Commerce Commission investigating retirement villages
The Commerce Commission is launching an investigation into potential breaches of the Fair Trading Act by retirement villages.
The probe comes after a series of complaints, including from Consumer NZ and village residents, about what they claim are unfair contract clauses which can leave retirees significantly out of pocket.
A commission spokesperson on Wednesday confirmed it had received complaints relating to the industry and was beginning an investigation into whether there were any potential issues under the act.
I despise the retirement village industry.
It’s not just the business tactics that would make your average South American Drug Cartel blush, it’s the whole concept of shipping our elders off to a retirement village so they aren’t cluttering our family lifestyle.
I’ve always found the way we treat them as sickening, like they are a drag on our ability to consume so let’s remove them altogether.
We have to radically clamp down on the deplorable practices of these corporate retirement wankers who have enjoyed a deregulated industry for too long while actually finding affordable social housing for our elderly.
But it goes deeper than that because it also demands a different approach from us to our elderly relatives.
We have an obligation to look after them to keep them in our social field and include them in our family lives.
Moving mum and dad off to a corporate babysitter who doesn’t give a shit about them is a cold way to live a life.
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Martyn – The more I learn about the Retirement Village industry, the more I dislike it…
… because that’s where most of the Boomers wealth is going, not to your inheritance.
You have got you generations wrong. It’s the parents of the Baby Boomers that have been sucked into this industry.
The industry’s main strategy is to turn family wealth (a house) into a ‘right to occupy’ a smaller dwelling and reap a capital gain. On death the original ‘right to occupy’ capital is returned to the family after some years (say a decade) less twenty percent and devoid of any capital gain on the value of their retirement apartment. Families whose parents main asset is a house are losing up to fifty percent of intergenerational wealth. Often times the inheritance money would have been used as lump sum payments on the kids mortgages.
That’s not to say retirees don’t enjoy living in retirement homes.
However that’s not where it ends. The old people once they can no longer look after themselves are moved to the hospital part of the village. The billing for this is largely covered in the initial purchase price. Obviously high intensity end of life care is labour intensive and expensive and there is obviously an incentive for the end of the customers life to come quickly as a cost saving. I know of one case where a doctor shockingly ended a high cost patients life in front of family members.
Trying to get out can also cost, and be complicated. It happened to a fairly elderly clergyman I know, and certainly not very monied. He said that he had no privacy, and that they were very bossy, and he was clearly miserable there, but I don’t know the details.
There is a lesson in here.
This may well be the one industry that government should invest in so that society can reap the benefits of this wealth transfer.
But then again… Kiwibuilt comes to mind.
Free Peach – I wish
… because that’s where most of the Boomers wealth is going.
It’s the last Boomer tax.
Redistribution of wealth.
Very effective and efficient way to redistribute wealth.
And councils fall over themselves to facilitate the investors across the country. Using broad based taxes to help the wealthy getting wealthier and to create more options for the wealthy.
When will we learn??
Except the profits go to the owners & shareholders (already wealthy), who employ the cheapest migrant workers they can find to exploit, to take care of the residents
.. take care of the residents (at the lowest cost) so their adult children don’t have to…
I am reminded of the retirement home’s motto in ‘The Simpsons’ – “We care so you don’t have to”.
It is called life.
The people looking after the needs of others well are angels.
I had a Mexican cartel take care of mine, and they certainly weren’t cheap.
Good to bring this up Free Peach. A signal to check your Kiwi Saver portfolio for ethical investment.
Yes more wider family responsibility is required in many cases.
Because when you have a family of 5 crammed into a 3 bedroom rental and you’re struggling to feed your kids, there’s always room for a few more people?
That was humans used to have many babies.
Now we have more choice.
The family of 5 crammed into a three bedroom rental is not the demographic that retirement villages target. So, yes, Helen. Another head living in already crowded housing. Unless their loved ones need level 5 care, in which case the state picks up the bill, supplemented by their pension payments.
Bob the first. Indeed. I am constantly haunted by the spectre of Chris Bishop’s hungry old father John, driving around Wellington petrol stations looking for a sausage roll. Poor old blighter.
That was a truly tragic tale, let’s not make fun of the elderly & mentally infirm.
I dislike the industry also, on ideological grounds. So many of my friends have made the choice and enjoy living in these villages. Other friends are less fortunate.
If one is adequately wealthy and your offspring are financially settled it is a choice that creates value for the old people who choose that lifestyle as well as their offspring.
I hate sharing my wealth with other wealthy bludgers and it will take significant wealth growth for my offspring before I invest in a lifestyle village and share my wealth with the dividend seeking bludgers.
I hope that I will sooner or later be in a position to make this choice without a feeling of guilt towards my offspring. That day is approaching.
so whom and how would you like to take care of elders? I don’t have an issue with ‘retirment’ villages per se, they need to be regulated better (not hodling my breath though). Or we need to start building small 1 bedroom / studio apartments in which these elders can live with in house carer or cares that come to the home.
Again the question then is, who will care for the elders that need care?
As a kid in the 70s I used to deliver papers and groceries and cigarettes to the oldies living in the state provided pensioner housing village. Their used to be one of these blocks near where I live now but National sold it to private landlords.
The industry largely exists because of the hard to ignore boomer population bubble, codgers living longer, and the medicalisation of aging. Plus, todays individualism leads to ‘me me me’ abandonment of family members in some cultures and ethnicities.
The industry strategy is to mercilessly rip older people.
Consumer is looking into the LTO rort (License to occupy). Occupants live in a glorified low security prison complex–hotel to put it more politely–that they do not own! They pay for the right to live there only–along with maintenance charges and monthly fees. All possible state and personal retirement funds are sucked into Ryman, Bupa or whoever’s shareholder coffers. And when people inevitably depart via death, the operators exercise a retention fee of typically around 30%. So any beneficiaries of wills are going to be rather disappointed perhaps that they shovelled mum and dad off to one of those lovely lifestyle retirements.
I don’t often agree with Tiger Mountain…
Most people go into these places willingly knowing the costs and pitfalls .For the children they value the security and peace of mind .For many aged people it is a haven from the worries of property maintenance and a chance to make new friends. The villages are growing so must be doing something right .
Be aware that many “boomers”, after a life of independence, don’t like to be reliant on the children. They still want independence. Now the retirement home industry is not the best but it fills a need for the independent “boomer”. That is if the children still actually live in new Zealand.
Another issue is the tiny shoe boxes that the state (for climate change reasons) calls medium and high density living. There is simply no room to cater for, possibly four, aging parents plus bring up a family. Those three story “townhouses” dont come with lifts to cater for those unable to climb the internal Mt Everest.
So regulate the sector, no worries. But don’t castigate those who have lived independently, to want to continue to do so and not be a burden on their children and grand children.
Days of a granny flat or tiny home in the backyard are gone. Hands up those who can accommodate their elderly in their current home?
Weirdly enough, the medium density urban policy would more easily allow those granny flats in the backyard or apartments above the garage.
Every NIMBY thinks it is just about three times three-story townhouses, but there is a lot more freedom to build the smaller stuff if the adult children want to.
I agree that the small print in these contracts needs to be challenged as no capitol gain when sold in many cases. Martyn’s article is a bit confusing though. These are not rest homes. They are villages where the residents are still active and choose to be there. Although many of us want to live in our home until death, many don’t. They don’t want to, or can’t keep their sections tidy, they don’t have to worry about maintenance, and they have the security and friendship that many can’t get in their original homes because their children both work and have families as well. I think you will find our older residents are split on this, not because of any fault with the village, some would rather die than go there, and some can’t wait to get there. I have a sister with MS who was LUCKY enough to be accepted,(in her late sixties) buy a home in a BUPA village. She absolutely loves it. A small area of lawn and garden, a new modern home, security, a fantastic communal area more like a hotel, with TVs gyms, kitchen area lounge areas, everything. You can be involved in everything or keep to yourself, the choice is yours. Its the old people who won’t shift but end up in a rest home after being in hospital after a fall, with failing health, and relatives who in some cases don’t show much interest or empathy. That’s where the problem is.
On the street instead?
NOT the only other option at all.
With assistance my mum lived in her own home pretty much under her own steam until 94.
Sure, it takes a bit of effort but probably less effort than raising me
Ditto. The state provides heaps of support for elderly who want to remain in their own home but need support.
o really o’reilly….?
has a relative of youyrs tried toi mget a home help lately, or god forbid the charity administered mobility scooter?
Sorry – good you feel this way. But I’ve not seen this for years. End of the day I think some aspects of NZ culture is not great in this area. I love the Maori way of this, I have it a bit with Eastern European but I think we lack whanua integration a bit statistically.
I think all boxes with tools are needed.
exactly what happens when the state abdicates it’s responsability, privatised services are NEVER better, entirely predictable they exist to squeeze their victims, that’s the business model
White Cis Male Culture doesn’t value or respect elders.
Evidence please.
Rubbish and racist with ignorance for desert.
You are an offensive racist.
oh and diverse etnic culture does black?
House prices have plummeted while the ORA entry cost for retirement villages have gone up – substantially.
Retirement Villages are fast becoming gated, private communities for the wealthy minority of retired people.
Increasingly an inequitable situation which, if it continues, they will become less secure places to live out one’s dotage.
Ask yourself why the price of village entry has gone up Verity. It’s supply and demand. Nothing to do with being ripped off.
Where did I mention ‘being ripped off’ NV?
You don’t happen to be a salesperson for these RVs are you? You sound like one.
Verity. Ripped off is the wrong words agreed. People already with freehold homes sell them to buy into the village. Although house prices have come back the difference between those prices and the village prices won’t be that different. In Napier new homes in the Bupa village around $800000 similar to what many homes are still sold for. My comments were just an alternative balanced view to some here, archonblatter being one. I have some knowledge of the village my sister is in and I’m impressed with what I’ve seen there.
I call them the gulag. I know of old people, male and female who have been coerced even bullied into the gulag by their avaricious offspring. On the other hand I’ve come across plenty of old singles and couples whose children have grown up, got qualified and gone overseas, married, settled and will never return. Can’t say I blame them. The parents see them and grandchildren perhaps for a few weeks every two years. Then health and other difficulties see the lonely elderly shuffling off to the gulag.
These pens for the elderly are full of cliques and gossip. Some oldies stay inside most of the time with the blinds down or curtains drawn.
Probably some people actually manage to enjoy their final days in this sort of institutional living. A close friend showed me the swimming pool one day. The only swimmer was an old gent cavorting rather oddly with his young grand daughter, but my friend and others try to get out and attend U3A groups and classes, walking groups etc.
The Covid years were very hard on the inmates. I know of instances which were truly appalling.
Some enterprising genuine investigative journalist needs to to a thorough report on all of this.
The subject is related to the history of the erosion of the idea of home buying and the acceptance of the idea of renting.
To be fair, a lot of older seniors need constant babysitting when prone to wander off and get lost with varying degrees of dementia, or bed ridden needing everything done for them. How can family babysit them when they have to be at work all day. It’s just not always practical unless someone is otherwise unemployed or perhaps works from home.
We just need to find better solutions for those who are in need and lack the wealth to live out their lives.
Seymore’s Act is not useful.
Agree 100% Martyn.
The retirement industry is abhorrent and allows to rip off elderly people who want peaceful last years.
The elderly should be able to buy and sell their retirements units on the open market and not be tied into a retirement home taking the profits in a monopoly situation.
In addition, too many abuses from staff on the elderly – preying on them. For example doctors/psychologists/lawyers/professionals are not allowed to develop other relationships with their patients because they are vulnerable but it seems nurses and supports staff are allowed to enter into relationships with the elderly and that abuse of a vulnerable person is ok!
It should not be allowed for anyone who looks after an elderly person to then get into a financial or other non professional relationship with them.
Time that laws that protect everyone are tightened up to protect the elderly from relationships and financial and other abuse that should not be allowed which are already in place for professionals but apparently not nursing/support/other staff etc for elderly!
We already have lawyers asking their jailed clients for loans! Standards are slipping everywhere in NZ!
Government have ignored the elderly and failed to protect them from people for example marrying their nurse/support worker at 80! If a doctor did it, they would be struck off – people are allowed to manipulate and defraud the elderly – while other vulnerable people are protected.
Although not that well, in many cases. https://www.nzherald.co.nz/nz/immigration-marriage-and-dowry-scams-on-the-rise-says-charity/P7JVDQUH2Z6HWJHQNFEJGZ6MII/?c_id=1&objectid=12123831
NZ now seems to be a paradise for scammers both corporate and individuals flocking here to fleece others.
People are also living much longer, sometimes longer than they may want to, thanks to medical technology and the powerful pharmaceutical industry. Quality of life doesn’t necessarily improve with age; the dislocation of being uprooted, can also be a major stressor.
There are really good situations kinda like flatting for the elderly that they can afford on their pensions. In these cases 4-5 elderly residents live together in a room/ensuite and a support staff gives them dinner and does the cleaning. That is a really nice, low cost solution.
It feels like retirement villages sell them a luxury dream lifestyle that they can’t afford and is about making a profit not a long term affordable solution for more and more elderly that will not retire with enough money.
There is also another effect where younger people are not getting an inheritance that used to help people renting get on the property ladder in NZ or pay off their mortgages. That money is now going off shore to retirement shareholders, while current NZ taxpayers then have to subsidise more poorer NZer’s who just can’t get ahead.
Poorer NZers can’t get ahead because we have made it very expensive to build houses, apartments, townhouses, and every other form of housing.
The price is just supply and demand working, where supply is deliberately constrained by Councils, NIMBYs, and heritage fanatics, while demand is managed upward by Finance and Immigration Ministers
… and it’s all Nimby’s fault, standing in the way of the nice, caring property developers, whose only joy in life is to provide comfortable, well-designed, affordable housing to the destitute. Bad Nimby, bad!
The word Retirement should be banned. It’s soul destroying. Replicants get retired in Blade Runnner. Humans should merely change direction. Or do something else. But not retire.
Legalised crime.
Our olders like it from my far too extensive experience. Ma, a nurse, before her major stroke, hated corporate resthomes etc. She was in charge of one. Her kindness was her north pole. Got her into a lot of good trouble. We stuck her in one after the stroke. Not much choice.
The resthome she ‘ruled’ at was Sally Army. Some Capt and his missus over her. She hated them ever after, talked agin them, was scorned for it. Just gave some change to them at The Warehouse, by which I deprived myself of a sausage outside. But I did get a bullshit ‘god bless you’. What person has the right to say that?
I have a 92 year old friend living in a room the same size as what I had at varsity, for which he’s forking out $5000 per month. Wife died early last year (not Covid) and I think he was worn down taking care of her. But after she went to the hospital he fell on the upstairs floor, knocked out, and found 24 hours later. Was in hospital for months.
One Boomer child overseas and one here who is still working in her mid-60’s so felt she could not take care of him. So into the rest home of Ryman Health Care.
Their family and their choice but I hate it. He could have continued living at their old house with support – except the State support was feeble even when it was he and his wife. “Nurses” that did not turn up and seemed to do bugger all when they were there.
Over all it’s pretty damned sad and yeah, I think the bastards are gouging him, and I think he knows it too, but nothing to be done. Oh well, movie night with him tomorrow night. Have to bring a new bunch as he’s watched all the others I bought and loaded up on his computer – thank god he’s computer literate, unlike almost all the rest in with him. Still, “Of course I watched them all. Nothing else to do except that and reading”