After the backlash and controversy of last year, many over 55s may be wondering what 2018 holds for the Australian retirement village industry.
Will any of the concerns regarding transparency of contracts, excessive fees and the rights of residents be addressed? And if so, will the changes made be meaningful and make a difference?
In the first industry-wide step towards a solution since the highly-publicised Four Corners and Fairfax investigation, an eight-point plan for positive change has been created by the Retirement Living Council and Property Council of Australia. So, what is included in the plan and how will it help? Let’s take a closer look.
What Does the Plan Hope to Achieve?
When peak industry bodies, retirement village resident association leaders and 20-plus village operators gathered in Melbourne in the second half of last year, they discussed the common issues that affect village residents. From the feedback and concerns raised, an eight-point plan was created to deliver “higher standards, clearer information about costs and contracts and an independent umpire to resolve disputes” for the more than 180,000 older Australians living in retirement villages today. The plan will be used as a starting point for discussions with regulators and politicians as they take steps to improve the industry moving forward.
As Ben Myers, executive director of the Property Council’s Retirement Living division explains, “This is about addressing the feedback and public perceptions, and demonstrating that our industry is listening and responding to public concerns.”
What Does the Plan Cover?
Here’s what the Retirement Village Industry Eight-Point Plan includes:
- Support nationally consistent retirement village legislation and contracts.
- Ensure there are transparent and easy-to-understand descriptions in contracts of entry pricing, ongoing service fees, reinstatement costs, and departure fees and payments, so residents have certainty about the costs associated with living in a retirement village.
- Encourage all potential residents to seek independent legal advice before signing a contract, and work together with government and the legal profession to make this happen. We will also encourage potential residents to share this information with family members and trusted advisors.
- Improve training and professional support for village managers, sales people and other staff who engage directly with current and potential residents.
- Commit to improve industry village accreditation standards and coverage, and support government initiatives to make accreditation a mandatory requirement for operating a village.
- Work with the Australian Retirement Village Residents Association to implement an Industry Code of Conduct to set and maintain high standards about the marketing and operation of villages, including dispute management procedures for operators and residents.
- Commit to the establishment of an efficient and cost-effective government-backed independent dispute resolution process, such as an Ombudsman or Advocate, for disputes that are unable to be solved at village level.
- Maintain and strengthen the relationship between industry and the Australian Retirement Village Residents Associations, to make sure resident issues are clearly identified and addressed.
What Does the Plan Mean for Retirees?
As you can see, there is nothing earth-shattering included in the plan – in fact, it would be reasonable to expect that all the above should already be happening today! While we all hope that every point in the plan is adopted and where required legislated for by government, unfortunately it will not happen overnight.
The good news is though, that this is a step forward for an industry that is in real and urgent need of an overhaul. And while the common perception is that the problems with contracts and fees are an industry-wide problem, there are in fact many village operators who offer over 55s accommodation with easy to understand contracts, no hidden costs, and no departure or exit fees.
If you’re looking for suitable accommodation for your retirement years, there are some excellent and affordable options out there. However, there are also some operators who continue to charge excessive fees and provide complicated contracts that can be misleading.
To ensure you don’t find yourself in a situation where you feel trapped or financially strained, it is essential to thoroughly research your options, so you can accurately compare the fees and terms of any villages you are considering. And most importantly, always seek legal advice before signing anything.
Over to You
Do you think the eight-point plan is a step in the right direction? We’d love to hear your thoughts!
Want to know more about deferred management fees and other traps related to lifestyle villages? Download our FREE guide, 20 Questions You Must Ask BEFORE Choosing a Village.