Function of Government

The role of government is to create an environment for commerce to function whilst at the same time protecting retirees and particularly vulnerable retirees from both financial and emotional harm emanating from that function.

The Victorian Retirement Villages Act 1986 provides the environment for commerce to function but fails to fully protect retirees from financial and emotional harm as a result of it.

The Victorian legislative definition of a retirement village in demanding the payment of an 'in-going' amount without the transfer of property ownership is a major contributor to that financial and emotional harm suffered by retirees.

Sunday, 20 May 2018

Retirement Village Residents Make Their Complaint Count

Retirement Village Residents Make Their Complaint Count

Perseverance by one retirement village resident has paid off for around 50 residents of a Victorian retirement village. Although not directly affected the resident took up an issue on behalf of those residents who were facing a large collective financial impost. Potentially in the order of two million dollars plus the matter resulted from a breach of law by the village operator.

The Victorian State Government introduced new provisions into the Retirement Villages Act 1986 effective from July 1 2014.  Section 19 of the Act made it mandatory for retirement village operators to provide a prospective resident with a Fact Sheet before executing a contract.

For a period of approximately 18 months after July 1 2014 the village operator failed to meet this provision of section 21A of the Act. There is a legislated penalty in the order of $30,000.00 for each occurrence.

For a period following the above the village operator issued fact sheets with a material difference to the contract. The fact sheet advised prospective residents they will NOT be responsible for the refurbishment of their unit on departure from the Terrace whereas the contract states that they WILL be responsible for the refurbishment costs. There is a legislated penalty in the order of $8,000.00 for each occurrence where a person knowingly issues a fact sheet with details contrary to the contract.

Refurbishment costs were highlighted on page 55 of the March 2017 report of the Victorian State Government LSIC Committee inquiry into retirement living - Refurbishment costs could be as high as $60,000.00 per unit

June 2016 - The resident raised the issue with the Residents Committee who wrote and advised management of the problem. Village management subsequently advised the committee "We are checking the information contained in the Factsheet and Disclosure statement and will correct any information that is inaccurate as a priority".

July 2016 - Management refused to release to the Residents Committee a copy of a fact sheet and a contract currently being issued to any prospective resident. The committee wished to ensure the matter had been corrected.

August 2016 - The resident lodged a formal complaint with Consumer Affairs Victoria as evidence came to light that the matter had not been corrected.

January 2017 - The resident subsequently lodged a complaint with CAV as there had been no follow up from CAV with the resident over the matter. The resident was advised that as they (the resident) was not directly impacted by the matter and was merely raising the issue in the interest of fellow residents, the resident was regarded as an informant rather than a complainant and therefore not entitled to any further information.

April 2017 -  The resident advised CAV that as a result of information provided to the State Government inquiry into Retirement Living residents could be facing a refurbishment cost in the order of $50,000.00 per unit, the potential cost to residents from the breach of law by the operator was in the order of two million dollars plus. The operator would receive the cash benefit of this two million dollars plus over time. The resident was advised in a telephone call with a CAV officer that the CAV priority in the matter was simply to achieve compliance going forward.

May 2017 - The resident wrote to the Board of Governors and each member of the Board of Governors personally.  Evidence had continued to come to light that the matter had still not been corrected and there was consideration of a merger with another organisation. The resident received no response to any of the letters.

July 2017 - The resident wrote to the local newspaper providing background to the matter and seeking an article be published which may assist in obtaining redress. No article was ever published.

July 2017 - The resident wrote a letter about the matter for insertion in the 'Letters to the Editor' section of the local newspaper. The letter was never published.

April 2018 - The resident wrote to the new chairperson of the Board of Governors. A meeting was convened where the resident provided background to the matter, highlighted the breach of Retirement Villages Act 1986 by the organisation and the substantial financial penalty flowing to the residents from this breach. The chairperson advised the matter would be raised with the Board.   The Board of Governors and upper management had been transformed following suspension of accreditation stemming from an influenza outbreak in the adjacent aged care facility in 2017.

May 14 2018 - The resident raised the issue again directly with senior personnel from Consumer Affairs Victoria at a meeting of statewide retirement village residents held in Melbourne. The meeting titled 'Make Your Complaint Count' was convened by the Housing for the Aged Action Group in conjunction with the Consumer Action Law CenterResidents of Retirement Villages Victoria and the Council of the Ageing Victoria.

May 18 2018 - The new chairperson of the village Board of Governors issued a letter to current residents advising that amendments would be made to any relevant contract.  Amendments would reflect the statement in the fact sheet that a resident would not be responsible to pay a unit refurbishment cost on departure. Future fact sheets would be amended to reflect the terms of the contract in that new residents would be responsible for the refurbishment cost of the unit on their departure from the village.

Although a long drawn out process perseverance paid off for those residents who had entered the village post July 1 2014 saving them a substantial amount of money.

Ed Note:- This matter epitomizes aspects of the retirement village industry. A breach of the law by an operator and then continuing knowingly of the breach, together with a failure of the regulator Consumer Affairs Victoria to enforce the law for which it was responsible and to take firm action on behalf of those people it is sworn to defend. Each of the above contributed to the matter continuing over a period longer than it should have and but for the perseverance on one village resident would still be happening. This was not about nickle and dimes, this was about dollars, big dollars, millions of dollars that would have been taken from retirees in contravention of the law. The law was clearly on the side of the retirement village residents. It was a lack of access to affordable, quick, decisive enforcement of the law that failed them most.

Retirement Village Residents Make Their Complaint Count

Retirement Village Residents Make Their Complaint Count

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