Chief welcomes cleanup of 'complicated' retirement village contracts, slow change a worry

Retirement village Govt entity hits out at 'confusing contracts'. Video / Supplied

Retirement village operators have vowed to clean up their act on what a Government entity this month called "complicated" contracts but the slow speed of change remains a concern.

Troy Churton, Commission For Financial Capability retirement villages national manager, said he was encouraged by responses after he raised concerns about contracts so difficult that not even some lawyers could understand them.

The commission is worried about lack of clarity over village owner/operators marketing the independent living part of a village and the care facility.

But those two aspects operate under different regulatory regimes and different cost structures, Churton said: the independent living side is regulated by the Retirement Villages Act and monitored by the Retirement Commissioner but the hospitals in villages are under district health boards and monitored by the Health & Disability Commissioner.

Churton said a call this month for owner/operators to make that distinction clearer had met with a good response.

Retirement Villages Association executive director John Collyns had indicated his membership body had a working party looking at a response for its members to help improve front-end disclosure, Churton said.

He was pleased the association was looking at a new membership tool to improve the information for new residents, he said but he still has concerns about how long it might take.

"It is important to the commission that we don't suspend actions that should bind all operators, including non-association operators, and benefit all residents. Regardless of whether the association produces a disclosure tool to us for feedback soon or not, it may take time for the use of that tool to become a mandatory association membership requirement," Churton said.

Troy Churton of the commission, concerned about time change could take. Photo / supplied

A few years ago, the commission suggested a template creating a one-page disclosure summary document highlighting key terms of all the documents that had financial implications. The association developed it and the commission provided feedback to ensure certain terms were referenced.

After an agreed summary sheet was made, the commission told the association to make it mandatory for its members but Churton said nothing happened.

"We have continued to ask when that will happen over the last two years. At the 2019 association conference and AGM, we were told once again the summary sheet's mandatory use will become a membership rule soon," he said.

Around eight to 10 per cent of villages are not in the association, so the commission needs to consider making any disclosure improvements part of the regulatory framework for all operators, perhaps by a variation to the code of practice, he said.

On simplifying contracts about hospital care, Churton said some operators of big village companies agreed it was important to provide information about a resident's potential transition into care at the front end.

"They are making greater effort to provide more information about the aged care they offer," Churton said.

One chief of a village with a hospital in Northland had praised the commissions' work in bringing the issues to the forefront of the industry and public attention, he said.

Earlier this month, when the commission sought clearer contracts, association president Graham Wilkinson defended the sector and indicated the hospital aspect was not something some people wanted to think about when moving into villages.

"Contracts are clear. The owner-operators have done absolutely nothing wrong," Wilkinson said in response to the CFFC criticism of the sector.

"But when people move into villages, they know they might have future vulnerabilities and that there is a continuum of care available, should they need it. But they don't necessarily all want to know the details of that. The focus is not on that aspect when they move in," Wilkinson said in early July.