Dalziel Lianne: Retirement Villages Bill — Second Reading 
Dalziel Lianne: Retirement Villages Bill — Second Reading 
[Volume:609;Page:7018] 
Hon LIANNE DALZIEL (Associate Minister of Justice) 
:  
I move  
That the Retirement Villages Bill be now read a second time 
. This bill addresses the situation that I began to address when I was Minister for Senior Citizens. Although the bill was properly that of the Minister of Justice and was then delegated to me as an Associate Minister of Justice I was very grateful that the Prime Minister delegated the role to me early on so that it could be given a priority that the bill could not get against a significant number of other justice bills. I have now gained the Prime Minister’s agreement to refer other bills to other population and advocacy Ministers so that priority can be accorded work in those areas. That is a very good model. 
At the outset I express my appreciation of the work of the Justice and Electoral Committee for the comprehensive and thorough consideration it has given to the bill and for the careful thought that the majority of members obviously gave to changes that will improve the bill. This bill is much better as a result of the consideration of the select committee than when first introduced to Parliament. I am particularly pleased with the work of the Government members of the select committee and I congratulate Tim Barnett on his chairing of it. I also acknowledge Murray Smith from United Future who has made a significant contribution to the better bill that we have before us today. On that note I also congratulate Stephen Franks and thank him for his contribution to the legislation. Although noting the report that the ACT party will not be supporting the passage of the bill I did note that Stephen Franks was prepared to make a professional effort to ensure that the bill was in the best possible shape for return to the House and I thought it would be appropriate to acknowledge that here. 
It would also be remiss of me not to mention the Law Commission whose report of course was made to a former National Minister of Justice back in 1999. The Law Commission played an important role in giving some impetus to the development of this legislation. 
Retirement villages have become more popular over the years—I guess for lifestyle reasons but also more important for security. However the nature of the transaction that brings an individual into a retirement village has caused many retirement village residents and their families considerable grief if my correspondence file is anything to go by. I know the select committee heard many submissions that contained examples of the kinds of misunderstandings that arise when the nature of the transaction is not understood. I came up with a simple expression so I could engage in discussion at large meetings on this subject where misunderstanding was very widespread: investing in a retirement village does not mean buying a home that one can sell. That is the simplest way to describe the nature of the transaction. The significance of the capital outlay though that is made at the time is very easily equated with the amount that one would spend on an apartment and that often leads to an assumption that occupiers are protected in the same way as homeowners. However in fact most people receive only a licence to occupy the premises and for access to the facilities and services of the village. 
In the absence of more specific legislation the situation of people moving into retirement villages was left to the Securities Act and its regulations whereby the financial outlay was identified and treated as an investment only. However there have been difficulties as to the coverage of that Act with regard to those villages that offer unit titles in addition to a licence to occupy and with regard to others that were exempt from that Act. In addition securities law is actually an inappropriate mechanism to address the social dimensions of retirement village living. 
This bill addresses both the investment and social policy considerations that apply to buying into and living in a retirement village. It responds to the very many letters of complaint I have received as Minister for Senior Citizens from people concerned about certain aspects of retirement village living including complaints about the way that villages are financed and the charges that are applied. In some cases the concern was about the way that villages are run. In many instances the concerns raised showed a lack of understanding by their writers of the terms and conditions that they had in fact agreed to when they signed up to enter a retirement village. But in a considerable number of cases they indicated an imbalance of power between the parties and the unfair way that residents were treated. This bill addresses the needs of residents and owners through measures that will ensure a balance in the responsibilities and obligations of residents and owners and that will establish quality practices in the way that village operations are managed. 
The measures in the bill however will not restrict the variety and diversity that is part of the retirement village scene in New Zealand. Nor do I believe this legislation will diminish the growing popularity of retirement village living as a lifestyle choice. Some 20000 older New Zealanders have already chosen to live in a retirement village and that number is increasing. To the contrary I believe that by according much better protection to both the financing and occupancy aspects of retirement village living this legislation will enhance the attractiveness of retirement villages. As long as people understand what they are signing up to then many of the concerns will diminish. 
The definition of a retirement village in this bill is wide and inclusive. Housing that might be caught inadvertently by that broad definition can be excluded by regulation. In the bill there is an emphasis on disclosure. That will ensure that people who are considering entering a retirement village do so fully aware of the terms and conditions that would apply to them—and of course there is a cooling-off period contained within the bill as well. A very important and preventive measure I guess is what disclosure focuses on and that is fully consistent with the approach to securities generally. The suggestion of the select committee that disclosure be further enhanced by legal advice and certification by a legal adviser that the terms and conditions have been adequately explained is one that I accept bearing in mind the age and sometimes the vulnerability of the people who enter villages. I also agree with the committee’s suggestion that the essential requirements of the disclosure statement be outlined in the bill itself instead of relying totally on regulation. Good practice in the management of relationships between residents and operators is achieved by a code of residents’ rights that summarises the key provisions of the bill as they impact on the day-to-day responsibilities of village residents and village operators to each other. 
Processes for dealing with complaints and disputes are addressed in the bill in a comprehensive way so as to promote harmony within villages. A good complaints system can deal with issues in an appropriate way before they become big issues. For those complaints that do involve more material matters there is a formalised disputes resolution process that will ensure that disputes are resolved at the appropriate level and remedies are applied if necessary. The disputes resolution procedure is prescribed in some detail in order to ensure the fairness and robustness of the process. I expect that having a good process will significantly reduce the need to use it. The bill provides for a degree of external oversight and also the concept of statutory supervisors has been adapted to meet the specific needs of the retirement village sector. 
Many members of the House are aware from constituents’ concerns that the greatest source of concern to residents and to families after a village resident has left or died is that there is no real incentive for the prompt sale of a vacated unit. I am very pleased that the select committee has suggested a more rigorous process and better alignment of incentives in that important respect. In relation to the code of practice I can report to the House that the Retirement Villages Association is already working on it and I look forward to working with the association. 
This bill is eagerly awaited by many people in retirement villages who until now have felt quite powerless and frustrated in terms of the way they have been treated. I particularly want to thank Grey Power the Retirement Villages Association—and in particular I mention Helen Melrose and Cliff Cook—and a Christchurch solicitor Leo Steele who not only offered his knowledge and expertise to the select committee but devoted a considerable amount of his personal time to getting this Minister up to speed with the intricacies of securities law licences to occupy unit titles and all the permutations that form the complex legal framework of the retirement villages industry. I thank also the Office for Senior Citizens without whose help and support this progress would not have been made. I commend the bill to the House.