#EldersForum2018 #AgeingInCommon #NCF2018

#EldersForum2018 #AgeingInCommon #NCF2018 SKY 6 - Building Communities Chair: Michael Voges, Executive Director, ARCO John Collyns, Executive Director, Retirement Villages Association, NZ The Retirement Villages Association Inc Mansoor Dalal, Founder and Chairman, Association of Senior Living, India Old Peoples Home for 4 Year Olds Femada Shamam, Chief Executive Officer, The Association For The Ageing, South Africa The Association for the Aged #EldersForum2018 #AgeingInCommon #NCF2018

New Zealand’s retirement village regulatory regime John Collyns, Executive Director, Retirement Villages Association of New Zealand 17 APRIL 2018

The NZ retirement village industry 401 registered retirement villages as at 31 December 2017 31,000 units – villas, apartments, serviced apartments 62% corporate, 25% independent, 13% not-for-profit Average village size = 74 units 40,300 residents at 1.3 people/unit 73% of villages have a care facility on site; many “lifestyle” villages are looking at building care Approximately 23,300 care beds within RV campuses; about 53% of all care beds. 95% of villages = LTO; 5% = unit title $13.5 billion capital value Mostly Jones Lang LaSalle

New Zealand’s retirement village model Retirement village operators do not retain the ‘capital gain’. Instead, they must pay back a considerable amount to residents or their estates following every sale In fact, the purchase price is almost fully repaid The only portion retained is the Deferred Management Fee (DMF) The following example clearly illustrates this: Unit sells for $800,000 Unit sells for $600,000 Unit sells for $400,000 On termination, $600,000 returned to residents Unit built for $350,000 -25% = $300,000 Returned to resident On termination, $450,000 returned to resident DMF $200,000 Retained by operator DMF $100,000 Retained by operator DMF $150,000 Retained by operator $1.35 million is re-paid to residents or their estates over the lifetime of the unit.

Key aspects of the regime Protection of residents’ financial investment Full disclosure so decision made is informed Creating and maintaining a fair and reasonable balance between operators’ responsibilities and residents’ interests Code of Residents’ Rights Code of Practice

Resident protection Villages must be registered with Registrar Memorial placed on land title – means village can only be operated as a retirement village and sold as such; residents’ tenure is protected ahead of all creditors. Copies of key documents held and available on-line Statutory Supervisor appointed Regulated by Financial Markets Authority – “fit and proper” Role governed by a Deed of Supervision signed with the operator Legislative responsibilities include overseeing and reporting on village’s financial probity, liaising with residents, holding deposits, and stepping in to direct how the village is run if need be. Practical examples – Crossdale, Ropata villages

Full disclosure Documents the operator must provide: Occupation Right Agreement, Disclosure statement, Code of Practice, Code of Residents’ Rights. On request – village financial statements Disclosure statements include ownership, village status, services and facilities provided and/or planned, fees and charges, time taken to re-sell units, etc All intending residents must have legal advice; lawyer must attest that the advice has been given before ORA signed by operator 15-day cooling off period after signing ORA – money back, no questions. Money held in trust by Statutory Supervisor until after 15-day period

#EldersForum2018 #AgeingInCommon #NCF2018