Registration of Retirement Villages
Staff at the Office of the Registrar of Retirement Villages are used to getting phone calls from village residents, prospective residents and their families and lawyers, plus village operators – all asking about the compulsory registration of New Zealand’s retirement villages.
It received several such phone calls from savvy residents at the 34-unit Jackson Mews in Petone, Wellington, who were concerned that their village’s lack of registration deprived them of legal and financial protection.
Their concerns led to a test case under the Retirement Villages Act 2003 and a decision that is expected before the end of 2009 that will further clarify exactly which villages are required to be registered.
Under the Act, retirement villages with two or more residential units for those in retirement, that also provide services or shared facilities, must be registered regardless of what they are actually called. Owner-occupier villages that offer no more facilities than that of a standard residential subdivision are not required to be registered.
Throughout the country there are 318 registered retirement villages and an unknown number that are unregistered. Many villages offering units or apartments under an ‘own-your-own’, cross-lease, freehold or ‘licence to occupy’ agreement also offer services and facilities and therefore require registration. Some of those registered are ‘strata title’ villages. Most of those not registered are ‘strata title’ and ‘cross lease’ villages, but it is their level of or lack of services that is the defining point of difference.
The test case known as The Crown v Jackson Mews was heard before the Wellington District Court in June 2009. In the lead up to the judge’s reserved decision, it was followed with interest by the retirement village industry, which is governed by an act designed to bring in new rights and protections for retirement villages, and new responsibilities for village operators to ensure residents fully understood their financial obligations and entitlements.
What registration means
For residents, registration adds another layer of protection to their financial investment. The Act itself requires approval of each village’s statutory supervisor to oversee financial matters and hold trust fund deposits. Registration requires a ‘memorial’ – or note – to be put on the title of the property to define it as ‘a retirement village’. This protects residents from being evicted if a mortgagee sale were forced on an owner in financial strife.
“One of the greatest protections for residents is the fact that this note goes on the title. Everyone is on notice that it is a retirement village and the residents are protected accordingly,” says Sarah Burnett, a solicitor from the registrar’s office.
To become registered, retirement village owners or operators must:
- List the village’s status and facilities;
- Supply full details about the operator, any security holder against the property and the name of the statutory supervisor; and
- Supply a copy of the village’s Occupation Right Agreement and Disclosure Statement along with a fee payment.
There is provision in the act to fine an individual operator up to $30,000, or a company operator up to $100,000, for failing to comply with its provisions.
The registrar’s role is to formally register the village, maintain the official register and notify the Registrar-General of Land so that the title can be noted as a ‘retirement village’.
Mr Neville Harris is the man behind the registrar’s title and he is also the Registrar of Companies, working out of the Companies Office which is part of the Ministry of Economic Development. Under the Retirement Villages Act, the registrar can suspend the registration of a village, exempt a village from appointing a statutory supervisor and inspect and retain any relevant documents.
For prospective residents, it’s helpful to remember that your Occupation Right Agreement must be signed after consultation with a lawyer, whose job includes asking the right questions to protect your interests.
Questions to ask on registration
Is my retirement village registered? If so, how does that protect me? Can I see the certificate of registration and registration number?
If it is not registered then why not? Has the village operator applied for registration? What level of protection does this village offer me to protect my financial investment and my personal well-being?
Who is the statutory supervisor of my village? When is the village annual general meeting held?Registrar of Retirement Villages 0508 266 726
Companies Office www.companies.govt.nz