Code of Practice 2008
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The Retirement Villages Code of Practice 2008 is issued by the Minister for Building and Construction. It sets out the minimum requirements that operators must meet, or ensure are met, to fulfil their legal obligations under the Act. These include the minimum requirements for the occupation right agreement (contract) signed between the operator and the intending resident. The Code of Practice took effect on 2 October 2009.
The Code of Practice 2008 covers the requirements of the Retirement Villages Act; is consistent with the Code of Residents’ Rights; and reflects the diversity of the retirement villages sector.
The Code of Practice contains information that improves consumer protection and awareness and provides a minimum standard that all retirement village operators must attain, or exceed.
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Variations to the Code of Practice issued October 2013
The Code of Practice 2008 has been updated to include three variations approved by the Minister for Building and Construction.
The Variations have been issued following the Canterbury earthquake experience where five retirement villages sustained damage. The earthquake experience caused some retirement village stakeholders to question the adequacy of aspects of the Code of Practice. The issues relate primarily to uncertainties in the no-fault termination process for occupation right agreements, and the adequacy of the payout received by residents in a no-fault exit situation when their unit will not be rebuilt.
What changes have been made?
Clause 22: Insurance
The requirement for a Certificate of Currency has replaced the requirement for full insurance documents to be provided to residents on request. This is more satisfactory as the only alternative was numerous documents that would have ben heavily edited and provided little useful information.
The requirement for the insurance policy to be to the satisfaction of the statutory supervisor has been retained, which is an important safeguard for residents.
Clause 47: Grounds for termination if the unit is damaged or destroyed through no fault
The most significant change is to Clause 47 which covers a ‘no fault termination of an occupation right agreement’ such as an earthquake. From 14 October 2013 retirement village residents will be entitled, as a minimum, to receive the full original capital sum of their investment in a retirement village in a ‘no fault termination’.
The ‘no fault’ clauses are now separate from usual termination clauses, giving them greater clarity.
Clause 54: Payment due to the resident on termination or end of occupation
The revised Clause 54 clarifies how termination payments and deductions are calculated, including more specific requirements following a ‘no fault’ event.
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Who was consulted on the changes, and how do I get more copies?
The new variations to the Code of Practice have made it clearer and give greater certainty to both retirement village residents and operators.
The changes take into account input from the Commission for Financial Literacy and Retirement Income, the Retirement Villages Association, the Association of Residents and Retirement Villages (Auckland), as well as retirement village operators and residents.
The revised code with variations came into effect on 14 October 2013. Retirement village operators and residents should now be using the revised code
Hard copies of the Retirement Villages Code of Practice 2008 can be obtained by contacting us.
The Ministry of Business, Innovation and Employment (formerly the Department of Building and Housing) is responsible for the Retirement Villages Act 2003 since 1 July 2005. The Ministry’s responsibilities include the promotion of education and publication of information about retirement villages. These functions were previously undertaken by the Retirement Commissioner. The Ministry agreed with the Commissioner to undertake these functions in August 2007.
Commission for Financial Literacy and Retirement Income
Role is to monitor the effects of the legislation and Code of Practice and the establishment and oversight of the disputes panel system.
Registrar for Retirement Villages
Is located in the Companies Office in the Ministry of Business Innovation and Employment. The Registrar of Retirement Villages is responsible for registration-related matters.
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