What Are You Really Buying In A Retirement Village?

If you're thinking about a retirement village or your parents are, your property Assument works a bit like buying a home. You sell the family house, you buy units, you move in and cash up again at the end. The retirement villages don't work like normal property, and that's where so many families get caught off guard. You're not usually buying a title, you're buying the right to live there under a long-term agreement. And that affects what you pay, what you get back, and what happens if your health changes later. So, what are you really buying in a retirement village? We're joined by Jenny Baldwin, a lawyer who specialises in retirement villages and aged care. She leads the team at Anthony Harper, and she's worked in the sector for nearly 20 years. OK, Jenny, let's talk about retirement villages. I feel there's a little bit of confusion around what you're actually buying when you buy into a retirement village. Can you explain it to us? Yeah, that's right. When you're buying into a retirement village, generally, you're not buying property. What you're buying is basically a bundle of rights, so that you have a contract with the owner or operator of the village. And that contract gives you right to live in the unit for your lifetime. It gives you the right to access any services and facilities that are available at the village. And it gives you a right to be repaid a certain amount once that contract comes to an end. Is that an occupational right agreement? Yeah. So, the legal term is occupation right agreement. And we often use the acronym RRA. So, if I slip into that, that's what I'm talking about. There's a lot of acronyms and the retirement village sector. So, RRA is like a number of tombs, so there can be different kinds of RRA. So, the one that you find predominantly in New Zealand retirement villages is a license to occupy. So, it's a pure contractual right to live in the unit. It's not a property right. Yeah, so you don't own it? You're allowed to stay there, definitely. Yeah, there are some villages that have a property right that attaches to that RRA. But they're fairly few and far between. So, most villages that you would look at would have a license to occupy structure. And your experience does it frighten people? Do they understand what it means? Yes. I think you do have to get advice before you sign up for an RRA. You do have to get independent legal advice. So, your lawyer should be explaining it to you. And it can be a little bit off-putting to some people because they're used to having a home ownership throughout their life. And to move into an environment where you don't actually own property can be a bit daunting. But it's a bit of a balancing of risks and responsibilities and rights. So, you might not own the property, but that means that you don't have the ultimate responsibility for that property. So, if something were to go wrong with the property, it's the operator who needs to sort it out. They need to maintain it, make sure that it's habitable and usable when good condition. But you also don't get the capital gains as well. So, you don't have the obligations, but in most instances you don't get the capital gains. Yeah, in most instances, most villages in New Zealand, you don't get the capital gain when it's resold. And, yeah, is that balancing of risk and reward? So, you've been able to live there. You haven't had to worry about, you know, there's a hole in the roof that needs repairing. So, I hope you're not in there for a little bit. No, no. But you never know what might happen. I mean, yeah, with the events happening, there's benefits with that. So, what do you get at the end of the day? When. So, you pass all. In most cases, when you either moved out or passed away, you. what we usually won't get any funds until they found a new resident to move in and they have settled their payment. Then you get back your original payments that you made, the original capital that you put in, less what we call a DNS, which is short for deferred management fee, can be called different things and different villages. But that's a deduction made at the end. And it's typically around 30% of your original price that you paid when you went in. So, that gets deducted and then you get the balance. So, I'll come back to the myth in a second. Yeah. What is the one thing in your mind that people don't necessarily grasp the detail of something? Because it's one thing to say that you'll. You go down with the lawyer and you talk to them, but you. Your lawyer can tell you things. And you still don't necessarily understand the impact of what they're imparting. They have genuinely discharged. They have explained it, but you don't necessarily piece together what that means practically. For your mum or your dad, if you needed them to grasp one thing from auto from that agreement, because there's a lot of agreement. It's quite overwhelming and it's quite a transition just to kind of move to that into a village. What would be the. The points that you would want to labour to them to understand? Sure. So, the key points if I'm advising a resident going in, which does happen occasionally, I will act for a resident, is making them understand the financials. So, you pay this amount when you go in, you're paying a certain amount whilst you're living there, and then this is what you get at the end. It's really key that they understand that no money will come out until they've found a new resident for the yearnage. Which could take many months, it could do. Which will come back to it as a separate question. But yes, okay, so the financials you've got to understand what that means, and I'll do a bit of McQueen Math with you to make sure our members did it. So, we'll come back to them in a second, so the financials and any other key points? The key points are, are there any restrictions on you living there? So, is there a restriction about keeping pets? Absolutely. You know, who's going to be doing any interior maintenance to the unit? What tough channels are provided with it? Are there rules about accessing the facilities? There might be times that you know, you can't access the facilities, or whether you can have guests stay in the unit with you. Oh, really? So, there's a lot of. Yeah, there's a lot of rules in terms of baking the village run smoothly. So, you can't have someone necessarily, you can't have someone to stay? So, most ORAs will allow you to have guests for a limited number of guests, or a limited number of. No, it's gorgeous. But basically no squatters. So, if you had, say you had a visitor from ODC's, who would want to stay with you for three months, generally you'd need to just get the consent of the village operator to. A bit so that a reasonable. Which is reasonable because you don't want that situation of squatters, or occasionally you might get the residents' children, they're sort of between homes. Oh, my God. moving in and you don't want to. You're probably. moving there for a long time. So, that's why those rules are in place, because it does impact on other residents as well. If there's sort of extra people in the village who, you know, aren't normally meant to be there, it might impact on all your use, the facilities. And if you have your. what, I call it a apartment, I suppose, or your place where you were living. Without a rush, without a. Yeah. Yeah. It's nice now. Yeah, I'm sorry. Can you stamp your mark on it? I mean, can you. You know, if you. No, you can't. creepy the walls. Well, you know, modern. modern. you know, dystopic look, or whatever they call it. But, you know, what I mean, can you. Can you make it your own? Can you. indosualise it? Most villages will allow a certain amount of individualisation on the interior. They tend to want to keep the exterior fairly, you know. In exactly one as long as it's white. Yeah, yeah. But, anything more extensive, you generally have to get the consist of the operators. So it might be, I want to paint the walls, paint. And an operator might say no, because it might actually be visible from outside, and they want to keep the look and feel of the village as it was designed. But some operators might say, yeah, that's fine. You can have a pink bathroom if you so wish. But, you know, when you need, you will need to put it back to white. And you will need to pay for that, if you. Yeah, potentially. Just back to some of those earlier points around the rules, what you're allowed and what you're not. Any mentioned pets? How many of them let you have a pet? Roughly. Yeah, I don't. I couldn't say in terms of like a percentage of what units will allow pets or not. Most villages do allow pets with consent, so they'll want to just check that you haven't got like three some burnards. You can try to squeeze into an apartment. But the gym door. They're actually ruined the road. So, yeah, they'll be generally. So it's usually sort of a conversation that's had when people are looking and lying for a village. They're like, do you have any pets? You know, we've been bringing them with you what they like. You know, what size are they? Have older, they kind of think. And there will be some rules about it. So if that pet were to start causing a disturbance to other residents, then the operator might say, "Oh, Nellies, who you need to re-hype it." What about the other costs? Like, you know, weekly costs, do you pay food or will that your own. Yeah, what's the structure? So the structure is when you move in, you pay a capital sum. So, um. It's like $1 million. Yeah. So for a really nice apartment in Auckland, $100 million. So you pay $100 million when you move in. And whilst you're living there, you pay a weekly fee. So the weekly fee is, they're sitting at around $200 a short the moment for Auckland area, 220 maybe. That is your contribution towards the costs of running the village. So it covers things like rates, insurance, staffing of the village, maintenance, running all the facilities, things like that. So generally doesn't cover the actual costs or providing all those things, but it's the resident's contribution towards it. So that's paid for the time that you're living there. So if we've paid a million dollars, I think you said the deferred management fee that is 30% say. So when you move out, you're going to get 700,000 back. And maybe that's in 10 years time. So it's really, it's cost you $300,000 or $30,000 a year or $600 a week. Plus your $200 a week that you're paying in your weekly fee. That's the equivalent rent that you're paying, but you're paying that all in advance, which is neither good nor bad. It's just that's how it works. And then my other observation is, if I understood that correctly. Okay, so maybe you're paying a little bit over the odds for the rent, because people will say, well, I don't have the property rights and it's like, yeah, but you're really actually only paying a rental amount, maybe a slightly inflated rental amount, just capitalised up front. But then you say, well, I'm getting my $700,000 back in 10 years time. The value of that $700,000 is less because 700,000 in 10 years is less. So when I was doing my rough back of a facet Mac, it probably is another almost double the DMF, so you're getting back maybe $500,000 in 10 years time. In real 10 years. Which again is neither good nor bad, it's just helpful to understand that. Because the estate is what's getting the difference at the end of the day. That's right. It's not an investment. It's definitely not a financial investment. It's a lifestyle that you're buying. Yes, so the way that the structure is set up is to enable people to be able to afford that weekly fee by keeping it relatively low by sort of, you know, you're paying at the end. So I think one of my clients likes to explain it. It's like having a country club membership, but you don't have to pay it each year. You just pay it when you leave. So all of those things that you've enjoyed instead of like paying, you know, a full membership and a gym membership and, you know, all those kind of things. You just, yeah, just paid at the end. And that deferred management fee. So let's say it was that 30% or 300,000. That's just so that you're clocking it. That's paid or earned over a three or four year period. So it might be 10% in the first year, 10% in the second year. Right. So if you left and each operator slightly different, but let's say you left at the end of year one or you were kicked out because you were rolling the rows when you've graffiti the walls, you might get 90% of what you put in back. Right. So it's not that you've kind of committed the whole 30% upfront. There's a period of three to four years where that's earned, I guess, by the operator. And from your perspective, the longer you can stay in that village, the better value. A bit of value, yeah. Yeah. What's the average age people are entering retirement villages? It really depends. So some villages are more of a lifestyle offering. So they might not have hair or services like meals delivered to you, things like that. So they tend to be older, slightly younger. Age, whereas other ones are sort of full service villages that you can transition through to care and they might have a bit of an older entry. So I think probably around 75. Yeah. That's when the ice people go away. Yeah. So some people will go in younger and there are some lifestyle villages that end up, I mean, I've got one of my clients is 50 plus, which is a bit scary because, you know, I'm a class approaching that. Yes. But, yeah, some of them will have a minimum age of 70 or 75. You went into a couple of retirement villages as part of research for another episode. I thought they were amazing. I could live there now. It sort of felt like you were on holiday. Yeah. I could resort. Yeah. I loved it. I guess I'd still like the people going there. Just to hold that one bit. Yeah. The capital game is an interesting thing because, yes, you're missing out on the capital game at the end of the ORA. But if you've stayed in your family home that you've owned for 30 or 40 years and you stayed at all you die, you've not realised that you're going to be in a family home. You've not realised any of the capital game that you've had on that property who gets the benefit of that capital game as you're a state. Whereas if you go into a village you can realise that capital game from your house. Hopefully that's enough for you to be able to buy into a retirement village and have some funds left over for, you know, travel, upgrading the car, things like that. So, yes, you don't get the capital game at the end of the ORA, but you might be able to actually capitalise on your family home. You could have quality of life. Yeah. It's a choice. And it's not a choice that everyone wants to make and that's fine. It is a choice. It's. These contracts are negotiable in any way or are just sitting and staying the way. They tend to be fairly standard contracts. If the market is a bit soft, which probably is at the moment, there's probably lots of units for sale. Some operators might be amenable to doing a bit of a deal around the edges. So there might be a lot of people out there at the moment waiting around for their properties? Well, the estate's out, waiting around for the properties to be sold. Yeah, I'd say that resale times probably have driven up in the past year or so because of the residential property market. So, so the retirement village sales market is very closely linked to the residential property market. So generally people will need to sell their family home in order to move into a village. So if you're leaving a village, that pool of people who potentially might move into your unit, they all need to sell their houses. So if that's taking them longer or they're not achieving the price that they had thought that they might be getting, then that does tend to slow down the process a bit. And from an operator's perspective, excuse me for being cynical with this. The other ones who are going to get the capital gain. Right. And you're 700k back. So, essentially there's no rush on their part. Which then leaves me to another question, which is one of the points you made earlier. So one of the things I'm not sure everyone understands is when you get your money out at the end. Yeah. And if you and your partner are both dead on one hand, it's like, well look who cares, so let's see a estate that can do with that. So there is a very real scenario where one of you has to go into care and all your money is actually tied up in the property that the other spouse still needs to live in. Can we just unpack what happens practically, not in that situation, but how we get our money out. So let's say the more simple example, I'm living there by myself, I die. And as my estate going to get that money, 700k, they've got school fees to pay or whatever they're all getting a bit ratty. I'm not around anymore, so it's on them, but practically we're now they're going to get that money because that feels a little bit vague. Yeah. So each village has to have a disclosure statement that gives various details about the ORA and about the village itself. That should set out how long it has taken to resell units over the past 12 months. Here's sets out which units have resold, how long it took for each of them and gives you an average. So there is that data available there. These are publicly available documents. The village should be able to provide that to you if you ask or you can go online and have a look at the register of retirement villages. So that will give you an idea. So if you, you know, mum and dad have both passed away and the family wondering how long it might take, I mean always talk to the operator because they can give you a better feel for whether this particular unit's been more desirable or say a little bit, but the disclosure statement should give you some data as to how long it's been taken. And this disclosure statement is given out when people move in. So when they're moving in they can get a feel for how long those time periods have been in the past. It doesn't necessarily indicate what the fetch might hold. So the years down the track, the sales market might be quite different. But it does give you an indication. So it gives you the indication, but sometimes the estate needs more than an indication, right? So my understanding is on average properties have sold within six months, on average, typically when I looked at some of that data. So you could say, well on average historically you're getting that money back, but there is no guarantee of that. And sometimes that can put pressure on families, can't it? So it's like, well, that's what we can, it's sort of pithy for the family, do you agree? Well it's a bit flimsy, well we'll do our best but we've actually financially incentivised to not actually care because we've built another 800 over here. Yeah so there are some protection on that. So I think I don't think it's quite accurate to say that there's no impetus on the operator to resel because they're still wanting to get those weekly fees in so they'll generally want a new resident, they want to realise their capital gain as quickly as possible as well. So there's no real, you know, there's nothing that would disincentivise them from reselling. But up until, sorry, up until recently those weekly fees could still be getting deducted even though you went there. That's only changed in some more recently hasn't it? Yes, it's quite accurate. But it's still quite. Yes, so the sector had made changes recently so most villages now will cease those fees when you move out. There are some villages where it might continue until the resale but the majority of them and now it ceases when you move out. That would be another thing to be aware of when you're comparing, yeah, contracts, right? Because it has in the state, with mum and dad have died and the unit hasn't sold and that's one thing because you could say well they indicated six months, ten years ago, it's all good, but in the meantime mum and dad aren't there but they're still going to pay that $230 a week and that estate doesn't even exist. Crazy. But the sector has recognised that which is great. It's also makes it, you've got to choose the right apartment at the start, don't you? Because you've got to make it more resaleable if you like. I suppose the better apartments and more expensive. Yes, it looks going to the north. There's more space in the south. In the view of the ocean. Yeah, they will do. There are other protections so the operator can't prefer new units when they're doing sales. So if there are resales and the village that need to happen, they can't incentivise sales on the new units above those resales. So they need to act fairly to say, well we need to sell our new units but we also need to see the existing residents right by doing, making sure those resales happen as well. So if they were going to sit down and get advice from a lawyer as part of this process, what does that actually look like? So it's a statutory requirement. So under the Retarm Ability Act, every intending resident has to have independent legal advice before they sign their RRA. So the lawyer has to advise them on the terms of the RRA in a manner and to the level of their understanding and age. So I do a lot of education through the law society with educating lawyers about things to think about when advising older people moving into villages. And it's really important that they, you know, the lawyers shouldn't be sitting there just saying these are the terms of reading from a list. It's about having a conversation so understanding how much is being understood. And you know, techniques like the lawyer can explain it and then say to the residents, so how do you understand it? And that's a really good check for the lawyer to make sure that that the resident has understood it. So the lawyer then has to certify that they've done that. And 15, there's a period of 15 working days after the resident signs that they can change their mind and cancel. It would be one piece of advice you'd give to our listeners, legal advice on if you're going through that process, what they should be thinking about or just a tip for them if they are dealing with a lawyer. Just to ask lots of questions, I know I've listened to some of your other podcasts and it's about, you know, being brave to ask all the questions and say, how would this work if this scenario rose? What would happen? Yeah, have that discussion with the lawyer, don't just expect to sit there and listen. And accept it. Yeah. Yeah. Yeah. And your company, your law firm, it covers the range, doesn't it, from the big corporates to the small family, you know, I've reached out to the size-wise. Is there a difference? I mean, you probably can't say which words are for you. But what would you say there in terms of how do you look at what which is better? Which is better. I think in terms of when people are picking up retirement footage, they tend to not, most people don't tend to focus on who the operator is necessarily. They're more focused on location. What are the services and facilities and what are the types of units that are available? Those are sort of the key drivers that people will look at in the village. In terms of. Visits, lifestyle, isn't it? Yeah. It's a stage. We're not talking about care yet. We're looking at that lifestyle. Yeah. So in terms of what different operators can offer, you've got the big groups. So there's like the big six who hold most of the retirement villages in New Zealand because they're larger and have more of a nationwide presence. They may be building larger villages with more extensive services and facilities. So some people will be drawn to that. Some of them are amazing. They look like five-star resorts. Yeah. They can also offer facilities. The foundation. Yeah. I'm there. I'm on the final. So they can have those wider offerings because they've got the financial cloud to build those things and deliver them. They may also have nationwide programs, sort of health fitness programs, intervillage tournaments, things like that. They might run wider services. But some people might be more comfortable with a family run or with a small group. And some of those small groups and family run villages are also quite extensive as well. And then there's not for profits. So some charitable trusts will own villages and some of them are extremely large and own numerous villages whereas others will be just a few units in our rural setting. So yeah, it's quite a variety. So if we go to the next stage, which people don't often think about when they're entering this first stage and maybe then something that they should be thinking about, which is if someone needs to move into care so that they need that nursing home support, which we call rest homes or private hospitals, there's a whole variety of words that could be used to describe that. But the big sex would call it being able to have continuum of care where you can stay within the same facility and your partner might get moved into the hospital and you can still live in that facility. That wider, I guess, a thing. That's something I'm not convinced everyone understands what happens at that point because if all your money is tied up in that original ORA, occupational rights agreement, that partner needs to sign a new ORA with the care facility often. And if your money is tied up in the first and that's not being released because they said, because at first they're still living there. But even if you would, it hasn't been sold and no one seems to have an obligation to sell it by a particular point and you've got to fork out the money for this new one, that can create a whole lot of tension on families that could push mortgages and things onto the family as opposed to the parents and then you're reaching for financial measures like reverse mortgages and some of those things, not that you can do that against an ORA. But there's a bit there that I'm not sure anyone is clocking or the lawyer's explaining because that's not necessarily what the contract covers. Sometimes that's what the contract doesn't cover that might need a bit more information. Especially when one is still in their apartment or house. Yeah. And the other is going off into care. Yeah. There's a number of considerations here. So there had been a lot of negative comment about the sector, about not properly explaining that transition to care how it works in practice. So they have strengthened the disclosure statement to provide more information about transfer to care within the village. So there should be more detail there. I definitely encourage people who are looking at retirement villages to think about it. The problem is I think if people are younger and more independent when they're moving in, they kind of don't really know what to think about that. Or they may have thought about it and may have been discussed when they moved in but by the time they get to that point might be like 10, 15 years later and then. That's a guy they're really. Yeah. So, um. So, um. So, um. So, um. The other thing is that the funding of residential care might be changing. There's a big funding review of the model at the moment. So, what we say about how it works and how it might change in the future. So, um. That kind of needs to be born in mind. The larger groups, if they have a care facility on site, they will generally give preferential access to any resident who needs to move in. So what that means is you're not guaranteed a bed in the care facility. But if there's one available and say there's one resident in the village who needs it and there's one out there, from outside the village who needs it, they wouldn't waste that the village resident moving ahead of anyone else. So you have that right, but there's no guarantee. So it is subject to availability. Obviously, villages can't build a care facility with enough beds for every single resident, and you wouldn't want to, because not everyone does move into care. I think I listened to your discussion with Sue Martin, who's been in care for a very long time, and I'm not sure if you've heard of that. I'm not sure if you've heard of that. You do sometimes see there's a couple in a villa, one's gone into care, the other one needs a bit of help, so they'll move into a service department. So in terms of the finances for that move, a lot of operators do have a transfer policy. So if you're transferring to the care facility within the village, you might not necessarily have to pay another capital some in cash, when that person's moving into the care facility. So if you're paying for that, you might not necessarily have to pay another capital some in cash. I think it's important to have that discussion. But yeah, there will be some people who are just not interested. I was advising some people recently. I said, "Oh, no, that's not the last one." I said, "That's not the last one." I said, "Don't want to know." So yeah, it can be difficult to have those conversations. But yeah, there is that information there in the disclosure statement. And the other lawyer should be discussing it. I think Tracey Martin said when she was on that Somerset had a number of their beds full at a time. And they didn't think they could guarantee beds for people. But they actually came out and said that. And there's just a real honesty and a transparency. You really respect? Yeah, I think Somersets basically said that they would only build enough care suites and new villages to service the village, not for any outside people coming. And because the cost of building them is just so high. And the funding is not there. And that is something to call out. That they are the ones who are putting this infrastructure in. They're building the beds. And that certainly should be celebrated. And that someone needs to. Because the government certainly is. No. How has the industry evolved in the last 10 years? The basic model of the ORA is pretty much the same. So there have been little movements around the edges in the last 10 years. So we mentioned earlier that a lot of operators now cease the weekly fees when you move out. So that's one change that has happened to the benefit of residents. The DMF's pretty much unchanged in the last 10 years. It sort of ranges between 25% to 30%. There are more villages being built which are capital gains models. So you get either the whole of the capital gain or a share when you leave. But you need to bear in mind that those types of villages they tend to have less services and facilities. They won't have services. They'll have more modest facilities and they tend not to have care. No host. Because you simply can't fund it. If the operator is not getting that revenue from the capital gains, then they just can't. How are they funding it then? Is it at least whole property for the operators for the capital gains? Well, some of them are unit, say you only unit title in a hedge. But some of them are licensed to occupy. So it's still that contractual right just to live in the unit. But in addition to all the rights that everyone else has, you have this right to share in the capital gain when you leave. How many have that? That sounds great. There's a couple of operators who are building new and doing that model. So we're seeing a few more that do it. Freedom lifestyle villages and caracapines are two that do it. But the down side is you don't necessarily have those amenities. You don't have that hospital on site most likely. It's a lifestyle. It's a lifestyle village. And it tends to be aimed at the slightly younger cohort because of that. There are other places I've heard that you have to be 65 to live. Some of them all die. So your kids can move into it. But they've got to be 65 to actually do so. Well, usually your RRA is just for you personally. You can't leave it to me. I've got some of these for squatters. I bring the squatters in the dock. There's all in the labour door here. It's got to find rooms to labour door. That's right. What do detractors get wrong in your mind? Because there is a lot of negative sentiments. Yeah, there is a lot of times misplaced. Yes, some of it is misplaced. I think in the past there's been a lot of criticism of operators in terms of super profits. Or what was seen as super profits. I think that's, you know, you look at share prices now. It's simply not happening. They are businesses. They do, they are entitled to make profit. And, you know, their employers, they're contributing to the economy in terms of staff and construction, running the village. So there's no such thing as a free lunch. Like if you want to have a nice new unit to live in, not worry about the maintenance, have all the services and facilities. You do need to pay for it. So I think in terms of the financial model, there is a lot of criticism saying, well, it's unfair not to get the capital gains, or it's unfair to have to wait to get your funds out. But if it's very clear at the beginning as to what the terms are, and there's a rationale for it, the rationale for not paying residents out sooner is that the operator needs to be financially viable for the rest of the village. So all of the residents who are still in the village need to know that their operator needs to be financially stable, rather than having a run of people being paid out. I guess if it was tempered slightly, some of the suggestions of who does that even. even if the estate could get a lump sum or the remaining spouse could get a lump sum earlier, that would go a long way to calm in a lot of financial anxiety. Yeah, and some of it was 50,000, so not the 700,000 but 50,000, so it's almost like a bond getting returned to you, which of course commercially I'm all for, I've got to be profitable, it's got to be sustainable, we're pushing costs back onto the operator, if we're going to force them to do this within a week of death, they're going to get a 50,000 back. And all that can be mocked up in a whole lot of other ways from a commercial perspective. I just wonder who, from the little guys perspective, is anyone able to represent them in these discussions? Because the big six can be quite intimidating with you, an 85 year old woman, or just anyone, you're aging and you've got, you can't get access to capital that you might need for other reasons, even though you've moved out of the village. Yeah, I'd say that a number of operators are probably amenable to doing that, if someone really needs some funds, they will try to make that happen, not all of them will have the funds available to do it, but it's definitely worth asking. So are the three you know here, or there are bodies that represent residents, so there's the Retirement Village Residence Association and their residents' council as well. So see, great power, age concern, there's a lot of great organisations out there that look out for residents. So I would say have that conversation, you know, sometimes you don't get until you are. Squishy will. But the other thing to think about is that there is some legislative reform that's happening, so at the end of last year the government announced the key terms of how they were going to change the Retirement Village's law, and they are putting in some measures which will offer some of those protections to residents. So the three key things, the important for leaving, or it's actually for one is that there will be a 12 month repayment timeframe, so ideally you're still going to get it resold before 12 months, but if things are really bad you will get your money at 12 months. Here are some exceptions to that, and they'll be working through the details of that. The other one is if it's not resold within six months you'll get interest, and if it's not resold but you need access to funds for care or alternative accommodations somewhere you can make an application to get an early release of part of your funds, and they will also make mandatory that ceasing the weekly fees when you move out. So which is a move, yeah, which is a move that a lot of operators already done, but to actually make that possible. If you had a being option or the relative, what do you have the ability to make? What would you do if you could redesign the financial model? That is a Curly one. That is a Curly one, you're asking a lawyer to be creative. You've got it in here, go for it. We're asking the right lawyer. Yeah, it's something. But, yeah, I mean, when you look to Australia, I know that some of the Australian operators have a model where they give people options when they're moving in, and I know some of the retirement village operators in New Zealand are now having various options about different things. So in Australia, you pay this price, there's a 20% DMF. You pay a lesser price to go in, but your DMF's 30%, or you pay a higher amount to go in and you can get a sharing capital gain. So it gives people the option to think about the model that they want and what works for them financially. So it's a really interesting concept, but the one thing that I think there's a drawback with that is that it adds more complexity when you're moving in, because it's not just simply understanding one set of terms, it's trying to understand different sets of terms, and then make a decision as to what's better for you. So some operators now they offer options like you can either have the weekly fees that you pay fixed for life, so you tend to be a higher amount, but it's fixed, or it's a slightly lower amount, and they will increase by CPI each year. So that's the kind of financial decision a resident has to pay, like is it worth to pay a bit more and just have that certainty that it's fixed? Or do I really want to do that if I only think I'm going to be around for another couple of years in which case, will I take the risk that it just goes up by CPI? Yeah, having options is good, but as long as it doesn't make the whole process more complex. Well, it's been great, Tetting with you, thank you so much for sharing your expertise, and yeah, no problem. Lovely, thank you. Thanks, thanks for having me. If you take one thing from this episode, it's that a retirement village is not a normal property purchase. It's a long-term contract for a lifestyle at home, and a set of services you need to understand the trade-offs. You don't need to be a lawyer to ask the right questions. You just need the right information before you sign. Now, if you found this useful, please share it with your siblings because these decisions are very rarely made by just one person. And if you want help planning ahead, whether it's understanding aging and staying independent longer, join our community at agebrightly.co.nz. See you next time on The Next Bits. [MUSIC]