Retirement Villages Stakeholder Forum 26 November 2019 - - PowerPoint PPT Presentation

Retirement Villages Stakeholder Forum 26 November 2019

zyxwvutsrqponmlkjihgfedcbaZYXWVUTSRPONMLKJIHGFEDCBA Welcoming Address – Why today matters?

I nte rim Re tire me nt Co mmissio ne r – Pe te r Co rd tz

• Hon. Kris Faafoi

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Monitoring Matters

Extracts from an independent legal opinion to the Retirement Commissioner on the obligation to monitor.

" We c o nsid e r the (mo nito ring) pro visio ns pe rmit a fa r mo re pr

• ac tive

appr

• ac h to the inve stig a tio n a nd re po rting o f ind ustry

b e ha vio ur a nd e ve nts..." "..the Co mmissio ne r's ro le a s mo nito r is e sse ntia lly o ne o f 'wa tc hd o g ' - e nsuing it is suffic ie ntly infor

me d to flag any pr

• ble ms be for

e the y ar ise,

pro vid e info rma tio n a nd inte llig e nt a d vic e to the Ministe r, a nd to

r e c omme nd c onstr uc tive c hange s to the re g ula to ry re g ime ....“

.."the purpo se o f the pro visio n is to pro vid e a c he c k against any adve r

se c onse que nc e s o f the le g isla tive re g ime ."

"Pro a c tive inve stig a tio n a ppe a rs to b e c o nte mpla te d ...pro visio ns suppo rt the vie w tha t a d uty to mo nito r re q uire s mor

e than me r e ly ke e ping we ll-infor me d o f ind ustry ma tte rs..."

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Monitoring Matters

Pr

• ac tive appr
• ac h:
• MHUD po lic y / Ministe ria l me e ting s (T

wyfo rd / Sa le sa / F a a fo i).

• Sta ke ho ld e r me e ting s, fo rums, c o nfe re nc e s, this fo rum!
• Re sid e nt-o nly wo rksho ps, c o mmunity a g e nc y wo rksho ps
• Pub lic se mina rs, ‘ fo llo w-up’ b e ha vio r c ha ng e me a sure me nt.
• E

xe rc ising s36(3) info rma tio n-g a the ring po we r:

• e .g . ind ustry pra c tic e s fo r DMF

c ha rg ing o n tra nsfe r b e twe e n villa to a pa rtme nt.

• Me d ia , so c ia l me d ia , we b re so urc e s
• RV pa g e use rs spe nd mo re time o n o ur pa g e s tha n o the r CF

F C pa g e use rs

• Se c to r tre nd -a na lysis: ind ustry pub lic a tio ns, c o mpla int-re po rting , the ma tic re se a rc h.

a nd .....

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Monitoring Matters

• Handling r

e fe r r als

• I

nfo rma tio n re q ue sts / c o mpla ints

• L
• b b ying c o mmunic a tio ns
• Re sid e nts ma y b ring a lle g e d b re a c h o f Co d e o f Re sid e nts' Rig hts to the a tte ntio n o f the

Co mmissio ne r ( se c tio n 33)

• E

nquir y log - ind ic a tive re c o rd o nly – no t a ll e nq uirie s a re a b le to b e c a pture d

• 2018 e nq uiry lo g - 145
• 2019 e nq uiry lo g - 130 (a s a t mid -No v)

MBI E c a ll-c e ntre se rvic e – 0800 268 269

• 20-40 c a lls a mo nth – mo stly re sid e nt rig hts e nq uirie s
• spiking 80-180 a mo nth - se mina r e ve nts
• Dispute Pane l Ac tivity
• Appo intme nt o f ne w me mb e rs
• 3 No tic e s fo rma lly re c e ive d in 2019 – 1 he a ring d e c isio n

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Referrals / enquiries to CFFC – examples of 10 recurring themes in 2019

• Amb ig uitie s re g a rd ing liability for

r e pair

• r

r e plac e me nt of c hatte ls o r

fixture s

• Char

ge s for c ar e / c a re suite s / c o nfusing c a re -re la te d te rmino lo g y /

q ua lity o f c a re

• Ope ra to r ma na g e me nt o f r

e side nt c ommitte e s / c onstitution

• Slo wne ss o f re sa le a nd r

e tur n of c apital / ine q uity in c o ntro l o f re sa le

• Cha lle ng ing inc re a se d we e kly fe e s a nd fo re c a sts / ho w to ‘ re q uire ’ fixe d

fe e s

7

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Referrals / enquiries to CFFC – examples of 10 recurring themes in 2019

• Disc ontinue d se r

vic e s or ame nitie s: se c urity, first re spo nse c a re se rvic e ,

lib ra ry ro o m

• Non-pe r

for manc e of de ve lopme nt: c o ntra c tua lly re pre se nte d fa c ilitie s

• Alte r

native s to L T O mode l, a va ila b ility o f re nta l units, o the r o ptio ns a nd

whe re to find

• Ope r

ator bullying o r intimid a ting b e ha vio ur

• Cha rg ing DMF
• n inte r

nal tr ansfe r s (b e twe e n units)

8

Monitoring Matters – Complaint reporting

Oc tobe r 2018 to Apr il 2019 Apr il 2019 to Oc tobe r 2019

Complianc e r ate – re po rts

re c e ive d fro m village s / to tal re giste re d village s

290 villa g e s (o f 424) = 68% 390 villa g e s (o f 430) = 91%

Numbe r o f village s with NIL

210 (72%) 290 (74%) c omplaints Numbe r

• f c omplaints /

80 villa g e s with 205 c o mpla ints 100 villa g e s with 189 c o mpla ints

village s with c o mplaints

% of c omplaints r e solve d o r

part re so lve d within 20 days

Cate gor y with highe st

numbe r o f c o mplaints

Numbe r

• f c omplaints

r e fe r r e d to statuto ry

supe rviso r / third party me diato r

78%

• 1. Se rvic e q ua lity
• 2. Ma inte na nc e / re pa ir o f

b uild ing s 12 to supe rviso rs 7 to me d ia to r / third pa rty 74%

• 1. Ma inte na nc e / re pa ir o f

b uild ing s

• 2. Ma inte na nc e / re pa ir o f

g ro und s 25 to supe rviso rs 10 to me d ia to r / third pa rty

zyxwvutsrqponmlkjihgfedcbaZYXWVUTSRPONMLKJIHGFEDCBA Monitoring Matters – Financial assistance by operators

• Wha t a re the d iffe re nt type s o f fina nc ia l a ssista nc e / se rvic e s
• pe ra to rs a d ve rtise o r pro vid e ?
• Ho w a re o pe ra to rs a d ve rtising , re pre se nting o r info rming inte nd ing

re sid e nts a nd re sid e nts a b o ut the a va ila b ility o f fina nc ia l a ssista nc e / se rvic e s in the na ture o f fina nc ia l a ssista nc e ?

• T
• wha t e xte nt a re o pe ra to rs pro a c tive ly ra ising this with inte nd ing

re sid e nts o r re sid e nts?

• Wha t a re the e xpe rie nc e s o f re sid e nts who ha ve re c e ive d fina nc ia l

a ssista nc e re g a rd ing ho w we ll the y und e rsta nd the fina nc ia l a ssista nc e a rra ng e me nts the y ha ve in pla c e ?

Monitoring Matters – Financial assistance by operators

The Statutory Supervisor’s role in complaints

Garreth Heyns – Covenant Trustee Services Richard McLoughlin – Anchorage Trustee Services

November 2019

Procedure for resolving formal complaints - Code of Practice clause 35

• Operator has 20 working days to resolve the complaint.
• If the complaint is not resolved to the residents satisfaction, the complaint must

be referred to the statutory supervisor.

• The statutory supervisor has 20 working days:

‘to work with the parties to provide them with an impartial perspective and to recommend a way forward’

• < 10% of complaints are referred to the statutory supervisor.
• 12 out of 205 Oct 2018 – April 2019
• 25 out of 290 April 2019 – Oct 2019

Types of complaint referred to the statutory supervisor

• Complaints we receive usually involve complex issues, or where a resident does not

accept the outcome proposed by an operator, or an operator will not compromise

• n an issue.
• Sometimes we categorise complaints as either:

1. The complaint is not actually a complaint; 2. Complaints between residents; or 3. Complaints against the operator

• and whichever it is determines how we exercise our role
• The statutory supervisor can only make recommendations. Our recommendation is

not binding on either party.

The approach taken

• Engage with the parties to understand their position, their concerns and the
• utcome sought. This is not always clear from the written complaint.
• Generally provide a formal written recommendation as to a way forward.
• Our successful involvement usually requires the willingness to compromise by

the parties.

Case study 1 - Covenant

• Construction of an apartment block within village:

– Residents unhappy as construction site directly opposite their unit and wanting to move to another unit. – ORA and disclosure statement contained all necessary information regarding the proposed construction. – Met with resident and explained legal position. The residents considered the position unfair and were very unhappy. – Engaged with the operator to explain how the residents perceived matters. – Operator did not want an unhappy resident and although no legal obligation to do so, agreed to move the resident to another unit – Successful outcome because of the willingness to compromise by the

• perator.

Case study 2 - Covenant

• One case we were involved in led to a Disputes Panel hearing:

– Resident relocated due to remediation work required. – On completion, resident refused to move back to her unit, claiming issues with the remediation design. – Complaint was unable to be resolved to the resident's satisfaction. – Referred to statutory supervisor to work with the parties and recommend a way forward. – Unsuccessful – Resident refused to engage or meet with the statutory supervisor. – Recommendation based on engagement with the operator only.

Case study 1 – Anchorage

• 1. When a complaint is not a complaint:

– Residents whose understanding of the contractual position or an entitlement is simply wrong or may be an ‘overreach’ or vexatious – Example: – Key is communicating effectively, speak to the resident and deflect unwarranted criticism. – We may also liaise directly with resident lawyer in these cases. Their lawyer can help direct their client, as they certified when advising about the ORA.

Case study 2 – Anchorage

• 2. Complaints between residents:

– Often most problematic for us as they involve relationship/neighbourly issues which on face value may or may not fall within a complaint. – Example: family members overstaying with resident, effects on neighbours… – Often it is (again) all about communication and may require us acting like a

• mediator. It challenges what actually is the role of the Statutory Supervisor.

Case study 3 – Anchorage

• 3. Complaints against operator:

– The most serious if it involves a breach of disclosure or an ORA obligation. – Examples: failure to provide for community facilities or the village site being a work site years beyond time forecast. – Communication with resident and early involvement with operator management. – Need to have an operator willing to compromise.

Re Retirement t Village e Re Residents s Association n NZ Z (Inc) )

Residents’ Rights and Purpose of the RV Act

Purposes of the Act include:

• To protect the interests of residents
• To promote understanding of the financial and occupancy interests of residents
• To provide an environment of security and protection of rights for residents

What is the Code of Practice (CoP)

• The CoP is defined as a legal document and sets out the minimum rules for all

Villages and the contents of ORAs

• Its purpose is to provide an environment of security and protection of rights for

residents

• BUT CoP wording is NOT consistent with, and fails to give

effect to, the purpose of the ACT

Interpretation Act

• The Act describes various indicators used in the interpretation
• process. The most important one is the purpose of an enactment
• In recent landmark cases the Supreme Court * has also considered

Parliamentary Contemplation as an additional interpretation ‘indicator’

* Ben Nevis Forestry Ventures Ltd v Commissioner of Inland Revenue, 2009 * Alesco New Zealand Limited v Commissioner of Inland Reve, 2013

CoP provisions framed & used contrary to Contemplation or Intention

• f the RV Act
• Parliament’s purpose in enacting specific provisions is aimed

at the most common issues which arise.

• Anything that indicates a contrived application of a

provision is likely to indicate that the provision was not used in the way Parliament thought it would be.

CoP provisions framed & used contrary to Contemplation or Intention

• f the RV Act
• The two Court cases confirm our view that the wording of

some CoP provisions, and the way it is applied in practice, defeats the purpose of the Act to protect residents against exploitation

Defeating the purpose of the Act

How CoP and ORA provisions defeat the purpose:

• For example: Delays in obtaining a new resident to take-up

an occupational right result in vacating residents theoretically having to wait indefinitely for an operator to refund their capital and stop charging weekly fees with no compensation i.e. interest on amount due

Defeating the purpose of the Act

CoP and ORA provisions defeating the purpose:

• Total Refurbishment process not defined in the CoP
• Refer to the definition in the CoP- return the unit to
• riginal state
• Former resident has no say in the decision of

Operator

Australia- NSW

• NSW State legislator is on the point to introduce

legislation requiring Operators to:

• 1. Stop charging weekly fees 42 days after vacation
• 2. Pay-out the former resident’s capital within 6 months

Conclusion

• We acknowledge that residents enter into an ORA after obtaining legal

advice

• But the way some CoP provisions have been framed & used in ORA

drafting could not have been contemplated by either Parliament nor a resident when entering into a contract in good faith

• RVRANZ believes that no resident should wait longer than 6 months for a

refund of the capital.

• The Government should therefore strongly consider amending the CoP

and/or Act to prevent injustices such as those demonstrated

Unfair Village Contract Terms

• “You must maintain cover for your motor vehicle.

Irrespective of cause, we will have no responsibility, under any circumstance, for loss or damage to any of your property or vehicles.”

• “You must not make any alterations or additions

to your unit without our prior consent … We can give or withhold consent at our sole discretion.”

• “We may refuse to permit you to bring to the

village any caravan, trailer or similar item. If we grant you permission … we may require you to remove such item despite any previous approval”

• “We will not be liable for any loss or

inconvenience suffered by you arising from any defect to your unit unless you advised us in writing of any such defect and we failed to take reasonable steps to repair it within a reasonable time.”

• “The terms and conditions that will apply to your

transfer to another residential unit within the village will be as set out in our transfer policy which we may amend from time to time at our sole discretion.”

ywvutsrponmlihgfedcaRKEC Retirement villages need more transparency over care facilities Capital gain on retirement village units is hit by cost of having to refurbish Complaints system for Retirement village contracts to be retirement care failing - simplified: sector

Retirement village deals 'too confusing'

Consumer NZ Residents exposed to noxious sewer gases at retirement complex in Lower Hutt

Fishhooks of moving from retirement village unit to rest home care

Kāpiti retirement village death: Elderly man charged with murder Rest home residents 'assaulted, threatened, left on floor': Complainants

Code variation proposals

T ro y Churto n & Mic he lle Sulliva n

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• posals
• 1. Re furb ishme nt time line ss – Cla use 50
• 2. Outg o ing c ha rg e s – re d uc tio n / c e ssa tio n – Cla use 54
• 3. Ope ra to r b uy b a c k – Cla use 53
• 4. Po lic y a nd tra nsfe r te rms fo r c a re – Cla use s 8, 24
• 5. L
• ng te rm ma inte na nc e pla n – c o nsulta tio n / AGM / re vie w – Cla use s 26, 28,40
• 6. Co mpla int po lic y – re fe re nc e to re po rting – Cla use 33
• 7. De finitio ns: F

a ir we a r & te a r / F ixe d d e d uc tio n / Outg o ing s – Cla use 2

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50

Re fur bishme nt c osts and pr

• c e ss

1. T his c la use o nly a pplie s to o c c upa tio n rig ht a g re e me nts whe re the o pe ra to r ha s the re spo nsib ility fo r the sa le o f the re sid e ntia l unit. 2. I f a n o c c upa tio n rig ht a g re e me nt e nte re d into a fte r 25 Se pte mb e r 2006 sa ys tha t the re sid e nt must pa y o r c o ntrib ute to the c o sts o f re furb ishing the ir re sid e ntia l unit a fte r te rmina tio n, the re furb ishme nt pro c e ss must b e se t o ut c le a rly in the a g re e me nt. T he re furb ishme nt pro c e ss must: a ) se t o ut the te rms o f the o pe ra to r’ s rig ht to e nte r the re sid e ntia l unit to d o the wo rk b ) id e ntify ho w the c o st will b e d ivid e d b e twe e n the

• pe ra to r a nd the re sid e nt

c ) se t o ut the rig hts (inc lud ing c o nsulta tio n) a nd o b lig a tio ns

• f the fo rme r re sid e nt (o r the e sta te o f the fo rme r

re sid e nt, o r the ho ld e r o f a n E nd uring Po we r o f Atto rne y fo r Pro pe rty) in the re furb ishme nt pro c e ss. 3. Whe re a n o c c upa tio n rig ht a g re e me nt pro vid e s tha t the re sid e nt must pa y o r c o ntrib ute to the c o sts o f re furb ishing the ir re sid e ntia l unit a fte r te rmina tio n, the re sid e nt is no t re q uire d to pa y fo r fa ir we a r a nd te a r: a ) if the o c c upa tio n rig ht a g re e me nt wa s e nte re d into a fte r 25 Se pte mb e r 2006

• r

b ) the o c c upa tio n rig ht a g re e me nt wa s e nte re d into b e fo re 25 Se pte mb e r 2006 b ut a fte r tha t d a te wa s va rie d to inc re a se the re sid e nt’ s ra te o f fixe d d e d uc tio n

• r d e c re a se the re sid e nt’ s sha re o f c a pita l g a in upo n

sa le o f the unit.

50(2)

Re fur bishme nt c osts and pr

• c e ss
• 1. T

his c la use o nly a pplie s to o c c upa tio n rig ht a g re e me nts whe re the

• pe ra to r ha s the re spo nsib ility fo r the sa le o f the re sid e ntia l unit.
• 2. If an ope rator de te rmine s that a re side ntial unit is to be re furbishe d

prior to marke ting it, the ope rator must:

• Consult with the forme r re side nt (or the ir e state or the holde r of

an e nduring powe r

• f attorne y for

prope rty) about a re furbishme nt programme for the re side ntial unit within one month of the late r

• f the te rmination date or

the date the forme r re side nt stops living in the unit and re move s all the ir posse ssions, and

• Comme nc e the re furbishme nt within a re asonable time , and
• Comple te the re furbishme nt within a re asonable time but, in

any c ase , within six months; Provide d that the forme r re side nt (or the ir e state or the holde r of an e nduring powe r

• f attorne y for

prope rty) must give the ope rator unre stric te d ac c e ss to the re side ntial unit from the late r of the te rmination date or the date the forme r re side nt stops living in the unit and re move s all the ir posse ssions

• 3. An oc c upation right agre e me nt may spe c ify that the re side nt must

pay or c ontribute to the c osts of re furbishing the ir re side ntial unit afte r te rmination. Howe ve r, the re side nt is not re quire d to pay for fair we ar and te ar if:

a . the o c c upa tio n rig ht a g re e me nt wa s e nte re d into a fte r 25 Se pte mb e r 2006

• r

b . the o c c upa tio n rig ht a g re e me nt wa s e nte re d into b e fo re 25 Se pte mb e r 2006, b ut wa s la te r va rie d to inc re a se the re sid e nt’ s ra te

• f fixe d d e d uc tio n o r d e c re a se the re sid e nt’ s sha re o f c a pita l g a in

whe n the unit is sold

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54(2)

Continuing c har ge s for

• utgoings
• 2. T

he o pe ra to r must re d uc e b y a t le a st 50 pe r c e nt the

• utg o ing s c ha rg e d to the fo rme r re sid e nt if no ne w
• c c upa tio n rig ht a g re e me nt ha s b e e n e nte re d into fo r a

fo rme r re sid e nt’ s unit b y the la te r o f: a . six mo nths a fte r the te rmina tio n d a te , o r b . the d a te the fo rme r re sid e nt sto ps living in the re sid e ntia l unit a nd re mo ve s a ll the ir po sse ssio ns

54(2)

Char ge s for

• utgoings must be r

e duc e d thr e e months afte r te r mination or at e nd of oc c upation

• 2. T

he o pe ra to r must re d uc e b y a t le a st 50 pe r c e nt the o utg o ing s c ha rg e d to the fo rme r re sid e nt if no ne w o c c upa tio n rig ht a g re e me nt ha s b e e n e nte re d into fo r a fo rme r re sid e nt’ s unit b y the la te r o f:

• a. thre e months afte r the te rmination date , or

b . the d a te the fo rme r re sid e nt sto ps living in the re sid e ntia l unit a nd re mo ve s a ll the ir po sse ssio ns.

54(3)

Char ge s for

• utgoings must c e ase six months

afte r te r mination or at e nd of oc c upation

• 3. T

he ope rator must c e ase c harging outgoings c harge d to the forme r re side nt, if no ne w oc c upation right agre e me nt has be e n e nte re d into for the forme r re side nt’s unit, by the late r

• f:
• a. six months afte r

the te rmination date , or

• b. the date the forme r re side nt stops living in the re side ntial

unit and re move s all the ir posse ssions

Remaining sub-clauses (3) – (13) in 54 renumbered (4) – (14)

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53(1)

Ope r ator s may buy vac ant r e side ntial units

53(1)

Ope r ator s may buy r e side ntial unit

• 1. At a ny time b e fo re e nte ring into a ne w o c c upa tio n rig ht

a g re e me nt with a ne w re sid e nt fo r the va c a nt re sid e ntia l unit, the

• pe ra to r ma y a g re e in writing to b uy the fo rme r re sid e nt’ s inte re st

in the va c a nt unit.

• 1. At a ny time b e fo re e nte ring into a ne w o c c upa tio n rig ht

a g re e me nt with a ne w re sid e nt fo r the va c a nt re sid e ntia l

If the oc c upation right agre e me nt was e nte re d into afte r ( date

unit, the o pe ra to r ma y a g re e in writing to b uy the fo rme r

tbc – like ly date of c ode variation e ffe c tive ) the ope rator must

re sid e nt’ s inte re st in the va c a nt unit.

agre e in writing to buy the forme r re side nt’s inte re st if a ne w

• c c upation right agre e me nt has not be e n e nte re d into for

the re side ntial unit two ye ars afte r it has be e n le ft vac ant by the forme r re side nt.

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24(1)

T ransfe r re quire me nts in the oc c upation right agre e me nt

• 1. I

f a n o c c upa tio n rig ht a g re e me nt a llo ws a re sid e nt to tra nsfe r fro m a n ind e pe nd e nt se lf-c a re re sid e ntia l unit to a unit in the re tire me nt villa g e whe re a hig he r le ve l o f c a re will b e pro vid e d , it must se t o ut the te rms o f tra nsfe r. T he te rms o f tra nsfe r must inc lud e , b ut ne e d no t b e limite d to , the fo llo wing : a . the c irc umsta nc e s und e r whic h the tra nsfe r ma y b e initia te d a nd b y who m b . whe the r re sid e nts ha ve prio rity o ve r o utsid e a pplic a nts c . whe the r the tra nsfe r d e pe nd s o n: i - a suita b le re sid e ntia l unit b e ing a va ila b le ii - suita b le c a re b e ing a va ila b le iii - the re sid e nt b e ing a sse sse d a s suita b le fo r the a va ila b le c a re d . tha t re sid e nts a ffe c te d ha ve the rig ht to : i - b e g ive n info rma tio n o n a ll a va ila b le o ptio ns ii - ha ve a n ind e pe nd e nt a sse ssme nt (inc lud ing a ne e d s a sse ssme nt) iii - b e c o nsulte d , a lo ng with the ir fa mily o r re pre se nta tive .

24(2)

T ransfe r re quire me nts in the oc c upation right agre e me nt

• 2. Re sid e nts who a re c o nsid e ring a tra nsfe r sho uld b e ma d e a wa re

tha t a ne e d s a sse ssme nt ma y b e re q uire d in o rd e r to a c c e ss sub sid ie s a d ministe re d b y o the r g o ve rnme nt a g e nc ie s suc h a s the Ministry o f He a lth a nd Wo rk a nd I nc o me

24(1)

Oc c upation r ight agr e e me nts must se t out te r ms of tr ansfe r

I f a n o c c upa tio n rig ht a g re e me nt a llo ws re sid e nts to tra nsfe r fro m a n ind e pe nd e nt se lf-c a re re sid e ntia l unit to :

• A unit in the re tire me nt villa g e whe re a hig he r le ve l o f c a re is pro vid e d , or
• A room in an onsite or

c o-loc ate d c are fac ility

it must se t o ut the te rms o f tra nsfe r. T he te rms o f tra nsfe r must inc lud e (b ut no t b e limite d to ): a . the c irc umsta nc e s und e r whic h the tra nsfe r ma y b e initia te d a nd b y who m b . whe the r re sid e nts ha ve prio rity o ve r o utsid e a pplic a nts

c . for available units or rooms

d . whe the r the tra nsfe r d e pe nd s o n: i. a suita b le re sid e ntia l unit b e ing a va ila b le ii. suita b le c a re b e ing a va ila b le

• iii. the re sid e nt b e ing a sse sse d a s suita b le fo r the a va ila b le c a re

d . tha t re sid e nts a ffe c te d ha ve the rig ht to : i. b e g ive n info rma tio n o n a ll a va ila b le c are o ptio ns, inc luding the c ost and

availability of standard rooms and pre mium rooms ii. be c le arly informe d of the e ffe c t the transfe r will have on a re side nt’s

• c c upation right agre e me nt, inc luding the c alc ulation and payme nt of the

fixe d de duc tion and the re side nt’s obligation to pay we e kly se rvic e fe e s

• iii. ha ve a n ind e pe nd e nt a sse ssme nt (inc lud ing a ne e d s a sse ssme nt)
• iv. b e c o nsulte d , a lo ng with the ir fa mily o r re pre se nta tive .

24(2)

Re side nts should know a ne e ds asse ssme nt may be r e quir e d

• 2. Re sid e nts who a re c o nsid e ring a tra nsfe r sho uld b e ma d e a wa re tha t a ne e d s

a sse ssme nt ma y b e re q uire d in o rd e r to a c c e ss sub sid ie s a d ministe re d b y o the r g o ve rnme nt a g e nc ie s suc h a s the Ministry o f He a lth a nd Wo rk a nd I nc o me

November 2019

Issues with Regulation 9

Richard Spong Susan Bingham

The Regulation

Retirement Villages (General) Regulations 2006

9 Operator’s obligation to provide financial statements (3) An occupation right agreement must include a provision requiring the operator of the retirement village (a) to prepare, at the start of each accounting period of the operator, a statement forecasting for the period— (i) the operating expenditure relating to the village; and (ii) all expenditure relating to the village (including amounts repayable to residents, former residents, and their estates); and (iii) all income relating to the village; and (iv) the amounts of the operating expenditure that must be met by the residents of the village; and (b) to give a copy of the statement to each resident of the village within 3 months of the start

• f the accounting period.

Practical Difficulties

• The biggest challenge = ensure useful information is provided that

meets a clear objective.

• Information required to be provided is:

– a ‘hodge-podge’, – does not apply general accounting conventions; and – includes elements of the Income Statement, Cashflow Statement and Balance Sheet.

• It does not make sense to the users (residents) and can be

confusing and can’t be reconciled to anything.

What is the objective?

• It is not clear what the Regulation is trying to achieve. Is it:

(1) A forecast of weekly fees and operating expenses so residents can see what their weekly fees are paying for?

What is the objective?

• Or (2) A forecast of village income and expenditure so residents can

form a view of future profitability/sustainability?

What is the objective?

• Or (3) A cashflow statement, so residents can form a view on the

availability of funds to repay their ORA

Are the reports useful?

• If residents are on fixed weekly fees, are the reports still

useful?

• If a resident is in an ORA care room – there are no weekly
• fees. So are the reports useful?
• Has the industry moved on and the Regulation not kept up?

What we think residents are interested in

• What their weekly fees are being spent on (particularly those with variable

fees).

• Ensuring they are getting value for money, that the Operator is using the fee

for the correct expenses.

• The regulation 9 reports are usually prepared with details of the ‘material’

types of expenditure.

• Residents on fixed incomes are concerned about increases in weekly fees

and their ability to afford them.

An additional regulatory change opportunity

198 Duty of auditor to report to supervisor or FMA (1) This section applies to the auditor of an issuer of a debt security or a registered scheme. (2) If the auditor provides the issuer, any of the issuer’s members or shareholders, or any of the holders of the debt security or managed investment product with any document required by an Act or a trust deed relating to the financial product or scheme, the auditor must, as soon as practicable, send a copy to the supervisor of the debt security or registered scheme or, if there is no supervisor, to the FMA. (3) If, in the performance of the auditor’s duties, the auditor becomes aware of a matter that, in the auditor’s opinion, is relevant to the exercise or performance of the powers or duties of the supervisor

• f the debt security or registered scheme, the auditor must, within 7 working days of becoming aware
• f the matter, send—

(a) a written report on the matter to the issuer; and (b) a copy of the report to the supervisor or, if there is no supervisor, to the FMA.

Template

Template

zyxwvutsrqponmlkjihgfedcbaZYXWVUTSRPONMLKJIHGFEDCBA CFFC RV stakeholder day

Re tire me nt Villa g e s Asso c ia tio n Jo hn Co llyns, E xe c utive Dire c to r

Re purpo se d la nd – Hutt Va lle y T e c hnic a l Co lle g e b e c o me s Bo b Sc o tt Re tire me nt Villa g e

ywvutsrponmlihgfedcbaUSNKIHC Re purpo sing pro pe rty – the Russle y Ho te l (o pe ne d 1964, c lo se d 2008) is no w the Russle y Re tire me nt Villa g e (abo ve pho to K

e te Christc hurc h)

Re purpo se d la nd – We lling to n’ s Athle tic Pa rk b e c o me s Arvid a ’ s Villa g e a t the Pa rk

zyxwvutsrqponmlkjihgfedcbaZYXWVUTSRPONMLKJIHGFEDCBA What’s driving RV growth

• I

nc re a se d a va ila b ility o f q ua lity pro d uc t a nd c o ntinuum o f c a re

• Pub lic a c c e pta nc e o f RV a s ma instre a m ho using o ptio n fo r o ld e r

pe o ple

• Re sid e nt-fo c use d c o nsume r pro te c tio n le g isla tio n
• Re le a sing e q uity in pro pe rty d ue to inc re a se d pro pe rty va lue s
• Re sid e nts’ impro ve d se nse o f se c urity, c o mpa nio nship a nd physic a l

a c tivity

• I

nd ustry c o mmitme nt to impro ving the re g ime .

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ywvutsrponmlihgfedcbaUSNKIHC

World-leading legislation

Dr Bria n Be a c h (UK ): “Pe rha ps the stro ng e st e xa mple o f le g isla tio n spe c ific to this se c to r (re tire me nt villa g e s) c o me s fro m Ne w Ze a la nd , whe re the RV Ac t e sta b lishe d the d e finitio n o f a re tire me nt villa g e a nd put in pla c e o pe ra tio na l re q uire me nts a nd re g ula tio ns to pro te c t c o nsume rs”. * GRI E NE R RE PORT (NSW): “Re g ula to ry re g ime s in b e st pra c tic e jurisd ic tio ns suc h a s Ne w Ze a la nd … E xe mpla ry g uid e s fro m o the r jurisd ic tio ns suc h a s NZ …”

S tro nge r fo undatio ns : I nte rnatio nal le sso ns fo r the Ho using-with-Care se c to r in the U K

, Ja nua ry 2018

• Our le g isla tio n b a la nc e s o pe ra to rs’ re spo nsib ilitie s with re sid e nts’ inte re sts a nd we ll-

b e ing .

• F

le xib ility a llo ws ma rke t-le d so lutio ns witho ut re q uiring a ll o pe ra to rs to fo llo w, if the y a re no t a b le to d o so .

zyxwvutsrqponmlkjihgfedcbaZYXWVUTSRPONMLKJIHGFEDCBA RVA members offer higher standards

RVA's me mb e rship a nd ro le . Co d e o f Pra c tic e - minimum sta nd a rd s a ro und villa g e ma na g e me nt. Hig he r sta nd a rd s o ffe re d b y o pe ra to rs inc lud e :

• F

ixe d we e kly fe e s (178 villa g e s, o r 48%) o r CPI ind e xe d

• Sto pping fe e s c o mple te ly whe n re sid e nts mo ve o ut
• Pro vid ing a re b a te o r inte re st if a unit is no t re lic e nse d within a n a g re e d time
• Offe ring inte re st-fre e lo a ns to mitig a te re sid e nt ha rd ship
• Pro vid ing sta nd a rd ise d “K

e y T e rms Summa ry" o f ma in c o ntra c t te rms to a llo w re sid e nts to c o mpa re d iffe re nt villa g e o ffe ring s

• Pro vid ing g uid a nc e to c la rify tra nsfe rs to c a re , whe re a va ila b le .

zyxwvutsrqponmlkjihgfedcbaZYXWVUTSRPONMLKJIHGFEDCBA TRANSITION TO CARE

• CF

F C’ s Mo nito ring Re po rt – T he I nte rfa c e o f Re tire me nt Villa g e s a nd Ag e d Ca re 2018-2019

• RVA ha s wo rke d with the CF

F C to d e ve lo p b e st pra c tic e g uid e line s fo r d isc lo sure

• Re g ula tio n 31 – Mo ving into re st ho me o r ho spita l c a re institutio n in a

re tire me nt villa g e

• Co d e o f Pra c tic e – Cla use s 24 a nd 25 – T

ra nsfe r fro m a n ind e pe nd e nt living unit to a unit in the villa g e whe re a hig he r le ve l o f c a re is pro vid e d

zyxwvutsrqponmlkjihgfedcbaZYXWVUTSRPONMLKJIHGFEDCBA BEST PRACTICE DISCLOSURE - GUIDELINES

• 1. I

s c a re a va ila b le o n site ?

• 2. Do e s re sid e nt ha ve the rig ht to mo ve to c a re ?
• 3. L

e ve ls o f c a re a va ila b le

• 4. Numb e r o f ro o ms in e a c h c a re c a te g o ry
• 5. Do e s re sid e nt ha ve prio rity?
• 6. I

s a n a sse ssme nt re q uire d ?

• 7. Are the re a ny re sid e nt-fund e d c ha rg e s a nd d e sc rib e
• 8. De ta il tra nsfe r po lic y if re sid e nt purc ha se s a n ORA fo r c a re .

zyxwvutsrqponmlkjihgfedcbaZYXWVUTSRPONMLKJIHGFEDCBA Issues of concern to residents

• L

ONG-T E RM MAI NT E NANCE PL ANNI NG

• DE

L AYS I N UNI T RE NOVAT I ONS

• ST

OPPI NG WE E K L Y F E E S WHE N UNI T I S VACAT E D

• MANDAT

ORY BUY BACK S

• PAYI

NG MARK E T VAL UE I F UNI T DE ST ROYE D AND NOT RE BUI L T

• E

XPL OI T AT I ON AND T HE F AI R T RADI NG ACT

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Meeting government objectives

Housing c r isis

• 1,700 ne w RV units b uilt a nnua lly
• 4,700 fa mily ho me s re le a se d to the ma rke t a nnua lly
• Susta ina b le fo c us in ne w d e ve lo pme nts

Impac t on tla infr astr uc tur e

• Rv Are e ffic ie nt use rs o f la nd
• 1.3 pe o ple pe r d we lling – le ss wa te r use
• F

e we r ve hic le mo ve me nts, le ss use o f c o unc il a me nitie s

Impac t on he alth and we ll-be ing

• Re d uc e d inc id e nc e o f lo ne line ss a nd impro ve me nt in me nta l a nd physic a l

he a lth

• Villa g e s slo w e ntry to a g e c a re
• E

ffic ie nt d e live ry o f ho me -b a se d suppo rt

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What we could do better …

• Communic ation, b o th with re sid e nts a nd the wid e r pub lic , a b o ut RV b e ne fits.
• Use so c ia l me d ia , we b site s, vid e o c o nfe re nc ing mo re e ffe c tive ly
• Ma ke the tra nsitio n to c a re mor

e tr anspar e nt

• Soc ial housing – a pro fita b le se c to r is e sse ntia l, b ut o pe ra to rs c ho o se ho w to

spe nd pro fits.

• Aro und 60 o pe ra to rs pro vid e +600 re nta l units. ANZ re se a rc h sug g e sts tha t 14% o f
• pe ra to rs will try re nta l, a nd 46% wa nt to se e the e vid e nc e tha t it wo rks.
• De signing othe r

mode ls to c a te r fo r pe o ple with limite d c a pita l

;

• 12% o f o pe ra to rs to ld ANZ the y’ d lo o k a t a no -DMF

mo d e l a nd 49% sa id the y “will c o nsid e r a ne w pro po sitio n to a ppe a l to re tire e s”.

• T

e c hnology – 49% sa id the y wa nte d to use te c hno lo g y mo re e ffic ie ntly.