Code of Practice 2008

The Retirement Villages Code of Practice 2008 (the Code) was amended in 2013 and again in 2017. The Code sets minimum standards that all retirement village operators must comply with.

About the Code

The Retirement Villages Code of Practice 2008 (the Code) took effect on 2 October 2009.

It sets out the minimum requirements that operators must meet, or ensure are met, to fulfil their legal obligations under the Retirement Villages Act (2003).

The Code contains information that:

  • improves consumer protection and awareness, and
  • provides a minimum standard that all retirement village operators must attain, or exceed.

The Code:

  • covers the requirements of the Retirement Villages Act 2003
  • is consistent with the Code of Residents’ Rights, and
  • reflects the diversity of the retirement villages sector.

Variations to the Code of Practice issued April 2017

The Code of Practice 2008 has been updated to include variations to the disputes resolution process approved by the (then) Minister for Building and Housing.

Retirement village operators and residents should now be using the revised code.

The Variations improve the dispute resolution process in the Code and prioritise the early resolution of disputes. The amended Code:

  • requires operators to have a written procedure so that residents may informally raise concerns or issues. This is intended to facilitate early resolution of issues.
  • makes the formal complaints and dispute resolution process more user-friendly through a new step-by-step procedure for formal complaints to encourage earlier resolution
  • includes a diagram explaining the complaint process to help residents recognise that a mix of options are available to them and where they may turn for help
  • clarifies the statutory supervisors role is to work with parties to provide an impartial perspective and to recommend a way forward
  • includes mediation as a clear step if a complaint cannot be resolved informally
  • requires operators to report formal complaints data to the Retirement Commissioner every 6 months.

Which clauses have been affected

The following clauses have been affected by the Variations.

Clause 31 — Resident may raise an issue or concern informally

Clause 31 requires operators to have and use a written procedure so that residents may contact the operator or their representative informally about a concern or issue at any time.

The resident must receive an acknowledgement and a response to the issue or concern in writing within a reasonable time.

The new procedure for raising issues or concerns informally does not prevent a resident from making a formal complaint in the first instance.

Clause 32 — Complaint facility objective and monitoring

Clause 32 sets out that the objective of an operator’s Complaint Facility is to enable every formal complaint to be resolved in a way that is resident-appropriate, objective and fair, quick and cost-effective for the operator and the resident.

The ability of residents to proceed directly to a formal complaint or to file a formal complaint without first going through the informal process is protected.

The clause also requires operators to report to the Retirement Commissioner six-monthly in relation to formal complaints for each village.

Clause 33 — Formal complaints policy

Clause 33 sets out a requirement that operators have and use a written complaints policy for dealing with issues raised by residents as formal complaints, and how operators must provide the policy to residents.

The clause also contains operators’ obligations to explain the steps in the complaints policy to residents or intending residents.

Clause 34 — Making a formal complaint

Clause 34 sets out how a resident may raise an issue or concern as a formal complaint. This clause sets out the option available to residents to have an authorised representative or the operator write a complaint on their behalf and the process for ensuring that formal complaints are recorded accurately in these situations.

Operators have to provide written confirmation of receipt of a complaint within 5 working days.

Clause 35 — Procedure for resolving formal complaints

Clause 35 sets out the procedure that operators must follow in resolving formal complaints. This includes the new option of referring complaints to a mediator with the resident’s agreement.

The new approach follows a progressive step-by-step process to resolving formal complaints. Following receipt of a formal complaint the parties may try to resolve the complaint between themselves.

If the complaint is not resolved within 20 working days the operator may refer the complaint to the village’s statutory supervisor who may recommend a way forward. If the complaint remains unresolved after a further 20 working days or if referral to the statutory supervisor is not possible then the operator must provide the option of mediation.

If the dispute remains unresolved following mediation the resident may issue a dispute notice and proceed to a dispute panel administered by the Retirement Commissioner.

The resident retains the right to issue a dispute notice at any stage of the process after 20 working days and within six months of filing a formal complaint.

Clause 36 — Costs of mediation

Clause 36 sets out the operator’s requirement to pay for mediation services for disputes between an operator and resident/s and that the cost of mediation services will be split evenly between the operator and the resident/s in cases of disputes between residents.

Each party will be responsible for paying their own costs in relation to preparing and attending mediation and operators are responsible for the Disputes Panel costs unless the Panel decides otherwise.

Dispute resolution diagram

Te Ara Ahunga Ora, formally the Commission for Financial Capability, provides residents with information to explain the options available to them, and where they may turn for help.

Complaints and disputes process

Consultation on the changes

The Retirement Commissioner held 2 rounds of public consultation.

The first took place between 17 December 2015 and 14 March 2016, and 17 submissions were received. Based on these submissions the Commissioner decided to propose additional changes and consult again.

The second round of consultation took place between 2 June 2016 and 14 July 2016, and 16 submissions were received.

The changes take into account input from:

  • the Commission for Financial Capability
  • the Retirement Villages Association
  • the Retirement Villages Residents Association of New Zealand
  • retirement village operators and residents.

The Government Centre for Disputes Resolution (GCDR) was involved in an advisory capacity, providing advice on best practice dispute resolution.

The GCDR was established to be a centre of excellence for dispute resolution in New Zealand and is focused on providing best practice dispute resolution stewardship and functional leadership across the public sector.

Variation to the Code of Practice issued October 2013

The Code of Practice 2008 has been updated to include 3 variations approved by the Minister for Building and Housing.

The Variations have been issued following the Canterbury earthquake experience where 5 retirement villages sustained damage.

The earthquake experience caused some retirement village stakeholders to question the adequacy of aspects of the Code of Practice.

The issues relate primarily to uncertainties in the no-fault termination process for occupation right agreements, and the adequacy of the payout received by residents in a no-fault exit situation when their unit will not be rebuilt.

Which clauses have been affected

The following clauses have been affected by the Variations.

Clause 22 — Insurance

The requirement for a Certificate of Currency has replaced the requirement for full insurance documents to be provided to residents on request.

This is more satisfactory as the only alternative was numerous documents that would have been heavily edited and provided little useful information.

The requirement for the insurance policy to be to the satisfaction of the statutory supervisor has been retained, which is an important safeguard for residents.

Clause 47 — Grounds for termination if the unit is damaged or destroyed through no fault

The most significant change is to Clause 47 which covers a ‘no fault termination of an occupation right agreement’ such as an earthquake.

From 14 October 2013 retirement village residents will be entitled, as a minimum, to receive the full original capital sum of their investment in a retirement village in a ‘no fault termination’.

The ‘no fault’ clauses are now separate from usual termination clauses, giving them greater clarity.

Clause 54 — Payment due to the resident on termination or end of occupation

The revised Clause 54 clarifies how termination payments and deductions are calculated, including more specific requirements following a ‘no fault’ event.

Consultation on the changes

The new Variations to the Code of Practice have made it clearer and give greater certainty to both retirement village residents and operators.

The changes take into account input from:

  • the Commission for Financial Literacy and Retirement Income
  • the Retirement Villages Association
  • the Association of Residents and Retirement Villages (Auckland)
  • retirement village operators and residents.

The revised code with variations came into effect on 14 October 2013.

Published: May 18, 2020