Retirement village contracts a 'disappointment'

COMPLAINTS about retirement village contracts have been going on since the early 90s, so will the latest expose drive changes in the industry?

Last night's ABC TVs Four Corners program highlighted a range of disturbing issues around seniors understanding their rights and entitlements under their retirement village contracts and how the village operators are implementing the fine-print conditions of those contracts.

Federal Government Aged Care Minister Ken Wyatt joined the outcry this morning voicing "disappointment" over the revelations shared in the ABC program.  

In a statement released late today he stated,"The Turnbull Government will not tolerate any behaviour that leads to the exploitation of elderly and vulnerable Australians".

He was joined by National Seniors Australia's advocate Ian Henschke who describes the issue as an industry-wide problem and that needs a lot done to fix the problems.

"There are 5.5 million baby boomers who are starting to retire and if this isn't fixed then I think there will be a big push back from them," Mr Henschke said.

"Many people buy into retirement villages expecting to have autonomy and security in their later years.

"Instead, more people are being faced with unaffordable increases to ongoing fees and charges and reduced service standards, causing them a great deal of worry and, at times, fear and a sense of persecution," he added.

He is calling for a simple, clear contract that explains that both a senior and a lawyer can understand.

"There are two sides to the story; the consumer has to understand the contract and the person who creates the contract, has to create a contract that is fair," Mr Henschke said.

"Some of the onus maybe on the buyer because they didn't look at the contract clearly enough," he said.

However, he argues that the retirement village staff need to clearly explain these complex contracts so that situations can be avoided unlike the one highlighted last night where the partner of a man wasn't counselled to have his named added to the contract for their shared house and ended being evicted on the death of his partner.

"The other thing they have to consider is there are a lot of people who don't have English as their first language who would be vulnerable," Mr Henschke said.

"There are also Australians who are 'functionally illiterate', which means sitting down and looking at a contract like that is beyond their scope."

As the Senior community voice their fear over the realities of the loss of control of their investment and their quality of life, the call for consumer law changes is loud. 

Mr Henschke's recommends there is legislative overhaul of the retirement village industry with an arbitrator appointed to create a standard, plain-English contract that governs the way in which the villages operate, applicable Australia-wide, but still allowing for the villages to operate as a profitable business.

Standardised purchase contracts are the norm for the real estate market now, so why not for the purchase of retirement village property? "They should also have in them cooling-off periods and other items for consumer protection," Mr Henschke added.

Earlier today there was no promise of immediate action by the Federal Government. 

In Mr Wyatt's afternoon statement it appears the pressure from all quarters has been strong enough to push forward government promises of action. 

"The Government will consider all the recommendations of both the 2007 Parliamentary inquiry and the 2011 Productivity Commission review, in the context of the recently highlighted cases," it stated. 

"The Government will identify which recommendations can be taken forward, to prevent these situations occurring again, in consultation with the States, Territories and the retirement sector.

"The health, safety and wellbeing of older Australians is of paramount importance to the Government, and we will be taking meaningful action to ensure this kind of behaviour is not tolerated, is dealt with accordingly, and that the necessary regulatory framework is in place to prevent it from happening."

"I am hoping that now there has been some light thrown on it, that it will get addressed," Mr Henschke said.  

"It's a problematic area, but not one that is unsolvable."

As the number of people who are going to retire and require retirement village accommodation is increasing, Mr Henschke concludes; "We have had to clean up consumer laws in the past, and this is one that needs to be cleaned up now."


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