“This is where we are miles apart from the operators.”
Mr Peat said operators claimed they could not afford to pay the money back in that time frame but he suggested they could if they established a sinking fund for that sole purpose.
Another issue was capital gains.
Referencing his own situation, he paid $390,000 to enter his current residence. He then loses five percent a year in a deferred management fee, which is part of the deal.
“Everyone understands that — it’s for the refurbishment when you move on or pass on.”
The issue was around capital gains, as the price of a new resident to move in rises. That difference does not go to the resident when they move out, in most cases.
“Riverdeen Villages in Gisborne have one of the better business models for the industry. They certainly pay 30 percent capital gain to residents when they leave the village. This is one of the few operators who pay capital gain to exiting residents.”
Other issues needing to be changed included rules around salespeople, who at present, do not need any qualifications, as well as putting an
end to the practice of residents being charged for maintenance and repairs in facilities.
Another issue was the practice of operators charging residents for both rents and residential care/hospital stays
That was affectively double dipping, he said.
“All we are asking for is fairness, consumer protection and consistency.”
The Government has put out a 135-page survey on the review but the RVResidents Association has formulated a shorter six-page document with 24 questions, which is now live until a deadline of October 20, while the full government document is open until November 20.
Mr Peat spoke to retirement village residents and families at six venues in Gisborne last week.
The questionnaire can be found here: https://tinyurl.com/mc7yseyk
