Q - What is a retirement village?
Retirement villages offer older New Zealanders a range of affordable accommodation options, independent living, a continuum of care, community facilities and comprehensive consumer protection. Retirement villages are not rest homes. In fact, around 36% of retirement villages do not have a care facility on campus and aim to provide residents with a lifestyle. However, residents who are assessed as needing care can receive home-based support in almost every village.
Q - Who lives in a retirement village?
Retirement villages are for active, independent older people. The average age of entry is mid to late 70s, however many residents say, “don’t leave it too late”.
Q - HOW MUCH DOES IT COST TO LIVE IN A RETIREMENT VILLAGE?
Prices vary from village to village but generally they are aligned with the median price of property in that location. Retirement village living provides a no-hassle lifestyle with no need to maintain and upkeep homes, pay rates, insurance and water levies.
Residents pay weekly fees and in many cases this is fixed for life. A resident will also pay something additional by way of a deferred management fee, when vacating a unit. This fee, which covers the refurbishment and management of the retirement village, is deducted when your capital sum is repaid to you or your estate. This frees up capital and provides certainty to residents while they are living at the village.
Q - What accommodation options are available?
There are many types of villages and the accommodation options, services and facilities offered vary from village to village.
Unit, villa or apartment: this can be a one, two, three or even a four bedroom dwelling that may form part of a complex, be semi-detached or completely stand-alone. Units, villas, or apartments are designed for active people who choose to live independently within the village
Serviced apartments: a serviced apartment provides accommodation for residents who require some assistance with daily living. They are generally one or two bedrooms, where services such as cleaning and laundry assistance are offered. Meals may be provided in a communal dining room, although a kitchenette is usually included in the apartment
Q - What are the ‘ownership’ options?
All registered villages have a contract between the operator and the resident called an Occupation Right Agreement (ORA). A Licence to Occupy (LTO), a Unit Title and leases are variations of an ORA.
Licence to occupy: This is the most common form of occupation right in New Zealand. A licence to occupy gives you the right to live in your residential unit and to use to village facilities according to the terms of the licence to occupy. The ownership of the land and building remain with the village operator.
Unit title If you are offered a unit title, you own your residential unit and become a member of a body corporate. The body corporate is responsible for the upkeep and maintenance of communal areas and usually has a management agreement with a village manager to look after the day-to-day operation of the village.
Lease: There are a variety of lease arrangements available whether a lease for life, a life interest, or a cross lease – they’re not all the same, so it is important that you understand the details of your type of lease. The quality of life you enjoy at the village is part of what you are buying and contributes to the future value of your unit.
Q - ARE RETIREMENT VILLAGES ONLY FOR OLDER NEW ZEALANDERS WHO REQUIRE MEDICAL CARE AND SUPPORT?
More than 50,000 New Zealanders choose to live in retirement villages and this number is rapidly growing. While some residents appreciate the ready access to care, many people move to a village for the security, companionship, sense of community and high level of facilities.
Q - Are retirement villages only for the wealthy?
Village residents come from all walks of life and the variety of village offerings almost certainly means there’s a unit or apartment for everyone. It’s worth noting that many of our residents only have their National Superannuation to live on, and benefits such as the rates rebate are available to them.
RVA members work hard to make our villages affordable for the everyday New Zealander. The sector continues to evolve, particularly with the increasing focus on care, and there is more competition between operators and therefore more choice for New Zealanders than ever before.
Q - Is living in a retirement village isolating?
Retirement villages are important part of the communities they are located in and residents enjoy getting and out and about, but also welcoming friends and families to visit the village.
Q- What forms and information should I ask for?
A disclosure statement
A disclosure statement relates to the ownership, management and supervision of the village. It includes information about the occupancy tenure, the state of the village, the services and facilities offered and the arrangements for maintenance and refurbishment. It outlines the costs of entering, living in, and what you can expect to get back after you leave.
Occupation Right Agreement (ORA)
The ORA is the legally binding agreement between the resident and the village operator and sets out the terms and conditions of your right to live in the village. It will vary from village to village so it’s important that you understand the differences.
Consumer protection
Q - Do retirement villages have to be registered?
The Retirement Villages Act requires all retirement villages to be registered with the Registrar of Retirement Villages, part of the Ministry of Business, Innovation and Employment. Residents are not protected by the Retirement Villages Act if they are living in an unregistered village. Your first step should be to ask whether the village is registered. If it is registered, there will be a wealth of information available which can help you make a decision about the best retirement village for you. A registered retirement village protects its residents from mortgagee sale, liquidation or receivership by placing a memorial on the title of the land on which the village is based. The Registrar-General of Lands records the memorial which notifies interested parties that the residents’ rights have priority over other parties; this ensures that consideration is given to the rights of residents before a secured party takes action. This stops a creditor or operator selling the village other than as a going concern, and also stops residents from being excluded from using the village facilities they are entitled to use.
Q - What is a statutory supervisor?
While it is possible that villages may have an exemption, registered villages are required to have a Statutory Supervisor. The Statutory Supervisor is independent from the village manager and monitors the financial position of the village, ensures the security interests of the residents are protected and that the retirement village is adequately managed. The Statutory Supervisor must also report annually to the residents via the Village Annual General Meeting to which all residents are invited to attend. The Statutory Supervisor is regulated by the Financial Markets Authority.
Q - How can we be sure we are choosing the right village with a lifestyle that will suit us?
Take your time thinking about all the options before deciding on the village that most appeals to you and suits your needs, and then visit it several times before making a commitment.
It’s a good idea to take a friend or relative with you. You can meet residents at some of their recreational and social activities. They’ve all been through this process of decision-making and selection, and you will find many who will be happy to share their experiences with you and talk openly and honestly about the village. If you don’t have your own car, many villages have a bus dedicated to taking residents to and from shops and other outings. Check whether the nearest shopping centre is within easy walking distance or is on a public transport route. You should also consider how many facilities and services you can use within the village.
Q - We have seen a unit in a village that appeals to us, but we wish to consult our solicitor and talk the decision over with our family. Can we reserve a unit with a refundable deposit?
Most villages require a deposit to reserve a unit and their policy specifies how long the unit can be held. If you change your mind within their specified time your deposit will usually be refunded. You should enquire about this and also be aware that some villages may require an administration fee. If later you enter into an ORA, the deposit will form part of the price payable for your unit.
Q - Should we seek advice and, if so, from whom?
Under the Retirement Villages Act 2003 any intending resident must receive independent legal advice before signing the ORA. The same lawyer who witnesses your signature on the ORA must also certify that they have explained to you the general effect of the ORA and its implications. It is always useful to discuss your options and decision with your immediate family, other relatives and friends.
Q - Is there a cooling-off period?
Yes, there is. Should circumstances change or you decide the village is not for you, the Retirement Villages Act gives you the right to a refund if you cancel during a 15 working day ‘cooling-off’ period. The cooling-off period starts from the date you sign your ORA. Any money you have paid is held by the statutory supervisor (if there is one) until the cooling-off period expires.
Living in a retirement village
Q - What changes can we make to our unit’s design, décor or furnishings?
Buying a new unit in a retirement village is very much the same as buying a new home anywhere. If you select a unit ‘off the plan’ or one that is under construction, you may be able to choose from a range of interior colour schemes and customisation may also be possible.
Q - Must we be retired or can we still continue to work while living in a village?
You can continue to go to work while living in a retirement village. If, however, you intend to work from home you should make sure the village rules allow this and ask the manager what the village policy is. One reason for this is possible council restrictions on residential dwellings used for places of business. Increased visitor traffic may also inconvenience other residents, as will any noise associated with a trade. As many residents will be spending much of their day at the village, and will doubtless want to protect the pleasant and peaceful environment.
Q - What would happen to our unit if the village is sold to another organisation?
When you choose to live in a village, you will be asked to enter into an ORA that sets out your rights and obligations and those of the proprietors and managers of the village. If another organisation buys the village, they are obliged to honour these arrangements.
Q - May we rent out or sub-let our unit or apartment?
Most villages do not allow sub-letting or rental of a unit as it is contrary to the philosophy of village living, which promotes a constant and secure environment. It is comforting to know that all residents are permanent occupants of their units.
Q - What kind of storage is available at villages?
You should ask the village about storage if this is important to you. Many villas come with their own private storage areas, but this depends on the location, size and age of the village. Some villages offer communal storage facilities.
Q - What communal or recreational facilities are offered by the village?
Residents often treat the facilities of villages as an extension of their own lifestyle. They may enjoy the convenience of a variety of facilities that can include a library, dining room, swimming pool, club house or leisure area including billiard and card rooms, an internet café and more on their doorstep. Some villages have bowls facilities, workshop areas, vegetable gardens, craft-rooms, gymnasia, caravan parking and other features. Many villages also offer services such as doctors, physiotherapists, hairdressers and banking. Before committing to a village you should carefully check what facilities are available and are promised.
Q - Can family and friends be our guests and use the communal facilities while staying with us or visiting?
Friends and family may be welcome to stay with you in your unit for a time and to use the communal facilities while in your company. This depends on the terms of your ORA. Naturally, as in any caring community, residents expect not to be disturbed or inconvenienced by others.
Q - What about car parking for our vehicle and for visitors? How about a boat or caravan?
Most villages offer a choice ranging from common car park areas to private carports or individual, lockable garages. There may be an additional charge for these. Villages usually provide some visitor parking. A number of villages have boat and caravan secure parking areas, often at no charge. As space may be limited, always ask about availability
Q - I love to garden – can i still have my own garden? What about my workshop?
Most village residential units have gardens immediately around them and, in most cases, you will be able to maintain the garden yourself. However, you should check with the village manager about whose responsibility it is for the maintenance of the garden or any ongoing concerns you may have about it. Many villages have a residents’ workshop where people share their tools and skills. Ask if this is important for you.
Q - Are pets welcome?
Most villages recognise the value of pets and the companionship they provide. However, they also recognise that domestic animals must not intrude on anyone’s quiet enjoyment of their home and village amenities. This may be included in the ORA or be at the manager’s discretion. Some villages may exclude pets completely, so please ask.
Q - May we come and go as we please and leave our unit unattended if we are away on holiday?
Village life brings security and freedom to travel. You can go on holiday knowing that your home and garden will be cared for while you are away. Most villages recommend that you notify management of a planned absence.
Q - Do villages provide medical facilities? Can we keep our own doctor?
Many villages will have consulting rooms to allow a local doctor to see residents at the village. However, the choice of a medical practitioner remains yours, and you are not pressured to transfer to any village doctor. For medical emergencies, many villages offer call systems in their units, and larger villages may offer 24-hour monitoring services where any emergency call is attended by a person whose experience may range from first-aid certification to full nursing experience.
Q - Are there village rules?
All villages have rules about using the common facilities and maintaining a positive environment for everyone’s benefit. Ask for a copy of the rules before you make a decision.
Q - Does the village have a residents’ committee? What procedures are available to resolve any dispute?
Many villages have a residents’ committee that works with management to maintain or enhance the quality of village life. To participate or not is a matter of personal choice, but residents may enjoy making significant contributions to whatever facets of village life most interest them.
If a dispute arises management is available to work with the resident to try to resolve the difference. The RVA has a disputes resolution process and a more formal system is set out in the Retirement Villages Act.
Q - What does the ‘outgoings’ or weekly fee cover?
The regular ‘outgoings’ or weekly fee covers certain running costs of the village. These costs may include the upkeep of the village facilities, maintenance of the village grounds and gardens, staff wages and salaries, statutory charges such as council and water rates, security costs, ACC and public liability insurance, and common area insurance for the entire village.
Q - How is the ‘outgoings’ or weekly fee determined and can it be increased?
The basis of calculating the ‘outgoings’ or weekly fee varies from village to village and is fully explained in your ORA. The fee is generally reviewed annually as management plans the budget for the year ahead.
Q - Will we receive a regular statement of the village’s finances?
The Retirement Village Act requires management to provide residents with annual financial statements and budgets. These are usually presented and discussed at the village’s Annual General Meeting.
Leaving a retirement village
Q - What happens to our unit or apartment when we leave? How is the resale price of our unit determined and, are there any restrictions on who may buy it?
As with all residential property, unit prices are determined by the market. However, in a village there are additional factors that may add value to the resale potential of your unit, including stable management and attractive and relevant services and amenities.
The village manager may either take responsibility for or will assist you or your estate in the resale process. The terms of any repayment due to you or your estate will vary from village to village and will be set out in the ORA. Make sure you and your family understand this before committing to buying.
A deferred management fee is deducted by the village when your unit is sold. The amount of the fee varies. The sales person will provide you with an explanation of their terms, including examples.
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