Elderly couple in legal wrangle with retirement village Radius Care

Radius also told the couple it reserves the right to charge them a further $330,500 for rent payments from before they moved into the unit. The village has also threatened to take possession of the unit and exercise its power of sale if the couple don’t pay.

The couple, whom we are calling Carol and Peter as they don’t want to be named, are in their mid-70s. They moved into Windsor Court Village in Ohaupo, near Hamilton, in 2017. They say they feel bullied by Radius and cannot afford to pay what the company is demanding.

Unlike other retirement villages, which usually only offer a licence to occupy a unit, the couple’s unit title has been owned outright by Carol’s family trust since 1988. Carol was the sole surviving trustee when she and Peter moved in. Radius holds an encumbrance over the title to the unit, which limits how the owner and village operator can use the unit. The encumbrance also imposes an annual rent charge if the terms of the management deed are breached.

Moving into the village

When her father died in 2014, Carol, as the sole surviving trustee, advised the village that her family trust wished to retain ownership of the unit and that she and Peter intended to move in when he retired in 2017.

In 2017, Carol and Peter met with Radius to discuss their move into the unit and their plans to build a deck on the property. The plans were agreed to by the managing director of Radius Care at the time, Brian Cree. The couple said the then village manager also agreed to them moving in and later confirmed this in writing to the couple and their lawyers.

Carol and Peter got involved in village life and were treated as residents by village staff and management. In the AGM minutes for a 2017 Windsor Court meeting, both are listed as residents.

Legal action

Everything changed in 2019 when Radius, through its lawyers, contacted the couple to raise concerns about their occupation of the unit. It claimed a review by the village highlighted it was missing evidence of a range of approvals, including approvals that Carol and Peter were suitable residents. It also asked for a copy of any new management deed entered into by the couple.

After receiving the letter, the couple consulted their lawyer. The lawyer advised that as they were both over 55 and had been given approval to move into the unit by the then village manager, then they hadn’t done anything wrong. The lawyer said it was up to Radius to offer a replacement management deed. As a result, the couple did not reply to the Radius letter.

Radius wrote to Carol and Peter again in 2020 to say that because they had not provided the requested evidence, it concluded that Carol (as sole trustee of her family trust) had breached the management deed.

The 1988 management deed states the unit cannot be sold or otherwise disposed of to anyone “who is under the age of 55, and has not been approved by the Company as a suitable Resident and has not agreed to enter into a Management Deed with the Company…”. The deed also states that homeowners need to be residents and members of the body corp.

Attached to Radius’ letter was an invoice for $152,000 in backdated rent. It also said if the invoice wasn’t paid, Radius intended to exercise its powers under the encumbrance, which included the power to take possession of the unit and the power of sale.

Carol and Peter then provided documentation to Radius via their lawyer, showing that Radius managing director Brian Cree had agreed to them building a deck, as well as the AGM minutes in which they were listed as residents.

Their lawyer wrote to Radius’ legal team saying there had been no breach of the management deed, and as Carol wasn’t a party to the deed, it wasn’t possible for her to breach it. They also said it was up to Radius to obtain a replacement management deed, and the couple should not be punished for the company’s failure to do so.

The lawyer also pointed out that Carol became the sole owner of the unit as trustee in April 2014, and at no time had the village management questioned that ownership until 2020 – citing a significant amount of communication from village management to the couple about their plans for the unit.

A letter from Radius’ lawyer to the couple’s lawyer in 2021 states that any discussions with village staff regarding the couple moving in may have been based on the mistaken belief that Carol was in fact the original resident named on the management deed, when that was her relative with the same first name. It said: “The occasions of Carol and Peter being treated as Residents by village staff based on that mistaken belief cannot properly be construed as consenting to your client’s occupation or confirming their suitability to become Residents of the Village.”

Radius Care claimed the fact the title is in a trust does not remove the obligation that owners have under the management deed to seek approval for occupancy and pay all associated fees. It said the couple’s actions – whether intentional or not – have resulted in a financial loss for the operator.

In response, Carol and Peter’s lawyer outlined his deep concern at the demands for excessive rent charges. The lawyer said Radius’ actions were “unconscionable in the extreme” and the amount sought manifestly excessive against vulnerable, elderly property owners.

Attempts to resolve the dispute

In April 2021 Radius offered to purchase the unit title for its 2014 value, minus a 5% fee, and then waive all outstanding annual rent charges – totalling $186,000.

This offer was rejected by Carol and Peter, who said they would only sell for a “reasonable price”.

At Carol and Peter’s request, Radius had the unit valued. The valuation by the global commercial real estate company CBRE came in at $380,000, which the couple said was unacceptable as it wouldn’t allow them to purchase another unit of similar quality in Hamilton.

Radius then made a final offer to purchase the unit and grant Carol and Peter a right to occupy it so they would have the same rights and benefits as the other residents. However, the couple would still have to pay the fees allegedly due under the management deed when their right to occupy the unit came to an end.

Carol and Peter, dissatisfied with this offer, made a formal complaint to the Radius CEO, and asked to meet him in person. At this meeting they advised they would only sell the unit title to Radius for a price that would allow them to buy a freehold two-bedroom unit in Hamilton – which they estimated to be around $790,000. Radius rejected this and maintains that its final offer to purchase the unit and grant the couple a right to occupy still stands.

Peter and Carol say they feel bullied and threatened by Radius and are worried they will lose ownership of their home. However, Radius insists it has been working in good faith with the couple since 2019 to resolve the dispute and has not enforced any of its rights in relation to the annual rent charges while it does so.

Carol’s health has deteriorated. Her husband told Consumer NZ the legal battle and demands for money have taken a huge toll on her mental and physical wellbeing.

“My wife has become very fragile, emotional and broken with any mention of Radius,” Peter said.

“We are both suffering from anxiety and lack of sleep and not knowing what Radius is going to throw at us next. They are not interested in our side of the dispute – they just keep bullying us.

“We are pretty sure they are waiting for Carol to die and then take over the lot, as it is only her name on the title.”