Michelle Palmer: Retirement Villages Association Executive Director on the amendment of the Retirement Villages Act 2003

The Retirement Villages Association is calling out the Government for issuing a double whammy against the sector.  

Newly announced Retirement Villages Act 2003 amendments include ensuring money on a unit is paid back within a year after a resident leaves.   

Interest will also be payable after six months if a unit remains empty.   

Association Executive Director Michelle Palmer told Ryan Bridge the moves could seriously jeopardise the sector.  

She says they were the ones who suggested the interest element, which the Government has taken and then topped with the full repayment at 12 months. 

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Episode Transcript

Speaker 1 (00:00):
Good news this morning. For the sixty three thousand key
he's living in retirement villages, operators will have to repay
residents within a year of them moving out. Until now,
there's basically been no deadline. Michelle Palmer is Retirement Villages
Association executive director, with me this morning. Michelle, good morning,
Good morning, Ryan. Can you not on sell the units quickly?
What's the hold up?

Speaker 2 (00:20):
The hold ups the property market? That's it in a nutshell.
You know, if we can fix the property market like
a few years ago when it was booming, we wouldn't
even been talking about the need for repayments at it
by a certain date.

Speaker 1 (00:35):
Is there not a demand for retirement village homes? Is
the property market just the same for retirement villages?

Speaker 2 (00:43):
Well no, there's a bit more of a bit more
to it, and we've got a waiting list across the
country for people who want to move into retirement villages.
The problem is that people just can't sell their homes
quick enough to get in. So, you know, in some
areas are like christ it's booming a little bit more.
You know, people are taking between three and six months

(01:03):
to sell their property and are able to move into
a retirement village. In other parts of the country, like
in Auckland, the property market is a lot slower, and
particularly in rural communities, and it can take a lot
longer for someone to sell their home to be able
to buy in and come into the retirement village.

Speaker 1 (01:21):
But why should that be the problem of the resident
who's moving out.

Speaker 2 (01:25):
Yeah, that's a fair question, but that's how the model works.
So the outgoing resident or their estates, they don't get
paid neither does the operator until the new resident moves in.
Just as you would if you were selling your own home,
you know, you don't get paid that money until the
sale is complete, and it's exactly the same with the
incoming resident. The payment then is made to the parties

(01:47):
that you know, they're both to the operator and also
to the outgoing resident.

Speaker 1 (01:51):
This is not going to be what's the longest that
you're aware of someone's had to wait?

Speaker 2 (01:56):
A really isolated case, but an awful one was just
on the two year mark, and you know, a much
older village, rural location, and there just wasn't the ability
for people to sell. There was absolutely a number of
people wanting to move into that villa, but people just

(02:18):
couldn't sell their properties.

Speaker 1 (02:20):
Is this going to bankrupt the time in villages? Is
it going to be the end of the world, Because
if you're waiting two years to sell out to get
your money back from a retirement village, that's your whole
life on hold.

Speaker 2 (02:30):
Yeah. Absolutely, it is for the operators too. They don't
they are paying rates and insurance and maintenance. They're keeping
the power on and all those things in that in
that villa when it's empty, So everyone loses on that. Look,
it is an isolated case. Generally speaking, the majority are
around the six to seven months at the moment. A

(02:52):
year ago it was five and a half months on average,
But it does string out across and look, it's just
one of those things that is really we're struggling with
as a sector. You know, we would love to get
those resold as fast as possible. What the government has
proposed is really hitting us with a double whammy. We

(03:14):
put forward to the government that there's an opportunity for
operators to pay interest on the amount payable at the
six month mark, when you know, if the unit hadn't
been resold, and the government has said they'll take that,
and they've also put on that full repayment at twelve.

Speaker 1 (03:32):
Months, so you're get in both. They've obviously gone and
sided with the elderly voters. It sounds like, Michelle, appreciate
your time. Michelle Palmer Retirement Villagers Association. For more from
Early Edition with Ryan Bridge, Listen live to news talks.

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