Retirement Village Law Reform: Five Changes Being Discussed
In early December last year, the NZ Government announced proposed changes to the Retirement Villages Act following years of feedback from residents, families, advocates, and advisers. Much of what is being discussed aligns closely with the guidance the Commission for Financial Capability already encourages people to think about before buying into a retirement village.
Here are five proposed changes — and why they matter in practice.
1. Clearer timeframes for getting your money back
One of the biggest concerns raised by residents is how long it can take to receive exit funds after leaving a village. The proposed changes include a requirement that repayment be made no later than 12 months after a unit is vacated, even if it has not yet been re-licensed.
This aligns with the CFFC’s emphasis on understanding when repayment actually happens, not just what amount you are entitled to.
2. Interest on delayed repayments
Under the proposals, interest would start to accrue if a unit remains unlicensed after six months. This recognises that long delays can create financial pressure and that residents should not bear all the risk of market slowdowns.
The CFFC regularly encourages people to ask whether interest is payable if repayment is delayed — and if not, to factor that risk into their decision.
3. Early access to funds in cases of need
A new process is proposed to allow former residents to apply for early access to some of their exit funds where there is specific financial need, such as moving into aged residential care.
This reflects a real-world issue the CFFC highlights: exit funds are often needed urgently, not at some undefined point in the future.
4. Weekly fees stopping when a resident leaves
Another proposed change is that weekly fees and deductions would stop as soon as a resident vacates their unit, rather than continuing until repayment is made.
This aligns with the CFFC’s focus on understanding what costs continue after exit, which can come as a surprise to many residents and families.
5. More emphasis on transparency and understanding
While not a single rule change, the overall direction of the reform is towards clearer, more understandable documentation and fairer outcomes for residents.
This mirrors the CFFC’s core message: people need to understand what they are signing up to, how the agreement works day to day, and what happens when circumstances change.
A practical takeaway
These proposed changes are a positive step, but they are not yet law and are likely to apply only to new occupation right agreements. That makes it especially important for anyone considering a retirement village now to ask the right questions upfront — particularly about exit timing, ongoing fees, and how delays are handled.
Understanding these issues early can make a significant difference later, when flexibility and certainty matter most.