Retirement village residents got MPs to play the made-up game of ‘villageopoly’ to illustrate the costly fishhooks in retirement village contracts.
Nigel Matthews, chief executive of the Retirement Village Residents Association, led the game last week at Parliament’s Social Services and Committee select committee.
The committee was hearing evidence on the need for better consumer protection for retirement village residents, and in the game, MPs took the part of village residents dealing with unfortunate life events.
Green MP Ricardo Menéndez March was first, drawing a villageopoly game card saying he could no longer afford to pay the weekly fee on the occupation right agreement (ORA) at his village after his partner of 60 years had to go into a rest home.
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An ORA is the contract under which a person lives in a retirement village, which they buy by paying a capital sum to the village operator.
They get their money back, minus a “deferred management fee” of as much as 30% of their capital, after they leave the village, but some ORA contracts stipulate that only happens when the village sells a new ORA on the unit the resident has vacated.
Unfortunately, in the game of villageopoly, it would take months for the village operator to sell a new ORA on Menéndez March’s unit, and until that happened, he was contractually bound to carry on paying the weekly fee.
“That’s not a good start,” Matthews told him.
Nigel Matthews, chief executive of the Retirement Village Residents Association, tells MPs why the law needs changing to protection people moving into retirement villages.
Continuing to charge him fees was a bit like a car park operator continuing to charge someone who used one of its spaces until a new motorist parked in it, Matthews said.
Labour MP Terisa Ngobi was next to play.
She drew a villageopoly card telling her she had been assessed as needing dementia care, but to get it she’d need to move out of her retirement village, and into an aged care facility.
She needed $350,000 to buy an ORA at the aged care facility, but couldn’t pay until the retirement village sold a new ORA on the unit she had left, and that took a year.
Until she got the money back, she had to move into a rented room in town. But she suffered a second disappointment.
Ross Giblin/Stuff
Labour MP, Terisa Ngobi, drew a tough hand in the game of ‘villageopoly’, and it cost her a notional $100,000.
The deferred management fee on her ORA was calculated based on how many years she had her ORA, including the year in which village was trying to sell a new ORA on her unit.
As a result, she had to forfeit an extra $100,000 of her capital.
“That’s not a good start either,” Matthews said.
The residents’ association has created a “Framework for Fairness” charter, which it hopes Parliament will use as a template to set minimum consumer protections for retirement village residents.
It includes making village operators pay people their capital back soon after they have left a village, perhaps as little as 28 days.
It also includes banning village operators from continuing to charge weekly fees, or accruing deferred management fees, after people had moved out.
Matthews said getting MPs to play the game had been a bit of a risk, but it seemed like the best way to show them the need for change.
At the close of the game of villageopoly, select committee chairperson Angie Warren-Clark, said the playing game had been quite shocking.
Supplied
Bay of Plenty Labour List MP Angie Warren-Clark was shocked after her game of ‘villageopoly’.
The hearing was held as part of a process to report back on a petition to Parliament signed by 11,172 village residents calling for an update of the laws covering retirement villages.
Consumer NZ and Te Ara Ahunga Ora The Retirement Commission have both made submissions on the petition supporting residents’ call for an urgent review of the law.
The Aged Care Association’s submission on the petition said the issues raised were genuine, but opposed the call for ORA capital to be returned within 28 days, saying that would “impose unreasonable financial stress” on aged care businesses.
But in her submission, Retirement Commissioner Jane Wrightson said delays in returning capital could be stressful for village residents, and their families.
Kevin Stent/Stuff
Retirement commissioner Jane Wrightson: A 2021 white paper from Te Ara Ahunga Ora The Retirement Commission found there were unfair contract terms that needed to be eliminated in retirement village contracts.
Retirement village provider Ryman Healthcare said the changes proposed by the residents’ association would put some villages under financial pressure, and could lead to some failing.
Presbyterian Support, which is a charity that runs some retirement villages, said short mandatory repayment periods would “run the very real risk of putting an already stretched not-for-profit aged-care sector into financial failure, slow development and increased costs for incoming residents”.
It said the Retirement Village Association, and industry body for village operators, was working on best practice standards for the retirement village industry that would bind its members.
“We consider this a practical and good-faith approach for all concerned parties,” Presbyterian Support said in its submission on the residents’ association’s petition.
Peter Carr, president of the residents’ association, said the government had committed to a scoping study of possible law changes, and National had agreed there was need for change.
Retirement ‘Villageopoly’: MPs shocked after playing fishhooks game at Parliament & Latest News Update
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