Make the right choices in retirement

Queensland Minister for Fair Trading, Peter Lawlor, used Seniors Week (14-22 August) to remind people to seek independent legal and financial advice before signing up to a retirement village scheme. He also warned seniors to be scam smart.

“Queensland has more than 250 registered retirement village schemes and they can be a great place to unwind and enjoy retired life,” he said.

“But you need to remember there are different types of retirement village schemes, each with its own set of pros and cons – so it is important to pick the right one.

“Unfortunately many people moving into these schemes don’t read the fine print on contracts and find themselves with an arrangement that may not suit their needs,” he said.

“You may be living in a retirement village for a long time, so it’s vital to do your research and seek independent legal and financial advice.”

Different types of accommodation in retirement village schemes include:

• freehold – where the resident holds freehold title to the accommodation unit;
• leasehold – where the resident’s lease is registered on the title to the retirement village land; and
• licence – an unregistered contract between the resident and the operator, where the right is secured by a statutory charge over the retirement village land.

“Many people don’t understand the differences between these, or the rights and obligations which arise under each scheme,” he continued.

As village operators tend to make their profit on the resale of the right to reside, Mr Lawlor said it was important for those moving into a retirement scheme to ensure they were clear about fees and expenses they may incur.

“You don’t want to find yourself in a situation where you’re paying out fees and expenses which you didn’t expect,” he said.

“Make sure you know what the entry and ongoing fees are. Most importantly, find out what fees are payable if you leave the scheme as exit fees may be quite substantial.

“Shop around and take into consideration any circumstances which may require you to leave the retirement village and move into alternative accommodation earlier then expected.

“The Act seeks to promote fair trading practices and is the regulatory framework in the retirement village industry. It provides protections relating to services provided to residents by retirement village operators,” he said referring to the Retirement Villages Act 1999 which provides protection to residents.

“If disputes occur between retirement village residents and operators, a dispute resolution process exists under the Act.”

Mr Lawlor used the opportunity to also warn seniors about scams.

“Scammers reach people’s homes through multiple means – it might come in your letter box, email inbox, via a telephone call or knock at the door.

“Unfortunately many scam victims don’t report their experience because they feel humiliated when they realise they have been duped – they’d rather bear the loss out of fear of embarrassment.

“Seniors may be more at risk of falling prey or not speaking out because they might not recognise newer types of scams or know where to go for help.”

Mr Lawlor said many scams centred on making you believe you would get easy money, great prizes, or a way out of financial hardship by taking up the scammer’s offer.

“In almost all cases, you’re asked to pay a small fee or divulge some sort of personal information – perhaps identifying details or your bank account information to reap the reward.”

He urges seniors to do their research. Do not offer personal information such as passwords and banking information.

For more information on tips and advices, visit http://www.scamwatch.gov.au and for a free copy of Retire Smart visit http://www.fairtrading.qld.gov.au or call 13 13 04.