New law, old contracts — Retirement Village reforms New Zealand

The Government’s reform of the Retirement Villages Act is real, welcome and overdue. It will also do almost nothing for the agreement you are signing this year, and even less for the one you signed a decade ago. Here is why the contract still does the work — and what we find when we read one properly.

What has been announced — and when it might actually become law

‍On 4 December 2025, the Associate Minister of Housing and the Minister for Seniors announced a package of changes to the Retirement Villages Act 2003. It followed a review that began with a discussion document in 2023 and drew more than 11,000 submissions — an extraordinary number for a piece of consumer legislation, and a fair measure of how strongly residents feel.

‍The headline changes are these:‍ ‍

•    Operators will have to repay a former resident’s money no later than twelve months after the unit is vacated.

•    Interest will run if the unit has not been relicensed after six months.

•    Former residents will be able to apply for early access to their money in cases of specific need.

•    Weekly fees and fixed deductions will stop when the resident vacates, rather than continuing until the unit is resold.

•    Residents will not be liable for capital losses on resale unless they also share in capital gains.

•    Operators will be responsible for the chattels and fixtures they own, and must list them.

•    A new independent complaints and disputes scheme will replace the present dispute panel arrangements.

•    Regulations may be made prohibiting specified unfair terms in occupation right agreements.

Where the Bill has actually got to

‍Current status. The Ministry of Housing and Urban Development is finalising the legislation. The Retirement Villages Amendment Bill has not yet been formally introduced to the House, and it has not had a first reading.

The most recent development. In mid-August 2026, Associate Housing Minister Tama Potaka confirmed that the Government had rejected internal official advice to enforce a shorter nine-month repayment window. The twelve-month maximum is locked in, on the stated basis of protecting smaller operators from financial hardship. That is worth pausing on: officials advised that nine months was achievable, and the Government chose twelve. Residents’ groups have been pressing for three.

‍Next steps. The Government plans to introduce the draft Bill to Parliament before the November 2026 general election, subject to parliamentary time being available. After introduction, it must still go to the select committee, back to the House, through the committee of the whole, and through a third reading. The general election is set for Saturday 7 November 2026, and a Bill not passed before Parliament rises does not simply carry on — the new Parliament must resolve to reinstate it, and that adds months. On any realistic timetable, an introduction before the election is the beginning of the process, not the end.‍ ‍

Topic one — the money, and why the protections may never reach you

‍Almost all financial protections apply only to future agreements.

From what the Government has said so far, the twelve-month repayment long-stop, the six-month interest rule, the early-access mechanism, and the prohibition on unfair terms will apply to occupation right agreements entered into roughly one year after the amendment bill becomes law — not to agreements signed before that date. Ministers have cited the sanctity of contract as the reason.

What that means

If a bill is introduced late in 2026, reported back in 2027, and passed in 2027 or 2028, the twelve-month repayment guarantee attaches to agreements signed in 2028 or 2029.

The more than 50,000 people presently living in a New Zealand retirement village, and everybody who signs between now and then, keep their contract. Their repayment date remains whatever their agreement says it is — which, in most agreements we review, is “when we find a new resident”, and no sooner.

There is a second layer that has had almost no coverage. The Minister’s Cabinet paper already signals exceptions to the twelve-month rule, including where the village has fewer than 50 units, where the resident receives 50 per cent or more of the capital gain on resale, and where the resident is responsible for finding a new resident and setting the price. There is also a fourth: where repayment would cause the operator undue hardship, in which case the operator may apply for a six-month extension — taking the guarantee out to eighteen months. Small villages are exactly where resale can be slowest. If you are relying on the headline, check whether the headline is going to apply to your village at all.

‍A smaller group of the reforms is expected to reach existing agreements: responsibility for chattels and fixtures; the cessation of weekly fees and fixed deductions during vacation; capital-loss protection; disclosure and transparency measures; and the new disputes scheme. But the single issue residents and families raise with us more than any other — how long the money takes to come back — is, on the present proposal, reserved for a future class of resident.

What that looks like for one family

‍Margaret signed her occupation right agreement in 2019 and paid $680,000 for a two-bedroom villa. Her deferred management fee was fully accrued at 25 per cent by 2022, so the net sum repayable to her is $510,000. Margaret died in March 2026. Her agreement says the operator repays that sum when the villa is resold. There is a buyback backstop, but it can be suspended if vacancies across the village exceed a stated percentage — and the current disclosure statement shows vacancies already close to that trigger. ‍

Fifteen months later, the villa is still on the market. Margaret’s executors cannot complete the estate; one of her three children needs the money now, and the estate has incurred legal and administrative costs throughout the process. Nothing in the announced reform would change Margaret's position. Her agreement was signed in 2019; the twelve-month long-stop is proposed to attach only to agreements signed about a year after the amendment bill becomes law. If Margaret had died after the reform reached her, her estate would have been paid out by March 2027 with interest running from September 2026. As it is, her family waits for a buyer.

‍Margaret’s case applies to all of the agreements we have read this year. For an executor, the delay further delays the ordinary estate administration timetable: see our post on why the higher probate threshold still does not solve estate delays.

The one thing most people get wrong

‍Most people assume that when the law changes, their agreement changes with it. It does not. An occupation right agreement is a contract. Parliament can legislate over the top of existing contracts, and sometimes does, but on this reform the Government has expressly declined to do so. That single decision is why a reform described as the most significant in twenty years will, on the question of when funds are repaid, leave today’s residents exactly where they are.

The other side of the argument is that, as Operators point out, they fund repayments from resales; that a hard twelve-month obligation, applied retrospectively to contracts already priced without it, could put smaller operators under real strain; and that the sector houses many people very well. Residents’ groups answer that a two-tier system is indefensible, and some are pressing for three months rather than twelve. Both positions are honestly held. The select committee is where they will be argued, and it is the reason to submit.‍ ‍

Topic two — the gap the reform does not close: moving into care

‍An occupation right agreement is neither a property purchase nor a tenancy. It is a personal contractual licence, granted by a company, over a building that the resident will never own, in exchange for a capital sum that, in most cases, will not increase in value. Between a quarter and a third of that sum is retained by the operator over the first two to five years. The balance comes back on the date specified in the contract. That is not a criticism of the sector; a standard form keeps the entry price down. But a standard form is written by the Village to cover their risk, and the only stage at which a purchaser has leverage over it is before signing.

The five questions you need to ask for every agreement

‍1.   Does the document work at this village at all? Standard forms are drafted centrally and issued nationally, resulting in agreements containing elaborate machinery that cannot operate in all villages. A full set of clauses governing transfer to a care suite means nothing at a village that has no care suites, and a reader would reasonably conclude from those clauses that a pathway into care existed. So check, against the village rather than against the form: are there cross-references to clauses that are not in the document; does the personalised schedule carry the right particulars; does the chattels list in the application match the one in the agreement; and does every promotion promised in a covering letter or by a salesperson appear in the contract, the settlement statement or the disclosure statement?

2.   Can you actually move into care — and the right kind of care? Most villages say they can look after you for the rest of your life, however your health changes. Far fewer put that in the contract. Three questions settle it.

First: are you guaranteed a place, or only allowed to ask? Look for wording that gives you a place once something specific happens — usually once a health assessor says you need that level of care. If instead you see "may", "at our discretion" or "subject to availability", you have a hope, not a promise.

Second: who runs the care home? It is often a different company from the one signing your agreement. If so, the company you are dealing with may have no power to make it take you. A promise is only worth something if the person making it can deliver.

Third: what is that care home allowed to provide? Every care home is approved for particular kinds of care, and it cannot take you if you need a kind it is not approved for — however much it wants to. Most are approved for rest home and hospital care. Fewer are approved for dementia care. Very few are approved for the highest level, for people with dementia who also need psychiatric care.

3.   What does moving into care actually cost? This is almost never modelled before signing, and it is where the money is. A care suite in the same group typically requires a fresh capital sum of its own, payable in full on transfer, while the resident’s existing capital stays locked in an apartment that has not yet been resold. You need to check whether a second deferred management fee starts accruing under the new agreement, in addition to the fee already deducted from the first. Only some agreements cap the total management fee across both. A daily care fee applies on top.

4.   Which ongoing fees start again on transfer? A move into a care suite ordinarily brings a second set of periodic charges running alongside or instead of the first. Whether both accrue, whether either stops, and whether any aggregate cap applies is usually left to the interaction of three or four clauses that were never drafted to be read together.

5.   How long until the money comes back, and what can stop it? Read thestatement's statement’s resale data agreement's buyback provisions. Two provisions require close attention. The first is any buyback suspension event, typically triggered when vacancies exceed a stated percentage of the village: where the disclosed vacancy rate already sits near the trigger, the buyback is not a safety net; it is the ordinary payment route, and it is suspendable. The second is probate. In many forms, the obligation to pay an estate is expressed as conditional on the production of probate, which is a normal condition that cannot be avoided. ‍

Why we press hardest on the care question

Dementia is the condition most likely to require a resident to leave a village, the condition families are least able to manage at home, and the condition for which village-based provision is thinnest.

A resident assessed as needing a level of care that their operator cannot lawfully provide must go outside the group. They must then fund the new operator’s charges while their own capital remains locked in an apartment that has not yet been resold.

The numbers you need before you sign — and where they come from

‍Four figures determine whether a care transition is affordable, and none of them is typically in agreement. Ask for all four in writing and have them dated.

•    The current capital sum for a care suite at this village. Operators will usually give a current range on request. At many villages it is comparable to, and can exceed, the price of the apartment being left behind.

•    The current daily care fee, and what it is anchored to. Where the service is contracted long-term residential care, the fee is constrained by the maximum contribution gazetted under the Age-Related Residential Care agreement. This weekly, GST-inclusive figure is adjusted every 1 July and varies by region. Where the service sits outside that framework, or where premium room charges are added, the agreement often says nothing at all.‍ ‍

•    The certification level of the care facility you are relying on. Rest home and hospital certification is common. Dementia-level certification is much less common, and psychogeriatric certification is rare — in larger networks, it is available in only a small minority of villages, and some networks have none. Ask which villages in the group provide each level, and independently check the answer against the Eldernet directory, which lists certifications by facility.

•    The average and longest disposal times, and the current vacancy rate, from the disclosure statement rather than from a conversation. ‍

Put those four figures side by side, and the funding gap becomes arithmetic rather than anxiety. A resident transferring into a care suite must generally find a fresh capital sum in cash on transfer, while the bulk of their own money remains locked in an apartment awaiting resale. On typical resale periods, that gap is measured in months, and sometimes in years. Please model on the actual numbers for your village before you sign, not after a needs assessment. ‍

It is not a hypothetical risk

‍In August 2026, the New Zealand Herald reported the case of a 97-year-old village resident who waited fifteen months for his money after leaving his unit for a private hospital. The details came from the Retirement Villages Residents Association, and the man, the village and the rest home were not identified. He faced having to borrow to fund his care while his own capital sat in a unit that had not been relicensed.

That is exactly the sequence this section describes: a health event, a move into care that the village could not provide, a second set of costs falling due immediately, and capital locked up behind a resale. Under the proposed reform, a resident in his position would have been paid out at twelve months, with interest running from six—but only if his agreement had been signed after the new rules took effect. His was not, and on the present proposal it never will be. ‍

What happens when you ask the operator to fix it

‍Usually, a polite refusal. The standard answer is that the proposed amendments would materially alter the contractual and commercial arrangements that apply to residents generally, and that the operator’s documentation is consistent with industry practice. For an operator running thousands of units on a single registered form, that is a coherent and understandable position. It is not, however, a statement about whether the terms are fair. It is a statement about administrative uniformity.

‍The more important answer to understand is the one that sounds like a concession but isn’t. On the funding gap, the usual formulation is that the expectation is payment in full, and that a resident unable to pay is encouraged to discuss their circumstances. That deferral of part of the capital sum may be considered in appropriate circumstances, case by case, after considering the resident’s circumstances at the time. That is a statement of practice, not a term of the contract.

A stated practice is not a contractual promise.

A stated practice is genuine, and the operators who state it generally follow it. But it is unenforceable; it can change with the policy or the personnel, and it will be applied — by definition — at the moment the resident has least ability to negotiate: after a needs assessment, often after a hospital admission, and often by a family member acting under an enduring power of attorney.

A contractual term costs the operator nothing if the practice is real. That is precisely the argument to make when asking for it.

The protections we seek are specific and, in our experience, negotiable with some Villages: roll-over of the net refundable amount under the first agreement against the capital sum for the care suite; deferral of any shortfall, interest-free and without recourse; a single hard dollar cap on the deferred management fee across both agreements; the accrual clock not restarting; and the daily care fee anchored to the gazetted maximum contribution.

And asking pays for itself even when the answer is no

A refusal to draft is often accompanied by a great deal of information the operator is perfectly willing to give, even though nobody has asked for it. In our experience, the following can usually be obtained in writing, even where every proposed special term is declined: ‍

•    the current price range for a care suite, and the daily care fee for the coming year;

•    the precise certification level at the village, and which villages in the network provide dementia-level and psychogeriatric care;

•    an itemised chattels list with the age of the fittings, and confirmation of which items are fixtures rather than chattels — a hardwired alarm system, for example, is generally not a chattel;

•    a description of how deductions from the repayment sum are notified to the resident and approved before payment; and

•    confirmation of which entity operates the care facility, and whether transfer is a right or an application.

If none of that is in the agreement, it should all be in writing before you sign. It lets a purchaser price the risk they are accepting, plan for the care transition rather than discover it, and — if things later go wrong — point to a contemporaneous written record of what they were told. It is also, quietly, a fairly complete answer to the question the reforms are trying to legislate for.

We put the care questions to the operator in writing as a standard part of every review, and we keep the answers on file with the agreement.

It is also important to ensure that your estate planning documents are up to date: your enduring powers of attorney, your will, and your advance health care directive. Transfers into care are almost always negotiated by somebody other than the resident. ‍

What you can do — and where we can help

If you are considering an agreement now

•    Take advice before you sign, not during the cooling-off period. On most forms, the cooling-off period is 15 working days and starts upon signing. Every protection worth having is easier to obtain before the operator has your signature.

•    Obtain the full document set, not the documents offered. That includes the disclosure statement and its personalised schedule, the code of residents’ rights, the code of practice, the complaints procedure, the resident handbook, the village rules, the deed of supervision, any car park licence, the admission agreement for the care facility, and the chattels list.

•    Ask the care questions in writing, and insist on written answers. What is this care facility certified for? Which entity operates it? What does a care suite cost today, and what is the current daily care fee? What is the waiting list, and what happens if no place is available? Where in the group is dementia care provided, and where is psychogeriatric care provided?

•    Ask for the special terms even where you expect a refusal. Refusals are informative, and the answers that accompany them are often worth more than the terms would have been.

•    Read the resale data against the buyback clause. Average disposal time and current vacancy tell you whether the buyback is a backstop or the actual payment mechanism, and whether a suspension event is within reach.

If you are already a resident

• The reform will not improve your agreement in the respects that matter most. Read it, or have it read, so that you and your family know what it says about the repayment date, transfer to care, and deductions.‍ ‍

•    Make sure both enduring powers of attorney and your will are current and lodged with the operator, and that your attorney knows where the agreement is and what it provides.

•    Where the operator has a stated practice you may one day rely on, ask for it in writing now — while you are well and nothing turns on it.

•    Make a submission when the bill reaches select committee. Retrospective application of the repayment protections is the point on which existing residents have the most to gain and the least representation.

Questions clients ask us

Will the twelve-month rule apply to my agreement?

‍On the present proposal, only if you sign about a year or more after the amendment bill becomes law — realistically 2028 or 2029 — and only if your village is not caught by one of the signalled exceptions, such as having fewer than 50 units. If you signed before that, your repayment date is whatever your contract says. Residents’ groups will press for retrospective application and for a shorter window at the select committee — officials themselves recommended nine months before Ministers settled on twelve in August 2026. We support the argument. We would not advise planning around it succeeding.

We signed last month. Is it too late to change anything?

‍Possibly not, but move quickly. Most agreements carry a fifteen-working-day cooling-off period from the signing date, and there is nothing to stop you from asking the operator for a variation after that. What changes is your leverage. Even where the drafting cannot be changed, getting the care and cost questions answered in writing has real value, and it can be done at any time. ‍

The brochure shows a care home on site. Isn’t that enough?

‍No. Marketing a continuum of care is not the same as contracting for one. Ask three things in writing: whether transfer is a right on a defined trigger or a discretionary application; whether the care facility is operated by the entity that signs your agreement; and what level of care the facility is certified for. A village certified for rest home and hospital care cannot lawfully provide dementia-level or psychogeriatric care, however good its intentions. ‍

Can we get our money out early if Mum needs a care suite?

‍Under most current agreements, no — the capital comes back when the unit is relicensed, and the care suite must be paid for separately, in full, in cash. That is the funding gap. It is negotiable before signing, and it is the term we press hardest for. The reform’s proposed early-access mechanism would help, but only for future agreements under the present proposal.

Does the village unit count against the rest-home subsidy?

Yes, if you own it personally, unless your Trust lent you the purchase price under a Deed of Loan. For residential care subsidy purposes, a retirement village unit or serviced apartment is generally treated as a home and is included in the asset assessment. This surprises people who assumed a licence to occupy would be treated differently. Work and Income should be asked directly about your circumstances, and it is worth taking advice before moving money in anticipation of a subsidy application.

Where to get information and support

•    Retirement Commission Te Ara Ahunga Ora — retirement villages — the Act, regulations and codes in one place.

•    Retirement Villages Act 2003 — the legislation itself.

•    Ministry of Housing and Urban Development — the Government’s own summary of the package.

•    Eldernet — searchable directory of rest home, dementia, hospital and psychogeriatric facilities, and their certification levels.

•    Age Concern New Zealand — 0800 65 2 105 — free, independent support for older people and their families.