Many retirement village residents have to “downgrade their options” for aged care following a costly exit from their unit contract, Housing for the Aged Action Group says.
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Retirement villages have come under scrutiny during a state government inquiry into the regulation of the retirement housing sector.
Unclear contracts, unexpected fees and high “exit costs” are among issues frequently referred to HAAG, national development officer Jeff Fiedler said.
Included in these costs is a “deferred management fee”, paid upon the residents’ leave, which covers costs associated with the village’s communal areas and can amount to over 30 per cent of the home’s resale value.
“Many people find when they get to the point of needing to move into residential care that so much of the value of their home is taken away in fees they don’t have enough money left to pay a bond to enter care.
“Their choices become much more limited than otherwise would have been the case if it was a fair transaction at the end of the arrangement.”
Submissions from Ballarat included one from a man who was charged $17,400 to refurbish a unit occupied for less than three-and-a-half years, allegations of bullying and harassment by village management and fellow residents, and poor quality fit-outs requiring repair at residents’ expense.
Property Council deputy director Asher Judah said standardisation of contracts in Victoria has led to “better clarity but more complexity” and warned continued regulation could stifle the industry’s innovation.
The Property Council is calling for a retirement village advocate and a minister for retirement living.
“The research we are aware of is satisfaction levels are over 98 per cent in retirement villages, which does not indicate there is a severe problem ... in attempting to regulate, we're not going to upset the 98 per cent that are happy to comfort the 2 per cent who are not.
“At the end of the day contracts are negotiated, are worked out between the resident and retirement village and no one is forced to sign anything.”