Retirement Villages have been in the firing line of late, with recent media focus on what many might consider unconscionable fees charged to residents and the complexity of contracts that could bamboozle even the sharpest of seniors.
The ABCS's Alan Kohler weighed into the debate, while the ABC's 7.30 Report covered the case of a Mosman retirement village still charging service fees to the family of a resident who passed away three years ago. See links to articles below.
Around 160,000 retirees throughout the country live in retirement villages that offer a range of accommodation from self-care units to assisted living serviced apartments, and the numbers are growing. Residents must sign lengthy and complex service contracts with the operator of the village, which undoubtedly have pitfalls for the unwary. On the plus side, however, the vast majority of residents in retirement villages report they are happy and satisfied with their new lifestyle.
The lesson here is that, should you be considering a move to a retirement village, you need to be fully aware of exactly what you are purchasing and ensure that you engage an independent legal advisor to go through the contract with you and point out all implications for your future and explain all ongoing charges and exit and service fees to you in detail.
Says President of the Retirement Village Residents Association (RVRA), Jan Pritchett: "The issues regarding retirement villages are very complex. To really understand the situation it is necessary to know about the anomalies in the Retirement Villages Act. It is even more complicated when it comes to strata villages, which are also subject to the Strata Management Act.
"Very few solicitors know or can explain the Retirement Village Act to prospective residents clearly. The RVRA, The Retirement Living Council (operator group), and the Minister's Advisory Council have all requested that the Law Society put in place an accreditation scheme for lawyers for retirement villages and aged care, similar to that with the family law or company law accredited lawyers can receive."
In the end, it's a case of caveat emptor. So, before entering into a contract with a retirement village operator, ensure that you:
- Ask lots of questions and, if possible, speak with existing residents.
- Understand your legal rights and the differences between entering into a contact as a Registered Interest Holder or a Non-Registered Interest Holder. These two groups have different laws regarding the payment of fees, and the return of money for their units after they vacate.
- Be aware that as a prospective resident you have a legal right under the current Retirement Village Act to take the contract to a legal practitioner to obtain advice before signing the contract.
- Ensure your legal advisor has knowledge of the Retirement Village Act and, if applicable, the Strata Management Act.
Those currently living in retirement villages as registered interest holders and their families also need to be aware that some operators are adding a $25-50K charge for refurbishment of the unit in the sales documents when a unit is vacated. "This is a contravention of the Retirement Village Act," says Jan Pritchett, "which states that refurbishment of a unit is not a resident cost if the contract was entered into after July 2000. Families who have no idea of the legislation are often not aware that this demand is illegal and will pay up."
So make sure you know exactly what you are doing before you move so you have peace of mind to enjoy the relaxed lifestyle and amenities offered by the retirement village of your choice.
Linda Coskerie, Seniors Real Estate Specialist
Links:
Alan Kohler : http://www.abc.net.au/news/2014-07-17/kohler-complex-contracts-and-the-lifestyle-village-swindle/5601198
ABC's 7.30 Report: http://www.abc.net.au/news/2014-05-20/retirement-village-charging-service-fees-for-dead-clients/5465854
plus video: http://www.abc.net.au/7.30/content/2014/s4009411.htm
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