Following a complaint laid by the Retirement Villages Residents Association of New Zealand (RVResidents) to the Commerce Commission, the Commission has taken a shot across the bows of retirement village operators over the fairness of their Occupation Rights Agreements (ORAs) and accuracy of claims made in promoting their villages on their websites.
In an Official Information Act (OIA) response to RVResidents’ complaint, the Commerce Commission identified multiple potential breaches of the Fair Trading Act including unfair contract terms and misleading advertising claims across all 12 of the retirement village operators they investigated.
“While retirement villages offer residents a high standard of life and independence, there are many fishhooks in contracts and when misleading claims are also made by operators that can not only sour the experience, but have significant financial consequences for residents and their families,” says RVResidents President Brian Peat.
“The fact that the Commerce Commission has identified multiple potential breaches of the Fair Trading Act in both the Occupation Rights Agreements and promotional claims made on the websites of operators should light a fire under the Government to accelerate their reform the Retirement Villages Act to better protect the rights and wellbeing of residents.”
While the Commerce Commission has decided against pursuing any immediate action against operators at this stage, Brian Peat says it’s clear from their correspondence to operators that the Commerce Commission expects changes, something that was also identified in RVResidents’ recently released Best Practice Scorecards.
“We’re pleased the Commerce Commission has taken a firm line on operators with a clear warning that they need to change their contracts to be fair to residents and to ensure they’re not making misleading claims about their rights and options while living in a village. The numerous issues around Occupation Rights Agreements is something RVResidents has repeatedly highlighted through our Best Practice Scores which the latest update was recently released.”