Venue:Te Papa, Wellington
Time: 9am, Tuesday 29 May 2007

President of the Retirement Villages Association, Norah Barlow; Vice President, Richard de Haast; the immediate Past President, Helen Melrose; Association members; special guests; ladies and gentlemen.

It is a pleasure to be here today, to address this sector, which has such an important role for an increasing number of New Zealanders into the future.

Indeed, your business is vital. You, along with the government and other stakeholders, provide housing for older New Zealanders, and exactly how you do that and to what standards, impacts directly and tangibly on their happiness, security and sense of well-being.

The legislation governing retirement villages is one of many regulatory responsibilities I have as Minister for Building and Construction, and it is one of my most important. How well we look after our older people and assist them in looking after themselves, is a reflection of ourselves as a nation and our social fabric.

It therefore follows that the Retirement Villages Association has a key role in our society. With 228 members, you are a substantial voice, an active lobbyist and an organisation that has made a strong contribution to the sector and to the formation and implementation of the Retirement Villages Act itself.

I acknowledge that this Act in no small way is forging a new era in the management and operations of retirement villages in this country. You, as the owners and operators of retirement villages the length and breadth of New Zealand, are going through a very substantial period of change as the Retirement Villages Act 2003 comes fully into force.

So in coming here today, I wish to support and encourage you in these changes and in the direction that you are taking your businesses in, and the sector in general.

I also, by my presence here, wish to signify that the Government is here to work with you. We are in this together. There is a social contract at work here, and I believe that there is a very strong commitment all around to getting it right for the residents of your villages and getting it right for you, the sector, as individual business people and business organisations.

And that means that as these changes are implemented, that if things show up that need to be amended, changed or just tweaked and a strong case can be made, then we are here and we are listening – the Government, the Department of Building and Housing, and the Retirement Commissioner.

The Retirement Villages Act reforms protect the interests and rights of residents, set out a legal framework for you as operators to run villages, place new responsibilities for disclosure of information to residents and intending residents, and provide for the new disputes resolution process, among other measures.
It is hard to believe that it has been nearly eight months since I had the pleasure of visiting the Ngaio Marsh Retirement Village in Christchurch, where I announced the approval of regulations that brought the Retirement Villages Act 2003 fully into force. To say this legislation creates a whole new world for the retirement villages sector to operate in is not an exaggeration.

So yes, I am very aware that you face challenges, and I acknowledge that change can be demanding if your business hasn't been geared up in preparation.

Equally, I want to assure you that the change in the retirement villages sector is not about a government making change for change’s sake. The reforms that this Act brings about were needed and will improve residents' lives and provide certainty for operators.

First and foremost, the Act is essentially consumer protection legislation, and to that extent, it is a very important piece of our law. After all, as I have said, your business is providing housing and security for thousands of New Zealanders in their senior years.

That is a very significant responsibility, and when you have that level of responsibility attached to your business, then it becomes more than just a business. There is a strong element of social contract in what you do. You are not just producing widgets. You are housing people.

Does the fact that we have the Retirement Villages Act mean that you have served your clients and customers badly in the past? Not at all. The vast majority of retirement village operators have conducted themselves honourably and looked after their elderly residents well.

And I have no doubt that they will continue to conduct their business to the same high standards that they have in the past. However, this should never be left to chance and good intention.

Old age is a time in life when security is a priority and the Retirement Villages Act recognises that, and puts in place some key mechanisms for ensuring that required standards are met.

For the first time, all residents now have a purpose-built mechanism for resolving their disputes with village owners and managers, and they have a clear voice. In the past, residents' only option had been court action, which can be out of reach for those on fixed incomes.

However, equally, you, as operators, now have access to that same process to sort out issues and problems that may arise. It has been eight months since the disputes process came into force (1 October 2006) and it is being used. As you know, if disputes cannot be resolved by each village's internal complaint facility, then they are taken to an independent disputes panel, which is overseen by the Retirement Commissioner.

I am advised that to date two complaints have gone to the panel, with the decisions being in favour of the resident. It will be interesting to see the value of this new disputes facility over time.

Of course, the reforms don't stop there. On the first of May, just four weeks ago, I announced the final phase of the implementation of the Act. For you as operators, this means that between May 1 and November 1 this year, you will need to submit registration documents to the new Retirement Villages Registrar, based in the Companies Office.

It means that any new villages will have to be registered with the Retirement Village Registrar before they can make offers of occupation, known as an occupation right agreement.

A valuable by-product of that process is that for the first time we will get an accurate grasp on the size of your sector. Currently we are reliant on an industry estimate of there being around 400 retirement villages. And planning for the sector can only benefit from accurate data and information on how many villages there are – and as a result, how many elderly New Zealanders actually live in them.

In order to be able to register, all operators will need to supply a series of documents, including a copy of their occupation right agreement, and details of their appointed statutory supervisor, although the Registrar may in some cases grant an exemption to appointment.

I am aware that there has been some concern in the industry, in particular among those running smaller villages, about the cost of statutory supervisors, but this cost can be minimised by sharing a statutory supervisor rather than having one for each individual village.

Statutory supervisors are not new for all villages. Indeed those of you who currently operate under the Securities Act will already have a statutory supervisor in place.

They play an important role in the village. They act as guardians of the collective interests of the residents by monitoring the financial position and the management of the village, and provide an avenue for residents to complain to statutory supervisors if they feel their rights have been breached.

Operators who are currently registered under the Securities Act have until 1 November this year to submit their registration. If they have applied for, but have not received confirmation of registration by 1 November, they will be able to operate under the Securities Act until their registration application is approved.

Also, all new residents entering into retirement villages as of May 1 this year should be provided with the new occupation right agreement, disclosure statement, Code of Practice and Code of Residents’ Rights.

To help you achieve all of this, you are being provided with plenty of support. Details on the registration process and application forms are on the register of retirement villages website (www.retirementvillages.govt.nz). And documentation and information for registration, including a disclosure statement template, can be found on the Department of Building and Housing website (www.dbh.govt.nz).

Clearly there are a fair few requirements being made of you. I acknowledge that many of these measures are about protecting the rights of residents. But no, it is not all about residents. There are some very real benefits under this Act for you as retirement village operators.

What the Retirement Villages Act delivers you as retirement village operators is something very simple, but also something quite invaluable. It delivers you certainty.

You now have the proverbial level playing field. You know exactly where you stand. And the goalposts? They stand where they stand and they are not going to be moved on you. You now have a legal framework to run villages, and to run them well. Those that don't meet the standards can now easily be identified, and the good name of good operators won't be dragged down by cowboy operators.

The information that you are required to provide to residents will also have a direct pay-off for you. Informed residents, clear in their expectations, with solid information on their rights and responsibilities, are far less likely to become disgruntled residents a few years on, and that means that they are far less likely to be involved in costly, time-consuming disputes with you.

You can expect fewer disputes, and with the new processes for resolving them available under the Act, you can expect that any disputes that do arise will be cheaper and quicker to resolve overall. And that means better business and fewer distractions.

The Retirement Villages Act also gives you another key benefit – a better and more defined way to interact with government than you have ever had before.

With the Act, you now have sector-specific legislation rather than just being one small part among many falling under the Securities Act – and even then that Act has only related to an estimated 40 to 60 percent of villages.

Your sector now has recognition and a voice in a way that it has not previously had, and you will benefit from this as you plan the future for your businesses.

So yes, it is a time of change and transition as you move into a regulatory environment – but there are very real pluses in that for you as a sector.

And I think we are seeing that at play already, with consultation on variation of Clause 49.1E of the Code of Practice around the issue of fair wear and tear, having closed just recently. I am currently awaiting the recommendations of the Retirement Commissioner.

So is the whole Act perfect? Broad-based new legislation invariably requires some bedding in and sometimes, with the best will in the world, unintended effects can arise. What I can assure you of is that the mechanisms, and the will, are in place to address any matters that could crop up.

The Retirement Villages Act is good legislation in place for good reasons.

You are an important sector performing a crucial role, and I am sure that you are a sector that will go from strength to strength in this new environment of certainty.

So it is in that spirit, that I am delighted to be able to open this conference and wish you well in your thinking and discussions.

Thank you.