Retirement living sector put under the microscope

The inquiry was established earlier this year following a wide variety of complaints including excessive entry and exit fees, management standards, confusing contracts, differing council rate classification and dispute resolution procedures. Around 37,000 Victorians are living in the 400 or so villages listed on Consumer Affairs Victoria’s retirement village register, and with no adequate forum to resolve disputes, many individuals and lobby groups have been calling for the appointment of an ombudsman.

Over the past few weeks, the committee has conducted a number of public hearings where residents of retirement accommodation, dispute resolution, financial and legal specialists, seniors groups, retirement housing operators and other relevant stakeholders have voiced their concerns.

The National Ageing Research Institute (NARI) researchers Dr Sue Malta and Sue Williams both gave evidence to the Victorian Legal and Social Issues Committee.

“Our advice to the inquiry was to consider making training mandatory for managers so that they better understand the diversity of older people who are going into and purchasing retirement homes,” says Dr Malta.

She also highlights the NARI survey which revealed out of 2000 respondents, 400 reported issues that were of significance to them, such as delays, building issues, availability of promised facilities and complicated or poorly written contracts. “For 170 of these cases the issues were not resolved before moving in and were unlikely to be resolved in the near future,” she says.

Consumer lobby group for older Australians National Seniors recommends all new retirement village contracts be signed off by a solicitor acting for the prospective resident and developing a standard contract for retirement villages in Victoria, which can form the basis of a nationally consistent contract.

As well as making individual submissions, The Consumer Action Law Centre (Consumer Action), Council on the Ageing Victoria (COTA), Housing for the Aged Action Group (HAAG), Justice Connect (Seniors Law) (Justice Connect) and Residents of Retirement Villages Victoria (RRVV), also made a joint submission which included the establishment of a Retirement Housing Ombudsman, Regulation of the Deferred Management Fees (DMF) business model, greater clarity in governing legislation and contracts, and training and qualification requirements for retirement housing employees.

However most of the 766 submissions to the Committee were from residents and resident groups. One resident highlighted that despite paying service fees for the past five years, they had been living in a building site and the facilities they thought they would get have been built in a highly reduced form.

Another thought she was buying a unit with an emergency button direct to the site manager however it wasn’t until she had moved in she discovered the emergency button contact was actually contracted to an outside party which would respond to her emergency. Several residents expressed concern over their management company expecting outgoing residents to replace the entire kitchen, white goods, built in wardrobes, bathroom and more on vacating the property. 

Many resident groups highlighted the discrepancy in Council rates; while many villages are responsible for their own lighting, footpath and road maintenance, they are still getting charged full council rates.

Gerard Brody, CEO Consumer Action Law Centre expects the inquiry will expose the systemically unfair business practices that we have seen in the retirement housing sector. “Too many vulnerable elderly Victorians are locked into unfair arrangements, financially exploited with little recourse to fair dispute resolution,” he says. “We strongly believe that a dedicated Retirement Housing Ombudsman is needed to adequately serve this sector.”