30,000 residents would have died or exited villages without protections since calls for urgent reforms began. Photo / 123rf
30,000 residents would have died or exited villages without protections since calls for urgent reforms began. Photo / 123rf
A record 101 new members have joined the Retirement Villages Residents Association in Northland.
The organisation says that is an unprecedented surge, which highlights growing frustration among the country’s 55,000 retirement village residents over long delays in repaying capital sums to residents moving into higher care or to familiesafter a resident’s death.
There is no specified timeframe for repayments, which can take up to 27 months.
Te Tūāpara Kura Kainga - the Ministry of Housing and Urban Development (MHUD) is leading a review of the Retirement Villages Act 2003, its regulations and Code of Practice.
RVResidents New Zealand association president Brian Peat said the process had taken too long. Despite increased resources shaving eight months off the review, more than 30,000 residents would have died or exited villages without protections since calls for urgent reforms began.
Residents were currently suffering some “truly awful” situations, Peat said, citing a 96-year-old man who faced getting a mortgage to move into rest home care because of delayed repayment.
Retirement Villages Residents Association of NZ national president Brian Peat.
“We know our members would accept a three-month timeframe if there’s some money upfront. Over 89% of the 11,000 plus respondents to an MHUD discussion document indicated they would like payment within three months.”
“In reality, the initial incoming payment is typically used to repay a village’s bank debt,” Wilkinson said.
“On top of that, the cost of providing community facilities and care services often leads to an initial cash loss.”
Wilkinson emphasised that retirement villages are capital-intensive, long-term investments—not “cash cows”.
He warned that mandating short repayment timeframes could force smaller or charitable villages to shut down, particularly in rural areas, reducing options for older New Zealanders.
The average repayment time, according to Wilkinson, is around 5.5 months—a reflection, he says, of the current property market, where incoming residents must first sell their homes before moving in.
He acknowledged the stress this can cause families but cautioned against retrospective legislation that could undermine existing contracts.
Peat criticised the suggestion of interest payments as incentives.
“It just gives the operator a low-interest line of credit. It’s our money.”
He warned that allowing delays while offering minimal interest amounted to a “quasi-ponzi scheme”, especially when 50% of retirees rely solely on superannuation.
“Where in the world would anyone lend a million dollars of which they would immediately lose 20 to 30% as a ‘deferred management fee’, interest-free money, no capital gain, with no idea of when they would get it back,” Peat said.
“No bank would ever do that.”
Peat recounted the 96-year-old man’s hardship: he and his 97-year-old wife paid for two rest home rooms while still holding rights to their previous unit.
He dismissed Wilkinson’s warnings as “scare mongering”.
MHUD told the Advocate it was still analysing options and noted that residents moving to aged care may be eligible for an interest-free loan through the Ministry of Social Development.
Sarah Curtis is a news reporter for the Northern Advocate, focusing on a wide range of issues. She has nearly 20 years’ experience in journalism, much of which she spent court reporting in Gisborne and on the East Coast. She is passionate about covering stories that make a difference.
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