People in retirement villages are uniting against contracts they say suck thousands of dollars from the vulnerable.
It's a sunny weekday morning and the lounge of Maygrove Village in Orewa is sparsely populated. A small group of women sit at a table, nursing cups of coffee and tea. Outside, beside an entrance that seems more suited to a high-end hotel than suburban Auckland, the bowling green almost sparkles.
Resident Robin Wilson is sitting by a picture window next to a bookcase that includes the title 1000 Places To See Before You Die.
He has become familiar with this view over the past eight years since he moved, then aged almost 70, into the village when it opened.
He made the shift because he wanted some security for his wife, Carole, should something happen to him.
They bought a two-bedroom apartment with views over the estuary and to have a spot in the carpark for their campervan.
The bar is open a couple of hours a night, the village's pristine pool is a good spot for kids to enjoy in the school holidays and Carole takes part in art, line-dancing and the book club run by some of the village's 240 residents.
Wilson points to a dance floor: "Some fairly wild dancing goes on there once a month."
It sounds like an idyllic retirement, right?
Well, Wilson says, most of the time. Lots of retirement village residents wish they'd known more about what they were getting themselves into before they signed on the dotted line, he says.
"People get the attitude that everyone else does it so it must be okay, but then the shock starts to come through."
For him, it's the worry that what is a reasonable expense of $130-a -week in service fees for a couple bringing in combined super of $549.88 could become far more onerous if there was just one of them left in the unit, getting only about $350 a week.
For others, it's the lack of capital gain when they come to sell a property. In eight out of 10 New Zealand retirement villages, people buy the right to live in the property, not the property itself. Some operators, including Bupa Care and Metlifecare, hold residents responsible for capital loss if the units are sold.
Then there's the cut, the "deferred fees" the village takes when it returns the purchase price to the departing resident - between 20 per cent and 30 per cent. The number of village units is increasing by 6 to 10 per cent every year nationwide and about 6 per cent of all residential consents are for retirement villages. There are about 350 villages and a third are run by the five big operators: Bupa Care, Metlifecare, Oceania Group, Ryman Healthcare and the Summerset Group. Last month, Summerset revealed it had more than doubled its net annual profit to $34.2 million.
In November, Ryman Healthcare reported a record first-half underlying profit of $58.5m, up 22 per cent. Metlifecare forecasts an underlying profit of between $34m and $38m in the 12 months to June.
Some retirement village operators have been reporting record profits lately. It's not hard to see why.
Build an apartment block for, say, $200,000 each unit, sell them for $300,000 and you've already made a profit. But you don't really sell them, so you then take another cut every time the properties change hands and the residents cover virtually all your outgoings with their weekly fees.
It is perfectly legal: these villages are businesses trying to get the best return for shareholders. But some residents would say that good business is not always kind business.
Residents sign an occupation right agreement (ORA) when they move into a village, which lays out all the terms and conditions. The law now requires that solicitors go through it thoroughly with clients.
But Wilson wonders how many people take it in. "A lot of people look at coming into a village, read all the promotional material, and it sounds great. But they get a bewildering amount of documentation."
Auckland architect Ken Davis says people end up in retirement villages because there's no other option.
His parents moved into a South Island retirement village. "It is basically a property company. They make their money by [depriving] elderly people of their life savings."
They bought the villa in 2000 and sold it in 2006, a period in which there was a huge property price increase. But when they moved out they saw none of that and lost 30 per cent of the purchase price.
His parents weren't able to sell the property straight away because the units cannot be sold on the open market and the village sets the sale price. "It's an indictment on society that we treat the elderly with such disrespect," says Davis.
He says Kiwis need to start thinking of different arrangements that might work. Davis drew up plans for an intergenerational-living village on Ngati Whatua land in Devonport. The proposal wasn't accepted.
"I really do think there's another way but we don't live in a particularly enlightened society. Everyone's grasping to make money out of everyone else. We have to put an end to the current model. It's the worst form of usury."
Ryman spokesman David King acknowledges the lack of capital gain for residents. But he says the big profits reported by the villages reflect the fact that residents are happy and the services are in demand.
"Ryman reinvests half of its profits each year in new developments. We have invested $1.5 billion in new facilities over the past 15 years. We have also ploughed a lot of the money into specialist care. Since 2007, we have built 1500 new aged-care beds, which is 75 per cent of all the beds built in New Zealand over that period."
Metlifecare's The Poynton, near North Shore Hospital, has one-bedroom units for sale for $495,000 to $575,000, two bedrooms up to $715,000 and three bedrooms up to $950,000. But the departing residents - or their estates - won't pocket those sums.
Bill Atkinson, Greypower's retirement villages spokesman, says the companies make a lot of their profit from the deferred fees payment they take when people move on.
Ryman takes up to 20 per cent, Bupa 28 per cent, Metlifecare and Oceania up to 30 per cent and Summerset 25 per cent. Some pay that money to shareholders in dividends and others use it for more investment.
A bone of contention used to be that companies could charge people for refurbishment costs on top of the percentage fee they took when a property sold.
That changed in 2006, when the law was altered to make refurbishment an operator's cost. But, in response, many operators just increased their deferred fee.
Wilson says: "The fees consequently all went up 5 per cent or 10 per cent - 5 per cent on $400,000 is $20,000 the operator is getting to cover a repaint and some new carpet."
Half a million to move in, then at least $100 a week. It doesn't sound all that appealing but it's a standard retirement village requirement.
The average ongoing cost is $120 per unit per week, whether for a couple or a single person, but fees range from $69-a-week to $150.
Wilson and Atkinson say people need to know before they move in how the fees will be set.
In some villages, such as those run by Ryman, the amount residents are charged does not change at all over the term of their residence.
Other fee increases are tied to increases in the consumer price index, or are not limited at all.
"The code of practice is not prescriptive and leaves it open to interpretation," Wilson says. "What do you do if your expenses are up 5 per cent and your pension is only up 2 per cent?"
The residents say the Retirement Villages Act, which became law in 2003, is still too open to interpretation. A 2011 report for the retirement commissioner raised concerns about unexpected fee increases, changes in services, inappropriate management of sales and a lack of consultation.
Wilson has been prompted to set up a residents' association to represent their interests and has linked with other similar organisations.
They are forming an incorporated society aimed at having the Act's code of practice reviewed.
He wants a better disputes process and better oversight. The operators have the most clout, he says. "There isn't anyone representing the residents.
"Market forces are great when a freedom of choice exists but, once locked into a retirement village, residents are left with few choices and minimally prescriptive legislation which does not adequately protect residents from exploitation.
"Presently, the operator has the power."
Hamilton woman Olive Jones is engaged in a long battle with the retirement village her mother, Ruth, was living in. And she's still angry.
Ruth Jones was 75 when, 10 years ago, she bought the right to live in a villa at Fairview Lifestyle Village in Albany for $279,000.
She eventually traded the villa for an apartment before moving out last September into rest home care in Hamilton.
Her initial $279,000 investment was whittled down to a return of $200,000 by the time the operator's cut and refurbishment costs were taken out.
It is estimated the villa sold to its new owners for about $600,000.
But Olive Jones says what they are really upset about is that it was five months before the unit was sold, and all the while she had to keep paying fees of $700-a-month - $3500 in total.
The phone was disconnected, but Jones was made to continue paying $45-a-month for it. "They acknowledged their error regarding the phone charges and dropped them, but I couldn't get a direct explanation about the other charges over electricity, hot water and meals."
After Fairview got its solicitors involved, Jones intends to escalate her complaint.
The Retirement Commissioner administers retirement villages disputes and oversees the settlement of many of them.
Very few go to a formal dispute hearing - just three last year.
The Act requires villages to have a statutory supervisor who can intervene if management is inadequate. But a 2009 report found varying interpretations of what was "inadequate".
Atkinson says: "We need a retirement village commissioner who has the authority and power to intervene and sort out problems and come up with an answer that both parties must accept."
Retirement Villages Association executive director John Collyns disagrees.
Collyns, who represents the corporates that own and run the villages, says they think the Act is weighted heavily in residents' favour.
"We think there's a good balance between protection for residents and making a profit," he says.
"If villages don't make a profit they don't have anywhere to live."
In a statement, Fairview Lifestyle Village director Scott Vernon says Fairview's sales are, on average, quicker than other villages around the country.
But unfortunately, five apartments had been vacated at the same time late last year so it had taken longer than usual to sell Ruth Jones' one.
The Jones family are being "entirely unreasonable", he adds.
"We obtained vacant possession on October 5," he says.
"We took a month to refurbish. We took one month to get a conditional offer ... It took us just under five months to refurbish, market and settle the apartment sale.
"We do not think that this was an unreasonable period of time to sell the apartment."
Vernon says rules around buying and selling the apartments, and the fees payable, are entirely upfront and transparent.
"If you vacated your home to enable refurbishment and sale, you would not be surprised that you still needed to pay for rates, insurance, security costs, lawn-mowing fees and other similar costs to keep the house and surrounds presentable, saleable and secure.
"We have to accept with such a large village, we will eventually encounter one or two people who will raise positions with us that we cannot entirely understand or accept - or are patently unreasonable.
"However, we are deeply disturbed that someone would unfairly impugn our goodwill and reputation in the media in this way."
The sale of Ruth Jones' apartment was settled just before the six-month deadline for cutting the cost of outgoings by half.
Olive Jones says such a delay in finding a new resident would come as a shock to people who had to go on a waiting list.
"People assume because when you are coming in you are on a waiting list you get the sense that everyone wants to be there, you don't imagine that when you depart it could take months to find another person."
Village operators lose nothing by dragging their heels, she argues. But families are not able to market the properties. "As the exiting person, you're absolutely over a barrel, you can't do a thing," Jones says.
She doesn't want to criticise staff at the complex. "Issues are with the system that gives the owners full power to dictate terms and control."
The owners "won't talk about the moral issues. They just hide behind what they're perfectly entitled to do."