Retirement Villages Act - Reforms
Major Reforms to the Retirement Villages Act – What This Means for You
The Government has now released a set of proposed reforms to the Retirement Villages Act 2003 (the Act). These changes have been a long time coming after several years of consultation, and the overall aim is clear: give residents stronger protections and bring more transparency to how villages operate. Importantly, some of the proposals will apply not just to new agreements but to certain existing occupation right agreements (ORAs) as well.
Here’s a rundown of what’s been announced and what it means in practice for both residents and operators.
1. Faster Repayment Timeframes – and Interest Payments Added In
One of the biggest changes is a new requirement for operators to repay outgoing residents within 12 months of their ORA ending.
If the unit still hasn’t sold after six months, operators will also have to pay interest on the repayment amount until it’s paid out. This wasn’t originally expected to be on top of the 12-month rule, so it’s a meaningful shift for many in the sector.
Residents who need to move into aged residential care—or who face similar financial hardship—will be able to apply for early access to their repayment.
These rules are intended to apply to ORAs entered into one year after the amendment bill passes. Smaller villages with fewer than 50 units are likely to be exempt from the 12-month repayment requirement.
2. Changes to Fees, Chattels and Dispute Resolution
The Government has also confirmed several reforms that will directly affect how villages operate day-to-day:
Village fees must stop from the date a resident moves out.
Residents won’t be responsible for any capital loss unless they also share in the capital gain.
Operators will be responsible for maintaining and replacing their own chattels and fixtures inside residents’ units.
A new independent dispute resolution scheme will be introduced and funded by operators to support residents when issues aren’t resolved at village level.
Most of these changes are expected to take effect as soon as the new legislation is passed.
3. New Rules for Disclosure Statements and ORAs
Both disclosure statements and ORAs are set for a major overhaul. The aim is to make them simpler, clearer and more accessible, with better information about services and future facilities.
The Registrar of Retirement Villages will also get stronger enforcement powers—particularly around any misleading statements, unfair terms or inaccurate advertising.
4. A Practical Headache for Operators: Cashflow and Funding Pressures
While the reforms are designed to give residents more certainty, operators will need to take a careful look at their cashflow management.
Having to repay within 12 months—plus the added interest obligation—could create real pressure during slower sales periods or when multiple residents exit around the same time.
In reality, many villages may need to:
reassess their banking facilities and lending arrangements
model different resale scenarios to identify potential funding gaps
adjust sales, refurbishment and marketing practices to tighten sale-to-settlement timeframes
review their development pipeline to ensure capital remains available.
For residents, the upside is greater certainty and less financial stress when transitioning out of the village.
What Happens Next?
The amendment bill is expected to be introduced in mid-2026. Once that happens, operators, residents and industry groups will have a chance to make submissions to the Select Committee.
These are significant reforms and could reshape both the financial and operational models used across the retirement village sector. We’ll be keeping a close eye on developments and will provide further updates, via our website and social media channels as more detail emerges.
If you’d like to understand what these changes might mean for your village or your ORA, our team is here to help.
Contact Phil Shannon or Samantha Si using the button below, or email us: law@turnerhopkins.co.nz or call us on +6494862169.