Consumer NZ wants an overhaul of the multi-billion dollar retirement village sector and its regulations to protect around 45,000 residents from unfair terms.

Jon Duffy, chief executive at Consumer NZ, said a review of contracts found terms which unfairly favoured villages and risked costing residents money.

"Retirement villages promise the good life in your golden years. However, the agreements consumers must sign before they move into a village can have a nasty financial sting. Some also risk breaching consumer law," Duffy said.

Terms which made residents responsible for the costs of maintaining and repairing items in their unit - even though they didn't own them - were one worry.

The review examined contracts from Arvida, Bupa, Metlifecare, Oceania Healthcare, Ryman Healthcare and Summerset.

Most retirement villages offer a licence to occupy, which gives the resident the right to live in their unit but no ownership rights to the property. Despite this, some contracts made the resident liable for repairing the operator's chattels, Duffy said.

Jessica Wilson, Consumer NZ research head, said Metlifecare had a wide-ranging clause in its contracts which gave residents only a month after agreements began to advise the company of any repairs needed.

After then, the resident was required to meet all costs, including paying for repairs to the unit's stove, garage doors, plumbing and electrical fittings, she said.

"In our view, these terms conflict with residents' rights under the Consumer Guarantees Act to expect goods and services of a reasonable standard. If the oven in your unit fails, the village should wear the repair cost," she said.

Comment has also been sought from Metlifecare chief executive Glen Sowry.

Wilson said many residents also faced significant financial losses when their unit was sold because they didn't receive any capital gains, despite paying towards the property's upkeep.

Villages' retention of the capital gain was a major cause of complaint. In a Consumer NZ survey of 1680 residents, 63 per cent were unhappy their agreement didn't allow them to get any capital gain when their unit was sold.

Consumer NZ's review of village contracts also found terms that gave the village wide discretion to decide what residents could and couldn't do.

Several contracts restricted residents' rights to raise objections about village developments. Metlifecare and Summerset contracts included terms stating residents weren't allowed to object to any dust, noise or other nuisance caused by the development.

Wilson said these kinds of clauses ignored residents' rights to raise legitimate concerns.

Retirement Commissioner Jane Wrightson, responsible for monitoring the sector, will get the review, supported by a grant from the Law Foundation.

John Collyns, Retirement Villages Association executive director, acknowledged the issues Consumer NZ had identified were important, but claimed they did not reflect village residents' views.

"More than 45,000 New Zealanders choose to live in retirement villages and this number is rapidly growing, which is unsurprising given research by UMR has showed approximately 87 per cent of residents were satisfied," Collyns said today.

The sector was committed to continuous improvement.

"Individual operators have different policies but clearly the industry does not support the inclusion of any unfair conditions and we encourage anyone with any concerns to get in touch with the association directly," he said.

"Under the law, prospective residents must seek independent legal advice before moving in and we're very clear on that with them and their families. The retirement villages sector continues to grow and evolve, particularly with the increasing focus on care, and there is competition between operators so Kiwis have more choice than ever before.

In December, Wrightson's office released a discussion paper on the Retirement Villages Act 2003, its regulations and code of practice, noting a lack of significant reform in 17 years.

Guaranteed retirement unit buyback periods when residents move or die, limits to how long weekly fees are charged when people leave, more voice for residents and a consumer protection probe are mooted.

The Commission for Financial Capability document recommends stronger protection for the population which real estate agents and property consultants JLL estimate number at least 45,000 New Zealanders, with a further 12,000 places now under construction.

In 2019, the Government agency in charge of the retirement village sector hit out at retirement village owners and operators for "confusing contracts" presented to residents and their families.

Troy Churton, the now former Commission For Financial Capability retirement villages national manager, described the contracts as difficult to understand.

"They are so complicated we found that even some lawyers who work in the field could not understand them," Churton said in 2019.

The retirement village industry was growing rapidly as the population ages, and villages increasingly include care facilities so they can market themselves as providing a "continuum of care", he said.

By Anne Gibson, NZ Herald