The government has set a mandatory 12-month buyback period for vacated units, ending open-ended waits that have left some residents and families in financial limbo, writes Catherine McGregor in today’s extract from The Bulletin.
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A long journey to retirement-village reform
The government has unveiled the most significant overhaul of retirement village law in more than 20 years, promising clearer rules, stronger protections and, crucially, a long-awaited deadline for operators to repay former residents’ funds. Associate housing minister Tama Potaka confirmed on Thursday that repayments will be required “no later than 12 months” after a unit is vacated, RNZ reports. Interest will accrue after six months, weekly fees will stop immediately, and residents will be able to seek early access to funds in cases of hardship. An independent complaints resolution scheme will also be introduced.
The announcement follows a fraught review process that began under the previous government and attracted more than 11,000 submissions. Village resident and activist Moira-Clare Donovan said she was delighted about the news. “Everything the minister announced were things that we’ve been working on, we’re asking for.” But for those currently in dispute with their retirement villages, the announcement is bittersweet. The rules will apply only to future agreements, with Potaka citing “sanctity of contract” as a reason they couldn’t be made retrospective. The legislation is expected to be introduced to parliament by mid-2026.
What the changes mean for residents
While they may not benefit themselves, families who have endured months of waiting for a unit to resell will still welcome the changes. Many cases mirror the experience of Joanne, the daughter of a village resident who died in 2024. Consumer NZ’s Vanessa Pratley reported that Joanne waited six months without any updates on plans for the sale of her late mother’s unit. All the while, fees continued to accrue. As well as being fairer for residents and their families, the new rules are designed to give operators a tangible financial incentive to move units faster.
Still, not everyone is satisfied. The Retirement Villages’ Residents’ Council said the 12-month buyback deadline is still too long. Labour seniors spokesperson Ingrid Leary agrees: her member’s bill proposes a three-month repayment period, arguing “no one should be waiting a year to get their own money back”.
Industry warns of ‘chilling consequences’
Some operators have reacted sharply. Industry group the Retirement Villages Association (RVA) says the combined six-month interest trigger and 12-month buyback requirement will impose a “double financial hit”, slowing development and threatening the viability of smaller villages. Summerset chief executive Scott Scoullar told BusinessDesk’s John Anthony (paywalled) the reforms would have “chilling consequences” for new build projects, with operators holding onto more capital to prepare for mandatory buybacks.
But investment advisory firm Jarden argues the impact will be modest, noting many operators already pay interest from six months and buy back between six and 12 months as standard practice. A Ryman Healthcare spokesperson was even more blunt, stating the company did not expect to be affected by the reforms.
Fees remain a major unresolved issue
While the proposed law change will stop fees once a resident leaves, for many, the fees themselves remain a significant pressure point. As RNZ’s Susan Edmunds reports, residents have little ability to challenge hikes to the weekly fees that cover things like rates, insurance, staffing and maintenance. “It’s a cost that’s completely out of their control,” Consumer NZ’s Jon Duffy told her. “There’s no requirement to link price increases to the reasonable cost of operating a business.” Some residents say they’ve been hit out of the blue with 20%-plus increases. However the RVA said they estimate that “85% of the sector charges a weekly fee that is either fixed for life, or can only increase by the CPI, which is the same increase that applies to national superannuation”.
Read more:
- Donna Chisholm: How residents get trapped in the retirement village paradox
