Retirement Village 6 Month Payout Rule Madness

Victorian loan/lease retirement village residents are trapped in a legislation nightmare. They may never get their money back on leaving a loan/lease retirement village if the unit in which they resided is not re occupied. Hard to believe but this is current Victorian state government legislation, legislation overseen by the Minister for Consumer. There are real life examples of retirees, their estates or their families that are still waiting over 4 years now for their money as a result of village unit sales slowing or in fact stopped. Incredibly they may never get their money back unless Victorian retirement village laws are changed.

The original law was changed so that village operators could place certain clauses in occupancy contracts. Clauses that allowed residents the option, note the option, to participate in the selection of a selling agent and in some cases the setting of a new lease price for the unit they once occupied but did not own. The impact of this on the outgoing resident is the removal of the 6 month maximum period payout rule, incredibly this happens whether an outgoing resident chooses to actively participate in the re leasing of their unit or not. What happens if the unit never gets a new lessee, there is no statutory or contractual obligation on the operator to ever repay them their refundable money. This could range of course from a few hundred thousand dollars to over a million dollars, all because of a piece of poorly drafted legislation.

The mere action of the village operator putting these Regulation 6 Schedule 1 or Schedule 2 clause in the contract negates the 6 month payout rule. Why would a loan/lease retirement village resident knowingly give up a maximum repayment period of 6 months in exchange for absolutely no limit at all. Such is the complexity of retirement village contracts that this is happening every day, contracts are continually signed without a clear understanding of what is in the document.

The Minister responsible to oversee Retirement Village law has the power to fix this. The power to return the six month rule to at least those retirees who do not or did not want to participate in 1. the process of selecting the selling agent and 2. in some circumstances the setting of the new village ingoing price for that unit.