. Independence - The applicant and the applicant's sponsoring firm, as well as any person or firm associated with either the applicant or the sponsor's firm, may be required to provide a written undertaking that neither they nor any of their employees, shareholders, or officers will at any time hold any office or appointment or have any involvement, relationship or interest, including involvement as an auditor, in respect of retirement village for which the applicant acts as statutory supervisor, or as required by the Registrar.  The applicant is also required to disclose any boards of directors that the applicant sits on in common with directors of any company which owns or controls the retirement village or villages subject of the application.  Where the applicant is a company the company may be required as a condition of approval to not engage in any business other than as a trustee or statutory supervisor.

4. Accountability - Under the fourth criterion the applicant must demonstrate that they have adequate professional indemnity insurance.