Overly complex contract terms and unfair fee structures can make the decision to move into retirement accommodation a gamble. Many Victorians move into purpose-built retirement villages or other retirement accommodation with little control of the overall cost or the environment they move into.
Ahead of the Victorian Election at the end of November 2014, Consumer Action Law Centre has been speaking to all major parties and seeking a commitment to a broad based review of the retirement housing sector and the Retirement Villages Act 2010 in the next term of Government. To date, such a commitment has been received from the Greens and no other party.
‘We’ve heard from residents who’d chosen certain retirement accommodation because it offered stability for their later years. But, in fact, many contracts include deferred management fees of up to 40 per cent of the total cost. Hiding the cost of accommodation in high fees to be paid upon departure is unfair—these costs can surprise family members or limit aged care options when leaving the retirement accommodation,’ said Denise Boyd, Director of Policy and Campaigns at Consumer Action.
‘We’ve also seen contract terms that require residents to pay for repair and refurbishment costs when they leave. Refreshing the properties is reasonable, but this is being used by village owners to charge departing residents upwards of $50,000 for entirely new kitchens and bathrooms. These are capital works, not refurbishment, and should be paid for by the owners, not residents.’
Ms Boyd said she had personally briefed members of the Liberal and Labor Parties about the problems facing retirement village residents and explained the need for improved protections for residents but that, despite encouraging conversations, both parties have failed to disclose what action they would take during the next term of government.
‘This issue affects thousands of Victorian voters and we’d hoped all parties would make clear statements of intent to sort out this unacceptable and unfair situation.
Older Victorians need simpler contracts with fair fee structures. If they have concerns, or a problem emerges during their residency, there should be an independent dispute resolution forum so that residents don’t have to pick a fight with their landlords,’ said Ms Boyd.
Consumer Action wants firm commitments to reforms that will:
- Ensure retirement housing is safe and suitable for older people;
- Guarantee easy access to free and effective dispute resolution;
- Make operators provide fair contracts and pricing; and
- Require financial transparency and accountability.
Consumer Action’s policies priorities for retirement villages are outlined here.