Education & Training:
Building & Amenities:
Complying with the Act
Last year the Retirement Commissioner released a report revealing that many residents were left concerned and confused following poor communication from their retirement villages.
Seven months on, JUDE BARBACK looks to see whether things are any clearer in the retirement village industry.
In July last year the retirement village industry was in the media spotlight for all the wrong reasons. Retirement Commissioner Diana Crossan released a report (the Retirement Villages Act 2003 Monitoring Project: Residents’ Perspective report) that revealed a number of concerns held by residents of retirement villages. The research involved 23 focus groups held in five regions throughout New Zealand, with 293 participants.
Some residents felt they were not consulted properly about fee increases, reductions in services or changes in the operation or ownership of their village. Others were unhappy about the failure to maintain or provide amenities as agreed. Residents repeatedly noted that problems arose because they had not appreciated the meaning and implications of their contracts. While residents were generally happy with their decision to live within a retirement village, as the report states, it is clear their “confidence and comfort can be compromised by deficiencies around the processes by which they came into a village”.
It is important, at this point, to make clear that the report was not implicating the New Zealand retirement village industry in its entirety, rather the minority of village operators that failed to implement the 2003 Retirement Villages Act properly.
Without wanting to condone these operators for what is fundamentally poor communication, the report does beg the question of whether the industry is unnecessarily cluttered with complicated jargon and ambiguous terminology, making it difficult to easily comprehend the issues at hand. Indeed, top of the list of residents’ suggestions for improvement was for ‘easily understood information presented in a large font’.
One resident included in the research said, “I didn’t question the information I was given. I wasn’t aware of the architectural shortcomings of the building.” Others found that the cost of some ‘extras’ were not always made explicit, with one resident confronted with an additional $20,000 for a car park, which he was only made aware of on the day that the occupancy was to be taken up. This isn’t the only example. Another resident claimed, “I only recently realised that I have to pay the fee until the unit is sold. I didn’t realise this when I signed the agreement.”
As one resident put it, “Not everyone understands things like that [contracts]. You look at it and your mind goes blank.”
While retirement and aged care may present complex issues, perhaps the sector needs to simplify its outward appearance for the benefit of everyone, and especially the end user.
It seems Crossan agreed with this premise; in the report a number of suggestions for the industry were given, including making documents comparable between villages and keeping them in plain English so they are more easily understood. The report also recommended clarification of the Statutory Supervisor role and implementation of consultation guidelines for operators and residents. Villages should be independently rated on their financial, service, amenity and procedural performance. It also stated there should be an independent advice service for people entering retirement villages as well as a dispute resolution service for complaints.
Essentially these suggestions were to address three main perceived problems with the system: problems with the Act itself, including a lack of clarity about the role of the Statutory Supervisor and requirements around disputes procedures; problems with the implementation of the Act, mainly concerning a failure to equip residents with the necessary information and detail concerning fees, maintenance plans, complaints processes and other factors; and, problems with consumer support, which pertained to a lack of awareness and confusion around the key areas of occupancy.
Seven months on and I’m curious to know if the report has prompted retirement villages – or at least the main offenders – to rectify themselves. Or are we still faced with an industry plagued with convolution? Does it warrant an overhaul of the Retirement Villages Act and the Code of Practice?
Crossan says the review has been helpful in addressing a number of areas. She says since the report they have implemented a disputes process for retirement villages. They are also encouraging the use of mediation for the rare incidents when this is needed.
Crossan also supports regional residents’ associations as a means of feeding back residents’ concerns. She says there was some push to set up a residents’ association at a national level, but the practicalities of this proved to be too much of a barrier. “Residents don’t want to spend all their time serving on committees; they have spent their whole lives on committees,” says Crossan. Incidentally, Crossan says she plans to attend a regional meeting in Hamilton shortly where she will speak to the residents, and also listen to their concerns.
Such an opportunity is rare for Crossan. In fact, she says one of the main difficulties is that she is not alerted to any concerns, so unless feedback is actively sought through a formal process, such as the review, she remains unaware of any problems in the sector. As a result, it tends to be a self-regulating system. There are ongoing meetings to address housing, residential and other sector concerns. Crossan gave me the example of a resident who spoke up publicly at one of these meetings, saying that as an intending resident she had been treated with the utmost respect by the village operator in question, but once she had signed on the dotted line, the respect vanished and she claims to have been treated appallingly. Her words would have certainly been damaging for the reputation of the village in question. Crossan says she doubts the operator will behave in that manner again. “It is a process of evolution, really,” she said.
Last year’s review was the third of five reviews intended to assist with the ongoing monitoring of compliance with the Retirement Villages Act. The first looked at the role of the Statutory Supervisor, and the second at village operators. This year’s review was supposed to look at intending residents; however, with the variation to the Code of Practice – which mainly concerns insurance issues resulting from the Christchurch earthquakes – currently underway, Crossan thinks it is likely this particular review will be put on hold. She hopes to make the recommendation to Government very shortly.
The final review of the series will hone in on the disputes process. All of these should go some way in helping to monitor compliance with the Act, but for the most part, it is down to the self-regulating nature of the market to keep operators doing things right by their residents.
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